Institutional Securitisation Market

Malta set to have its own ISM by end of 2017

The Malta Stock Exchange is set to launch the island’s Institutional Securitisations Market (ISM) which will put the country on a competitive footing in the sector with Luxembourg and Dublin. The market is an addition for the issuance and trading of Maltese and international primary debt targeted at institutional and professional investors, with particular focus on small to medium investors who wish to have their assets listed on a regulated market.

The move signifies a huge effort by the Malta Stock Exchange to expand its services and improve the quality of Malta’s financial services offering. Malta’s securitisations framework is highly attractive with no VAT applied to transactions, no withholding tax payable on dividends or interest and importantly, no taxation on profit made by securitisations entities in Malta (conditions apply). This entails a scenario where tax free profits can be accrued inside an ABS to offset the depreciation of the underlying assets, which significantly reduces the default risk.

An asset-backed security (ABS) is a financial security backed by a loan, lease or receivables against assets other than real estate and mortgage-backed securities. For investors, asset-backed securities are an alternative to investing in corporate debt.

ISM will be most attractive to those issuers looking for a less expensive alternative to other markets but still with high professional standards and a comprehensive range of services to give issuers and investors a one-stop shop in this sector. The MSE hopes that this market will also ride on the success of the Prospects Listing MTF (an alternative listing marketplace for SMEs) and the Wholesale Securities Market (an EU wholesale-denominated debt securities marketplace).

Email our advisory team to find out more about ISM.