Central Bank of Malta signs MoU with the Malta Stock Exchange

A Memorandum of Understanding has been signed between the Central Bank of Malta (Bank) and the Malta Stock Exchange (MSE) in respect of Securities Settlement Systems (SSSs).

The MoU agreement was signed by the Governor of the Bank, Professor Edward Scicluna, and the Chairman of the MSE, Mr Joseph Portelli.

“It is always a pleasure to engage with Malta’s stock exchange. As Governor I will do whatever is within my capacity to see our exchange continue to develop and flourish for the good of the economy”, Prof. Scicluna said.

On his part, Mr Joseph Portelli said “with this agreement besides continuing to strengthen the relations that the Stock Exchange has with the Central Bank, it further strengthens the liquidity of the securities settlement system that is so necessary for the sustainability of the capital markets.”

The MoU is based on the fundamental principle that Eurosystem counterparties make use of SSSs and links between SSSs operated by central securities depositaries in order to mobilise adequate collateral for Eurosystem credit operations.

The MSE offers clearing, settlement and custody services through its depositary established under Article 24 of the Financial Markets Act (Cap. 345 of the Laws of Malta). Furthermore, the MSE establishes and maintains a system designated as ‘MaltaClear’ – which is the Maltese euro area SSS operator. 

SSSs and links between SSSs may only be used for mobilising marketable assets within the Eurosystem if they are deemed eligible by the Eurosystem. The eligibility regime of SSSs and links between SSSs is established in Annex VIa of Guideline (EU) 2015/510 as implemented in Annex 6A of CBM Directive No. 8 on Monetary Policy Instruments and Procedures.

The Bank and the MSE entered into the MoU on 27 September 2021 in order to set up and maintain an arrangement which incorporates the relative Eurosystem requirements falling under the eligibility regime.