CHAPTER 4
TRADING,
SETTLEMENT AND
CENTRAL
SECURITIES DEPOSITORY
4.00.00 General
Conditions
Trading Sessions
4.00.01
Meetings of the Members, known as “Trading Sessions”,
shall be held on such days as the Council shall from time to time determine by
Council Notice.
4.00.02
Market open and closing times are established by the
Exchange and may be different for each category of listed securities. No
transactions may be effected before the opening signal or after the closing
signal.
Trading Restricted to Trading Session
4.00.03
Subject to the
provisions set out in the Act, all purchases and sales of listed
securities must take place on the Exchange during a trading session thereof.
Unless otherwise prescribed by the Exchange, all securities shall be traded
using the Malta Automated Trading System (MATS) in terms of these Bye-laws
and the “Rules and Procedures” established by the Exchange for MATS.
Access to Trading System
4.00.04
The access to the Trading System is limited to :
(i)
authorised traders;
(ii)
indicated Exchange personnel; and
(iii)
any other person duly authorised by the Exchange.
Installation
4.00.05
Installation of software in respect of MATS
onto the trading terminals is the sole responsibility of the Exchange.
Every Member shall
provide officers and persons appointed or delegated by the Exchange with the
necessary access, on site or through electronic means, to their premises,
terminals and other facilities related to the trading system in order for them
to be able to carry out the necessary installations of MATS software and updates
thereof or other computer hardware and / or other equipment, as well as to
effect such inspections of such premises, computer software, hardware and / or
other equipment as may be necessary or expedient. During such inspections, the
Exchange officers and / or other persons appointed or delegated by the
Exchange, shall have the power to retrieve, extract, copy or seize in whole or
in part any computer software, hardware and / or other equipment or materials
as the Exchange may in its absolute discretion deem necessary or expedient for
the purpose of carrying out any investigation or enquiry with a view to ensuring
compliance with the Act and / or the Bye-laws.
4.00.06
The number of trading terminals permitted per Member
shall not exceed the number of authorised traders operating on behalf of that
Member.
4.00.07
It is the responsibility of Members to ensure that all
hardware and other facilities connected with the trading system are in
compliance with specifications as laid down by the Exchange from time to time.
Power to deny / terminate access
4.00.08
The Exchange has the right to suspend for a definite
period or indefinitely, as well as deny or terminate access to the trading
system of any Member and / or his authorised traders should the Member and / or
his authorised traders be in default of his contractual obligations or has
failed to pay the appropriate fees in terms of Council Notice 1 or has failed
in any way to satisfy the provisions of the Act, Statute or the Bye-laws.
4.00.09
A Member shall not be entitled to claim against the
Exchange or officers of the Exchange or any person appointed or delegated by
the Exchange, for any loss or damages whatsoever related to their functions
under the above Bye-laws.
Trading Regulations
4.00.10
The rules regarding trading on MATS are set out in
Appendix I to this Chapter, as may be amended from time to time and which are
binding on each Member.
Instructions from Clients
4.00.11
It is the responsibility of Members to ensure that
they receive bona fide instructions
from clients and that they have effective procedures for identifying the
persons from whom they take instructions to effect transactions.
4.00.12
Instructions may be received from clients :
(i)
directly on completion of the appropriate Instruction
Form duly signed;
(ii)
by completing the appropriate Instruction Form but
utilizing Financial Intermediaries duly signed by the Financial Intermediaries;
or
(iii)
through their appointed attorney and in accordance
with the terms set out in the power of attorney; or
(iv)
in accordance with a Client’s Agreement Letter.
In the case of (ii)
and (iii) the Exchange has to be informed by the client of the person
authorised to act on behalf of the client.
All orders must be
recorded on a Client Instruction Form. Instruction Forms in respect of orders
received over the telephone or from overseas clients must be backed up by
written and signed instructions from the clients.
4.00.13
The Client Instruction Form must at least include the
information outlined in bye-law 4.00.17.
4.00.14
At no stage shall a Member offer or bid for shares
unless he has a genuine request by a client in accordance with this bye-law.
The Market Official can ask any Member to prove that a genuine request exists
and the Member is required to comply.
Order Log Book
4.00.15
Each Member shall retain an “Order Log Book” wherein
all buying and selling orders must be listed in the order in which they are
received and indicating all the information outlined in bye-law 4.00.17. The
“Order Log Book” must reflect the sequence in which orders are entered into the
trading system.
4.00.16
The Order Log Book may be kept in electronic format.
However, for regulatory purposes, a copy highlighting any changes should be
printed and duly signed by the trader effecting such changes. Such hard copy
may be printed at the end of the business day to encompass all changes effected
during that day.
Such printed copy
must be filed together with the respective Client Instruction Forms.
4.00.17
The “Order Log Book” shall, at least, contain the
following information :
(i)
a sequential order number [this should be
cross-referenced to the order received];
(ii)
the date and time of receipt of the order;
(iii)
the type of order [purchase or sale];
(iv)
the name and / or symbol of the listed security;
(v)
the number of shares or nominal value of bonds [as
appropriate] to be traded;
(vi)
the trading price and any conditions attached thereto;
(vii)
the expiry condition of the order, if any;
(viii)
the client/s name/s; and
(ix)
the MSE Account Number.
4.00.18
Traders must verify with the clients concerned all
“open” orders which have not yet been executed in full or in part within a
period of three months from date of input. Should the client confirm his
original order, an appropriate note must be made on the Client Instruction Form
which should be duly initialed by the trader.
4.00.19
At least on a monthly basis, the Compliance Officer
must reconcile and verify the Order Log Book with Client Instruction Forms and
sign the Order Log Book as confirmation.
4.00.20
At the end of each month, the Compliance Office must
reconcile and verify the Order Log Book with the Outstanding Orders Report as
generated by the trading system and sign in confirmation.
Functions of the Member
4.00.21 The selling Member will use his best
endeavours to sell the listed securities on the first trading day following the
receipt of instructions from his client.
4.00.22 The selling Member shall be responsible
to ensure that his client is the registered holder of the security. He is also
to ascertain that there is enough available holdings to be sold and that there
is no charge registered against these holdings in the Central Securities
Depository. If it results that the holdings are not sufficient to meet the
order or that there is a charge against the holdings, the order will be
rejected by MATS.
4.00.23 The buying Member shall use his best
endeavours to buy the listed securities on the first trading day following the
receipt of instructions from his client.
4.00.24
Both the selling and buying Members shall be
responsible to supply the Exchange with sufficient details of their clients to
enable Client Contract Notes to be generated.
Client Account Amendment
4.00.25
In the event that an erroneous MSE Account Number has
been entered in respect of an order which has been executed on-exchange, a
Member may request a Client Account Amendment as provided hereunder as soon as
possible after the relevant trade has been executed, but, in any case, not
later than 15 minutes from the on-exchange trading session during which such
order has been executed.
4.00.26
Each request for a Client Account Amendment made in
line with bye-law 4.00.25 above shall be considered by the Market Official
separately on its own merit. The Market Official shall consider a Client
Account Amendment request promptly and may request further explanations or
documents as deemed appropriate. The Market Official may approve or refuse such
application and his decision is final. In the event that the Market Official
declines such a request, the Member shall be informed of the reasons for such
refusal.
4.00.27
Applications in respect of Client Account Amendments are to be made by
completing the Client Account Amendment Form as per Appendix III within
the time limit stipulated in bye-law 4.00.25 above and must be accompanied by
the client order forms pertaining to the client/s affected. An appropriate fee
as outlined in Council Notice 1 – Fees & Other Charges will be levied by
the Exchange in respect of each Client Account Amendment request.
4.00.28
In the event that the Market Official approves a
Client Account Amendment request, the point of entry of the transaction or
trade in respect of which an underlying client account/s has been amended shall
remain unaltered from the original time established in accordance with the
provisions of bye-laws 6.00.22 and 6.00.23.
4.00.29
Bye-laws 4.00.25 to 4.00.28 above are applicable only
to trades effected on-exchange through the MATS matching mechanism.
Disputes and Irregular Deals
4.00.30 The settlement of disputes arising
during a trading session concerning the terms of transactions shall be decided
by the Market Official and his decision is final.
4.00.31 Any deal which in the opinion of the
General Manager is irregular or is in contravention of the Act, Statute or
Bye-laws shall be reported immediately to the Executive Committee and to the
Competent Authority where deemed appropriate.
4.00.32 Any deal determined by MATS
is binding on both parties unless an appeal is lodged with the General Manager.
If after an investigation an error is detected, the General Manager may take
any action which he deems fit including the cancellation of the trade.
Trading Delays, Suspensions and Interruptions
4.00.33 The General Manager has the
authority to take such decisions as may be required to delay the opening in any
listed security or to interrupt trading in any such security in order to assist
in the orderly opening or trading of such security.
Systems Failure
4.00.34 In the event of widespread technical
failure of MATS or of any other component of the trading system which
impairs trading in securities or dissemination of pricing or any other
information, trading will be halted until the problem is rectified or the
trading session may be cancelled, if deemed appropriate.
4.00.35 In the event of the Exchange’s own
computer hardware and / or other equipment malfunctioning, trading may be
suspended until the problem is rectified or the trading session may be
cancelled, as deemed appropriate.
4.00.36 Whenever a trading session is
delayed for any of the reasons given above, the Exchange may at its own
discretion extend the trading session on that day for at least the period of
disruption.
4.00.37 If a Member’s computer hardware or
other equipment supporting the MATS system is malfunctioning, the
Exchange must be approached immediately for assistance. The Exchange shall
determine what technical assistance, if any, may be provided to such Member.
4.00.38 In the event of technical failure to
the computer hardware or other equipment as described in bye-law 4.00.33 above,
the trading session will not be suspended. The Exchange will provide at such
premises as it may determine, three (3) back-up, computer terminals solely for
the use of Members whose computer hardware is malfunctioning. It is the
responsibility of the Member to send a trader to the premises indicated to
continue trading through the back up terminals that are made available by the
Exchange for this purpose. The trading session will not be delayed to await
such trader to arrive at the designated premises. If, at any time, there are
more than three (3) Members with malfunctioning computer terminals, hardware or
other equipment, trading will be halted in the same way as described in bye-law
4.00.30 above.
Special Trades
4.00.39 A Member may file an application to
seek the Exchange’s approval for a trade to be classified as ‘special’.
4.00.40 In his application, the Member is to
specify why in his opinion the Exchange ought to classify this particular trade
as a ‘special trade’ at the same time disclosing full details of the proposed
transaction.
4.00.41 The Exchange will deem a trade in
listed securities as “special” if the deal as proposed in accordance with
bye-law 4.00.36 can have a strategic impact on the listed company in whose
securities the deal is to take place, either because of the possible effects on
that company’s business prospects or because of the ensuing shift in the
balance of control of the said company.
4.00.42 The Exchange will also be prepared
to consider other applications submitted in terms of bye-law 4.00.36, taking
into consideration the circumstances in each particular case provided that the
Exchange shall in all cases and in its absolute discretion determine whether a
trade is to be deemed as “special” or not.
4.00.43 Once the Exchange has decided to
authorise a ‘special trade’ such a decision will be declared immediately as a
match at the approved price.
4.00.44 The resultant match will be input in
MATS
by the Market Official.
Records and Reports
4.00.45 All trades executed on the Exchange
shall be recorded in the form prescribed by the Exchange from time to time.
4.01.00 Clearing
and Settlement Procedures
Clearing and Settlement System
4.01.01
The Exchange shall maintain one or more security
settlement systems in accordance with Chapter 6 of these Bye-laws.
Accrued Interest
4.01.02
Unless otherwise directed by the Exchange, Client
Contract Notes for transactions in fixed interest securities (excluding
preference shares) will show the amount of accrued interest separately. The
amount will be calculated by reference to the rate specified in the security
and the number of days which have elapsed from the last payment date up to
settlement day. Accrued interest will be calculated gross; that is withholding
tax is not taken into consideration.
Client Contract Note
4.01.03
Each Member shall produce Client Contract Notes for immediate onward transmission to his
clients.
Publication of Prices
4.01.04
An Official List and any other Recognised List shall
be issued by the Exchange at least once a week containing the latest prices
dealt in each security and any other information as the Exchange may from time
to time specify.
4.02.00 Post
Settlement and Registration Procedures
Off-Market Transactions
4.02.01
The transfer of securities by title of donation need
not be put through the market provided the following conditions are fulfilled :
(i)
the relationship between donor and donee both in the
direct and collateral line should not extend beyond the first degree;
(ii)
the donation is finalised by a public deed or private
writing;
(iii)
an authenticated copy of the said instrument in terms
of law is forwarded to the Exchange for registration; and
(iv)
the transfer document duly signed and stamped is
produced. In the case the transfer document is not subject to stamp duty, the
transferee will have to justify the reason for not paying the stamp duty.
Deposit or Withdrawal of Securities
4.02.02
Where an issuer of securities listed on the Malta
Stock Exchange has provided for the issue of depositary receipts, the deposit
with or withdrawal from the depositary of the listed securities need not be
passed through the market provided that the following conditions are fulfilled
:
(i)
the issuer and depositary shall enter into a written
agreement providing for the terms and conditions regulating the issue of the
Depositary Receipts. The agreement or an authenticated true copy thereof should
be filed with the Exchange;
(ii)
the issuer shall notify the Exchange of the rights,
terms and conditions of issue of the depositary receipts, duly authorised by a
competent authority under the applicable local or foreign legislation. The
Deposit Agreement shall provide for the appointment of a Custodian who is to
receive and hold on trust the deposited property;
(iii)
a person or entity giving effect to a deposit of
securities shall be the same person or entity to whom or to which depositary
receipts are issued; and
(iv)
the Custodian or any person delegated by him shall
file with the Central Securities Depository of the Exchange the relative Forms
agreed to with the Exchange containing clear written instructions with regard
to the deposit or withdrawal of the said securities. A deposit or withdrawal
shall not take effect during a trading session unless the Central Securities
Depository receives clear written instructions as aforesaid at least thirty
(30) minutes before the pre-opening stage of the trading session when the
deposit or withdrawal of the said securities is intended to take effect.
The Central Securities Depository
4.02.03
The Exchange shall establish a Central Securities
Depository which shall maintain the Register for each security admitted for a
listing on the Exchange. This service may also be extended to non-listed
securities. This Register shall contain the registration details of a holder of
such security including any or all of the following :
(i)
full name and address;
(ii)
identity card number;
(iii)
passport number;
(iv)
company registration number;
(v)
residence or place of incorporation;
(vi)
account number generated by the Exchange;
(vii)
any other relevant details as the Central Securities
Depository may reasonably require for administrative purposes.
4.02.04
The Central Securities Depository shall be regulated
in terms of the Bye-laws of the Exchange.
Exemption from Issuing Share / Stock
Certificates
4.02.05
Issuers of securities maintained by the Central
Securities Depository are exempt from the requirement of issuing Certificates
in respect of such securities.
Registration Advices
4.02.06
On Settlement Day the Central Securities Depository
will forthwith amend the registers of the securities which were traded during
the relevant trading session and issue Registration Advices to both buyers and
sellers. The Advice will include the following statement :
“This Advice is evidence of registration of the
holding as recorded at the Central Securities Depository of the Malta Stock
Exchange.”
4.02.07
The Central Securities Depository shall record the
date when a holder’s investment is first registered, when it ceases to be so
registered as well as the dates of any acquisitions, disposals or pledging of
the said security.
4.02.08
It shall be the duty of the Central Securities
Depository to take all reasonable security measures including the establishment
and maintenance of such procedures as may be reasonably necessary or expedient,
to protect information, data, records and other documents relating to the
affairs of holders and issuers of listed securities against unauthorised
access, alteration, destruction, disclosure or dissemination, and against any
accidental loss or destruction.
New / Rights Issue
4.02.09
When there is a new / rights issue of a listed
security, the Issuer concerned shall be responsible for the handling of the
issue. When the final list of holders is compiled by the company, full details
of the individual holders shall be handed over to the Central Securities
Depository to update the relevant Register and issue the advice of
registration. Should the Central Securities Depository handle primary issue
procedures it is still the responsibility of the Issuer to confirm full details
of the register prior to the issue of the Registration Advices.
Bonus Issue
4.02.10
Where a new issue is by way of bonus issue, then a
Registration Advice will be issued in the same form as if the security had been
purchased through the market.
Other Obligations
4.02.11
For as long as a security remains on the Official List
or any other Recognised List, the Central Securities Depository shall fulfill
the obligations outlined in the attached Appendix
II entitled “Central Securities Depository – Responsibilities and Services
Provided”.
4.02.12
The Central Securities Depository may agree to provide
other services as may be requested by the issuer of listed securities subject
to such charges as may be established from time to time by the Council.