Italy Hedge Fund Stars, Chefs Lured by Malta Climate

When money manager Simone Chelini left his Milan job last year to seek a hedge fund-friendly country, he rejected some obvious locations. “Luxembourg? Grey, flights are expensive. Ireland? Always rains.”

Instead, Chelini and his colleague Pietropaolo Rinaldi followed scores of Italians who’ve moved to Malta, lured by lower taxes, less bureaucracy and a Mediterranean climate. The number of Italian residents in Malta rose 30 percent in the five years through 2009 to 1,539. That doesn’t count temporary workers on the island, located about 80 kilometers (51 miles) from Sicily, or Italians without resident registrations.

“It’s close to Italy, it’s business friendly, we have a sea view from our office,” said Chelini. He and his colleague joined a unit of Swiss wealth management firm GWM in March 2009 and, in June, opened the 7H Absolute hedge fund from an office in Malta’s tallest building, the Portomaso tower.

Malta, the smallest economy in the European Union, is enticing Italians from fund managers to tile dealers. The country’s annual economic growth rate averaged 2.3 percent in the last five years, compared with an average contraction of 0.4 percent for its bigger neighbor. The jobl ... Read More

€4.5 million for Malta under the EEA and Norwegian financial mechanisms

Malta has been allocated €4.5 million under the European Economic Area (EEA) and Norwegian Financial Mechanisms for the period 2009-2014.

The aim of these mechanisms is to finance projects related to the themes of ... Read More

The use of Side Pockets by CISs

The MFSA has issued a guidance note on the use of Side Pockets by collective investment schemes. The guidance note applies to professional investor funds (PIFs) which are in the process of being established and which contemplate the use of Side Pockets in their offering memorandum when and if such need arise ... Read More

UCITS IV Directive

The Committee of European Securities Regulators (CESR) has issued four documents relating to the UCITS IV Directive:

(i) CESR’s Guidelines on Risk Measurement and the Calculation of Global Exposure and Counterparty Risk for UCITS – Consultation Paper – (CESR 10-108); This document outlines CESR’s proposed Level III guidelines on risk measurement and ... Read More

Positioning Malta as a winning destination

A consistent message to present Malta to the world must be communicated in order to position the country as a winning destination for both business and tourism, according to 'Creating the Malta Story', a foundation document by The Communication Group plc, a London-based PR and lobbying firm.

The document was commissioned on the initiative of Michael Refalo, a former Nationalist Cabinet Minister who also served as Malta's High Commissioner in the UK.

The report says Malta must be positioned as a brand and that a story about Malta needs to be developed which draws on emotions through powerful storytelling and distinct messaging. It also points out that Malta's human resources should be united to create a "coalition of the willing" in order to promote the country's image, and that information about Malta's competitor markets should be treated as valuable.

The document says public and private sector partnerships should be encouraged and a communication master plan is needed to develop a strategy to deliver Malta's message.

The purpose of the document is to create a holistic story for Malta's key audiences - businesses, tourists and talent - and to articulate a set of compelling messages that allow key organisations to promote Malta in the most powerful and consistent way.

The document provides a framework to ensure that Malta realises its ambition to be a globally respected destination of the future. It says a 'Malta story' should be agreed on, a framework for ... Read More

Malta’s financial services industry grew by 22 per cent last year – PM

Despite the global recession, the financial services industry in Malta grew by 22 per cent last year, and employment in the sector rose to almost 7,000, Prime Minister Lawrence Gonzi said yesterday, during FinanceMalta’s third annual conference held at the Grand Hotel Excelsior yesterday.

“We now have to focus on our ability to continue providing the human resources necessary for the sector to grow.

“We are addressing this issue by encouraging more students to go into finance and by offering scholarships to help them further their ... Read More

Malta expected to avoid Europe’s debt crisis

Malta is not expected to be affected by Europe’s debt crisis, which flared up in the past few days following the Greek financial collapse and the lowered credit ratings of Portugal and Spain.

Speaking to The Malta Business Weekly, the Maltese Member of the European Parliament, economist Prof. Edward Scicluna, said he does not foresee Malta being affected by the contagion that is spreading across Europe.

“Malta managed to reduce its deficit, at least on paper ... Read More

5,544 new companies in two years

Despite the global recession, the Malta Financial Services Authority registered 5,544 new companies over the last two years - 2,800 in 2008 and 2,744 in 2009 - and there was a one per cent increase in the deposits in the Maltese banking sector last year to €14.6 billion.

Introducing the second reading of the Financial Institutions and other Financial Services Laws (Amendment) Bill, Parliamentary Secretary Jason Azzopardi said this had been possible because both sides of the House had acted in unison on financial services legislation and the government had understood the economic tempo while being sensitive to people's needs.

He said the Bill would give the MFSA wider discretion on issuing and revoking licences to safeguard consumers and investors. It also sought to transpose an EU directive on payment services in the internal market, amend a number of directives and introduce amendments to the Financial Services Authority and the Banking Acts.

Dr Azzopardi said that the European Union had striven to override the financial crisis with the European Central Bank offering €120 billion for a period of 30 days to increase liquidity in the eurozone.

The EU had made a number of proposals to strengthen the supervision of financial markets and institutions to ensure financial stability. The turmoil in financial markets over the last two years had led to a loss of 13 per cent in GDP in the EU. For this reason the EU was proposing a pan-European supervisory body as part of a wider plan.

The EU plan included guarantees on bank deposits, as happened also in Malta. The World Economic Forum considered the Maltese banking sector as the 13th strongest in the world. Malta also ... Read More

MFSA publishes new rules to improve competitiveness of UCITS funds

The opportunities for using the UCITS funds framework to strengthen fund distribution across the EU and other international markets will soon be given an added boost following the publication of an MFSA Circular on the proposed adoption of the provisions of the UCITS IV Directive which will enable the setting up of Master-Feeder UCITS Structures in Malta. UCITS - Undertakings for Investment in Transferable Se ... Read More

Financial services a corner of 2015 vision

Jason Azzopardi, parliamentary secretary for small business and lands, told the Malta Institute of Management’s International Taxation Conference that the government is totally committed to the financial services industry and to the fact that this is a cornerstone of the strategy in the context of the government’s Vision 2015.

The same commitment exists in respect of maintaining the income tax system based on the full imputation system of taxation of dividends and on principles which are aimed at ensuring that investors are not subjected to economic and juridical double taxation, he added.

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Malta opposing EU crackdown on hedge funds

Malta is opposing a European Union crackdown on hedge funds as regulators are proposing new disclosure rules that could block foreign-based funds from the 27 Member States, The Malta Business Weekly has learnt.

EU Finance Ministers met this week to reach agreement on the new rules to oversee hedge funds but had to postpone to broker a deal with the dissenting countries.

Malta, together with Cyprus and Britain, are thought to be the only EU Member States to be opposing the new rules which require fund managers to register in Europe and supply more infor ... Read More

Deutsche Bank granted Maltese banking licence

German giant Deutsche Bank has been granted a full banking licence by the MFSA and will be expanding its existing office in Malta, Finance Minister Tonio Fenech said this afternoon. He said it was up to the bank to decide in which areas it would operate but this was "very good news" for Malta.

He made the announcement during a press conference to review his ministry's activities during the second year of the legislature.

In his presentation, Mr Fenech stressed the government's direct assistance to industry to safeguard jobs in tough international economic ... Read More

Cyprus and Malta Stock Exchanges sign MoU

The Malta Stock Exchange and the Cyprus Stock Exchange have signed a Memorandum of Understanding, at the Malta Stock Exchange premises in Valletta.

According to a press release, the Memorandum of Understanding was signed by Arthur Galea Salomone on behalf of the Malta Exchange and Giorgios Koufaris on behalf of the Cyprus Exchan ... Read More

MFSA close to issuing guidelines on Islamic securities market

The Malta Financial Services Authority is close to concluding technical studies which will put it in a position to publish guidelines on an Islamic securities market in the first half of 2010. In the case of Islamic banki ... Read More

100 German executives briefed on Malta jurisdiction

Around 100 senior executives from German law firms, banks, wealth management firms, fund managers and administrators attended an event at Villa Kennedy in Frankfurt showcasing Malta as a financial services jurisdiction.

The half-day seminar was organised by the Financial Times Global Events of London in collaboration with Finance Malta in the financial centre of Europe's largest economy. Delegates rep-resented ba ... Read More

Interview: Islamic Finance can bring huge benefits to Malta

The managing director at the Malta Institute of Management, Reuben Buttigieg, talks to Gerald Fenech on how Islamic Finance works and the benefits it can bring to Malta if the country taps into the considerable commercial opportunities that are available.

The term Islamic Finance has been gaining currency recently but few know about the considerable opportunities of this system. What exactly is Islamic Finance?

Islamic Finance is based on Sharia law which to be fair are quite common to various religions. These include no investment in prostitution, immoral activities or companies which deal with the production of pork as obviously Muslims cannot eat pork. Money is not considered as a commodity in this system and speculation or charging of interest is not allowed. However even the Catholic religion speaks about the imposition of interest and this has now become accepted within reasonable limits. Similarly, both religions talk about social responsibility. In fact if one analysis the modus operandi practiced by APS Bank one finds that profit maximisation may not always be the prime objective. Islamic Finance is not actually linked to a religion but is a similar way of doing business to conventional methods with certain limitations.

What are the main pillars of Islamic Finance?

The main pillar is banking followed by insurance and capital markets. The main differences in banking may be explained through the fact that Islamic banks provide a house loan interest free as the property is initially purchased by the bank and then sold at a profit to the buyer who then ... Read More

Foreign Office working to widen portfolio of bilateral agreements

In the first 18 months of this legislature, Malta has signed 14 double taxation agreements, the most recent with the Isle of Man and Georgia , according to Foreign Affairs Minister Tonio Borg. A host of bilateral agreements governing a wide range of issues have also been sealed.

These agreements are an additional tool to facilitate international investment and trade and are particularly useful to local firms looking to internationalise.

Meanwhile, the Foreign Office has embarked on a series of initiatives to make optimum use of human resources throughout Malta’s diplomatic network in Malta and at the 27 embassies, Dr. Borg said. Over 100 consuls have also been roped into this drive.

Several business dele ... Read More

Growing interest in Malta - a country no longer out of radar sight of investors

Malta has gone through something of a metamorphosis in recent years. This island just south of Italy has much to offer investors and is being discovered as a destination of choice for businesses, particularly those in the IT services, financial and insurance sectors.

‘Malta is no longer a location that is out of the radar sight of investo ... Read More

Malta retains competitiveness ranking

Malta managed to retain the same spot, ranked 52 among 133 economies, in the global competitiveness rankings according to The Global Competitiveness Report 2009-2010 issued yesterday by the World Economic Forum.

The survey, designed to capture a broad range of factors affecting an economy's business climate, was issued ahead of the annual meeting of the New Champions 2009 being held in Dalian, China. Switzerland tops the overall ranking and the United States, with weakening in its financial markets and macroeconomic stability, falling one place to second position.

Other EU countries ... Read More

Malta features in Hedgeweek Guide

Malta, together with Ireland, Luxembourg and the BVI, featured in a special report published by Hedgeweek at the end of July. The Guide to Setting Up Alternative Investment Funds aims at providing guidance to mangers, promoters and their advisers where best to locate their alternative investment funds.

The guide gives an extensive outline of the M ... Read More

Maltese financial sector continues to grow in tough times

The Maltese financial sector is continuing to grow despite the prevailing tough economic times, FinanceMalta chairman Kenneth Farrugia observed at the organisation’s recent second annual general meeting.

Addressing the AGM, Mr Farrugia said, “Despite the financial turmoil and economic crisis faced by the international financial community, Malta’s banking sector has proven to be relatively resilient.

“Equally important, the Malta Financial Services Authority’s 2008 annual report clearly reveals highly encouraging financial sector growth statistics for 2008 showing practically year on year growth in all the core sectors of the financial services industry.”

But, on the other hand, he stressed that notwithstanding the sector’s achievements, it was imperative to further strengthen the level of promotional initiatives being organised in order to ensure that Malta continu ... Read More

Malta gets gold star from OECD

Malta is among 40 countries that was praised by the OECD for "substantially implementing" internationally agreed tax standards - a major achievement for the country which has long fought for this recognition.

The OECD published a report on Friday noting the progress made by jurisdictions, with those ... Read More

Insurance sector thriving since EU accession

The insurance sector has since 2004 grown from eight domestic insurance companies to 41 insurance and reinsurance companies, operating in 27 EU States and other international markets while gross premiums written for last year are expected to go well beyond the EUR800m mark, from just EUR250m at the end of 2004. These figures were provided by the Minister of Finance, the Economy and Investment, Tonio Fenech, during the Insurance Rendezvous organised by the Malta Financial Services Authority, yesterday.

Mr Fenech ... Read More

Malta to become Sharia compliant

Small businesses with a share capital of under €10,000 will benefit from reduced registration rates and annual fees come January 1, the Malta Financial Services Authority said yesterday.

All larger businesses will be making up the difference by forking out more than they are doing before, to ensure that the MFSA rakes in the same amount annually.

Finance Minister Tonio Fenech said the aim was to support small enterprises during the difficult 2009 period and encourage small operators to become limited liability companies so that they could benefit more from EU fun ... Read More

MFSA reduces company fees for SMEs

The Malta Financial Services Authority is reducing its fees and charges for small businesses, in line with measures announced in the Budget, Finance Minister Tonio Fenech said this morning.

Fees for the bigger companies will rise.

Read More

French reinsurance subsidiary set up in Malta

French insurance company April Group has announced the launch in Malta of Axeria Re Limited, a fully owned subsidiary to write reinsurance business.

Set up in 1988 with headquarters in Lyon, April Group has a turnover of over €600 million and a total headcount of 2,500 employees. April Group specialises in the design, manufacture and distribution of insurance products adopting ... Read More

Publication of the report on EU banking structures

The European Central Bank (ECB) Monday published its annual report on EU banking structures. The report, which has been published every year since 2002, reviews the main structural developments in the EU banking sector in 2007 and the first half of 2008. It also contains two special features on the incentive structure of the ‘originate and distribute’ model of financial intermediation and the on a survey of EU banks on major risks on the year ahead (covering the period from spring 2008 – spring 2009).

The most important structural developments that took place in the EU banking sector are as follows:

The consolidation process (as indicated by the decreasing number of credit institutions) continued in 2007, although with signs of a moderate slowdown. Overall, the number of credit institutions declined by 162 (from 8,512 to 8,350) while the corresponding fig ... Read More

Malta's banks ranked 10th soundest in the world

Malta has the world's 10th soundest banking system, a major survey has found, backing up the government's assurances that local banks are on a sound footing. The World Economic Forum Global Competitiveness report gave Maltese banks a score of 6.6 out of a maximum of seven.

A total of 12,000 corporate executives around the world were interviewed on a number of issues and ranked banks around the world on a scale of one to seven - one being insolvent and possibly in need of government assistance and seven being entirely healthy.

The WEF put Canadian banks at the top with 6.8 points, just ahead of Sweden (6.7) and Luxembourg (6.7 ... Read More

Malta placed on FTSE ‘Watch List’ for Frontier group inclusion

The FTSE Group has placed the Maltese equity market on its ‘Watch List’ in the country classification of its Global Equity Index Series, meaning that next year it faces the possibility of being advanced to the index’s Frontier group.

The change in classification and the possibility of being upgraded to the Frontier classification next year enhances Malta’s potential as a financial services centre and increases the potential to attract a slice of the estimated $3tn in funds that track the index provider’s global benchmark indexes.

While Malta’s advancement from an apparent non-entity to it ... Read More

Fitch affirms Malta at A+ rating, outlook stable

Fitch Ratings on Friday affirmed Malta’s long-term foreign currency and local currency Issuer Default ratings (IDRs) at ‘A+’ with Stable Outlooks. Fitch has also affirmed the short-term IDR at ‘F1’and Country Ceiling at ‘AAA’, the common country ceiling for the euro area.

“The rating affirmation follows Malta’s successful adoption of the euro on 1 January and reflects the sharp consolidation of the public accounts in recent years in advance of joining EMU and the government’s sponsorship of reforms to enhance growth and competitiveness,” says Chris Pryce, director in the Sovereign Group. “The government is now expected to take advantage of its renewed electoral mandate to further constrain the growth of public spending while continuing its ... Read More

CBC and Malta sign Memorandum of Understanding

The Malta Financial Services Authority and the Central Bank of Cyprus, expressing their mutual interest and willingness in establishing and promoting bilateral ties in the domain of supervision of credit institutions, have recently signed a Memorandum of Understanding.

According to a CB ... Read More

Reinsurance directive being transposed into Maltese law

The MFSA is proposing a series of amendments to Maltese law as part of the exercise to transpose the EU Reinsurance Directive 2005/68/EC of November 16, 2005 into Maltese insurance legislat ... Read More

IMF upgrades Malta to ‘Advanced Economies Group’

In the April 2007 edition of the report, Malta had been included in the ‘Emerging Europe’ group of countries that were at the time in the process of integrating their economies with those of the rest of the European Union.

While the upgrade in economic category is a mere technicality, it nevertheless speaks volumes for the fiscal progress the country has made as it aligned itself with the eurozone economies, and for the levels of fiscal discipline entailed under the Maastricht Criteria.

While Malta’s upgrade was primarily the result of its euro adoption, it also reflects Malta’s growing importance on the international stage.

The Advanced Economies Group comprises 31 countries – the entire eurozone 15, including Malta, ‘newly industrialised Asian economies’, the G7 major advanced economies, and nine ‘other advanced economies’. The other non-eurozone EU member States have remained in the ‘Emerging Europe’ category.

According to the report’s global findings, the world economy has entered “new and precarious territory”. The US economy con ... Read More