The unusual tie-up will see the Irish Stock Exchange owning 80% of the joint venture and the Maltese exchange owning the rest. It will be run and regulated out of Malta.
The new European Wholesale Securities Market (EWSM), as it is called, “will offer issuers and arrangers of wholesale fixed-income debt securities access to an EU regulated market, and is supported by the expertise of a dedicated listing agency service,” the two stock exchanges said in a joint announcement, which may be read here on the Malta Financial Services Authority’s website.
The EWSM is described as having been designed to complement the products currently available to investors from both exchanges.
In addition to creating a new venue for trading products normally exchanged in one-to-one over the counter transactions, the EWSM is seen as potentially bringing new customers to investment specialities that are well established in one of the jurisdictions but not in the other.
Joseph Bannister, chairman of the MFSA, said Malta and Ireland have been collaborating on regulatory matters "for countless years" – for example, when Maltese fund managers seek to use administrators based in Ireland, which is a larger and longer-established financial centre.
The new EWSM, he added, had been in the works for about five years, and is seen as enabling both stock markets to benefit from the synergies and cross-fertilisation that it will generate.
‘Chance to grow key product area’
Irish Stock Exchange chief executive Deirdre Somers said the new market represented an opportunity for the ISE to expand its business internationally in one of its key product areas – listed structured debt products.
“We’ve been exploring ways to expand and diversify our activities in this area for some time,” she added.
“The European Wholesale Securities Market creates an additional market choice for debt issuers, which we believe is timely and attractive.
“It also allows the ISE to extend its geographic reach, and to build on our established reputation in market and listing support services.”
ISE handling promotion, primary infrustructure
The Irish Stock Exchange’s International Primary Markets Division, headed by director Gerard Scully, will oversee the promotion of the new market, while the Irish exchange itself will be responsible for primary market infrastructure, listings and other corporate services.
The Malta Stock Exchange’s role will be to act as the market operator, in addition to providing secondary market services, according to the announcement.
Also new at the ISE is a new entity, ISE Listing Services (ISELS), which is described as being designed to “leverage the ISE’s established expertise in structured debt by providing listing agency services on a commercial basis to issuers and arrangers interested in gaining admission to the new market”.