The EEC directives regarding stock exchange requirements : their impact on the local business environment

Abstract

A stock exchange is a place where stocks and shares are publicly bought and sold. The marketability of securities which the stock exchange imparts, has important implications for the individual saver, the investor and the economy as a whole. In order to ensure the proper functioning of the stock exchange, the competent authorities lay down a number of regulations governing the workings of the market. A group of EEC directives have been issued in the programme of harmonising, within the Community States, the legislation relating to stock exchanges and securities transactions. The aim of these directives is to enable investors to obtain reliable and comparable information and to encourage investment across the frontiers. The scope of this dissertation is to examine the provisions of the Admission Directive, the Listing Particulars Directive and the Interim Reports Directive and analyse the likely impact on local companies and legislation which their implementation will have. The provisions of the Listings Particulars Directive are compared and contrasted with the Second Schedule of the Commercial Partnerships Ordinance, 1962. The advantages of implementing these Directives in local legislation are also highlighted. In Malta, a committee has been appointed to make recommendations for the setting up of a stock exchange. However, if we are to actively pursue the establishment of a stock exchange, then one has to be aware of the shortcomings which currently serve as obstacles to the achievement of such an aim. These are highlighted in the concluding chapter together with recommendations for preparatory measures which should be considered prior to the setting up of a stock exchange.