User:VodkaJazz/Malta Stock Exchange

Intro

History
The MSE was set up in terms of the Malta Stock Exchange Act, 1990 as a body corporate with a distinct legal personality with the main objective to facilitate an exchange of savings into productive development (primary market) and to facilitate trading of issued financial instruments through the provisions of the secondary market. The MSE was the exclusive place for trading of listed securities in Malta and was deemed to be both regulator and operator of the local capital market with responsibility for listing, licensing of members and oversight of the market.

The Financial Markets Act (FMA) was enacted in October 2002, effectively repealing the Malta Stock Exchange Act, 1990. The FMA provided for the transfer of regulatory responsibility of the local capital market to the Malta Financial Services Authority (MFSA)/Listing Authority (appointed in LN1/03 and LN2/03), the exchange attaining the status of an RIE (governed by the recognition requirements in LN3/03), and the removal of exclusivity of trading. Under the FMA, licensing of members was governed by the Investment Services Act (ISA) but the exchange itself decides on giving access to market. Listing regulation was transferred to the MFSA, as the Listing Authority, but admission to recognised lists remained at the discretion of the exchange. The MSE retained oversight of the market, however investigatory powers were transferred to MFSA.

12 members The number of seats is currently not limited. Revenues are comprised of membership, trader, and licensing fees, transaction charges, listing fees and registrar services fees.

MSE Index
The stock exchange publishes one market capitalization-weighted equity index, comprising all ordinary share securities listed on the exchange. Securities denominated in a foreign currency are discounted by the median exchange rate issued by the Central Bank of Malta on the day of listing and henceforth updated every first trading of the month. The base-value was set at 1000 on 27 December 1995, and is then updated in realtime over the trade day by the percentage increase in the total market capitalization of the index based on closing (last trade) prices. The index is effectively calculated using the formula below: $$\mathrm{Index}_t = \dfrac{\sum_{i=1}^n (P_{it} Q_{it})}{\sum_{i=1}^n (P_{it-1} Q_{it-1})} * \mathrm{Index}_{t-1} $$

The formulae below would be best added to the Market value-weighted index article with the above formula:

Corporate actions are accounted for as follows:

Company joins the index: $$\mathrm{Index}_t = \dfrac{\sum_{i=1}^n (P_{it} Q_{it}) + \sum (P_{j1t} Q_{j1t})}{\sum_{i=1}^n (P_{it-1} Q_{it-1}) + \sum (P_{j2t} Q_{j2t})} * \mathrm{Index}_{t-1} $$

Company leaves the index: $$\mathrm{Index}_t = \dfrac{\sum_{i=1}^n (P_{it} Q_{it})}{\sum_{i=1}^n (P_{it-1} Q_{it-1}) - \sum (P_{j2t} Q_{j2t})} * \mathrm{Index}_{t-1} $$

Rights issue: $$\mathrm{Index}_t = \dfrac{\sum_{i=1}^n (P_{it} Q_{it}) + \sum (P_{Bt} Q_{Bt})}{\sum_{i=1}^n (P_{it-1} Q_{it-1}) + \sum (P_{Bt-1} Q_{Bt-1}) + (P_{Brt}Q_{Brt}} * \mathrm{Index}_{t-1} $$

Bonus issue: $$\mathrm{Index}_t = \dfrac{\sum_{i=1}^n (P_{it} Q_{it} C_{it}) + \sum (P_{Bbt} Q_{Bbt})}{\sum_{i=1}^n (P_{it-1} Q_{it-1})} * \mathrm{Index}_{t-1} $$