6 - 12 June, 2001
However, what is significant for Malta is that we are witnessing the launch of indigenous funds - funds that are conceived locally, registered locally and providing a wide range of investment opportunities both locally and overseas. My Government considers this to be an important development because we would like to see more locally conceived and nurtured investment instruments.
In Malta we have a unique situation where local investors are taxed a final withholding tax of 15% on interest earned. So far, financial centres around the world have been making it possible for investors from other countries to invest at even a zero tax.
As I had the opportunity to state in other occasions, there is mounting pressure in the international arena to establish an obligation on all centres to exchange information between them on investments held by each countries nationals.
In such circumstances, and given the bi-partisan consensus that we have in Malta about bank secrecy, I had stated that Maltese Investors should feel safest and most protected if their investments are in Malta. The situation in Malta is that government, through its departments, can only scrutinise bank accounts and holding in funds if the final beneficiary is seeking government social benefits and in so doing instructs the financial institution to give information to government on request.
For those who decide to convert their holdings in Maltese Lira, they would also have protection against exchange risk. This is why I recently stated that people with overseas investments should consider seriously bringing their money back to Malta without fear about their financial affairs being scrutinised by the tax authorities. During this year we have re-established equilibrium in the investment environment in Malta by redressing the unfairness that was being created by accumulator funds that were avoiding tax on interest by disguising them as capital gains.
The manipulation of the capital gains concession intended to boost equity holdings on the stock exchange, led to the absurdity that investment in foreign assets were being pushed as tax free investment. Malta was the only country in the world that taxed interest on local securities and bank deposits and did not tax interest in foreign securities.
I wish to conclude by sending a message to our fund managers.
It is important that they obtain and supply up-to-date information to investors - the consumers. Consumers have the right to be informed on business risks in the case of equity investments, country risks in the case of sometimes exotic bonds and exchange risks in the case of foreign currency denominated securities.
Clear and accurate information should be the key driver of future success of any financial services company. Funds managers should provide quality research and advisory services to consumers in order that they can reach sound investment decisions.
It is important that recommendations are not deal linked. There must be self-disciplinary restraint on speculation, trading or recommending poorly researched stocks.
Fund managers have a fiduciary function that they are expected to discharge in the most professional manner. Such professionalism assures this countrys success.
given by Finance Minister John Dalli at the Gasan Sicav Funds launch.