Overview of a securities market strategy to prevent money laundering and terrorist financing. The Malta Stock Exchange's experience

Publication Date01 Jul 2006
AuthorRobert Vella‐Baldacchino
SubjectAccounting & finance
Overview of a securities market
strategy to prevent money
laundering and terrorist financing
The Malta Stock Exchange’s experience
Robert Vella-Baldacchino
Malta Stock Exchange, Valletta, Malta
Purpose – The paper seeks to share the money laundering threats that ensue from current patterns
in international criminal activity and the anti-money laundering compliance work that is put up at the
Malta Stock Exchange (MSE).
Design/methodology/approach – The paper sets out by sketching the general demographic and
economic background of Malta as a small jurisdiction and member state of the European Union since 1
May 2004. It provides a view of the problem posed by the recently pronounced phenomenon of
irregular migration and illegal immigration into Malta as well as a general overview of the AML
regime that applies under Maltese law. The paper then dwells on the AML compliance function that
the MSE pursues while discussing the procedures that are put in place to detect, monitor and
eventually report any suspicious dealing on the securities market.
Findings The paper highlights practical and concrete procedures of prevention of money
laundering in the securities market and the synergy that results from effective cooperation between the
securities markets and investigative and law enforcement agencies or judicial organs.
Practical implications – Any effective domestic and international AML strategy will, however,
always rely on mutual cooperation governance arrangements and the good reputation of market
players as a prerequisite for the extensive intelligence necessary to combat money laundering and
terrorist financing.
Originality/value – The paper reports on the way small securities markets could efficiently and
effectively involve trading procedures and clearance and settlement facilities in the ongoing fight
against money laundering and terrorist financing.
Keywords Money laundering,Securities markets, Terrorism, Stockexchanges, Malta
Paper type Research paper
Malta is the smallest member state that joined the European Union on the 1 May 2004.
With a population of almost 400,000 and a land area of just 316 square kilometres, it is
by far the EU Member State with the largest population density of 1,262 persons
per square kilometre. Its mean gross domestic product per capita for 2004 totalled
US$20,119. Figure 1 shows a comparison on the basis of purchasing power parity
(PPP) calculations of the mean gross domestic product per capita statistic s for the EU
Member States and the EU average for the year 2004.
The current issue and full text archive of this journal is available at
This paper delivered at the Cambridge International Symposium on Economic Crime held at
Jesus College of the University of Cambridge, Cambridge, United Kingdom, between the 4th and
the 11th of September 2005 dealing with “The Enterprise of Crime and Terror – The
Implications for Good Business”.
Journal of Money Laundering Control
Vol. 9 No. 3, 2006
pp. 322-326
qEmerald Group Publishing Limited
DOI 10.1108/13685200610681841

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