MFSA penalises three local business heavyweights for administrative breaches

The Malta Financial Services (MFSA) has imposed administrative penalties on three individuals with longstanding experience in the local business community, after they failed to uphold their obligations under the EU Regulation on Market Abuse.

The MFSA said it decided to impose the penalties after the three did not submit Persons Discharging Managerial Responsibility (PDMR) notifications.

The individuals affected are Charles Borg, CEO of PG plc, Alfred Pisani, (best known as the founder and chairman of International Hotel Investments plc), and Winston V. Zahra.

Sources indicated that the fine was related to the three persons' involvement in PG plc.

The administrative penalties imposed amounted to €5,050 in the case of Mr Borg, €6,320 for Mr Pisani, and €15,800 for Mr Zahra.

The penalties may still be appealed before the Financial Services Tribunal.

They were determined to have failed to act in terms of the obligation stipulated under Article 19(1) of the Regulation (EU) 596/2014 on Market Abuse (MAR).

Under MAR, persons discharging managerial responsibilities, as well as persons closely associated with them, should notify the company and the competent authority of “every transaction conducted on their own account relating to the shares or debt instruments of that company or to derivatives or other financial instruments linked thereto”.

“A PDMR is a person discharging managerial responsibility, a senior person within a listed entity,” explains Charles Cassar, founder of Shoulder Compliance.

“These persons are required to notify the company and the regulator (the MFSA) if they enter into transactions in relation to the entities which they manage - for example by selling their shares.”

He says that the idea is to prevent market abuse and insider trading, by, for example, selling shares in the company just before a bad financial report comes out, thus unfairly avoiding a loss using privileged information.

MAR states that listed companies should ensure that information about any such transactions is made public promptly and not later than three business days after the transaction, in a manner which enables fast access to this information on a non-discriminatory basis.