The law of investor protection with particular reference to Maltese law

Abstract

The aim of this thesis is to take a general approach to the law of investor protection as a whole. It is not intended to be an examination of a law of investor protection. Both in Malta as well as abroad the tendency is to examine financial services regulation with respect to particular legislation. Such an approach usually involves a detailed analysis of a particular statute or statutes. This approach has been particularly evident in Malta post - 1994 when a spate of financial services legislation caused a mini revolution in the sector. This thesis will try to examine the foundations on which the whole investor protection edifice is built. An introductory chapter will attempt a definition of the term investor and should provide an understanding of the role of civil and criminal role in protecting the investor. The subsequent chapter (which is perhaps the most important part of the thesis) tries to highlight the reasons why the investor should -or should not- be afforded special protection under the law. Chapter Three identifies various systems of investor protection, commencing from the classic confrontation between self regulation and state regulation and ending in the newest models emerging in the :financial services world. The respective strengths and weaknesses of the various systems will also be examined. Of particular interest is, of course the Maltese position in this context. The next chapter deals with certain specific tools which statutes use in protecting the investor. It concentrates in particular on authorisation procedures as the key through which regulation of :financial services is possible and on compensation schemes as the archetypal investor protection mechanism. Chapter Five tries to concretize the preceding discussion. This will be done by focussing on a particular statute. In this respect an attempt is made at seeing how theory is put into practice in the Insurance Business Act 1998. This chapter will therefore involve a description of investor protection provisions in the most recent addition to the financial services legislation in Malta. The final chapter is devoted to drawing together the various threads of investor protection. In this context certain recommendations will be made where the Maltese investor protection framework is deemed to be lacking.