SPEECH BY THE HON EDDIE FENECH ADAMI, PRIME MINISTER, AT THE INAUGURATION OF THE NEW PREMISES OF THE VALLETTA FUND MANAGEMENT LIMITED, FLORIANA.

It is a great pleasure to be here this evening to officially inaugurate the new premises of Valletta Fund Management - the first company to take advantage of the legislative framework enacted by my Government in 1994, a legislative framework which marked Malta?s entry into the international financial services arena, and led to the promotion of Malta as a centre for international investment funds.

Even in the earliest phases of this activity, I am sure that we all sensed the importance this legislative package would have in laying the foundation for the development of financial services in and from Malta.

Today, I am proud to say that my Government?s decision to move forward in this industry has paved the way for significant contributions to the country?s economic growth.

In this context, may I say that the rapid growth of Malta?s financial services industry is now setting markers for our future endeavours in this field. And so it is a pleasure to note that, within this framework, Bank of Valletta was the first banking group in Malta to be proactive in taking up the opportunities provided by this legislation.

Right from the outset, given Malta?s attractive and strategic geographical location, the financial services sector was targeted by my Government as being a key activity within the overall strategic "hub" concept. Our aim then was to provide a legislative framework incorporating tax reforms and regulatory monitoring systems designed to provide the most attractive conditions for the promotion of financial services operations.

As a result, today Malta offers international financial services operators an advantageous business environment, which is very competitive with other financial centres around the world. This environment is characterised by economic and political stability, a favourable tax regime, freedom from exchange controls for non-residents, high standards of professional services, a fast and simple incorporation process as well as fees and other costs which are internationally competitive.

The legislative package, then consisting of fourteen new laws, also established a balanced regulatory and legislative framework, which has been built on the experience of other international financial centres and based principally on the EU model. Where required, aspects of other regulatory systems were adopted with the objective of establishing Malta as an international financial centre of the highest repute.

The fundamental principle which permeates the whole of the regulatory regime is the creation of a regulatory "level playing field" covering both offshore and onshore activities. This has attracted a number of international players including Rothschild Asset Management which, through its experience, has significantly contributed to the leadership qualities of Valletta Fund Management.

May I also acknowledge that the developments brought about by this legislative package would not have been possible without the support of the Malta Financial Sevices Centre and the Malta Stock Exchange. The adoption by the regulator of guidelines and standard licence conditions, rather than strict and detailed rule books for operators, is yet another essential feature of the regulatory framework.

As Malta becomes more focused on the need to accelerate the EU accession process, our priority is now to transform Malta into an EU-based regional service provider. EU accession will bring with it a set regulatory system for the financial services sector. This is a regulatory system, which Malta already subscribes to, but which, once membership becomes effective, will be adhered to in no uncertain terms. This evolving scenario implies stability and credibility for the

Financial Services Sector, as well and as access to a vast EU market and a network of favourable international trade agreements spanning into the Mediterranean, Middle East, Africa and beyond. Thus, membership of the EU should not be seen as mere absorption into a larger entity but as adding new dimensions to the potential of providing services to the global economy.

The strategic imperative that we have to come to terms with is that the financial services will only grow if they are cultivated. They will only flourish if an increasing number of foreign operators continue to be attracted and will only add value in the context of an active national strategy to define a creative role in the global economy.

In conclusion, I wish Valletta Fund Management the enduring success it deserves.

Mr Chairman, may I again thank you for inviting me to participate in this ceremony. On your behalf, it is my great pleasure to declare the new premises of Valletta Fund Management officially open.