Henley and Partners’ commission on sale of government stocks ten times what stockbrokers charge
The 4% commission Henley and Partners receives on the sale of government bonds is 10 times higher than the fees charged by licensed stockbrokers, industry sources have told this newspaper.
A recently-published report by the IIP regulator revealed that the concessionaires of Malta’s citizenship-for-sale scheme are getting an additional commission on the sale of government bonds – a requirement for IIP applicants.
Speaking on TVM’s Dissett on Wednesday evening, Justice Shadow Minister Jason Azzopardi said the news was “scandalous” as Henley does not have the necessary licence to take commissions. He accused Justice Minister Owen Bonnici of lying to Parliament – the minister had expressly denied that Henley and Partners were receiving other commissions other than the 4% they receive on the sale of citizenship.
He claimed that, because Henley was not licensed as a stockbroker, the government was in breach of financial services laws.
Now it also turns out that Henley are being paid much more than licensed stockbrokers, who have to pay licence fees. An industry source said the standard commission paid to brokers on Malta government stocks at initial public offer stage is 0.3%. This is paid by the Treasury.
“When dealing on the exchange brokers charge an average of 0.25% to 0.3%, even if commissions are liberalised.”
“It is a shame that I don’t work for Henley and Partners,” the source added. “I’d make more than 10 times as much while saving thousands in regulatory fees.”
Reacting to Dr Azzopardi’s claims, Justice Minister Owen Bonnici denied that the government was incentivising Henley and Partners. “The government wants to attract investment and it is willing to give them €4 from every €100 they bring over. This is an incentive to the concessionaire to bring in investment,” he said.
In the meantime Dr Azzopardi also stated that the PN would not extend the IIP beyond the current term. On the other hand, Justice Minister Owen Bonnici said the government would consider, towards the end of the current term, whether to launch a second round of the IIP.