While I respect the views expressed by Joe Pace Ross (What Small Bondholders Should Know, August 7) I remain unconvinced that small bondholders should be deterred from investing in local corporate bonds simply because the MFSA’s Listing Authority decided to remove the sinking fund requirement.

I have already argued my case in some detail (July 20) but space precluded me from adding another important aspect. This is that, in relaxing the need for a sinking fund, the Listing Authority made it compulsory for corporate bond issuers to incorporate in the relative prospectus a financial soundness report by an accountant independent of the issuer. This has to be supported by an analysis thereof by the sponsoring stockbroker who is also obliged to comment on the issuer’s last three financial accounts and a forecast for the year following the bond issue.

As I said in my previous contribution, in considering whether or not to invest in local corporate bonds, potential investors (small or otherwise), when unable to make their own assessment, should consult a licensed investment adviser.

Malta has an excellent record in the field of local corporate bond issues and this goes back even to the days when there was no sinking fund requirement. Fortunately, with hindsight, the Listing Authority realised that the decision to add this to its listing requirements was an overhasty one as this killed the market and I maintain that it is the small bondholder who suffered.