ACT No. XIV of 1994 A TT Nru . XIV la' I-I994 AN ACT enacted by the ATT mahrug b'ligi mill-Parlamcnl \.R' Malta.

Supplimtllllal- G~llt/tll lal-Gvtrn ta' Malta, Nru . 16,008, J3ta' Stlltmbru, 1994

T~qs;ma A

MALTA

ACT No. XIV of 1994

A TT Nru . XIV la' I-I994

AN ACT enacted by the

ATT mahrug b'ligi mill-Parlamcnl

\.R' Malta.

Parliament of Malta.

A IT biv: jirn,ogola t-tn}UXija tal ,

AN ACT 10 regulate the carrying

kWII1ltrt ta' 100·estiment u bie:<

on of In\"Cslmmt business and to

jipprO\'dl ghal h\\'f!ifg li huma

makf provision for ffilltlers

ant-mar! ghal ih Jew li ghandhom

ancillary thereto or connected

thfn'\I·lth.

x'Jaqsm u m)egb.u.

A

ARRANGAMENf TA' L-ATf

Preliminari

Titolu fil-qosor u bidu fi s-sehh

(Section 2)

Services

Dealing as Principal or Agent

Buyi ng, selling, subscribing for or underwriting instruments

as principal or as agent.

2. Arranging Deals

Amuiging for another person to buy, sell, subscribe for or

underwrite inslnlments.

3. Management and Administration

Acting as manager, administrator. sec retary or registrar in

rel ation to any inslnIment, or to any scheme or atnlOgement

involving an inslnlmcnt, or in relation to any of the assets or

investments represented by or otherwise connected with an

instrument, or in relation to a collective investment scheme.

4. Trustee. Custodian or Nominee Services

(a)

Acting as trustee. custodian or nominee holder of an

instrument, or of the assets represented by or otherwise

connected with an instn.lmen t, where the person acting IS

trustee. custodian or nominee holder is so doing as part of

his providing any investment service in paragraphs I, 2. 3 or

5 oftbis Schedule: or

Holdi ng an instrument or the assets represented by

(b)

or otherwise connected with an inslnlment as nominee.

where the person acting as nominee is so doing on behalf of

another person who is providing any investment service in

this Schedule or o n behalf of a client of such person. and

such nominee holding is carried Ollt in relation to such

investment service: or

A

(c)

Acting 85 trustee or custodian in relation 10 a

collective in~t scheme.

5. In vestment Advice

Giving, or offering or agreeing to give. 10 persons in their

capacity as investors or potential investors

advice on the merilS of their purchasing, selling.

subscribing for or underwriting an instrument, or

clIcrcising any right conferred by an insuumenl 10

acquire, dispose of, underwrite or convert an

,instrument: or

advice in relation to a scheme or ammgement

involving an instrumenL

(I)

·advenisement~ means any form of advertising. whether

done verbally or in writing. and, withou t prejudi ce to the

generality of the fo regoi ng. includes advertising in a publication.

the display of notices, signs, labels or showcards. by means of

letters, circuiars, prospectuses, catalogues, price lists or other

documents, by an exhibition of pictures or photographic or

cinematograpltic films, by way of sound broadcasting or

television, by the distribution of recordings or in any other

manner, and references to the issue of an advertisement shal l be

construed accordingly;

investment scheme" means any scheme or

~collective

ammgcment which has as its object or as one of its objects the

collective investment of capital acquired by means of an offer of

units for subScription, sa1e or exchange and which has an y of

the following characteristics-

(a)

the scheme or arrangement operates according 10

the principle of risk spreading; or

(b) the contributions of the participants and the profits

or income out of which payments are to be made to them

are pooled; or

(c) at the request of the holders, units are or are to be

re-purchased or redeemed out of the assets of the scheme or

arrangement, continuously or in blocks at short intervals; or

units are, or have been, or will be issued

(d)

continuously or in blocks at short intervals;

~collecti ve investment scheme licence" means a licence

for the issue or creation of units or the carrying on of an activity

by a collective investment scheme issued under section 6 of this

Act;

"competent authority" means the Minister or such othe r

person as he shall appoint. provided that until such time as the

Minister makes such appointment. any requirement in this Act

that the Minister cons ult the com pete nl au thority shall be

interpreted as a requ irement Iha! the Minister act alone;

"document" or "documentation" includes infonnation

recorded in any form and, in relation to information recorded

othe rwise than in legible fonn. references to its production

include references to producing a copy of the information in

legible fonn;

"exe mpted pe rson" means a perso n who fo r any reason

is exempted from any or all of the provisions of section 3 of this

Act;

"instrument" means any inslrUment, Contntcl or rig ht

falling within the Second Schedule to this Act and whether o r

not iss ued in Malta;

"investmeot agreeme nt" means any agreement the

making o r perfo rmance of which by e ither party cons titutes an

investment service;

"in vestment service" means any service falling within the

First Schedule to this Act when provided in re lation to an

instrument

"investment services licence" means a licence to provide

an investment .service llnder section 6 of this Act;

"licence" means a collecth<e investme nt sche me licence

or an investment .services licence

"licence holder" means a person who holds a licence

"Minister" means the Minister responsible for fi nance

·overseas reg lllatory authority· means an authority

which in a counlf)' o r te rrito ry o utside Malta e xercises any

functi on corresponding to

a function of the competent authority under this

(a)

Act

(b) a functioa of the Centnll Banlc of Malta uDder the

Banking Act;

(c) a function of the Council of the Stock Exchange

uDder the Malta Stock Exchange Act : or

Cap.)4S

(d) a function of the Minister under Ihe Insurance

Business Act , or under any of the abovementioned Cap.l9O

enactmc:nts.

"participants" means the persons who participate in or

receive, or are to participate in or receive, profits or inrome

arising from the acquisitioo, holding, management or disposal of

the property comprised in a collective investment scheme o r

sums paid out of such profits or income

"prescribed" nv:ans prescribed by ru les or regulations

made under this Act;

"qualifying sharcbolding" means a direct or indirect

holding in a body corporate which represents ten per ccnl or

more of Ihe share capital issued by such body, or of the voting

rights attaching to such share capital or which makes it possible

to exereise a signifICant innuenoe over the management of the

body corporate;

·subsidiary" has the same meaning as that given to the

tenn by section 97 of the Commercial Partnerships Ordinance: Cap. t68

"unit" means any representation of the rights and

interests of participants in a collective investment scheme.

(2)

In this Act and in any regulations made

thereunder, if there is any conflict between the English and Maltese

texts, the English lext shall prevail.

LlCENSlNG REQUIREMENTS

Instruments

Securities, including shares and stock in the capilal

of a company, debentures, debenture stock, loan stock ,

certificates of delX'Sit, bonds, notes and any other

instruments creating or acknow ledging indebtedness.

Subsection (I) above shall nO( a pply to

(2)

(a)

any

instrument

acknowledging or creating

indebl:edness for, or for money borrowed to defray,

the consideration payable under a contract for lhe

suppl y of goods o r services;

(b)

a cheque o r other bill of exchange, a banker'S draft

or a letter of credit; or

(c)

a banknote, a statement shOwing a balance in a

current, deposit or savings account or (by re-ason of

any ftnanCial obligation contained in it) to a lease o r

other dislX'Sition of property, Of an insunmce policy.

2. Units in a collective in vestment scheme.

3. Warran ts, options, certificates o r other instruments,

including any record whf."ther or not in the form of a docume nt ,

entitling the holdcr to subscribe for, acquire, sell or otherwise

dis pose of, underwrite or convert any instrument or an interest in

any instrument falling within this Schedule Of for any currency.

4. Certificates o r other instruments which confer prope rty

rights in respect of any instrument falling within lhis Schedule.

5. Futures and foreign exchange contracts entered into for

investment purposes or foreign exchange acquired or held for

investment purpose:;.

6. Right! under a conlmCt for differences o r under any other

conUOCl the purpose or intended PUIpOSe of which is 10 secure a

profit Of avoid a loss by reference 10 fluctuations in the val ue or

designated for that purpose in the contract.

A

44 \

( I)

No person shall provide, or hold hi mself out as

providing, an investment service in or from within Malta unless be

is in possession of a valid investment services licence.

(2) No body co rporate, unincorporated body o r

association fonned in accordance with o r existing under the: laws of

Malta. shall provide or hold itself out as providing an investment

service in o r from within a country , territory or o ther place outside

Malta unless it is in possession of a valid investment services

licence.

(Section 32)

A m endm e nts

First Column

Second Col umn

Central Bank of

Section 55 shall be deleted and any reference to

Malta Act, Cap. 204

that section in the Act, or in any other Act, shall

be deleted.

Section 2 shall be amended as follows

( \)

Malta Stock Excnange

ACI, Cap. 345

by the insertion of the following

(a)

definition after the definition of

~quoted company" and before the

definition of "related company"

" "quoted securities"

means

securities

which

have

been

admitted 10 deal ing on the

Exchange in accordance with the

listing requ;. ... ements, as may be

specified in the bye-laws;"; and

by replacing the word "securitie.<;"

(b)

in the definition of · Stockbroker"

with the words "quoted securities~.

(2)

Section 3 shall be amended as foll ows

(a)

in paragraph (a) of subsection (3)

the word "securities" shall be

replaced by the words "quoted

securities";

A

First Column

Second Column

(b)

sub-paragraph (i) of paragraph (b)

of subsection (3) shall be deleted

and shall be substituted by the

following new sub-paragraph

"(i) shall be the exclusive place ..

Malta for the trading of quoted

securities; and"; and

immediately after the proviso to

(c)

subsection (3) there shall be added

the following new proviso

"Provided further that units as

defined by the Investment Services

Act. 1994, of a coUecth'C

investment scheme licensed under

that Act, whether or not they are

quoted securities. may be traded

outside the Bona and other than

by means of facilities prov ided by

the ElIchange, by or with the

manager of the scheme or a person

actin for him and under his

authority,"

In section 9. the proviso to subsection (1)

(3)

shall be deleted.

Section 11 shall be amended by substituting

(4)

the words "carried out by him in securities

which are quoted" for the words "canied

o ut by him oUlside the Exchange in

securities which are not quoted",

A

Socoud Column

Fml Column

(5)

Section 34 shall be amended by substituting

the words "y licensed stockbrokers in

listed securitie5.~ for the words "by

licensed stockbrokels in listed and unlisted

securities.

M •

Sections 33, 35 and 36 shall be repealed,

(6)

and any reference in the Act, or in .. y

other Act, 10 the5e sections shall be

delel:cd.

Passed by the House of Reprtsentatives at Silting No. 303 of the 20th July.

1994. LAWRENCE GONZl

Speaktr

R1CHARD 1. CAUCHI

Cluk to Ihi! House of Rtprl!stntolivts

,.ft. .. ,

4"-

Nit'

"I._CLOd

,.,ijo~ _ ;." ,

,.,

'

Subjcct to the provisions of subsection (3) of this

(I)

section, no collective investment scheme shall issue or create any

units or carry on any activity in or from within Malta unless there is

in respect of it a valid collective investment scheme licence.

(2)

Subject 10 the provisions of subsection (3) of this

section. no collective inveslment scheme formed in accordance with

or existing under the laws of M alta shall issue o r create any units or

carry on any activity in o r from within a country, territo ry or other

place outside Malta unless there is in re spect of it a valid collective

investment scheme licence.

(3) No collective invesunent scheme shall be

precluded by the provisions of subsection ( I ) of this section from

iss uing or creating such units o r from taking such steps as may be

necessaJ)' fo r the incorporation o r, as the case may be, the

establishment of the scheme o r from laking such steps as may be

necessary for securing the authorisation of the sche me by the

compete nt authority.

APPLICATION, GRANT, REVOCATION, ETC. OF

LICENCES

An application for a Licence shall be made in the form

S.

and manner requ ired by the competen t authority and shall

furthermore·

(a) contain or be accompanied by such information

and particulars, in addition to those required by this secti on, as

the competent authority may requ ire or as may be prescribed;

(b) be verified in the manner and to the extent

required by the competent authority, or as may be prescribed

(c) contain the address in Malta for service on the

applicant of any notice or other doc ument l'e(juired or

authorised to be served on him by or under thi s Act;

(d) in the case of an investmcnt services licence, be

accompanied by a programme of operations setting ou t such

mallen as may be required to be set out by the competent

authority from time to time;

(e) in the case of a ooUective investment scheme

licence, specify the nMute of the collective investment scheme

concerned: and

(0 be accompanied by such fee as may be prescribed

in respect of the licence applied for.

( I ) The competent authority may grant or refu<;t; to Pow .. of

6,

grant a licence applied for under !his Act

Provided that the com petent authority shall not-

(a) grant an investmcnt services licence unless J[ IS

satisfied that the applicant is a fit and proper person to provide

the investment services concerned and that the applicant will

comply with and observe any rules and regulations made under

lhis Act and applicable to him;

(b) grant a coUcctive investment scheme licence unless

it is satisfied that the scheme wj)] co mply in all respects with any

roles and regu lations made under this Act and applicable to it

and that its directors, and officers, or in the case of a trust, its

trustees, are fit and proper persons to carry out the functions

requ in:d of them in connectio n with the scheme.

(2) In granting a licence the competent authority may

subjec t it to such conditions as it may deem appropriate, and having

granted a licence it may, from time to time, vary or revoke any

condition 50 imposed or impose new conditions.

When considering whether to grant o r refuse to

(3)

grant a licence the competent authority shall. in panicular, have

regard to-

(a)

the protection of tne public;

the protection of the repUlation of Malta;

(b)

the best economic interests of Malta: and

(c)

(d) in !be case of a coUective investment scheme

licence, the reputatio n and suirability of the applicant and all

other panies connected with the sc heme.

(4) Every licence shnll specify the investment service

which the holder thereof has been authorised to provide or, as the

case may require. the class of coUec tive investment scheme to

whic h the licence relates.

(S) Withoul prejudice to the generality of subsection

(2) of this section, the conditions 10 which the competent authority

shall subject a licence may be made applicable, or be prescribed 10

be applicable, to-

(a) all investment services licences or all collective

investment scheme licences, as the case may be;

(b)

certain categories of licences;

(c)

al l licences granted to certain categories of

holders;

(d) all licences in relalion to particular se rvices o r

schemes, as the case may be.

(6) Where the applicant for a Hccnce has not been

nOlificd by the competen t authority of its decision whether to grant

or refuse to grant the licence applied for within twelve months from

the receipt of an application made in compliance with the applicable

provisions of this Act, the application shall be deemed to have been

refused and the provisions of this Act shall appl y as if notice of such

refusal had been given on the expiration of the period aforesaid.

(7) Any requirement in this Act that a person be a fit

and proper person 10 carry out certain activities or funM.ions shall

be interpreted as a requirement nol only that such person be a fil

and proper person 10 carry out such activities or fuDCtions. bUI also

that any direclor or officer of such person, and, in the case of a

trust, each one of its trustees, be a fit and proper person to carry

out such activities or functions.

Where a licence holder contravenes or fai ls to

(8)

compl y with any of the conditions imposed in a licence issued under

this section, the competent authority may without recourse to a

court hearing impose an administrative penalty which may nOI

exceed forty thousand liri.

lbe competent authority may at any time cancel or Po.~o(

Selghal,' l-awlOrita' kompeten ti 1i th asstr ) ew tissospe:odi Iiteozi

(I)

suspend a licence in accordance with the provisions of this Act.

.

..

In the case of an LIIvestment servIces IJcence. the t~neu.

(2)

competent authority may cancel or suspend a licence-

(a) if it considers that the holder thereof is not a fit

and proper person to provide the investment service he is

authorised 10 provide; or

if it considers that the holder thereof does not fulfli

(b)

the requirements of, or has contravened, any of the provisions

of this Act or of any rules or regulations made thereunder, or

has failed to satisfy or comply with any obligation or condition

to which he or the licence is subject by virtue of or under this

Act; or

(c) if the competent authority has been furnished by or

on behalf of the licence holder with information which is false.

inaccurate or misleading; or

(d ) if the licence holder has no t cOll1lJlCnced ,10

provide the service he has been authorised to provide within the

time provided for in the licence or has ceased to provide such

servIce; or

(e) if it considers it desirable to cancel or suspend the

licence for the protection of the public or the reputation of

Malta; or

(f)

at the request of the licence holder.

(3) In the case of a collective investment scheme

licence, the competent aLlthority may cancel o r suspend a licence-

(a)

if it considers that the directors, officers or

trustees of the scheme are not fit and proper persons to carry

out the functions required of them in connection with the

scheme; o r

(b)

if it considers that the scheme to which the

licence refers does not ful fil the requirements of any provision

of thi s Act or of any rules o r regu lations made thereunde r, or

there has been a contravention of any such provision as

aforesaid, or an Obligation or condition to which the scheme o r

the licence is s ubject by virtue of or under this Act has not been

satisfied or complied with; or

(c)

if information has been furnished to the

competent authority by or on behalf of or in relation to the

sc hemc which is false, inaccurate or misleading; o r

(d)

if thc scheme has not commenced the activities

which it wa~ authorised to cany on within the time provided for

in the licence o r has ceased to cany on s Llch activities; or

(e)

if it considers it desirable 10 cancel or suspend

the licence for the protcction of the public or the reputation of

Malta; or

(f)

at the request of the manager or trustee or

c Llstodian of the sche me, or their cqLliva1cnt.

(I)

Where the competent authority ProlXlses-

NoIirlCation of

(a) to vary any condition 10 which the licence IS canceUation or

subject or to impose a condition thereon; o r

(b) to refuse an application fo r a licence o r to cancel

or s!lspend a licence,

it shall give the applicant or, as the case may be, the Licence holder

or the manager and trustee or custodian of a collective investment

scheme, or their equivalent. notice in writing of ilS intention to do

so, setting out the reasons for the decision it proposes to take.

(2) Every notice given under subsection (1) of !his

section shall state that the recipient of the notice may, within such

reasonable period after the service thereof as may be stated in the

notice (being a period of not less than forty-eight hours and not

longer than thirty days), make representations in writing to the

competent authority giving reasons why the proposed decision

should not be taken, and the competent authority shall consider any

representation so made before arriving at a final decision.

(3) The competenl authority shall notify its final

decision in writing to any of the persons to whom notice is to be

given under subsection (1 ) of lhis section and, where the said

persons have not been nOlilled by the competent authority of that

decision within twelve months from the dale on which the said

aut hority notifies in wriling the said persons of its intention as

stated in s ubsection (I) of this section. the competcnt authority

shall be deemed to have refused the application or cancelled or

suspended the licence. as the case may be.

OBLIGATIONS OF LICENCE HOLDERS AND OTIIERS

(I) T he holder of an investment services licence and Change. in

lhe manager of a collective investment scheme which has been infonnatioo;

]" lcense d un d e r t h" IS A cl, or any 01 h er person h avmg

" fCSlXlnsJ "bd' Ity paymenloffeu.

for the day 10 day administration or management of such a scheme,

shall provide the competent authority with particulars of any

changes in the infonnation provided under this Act as soon as such

holder, manager or person becomes aware of such changes.

(2) Every holder of a licence shall pray to the

competent authority such periodic fee, and within such time, as may

from time to time be prescribed,

( I ) No person shall acquirc a qualifying shatcholding

in a licence holder or increase such qualifying shareholding 50 that

the proportion of the voti ng rights or of the share capital held by

him in !.he licence holder reaches or exceeds 20 per cent, 33 pe r

cent or 50 per cent, or so that the licence holder becomes the

subsidiary of such person, unJess such person has served on the

competent authority a written notice stating that he intends to

acquire or increase such shateholding, and·

(a) the competent authority has, bdOfe the end of the

period of three months beginning with the service of that notice,

noti fied him in writing that there is no objection to his acquiring

or increasing such shareholding; or

(b) that period has elapsed without the co mpetent

authori ty having served on him a notice of objection; or

(c) the competent aut hority has, before the end of the

said period of three months served a notice of objection which

has subsequently been withdrawn, cancelled or quashed for My

reason

Provided tJlat the acqUlslUon or iocrease of the

qualifying shareholding takes place within one year following the

event ITM!ntioned in paragraph (a), (b) or (c) of this subsection as

the case may be

Provided also tha!. in the case envisaged in the aforesaid

paragraph (c) of this subsection the aforesaid period of one year

sh.all commence to Illn from the date Ihat the person concerned has

been notified of the wi thdrawal, cancellation or quashing of the

notice o f objection, as the case may be.

(2) A n()(ice served on the competent authority under

s ubsection ( I) of this section shall contain such information as the

competent authority may direct and the competent authority may,

after receiving such a notice from any person, by notice in writing

require him to provide such additional infonMtion or documents as

the compete nt authority may reasonabl y require for deciding

whether to serve a notice of objection.

(3) Where additional infonnation o r documents are

required from any person by a notice unde r subsection (2) of this

section. the time between the giving of the n()(ice and the recei pt of

the infonnation or doc uments s hall be added to the period

mentioned in paragraph (a) of subsection ( I) of this section.

(4) Every notice of objection mentioned in paragraph

(b) of subsection (I) of this section shall state the reasons for such

objection and shall state that the rcdpicnt of the notice may. within

such reasonable period after the service thereof as may be stated in

the no tice (being a period of not less than forty-cight hours and not

longer than thirty days), make representations in writing to the

competent authority giving reasons why the notice of objection

shou ld be withdrawn; and the compete nt authority shall consider

any representations so made before arriving at a final decision.

(5) The competent authority shall notify its final

decision in writing to the person who makes representation under

subsection (4) of this section and if s uch decision is not n()(iflCd

within thirty days of the CJlpiry of the deadline referred to in the

said s ubsection (4) of this section. the competen t au thority shall be

deemed 10 have decided not to withdraw its notice of objection.

(6) Any person who proposes to sell o r dispose of a

qualifying s hareholding in a licence holder or to reduce !M

qualifying shareholdi ng so that the proportion of the voting ri ghts

o r of the share capital held by him in the licence holder would fall

below 20 per cent, 33 per cent or 50 per cent. or so that the licence

holder would cease to be his subsid iary, must infonn the competent

aUlhority in writing stati ng his intention to sell. dispose of o r

reduce hi s sharcholding and stating the size of his sh.areholding

follo wing such sale, disposal or reduction.

(7) Immediately on becoming aware of any proposed

or actual acquisition o r di sposal of part or all of a shareholding in

its s hare capital in any ofme circumstances dealt w ith in this section

a licence holder shall infonn the competent authority in writing.

(I)

No person shall. without the consent of the

competent authority. issue o r cause to be issued any advertisement

or undenake any other promotional activity inviting pecsons

(a) to become or offer to become participants in a

collecti ve investment sche me, o r any advertisement or activity

contain ing info rmatio n calculated to lead directly or indirectl y

to persons becoming o r o ffering to become participants in s uch

a scheme

(b) to subscribe for or o therwise acquire or

underwrite an instrument, o r any advenisement o r activi ty

containing informatio n calc ulated to lead di rectl y or indirectly

to persons s ubscribing for or otherwise acquiring or

underwriting or offeri ng to subscribe for or otherwise acquire

o r underwrite an instrument: o r

(c) 10 purchase or otherwise procure an in vestment

se rvice

Provided that Ihis s ubsection s haU nOI a ppl y to any

advenisemenl issued o utside Malta and which is nOI di stributed in

Malta and does not relate to a coll ective investment sche me formed

in accordance w ith or existing unde r Ihe laws of Malta.

(2) The provisions of subsection ( I) of th is sectio n

shall not apply if the advertiseme nt is issued solely to

(a)

licence holders

(b) a pecson whose ordinary business involves the

acquis itio n and disposal of instrume nts of the same ki nd as the

instruments to whic h the advertisement relates: o r

(c) a pecson whose ordi nary business involves the

acquisi tion and di~posal of property of the same kind as the

pro perty, or a s ubstantial part of the propert y, to which the

collective invest ment scheme in the advertisemen t relates.

REGULATORY AND INVESTIGATO RY POWERS

KUDsens meb!ic! gbal re klamar 'a' skcmi, slrumenti u scrvizzi

Setgbal regolatorjl u Invesligattivi

Setgbllll-Minisuu Ii jagbmcl regolamcnti

(I) The Mi nister, acting on the advice of the Minisur'lpowerlO

competent authority, may make roles or ~gulations 10 give effocl make,..,WationI.

to the provisions of this Act, and withou t prej udicc to the general ity

of the foregoing may, by such rules or regulations. in particular, do

any ortbe following-

(a)

amend the dcrmition of ·coUcctive investment

scheme" contained in section 2 of lhis Act, as wcn as the

definition of "investment service· contained in sectio n 2 and tht'

FtrSt and Second Schedules to this Act;

(b) regu late investment servkes and collective

investment schemes, as well as services provided and activities

carried o n in conj unction therewith or in relation thereto,

providing fOf any matter hc may deem expedient including the

creation and exercise of rights by or for the benefit of the public

and the imposition of duties and obligations on the holders of a

licence o r persons responsible fo r the management or

administration thereof;

(c) establish schemes or make anangcmcnts for the

compensation of investors in case'! where the bolder of an

investment services licence or a collective in vestment scheme

licence. or the holders of an investment services licence in

relation to such a scheme. are unable to SIIlisfy claims in respect

of any civil liability incurred by them in connection with the

investment service provided by them or wi th a scheme a'!

aforesaid;

(d) define the cri teria for dctennining whether a

holding is an indirect holding fOf the purposes of dctennining

whether a qualifying sharcholding exists;

(c) regulate the promotion or saJe by or on behalf of

any person, and by any means. of an investment service or of 11.

collective investment scbeme or of any instrument, including the

criteria and procedures for the granting or refusing of consent

by the competent authori ty purs uant to the provisio ns of section

II of this Act;

amend the provisions of section 18 of this Act on

(I)

the circumstances in which au4itors are obliged to conununicate

information to the competent authority, to prescribe rules

governing the disclosure by auditors of information pursuant to

sec:tion 18 and to establish supervisory and disciplinary

procedures for auditors in respect of their duties under the

provisions of .section 18 of this Act;

exempt any person, service, instrol1'lent. collective

(g)

invesunent scbel1'le, or advertisel1'lent from anyone or more of

the provisions of this Act and on such conditions as may be

prescribed;

prescribe anything that is to be or which may be

(h)

prescribed;

(i) provide for any matter incidental to or connected

with any of the above.

(2) Rules or regulations made under this .section may

also contain provision for enabling a person who has entered, or

offered to enter, into an investment agreement with the holder of I!.

licence to rescind the agreement or withdraw the offer within such

period and in such manner as may be prescribed, and in particular,

but Without prejudice to the generality of the foregoing, may make

provision-

(a) for requiring lhe service of notice with respect 10

the rights exercisable undcr the roles or regulations;

for the restitution of propeny and the making or

(b)

recovery of payments where those rights are exereised;

(c) for such other matters as are incidental to or

connected with any of the above.

(3) Rules or regulations made under this section, may

be made subject to such exemptioos or conditions as may be

specified therein, may make different provision for different cases,

circumstances or purposes and may give to the competent authority

such powers of adaptalion of the rules or regulations as may also be

so specified.

(4) Rules or regular.ions made under this section may

impose punishments or other penalties in respect of any

contravention or failure of compliance not exceeding a fine (mu/ta)

of forty thousand liri or imprisonnEnt for a tenn not exceeding one

year, or both such fme aDd imprisonment.

(I)

The competent authorilY may. by notice in writing, Pnweral

competeM

(i) any person who is or was providing, or who

appears 10 be or 10 h.a\'e been providing, an investment

service; or

a coUective investment scheme; or

(il)

any person who is or was canying on. or who

(ill)

appears 10 be or have been carrying on activities in

connection with such a scheme; or

(iv) any person who has issued. or appears 10 have

issued an advertisement falling within the provisions of

subsection (I) of section 11 of thls ACI; or

(v) any olher person who appears to be in possession

of relevant information,

10 do all or any of the following

(a) 10 furnish to the compelent authority, al such time

and place and in such fonn as it may specify, such information

and documentation as il may require with respect 10 any such

service, scheme or advenisemenl as aforesaid;

to furnish 10 the compelenl authority any

(b)

infonnation or documentation aforesaid verified in such manner

as it may specify;

(c)

10 attcnd before the competent authority, or before

a person appointed by it, al such time and place as it may

specify. to an swer questions and provide information and

documen ultion with respect 10 any such 5c:rvice, scheme or

advertisement as aforesaid.

(2) The competent authority may take copies of any

documents furnished or provided under this section.

(3) ~ the person required 10 provide infonnarion

or documentation under this section does nO( have the relevant

infonnation or doc umentation. he shall disclose to the competent

authority where, 10 the best of his knowledge. that informntion or

documentation is. and the competent authority may require any

person, whether indicated as aforesaid or nOC. who appears 10 it to

be in possession of that information or documentalion, to provide

it.

(4) A stateme nt made and documentation provided in

pursuance of any requirement under this section may be used in

evidence against the person making the stalemcnt or providing the

doc umentation as well as against any person 10 whom they relate.

(S)

The provisions of this section shall not upply 10

information or documentation which is privileged in acconI.ance

with the provisions of subsection ( I) of section 642 of the Criminal

Code.

(6) Tbe power to require the production of

documentlllion under the provisions of Ihis section shall be without

prejudice to any lien or charge claimed by any person in re lation to

such documentation .

(7) Where the competent authority has appointed a

person under paragraph (c) of subsection ( I) of this seclion. suc h

person shall. for the purposes of carrying out his functions under his

appoi ntment. have al l the powers conferred on the competen t

authority by this section and a requirement made by him shall be

deemed to be and have the same force and effect as a requirement

o hlle competent authority.

(I ) 1be competent authority may, whenever it deems Appoinlmml of

it necessary or expedienl., appoint an inspector or inspectors to ;o· l"' tt ....

investigate and repon on the affairs of any persons or scheme

referred to in paragraphs (i) to (iv) of subsection (I) of section 13

oflhis Ad.

An inspector appointed under subsection (I) of

(2)

this section·

(a) may also, if he lhinks it nl"('C'Ssary or expedient for

the purposes of that investigalion, investigate the affairs of any

person or scheme mentioned in subsecti on ( 1) of this section;

(b) shall have and may exercise all the powers

conferred on the competent authority by section 13 of lhis Act,

and any requirement made by him shall be deemed to be and

have the same force and effect as a requirement of the

competent authori ty;

(c) may, and if so directed by the competent authority

shall, make interim reports and on the conclusion of his

investigalion shall make a fmal repon to the said authority.

(3) 1lle competent authority shall have power to order

that all expenses of, and incidental to, an in vestigation pursuant to

this section be paid by the persons or scheme concerned.

I S. ( 1) Without prejudice to any of the powers conferred Pow<r!o issu.

on it by sections 13 and 14 of this Act. the competent authori lY dim:tives.

may. whenever it deems it necessary, and whethe r upon a repon by

an inspector appointed under section 14 of this Act or nOI. give. by

notice in writing. such directives as it may deem appropriate in the

circumstances; and any person or scheme as is referred to in

subsection ( 1) of section 13 of thi s Act to whom or to which the

notice is given shall obey. comply with and othel"Nise gi ve effe<:t to

any such directive within the time and in the manner stated in the

directive or further directive.

(2 ) Without prej udice to the generality of the

foregoing provisions of this section, a directive under thi s sec tion

""y-

(a) requi re anything to be done or be omitted to be

done, or impose any prohibition, restri ction or limitation, or any

other req uirement. and confer powers, with respect 10 any

lraIIsaction or othe r act, or 10 any assets, or to My other thi ng

whatsoever;

(b) require a collective investment scheme and the

manager of such a scheme, or his equivalent, and any other

person who may issue. redeem. sell or purchase units in the

scheme, 10 cease the issue, redemption, sale. or purchase of

un its or all or any combination of those activities, as may be

specified in the dimctive or further directive;

(c) require that any person having functions in relation

to the holder of a licence be removed or removed and rep laced

by another person acceptable to the competent authority;

(d) require a collective investment scheme or its

directors and shareho lders, or the manager or trustee or

custodian of a scheme, or their equivalent, 10 wind il lip by such

date and in accordance with such procedure and other

provisions as may be specified in the directive or further

directive.

(c) require a lioence holder to cease operations and to

wind up ils affaiB. in accordance with such procedures and

directions as may be spedlicd in the directive. whic h may

provide for tile appointment of a person to take possession and

conuol of all documents. records. assets and property belonging

10 or in lhe possession or control of the licence holde r.

(3) The power to give directives under this se<:ti on

s hall include the power to vary. alter. add to or withdraw My

directive. as well as the power to iss ue new or further directives.

(4) Where the competent authority is satisfied that the

circumstances so warrant. it may at any time make publie nny

directive it has given under My of the prov isions of thi s sectio n.

( 1) Any officer, employee or agent of the competent Ri&b! ol"etltr)',

authority, on producing, if req uired, evidence of his authority, may

e ntcr premises occupied by a person OD whom a ooLice has been

served under section 13 of this Act or whose affairs are being

investi gated under section 14 of this Act, for the purpose of

obtaining there the information or documents required by that

notice, or otherwise for the purpose of the investigation. and of

exercising any nfttle powers conferred by the said sections.

Where any officer, employee or agent of the

(2)

competent authori ty has reasonable cause 10 believe that if such

notice as is referred 10 in subsection ( I) o f this section were served

il would not be complied with or that any docume nts to which it

could relate wou ld be removed, tampered with or destroyed , such

person may. o n producing, if required, evidence of his autho rity,

enter any premises referred to in subsection (1 ) of this section for

the purpose of obtaining there any infonnation or documents

specified in the authority. being information o r documents that

could have been required under such notice as is referred to in

subsection ( I) of this section.

(3) Fo r the purposes of any action taken under the

provis ions o f this section. the competent authority may request the

assistance of the Commissioner of Police. who may for s uch

purpose exercise such powers as are vested in him for the

prevention of offences and the e nforcement of law and order.

CO-OPERATION WITH OVERSEAS REGULATORY

AUTHORITY

( l) The compete nt authority may exercise the Powe"

following powers at the req uest o f or for the purposes of assisting • ..,dllbl •.

an overseas regu lato ry a uthorilY

(a) the power to impose, revoke or vary conditions

on the grant o f a licence pursuant to the provis ions of

subsection (2) of section 6 o( this Act;

(b) the power to cancel o r suspend a licence under

subsection ( I) of section 7 o(t his Act;

(c)

the powers o f inquiry under section 13 o f this Act;

(d ) the power to appoint inspectors under section 14

of this Ac t;

the powers of intervention under section 15 of this

(e)

the powers ofenuy under section 16 of this Act;

(I)

(g) the power to commu nicate to the overseas

regulatory a uthority infonnation whic h is in the possession of

the competent authority, whether or 1l()( as a result of the

exercise of any of the above powers.

(2) The competent authority shall not e xercise powers

by virtue of this section unless it is satisfied that the a<lsistance is

requested -by the overseas regulatory authority only for the

pu rposes of the exercise of one or more of its regu latory functi ons.

(3) In deciding whether to exercise its powers by

virtue of Ihis section, the competent authority shall take into

account, in partic ular-

(a) whether comsponding assistance: wou ld be given

in that counuy or territory to the co mpetent authority;

(b) whether the case concerns the possible breach of a

law, or othe r requirement. which has no close parallel in Malta

or involves the assertion of a jurisdiction not recognised by

Mal ta;

(c) the seriousness of the case and its importance in

Malta and whether the assistance could be obtained by other

means;

(d) whether it is o therwise a ppropriate in the public

interest to give the ass istance sought.

(4) The competent authority may decline to exercise

powers under this section unless the o verseas regulru:ory authority

undertakes to make such contribution towards the costs of their

exercise a<lthe co mpetent authority considers appropriate.

DJ.ITY OF AUDITORS

(I) An auditor of the bolder ofa Iiceoceshall havc the AudiIor'JclutylD

duty to report immediately 10 the competent authori ty any fact of "'pM.

which he becomes aware in his capacity as auditor of such licence

holder which-

is likely 10 lead to a serious quaJirK:ation or refusal

(a)

o f the auditor's rcpon on the acoounts of such lkence holder, or

(b)

gravely impam the licence holder's ability 10

continue as a going concern ; or

(c)

relates 10 any other matter which may be

prescribed.

(2) No du ly (incl uding the. dUlY of professional

SeCidY) to which an aud itor of the holder of a licence may be

subject, shall be regarded as contravened by reason of his

commun icating in good faith to the competent authority. whether

or not in resporu;e to a request from it, any information or opinion

on a maUer of which the audi tor has become aware in IUs capacity

as audilOr of Ihat licence ho lder and which is relevant 10 any

functions of the co mpctenl authority under the provisions of this

Act or is required 10 be communicated by vin ue of subsection ( I)

of this section.

(3)

The matters prescri bed for the purposes of

paragrnph (c) of subsection ( I ) of this section may incl ude matters

related to persons other than the licence holder.

APPEALS. REMELHES. SANCfIONS AND

CONFIDENTIALITY

( I) In Ihis section. !he "Financial Services Tribunal" Appeal ..

means the Tribunal established in te rms of section 10 of the

Banking Act. and "Tribunal" shall be construed accordingly; and the

provisions of section 10 of the Banking Act shall. except in 50 far

as any of them is incompatible with the provisions of this section.

apply to appeals made 10 the Financial Services Tribunal under !his

Act.

(2) Subject to the provisions of this section, an appeal

shall lie to the Tribunal with respect to

<a)

any deemed refusal of a licence under subscctioo

(6) of section 6 of this Act

(b) any refusal, variation, cancellation or suspension

of a lice nce under subsecti on (3) of section 8 oflhis Act;

(c) any decision or deemed decision under subsection

(5)of scction IOof lhisAct

(d) any decision concerning an advertisement under

section 11 of this Act;

(e)

any directive given under section IS of this Act; or

(I) any decision 10 make a public statement., under the

proVIS IOns of section 25 of this Act, as 10 a person's

misconduct.

An appeal under this sectio n shall lie only on any

(3)

of the following grounds:-

(a) that the com petent authority has wrongly applied

any nrtlle provisions of this Act: or

(b)

that the decision or directive of the competent

au thority constitutes an abuse of discretion and is manifestly

unfai r, but the discretion o f the compete nt authority may no[. so

loog as it has been exercised properly, be queri ed by the

Tribunal

Provided that u!'On application by a person who shows

that he is the person concerned by a deemed refusal under

subsection (6) of section 6 or a deemed decision under subsection

(5) of section 10, the Tribunal may order that the co mpetent

authorily give written reasons for its deemed re fusal or deemed

dedsion as the case may be, within ten days of the making of such

order, or within such longer period as the Tribunal may think fit,

and such written reasons shall be the object of the appeal having

regard to the provisions of parJ.graphs (a) and (b) of this

s ubsectio n,

(4) An appeal made under this section shall not

suspend the o peration of any decisioo o r directive from whic h the

appeal is made

Provided that a decision to cancel a licence s hall not

become operati ve until the ex piration of the period within which an

appeal lies under this section and, if an appeal is made within such

period, the decision shall become operati ve on the date of the

decision of the Tribunal dismissing the appeal or the date o n which

the appeal is abandoned

Provided further that a decision to iss ue Il s tatement as

to a perso n's misconduct s hal l no t be published until expiration of

the period within whic h an appeal lies under this section and , if an

appeal is made within such period, the statement shall nOl be

published before the date of the decision of the Tribunal dismissing

the a ppeal o r the date o n which the a ppeal is abandoned,

An invesunent agreement which is cntcred into -

(a) by a person in the course of providing an

investment service in conlra\'cntion of the provisions of section

3 of this Ac t: o r

(b) by the hol dcr of an investment services licence or

by an exempted person in conseq uence of anything said or done

by a person in the course of providing an investment service in

contravention of the proviS ions of se<:tion 3 of this Act,

s hall be unenforceable against the othe r party: and s uc h o ther party

s hall be e ntitled to recover any money paid, or o ther propeny

transferred by him unde r the agreement, o r where such propeny

canno t be so recovered, s uch party shall be e ntitl ed to have it

replaced by its value at the lime of !he agreement, together with

compensation for .. y loss sustained by him in consequence of such

payment or transfer or the non-m;overy of the property transferred

and any profits that may have accrued as a result of that money or

other property having been tnlnSf .. rred by him

Provided that where on demand for a recovery under

thi s section, the court is satisfied that·

in a case falling under paragraph Ca) of this

(i)

section, the person therein mentioned reasonabl y

believed he was not conrravening the provisions of the

said section 3: or

in a case falling under paragraph (b) of this

(ii)

secti on, the licence holder or exempted person neither

blew nor ought 10 have known that the agreemen t was

ente~ into as mentioned in that paragraph.

it may allow an investment agreement to which this section applies

to be enfOfl.'lCd and the money or property paid or transfelTtd

thereunder 10 be retained.

(1) If, on an application by the compete nt authority

made to the Commercial Court, the said court is satisfied -

(a) Ih ul there is reaso nable likelihood that a pcrlion

will contnlvene any of the provisions of sections 3, 4 or I I of

this Act or of any rules and regulalions made under il. or will

conlT3\'ene or fail 10 comply wilh any condilion. obligalion.

requirement. directive. or order made or given under any or lhe

provisions of this ACI; or

(b) that a person has contravened any SLlch provision

or has contravened or failcd 10 comply with any sLlch condition,

obligation. requirement. directive. or order and that 5tcpS could

be taken 10 remt.-dy the contra\'ention or failure.

the court may give such orders as it may deem appropriate to

restrain the contravention or, as the case may be, to require the

person refened to in paragraph (a) or (b) of this subsection, or any

other person who appears to the court to have been knowingly

concerned in the conlfaventiOD, to take such steps as the court may

direct.

(2) If, on an application made under subsection (I ) of

this section, the court is satisfied that a person has entered into any

transaction in contravention of any of the provisions of sections 3, 4

or 11 of this Act, the cou rt may order that person and any other

person who appears to the cou rt to have been knowingly concerned

in the contmvention 10 take such steps as the court may direct for

restoring the parties 10 the position in which they were before the

transaction was entered into.

(3) If, on an application made under subsection <I) of

Ihis sectio n, the court is further satisfied that -

(a)

profits have accrued to any person as a result of

the contravention; or

(b) an investor has suffered loss or been otherwise

adversely affected as a result of that contravention,

the coun may order the person responsible for the contravention to

pay into coun such sum as appears to it to be just having regard to

the extent of the profit, loss or adverse effect as aforesaid, and

order such sum 10 be paid out as the cou n may direct to the

persons who have entered into transactions as a result of which

profits ha\'e accrued or losses or adverse effects have been suffered

as aforesaid.

(4) For the purposes of this section the COlln may

order the production by any person of such accounts and the

provis ion of such infonnation, and verified in such manner, as the

coon may dee m appropriate.

(5) The provisions of this section shall be without

prejudice 10 any right of any aggrieved person to bring proceedings

directly in respect of any right such person may otherwise have

independently of the co mpetent authority.

(I) Any perso n who contravenes or fails 10 comply

with any of the provisions of sections 3, 4, 9, 10, 11 . 13, 15, or 26

of this Act or of section 13 as applied by section 14 or of sections

13, 14 or IS as applied by se<:tion 17. or of any court order made

under section 21 or of any rules or regulations made under sections

12 or 31 of this Act, or contravenes or fails 10 comply with any

condition, obligation. rtquirement., directive o r order made or given

under any of the provisions of this Act, shall be guilly of an offence.

Any person who r~ the purposes of, or pursuant

(2)

10, any of the provisions of this Act or of any roles or regulations

made thereunder, or any condition, obligation. requirement,

directive or order made or given as afOfeSaid, furnishes infonnation

or makes a statement which he knows to be: inllCc urate, false or

misleading in any material respecl, or recklessly fumishcs

information or makes a statement whk:h is inaccurate, false or

misleading in an y malerial respect. shall be guilty of an offence.

(3) Any person who is knowi ngly a party to the

carrying on of any investment service or of any activity by a

collective investment Sl.::heme with a fraudu lent intent o r fo r a

fraud ulent purpose. shall be guilty of an offence.

(4) Any person who by any statement. promise o r

fo recast which he kno ws to be mi sleadi ng. fal se: o r deceptive. or by

any dishonest concealment of material facts, or by the reckless

making (whether dis honest or otherwise) of any statement. promise

o r forecast wh ich is misleading. false o r deceptive. induces o r

alle mplS to induce another person to enter into o r offer 10 e nter

into an in vestment agreement, s hal l be g uilty of an o ffence.

(5) Any person who with intent to avoid detecti o n of

the conunission of an offence unde r this Act removes. destroys.

conceals or fraudule ntly alters an y book, document o r o ther paper.

s hal l be guilty of an offence.

(6) Any person who intentionally obstructs a person

exercising ri ghts confelled by this Act shall be g uilty of an offence .

A person gui lty of an offence under the provisions of PeDllliu.

section 22 of this Act shall be liable on conviction to a fme ( mu/ta)

not exceeding two hundred thousand liri or to a renn of

imprisonment not exceeding four years, or to both suc h fme and

imprisonment. unless such fine or tenn of imprisonment is

otherwise imposed unde r s ubsecti on (4) of secti on 12 of this Act.

(I) No proceedings for an offence under this Act shall Crimin.ol

be cO!llll"lenced without the consent of the Attorney General .

pn><e<du.p.

(2) The provisions of this Ac t shall not affect any

criminal proceedings that may be competent un de r any other law.

( I ) If it appears to the competent authority that a Pll.bliclW< .... nt.

person who holds or who held a licence has contravened any of the to.~·1

provisions of thi s Act or of any rules and regulations made under

this Act o r has conlravened or failed to comply with any conditio n,

o bligation. requirement. directive o r o rde r made o r given unde r any

of the prov isions of this Act. the competent authority may publish a

statement to that effect.

(2) Before publishing a statement under subsection ( I)

of this section, the competent authority shall give the person

concerned written notice of the proposed statement and of the

reasons fo r w hich it is proposed to act.

(3) Where the reasons stated In the notice relate

specificall )' to matters which·

(a) re fe r to a person identified in the nafice ot he r than

the pe rson who is the s ubject of the no tice: and

(b) are in the opi nion of the competent authority

prejudicial to that person in any office Of e mployment.

the competent a uthority shall, un less it co nsiders it impracticable to

do so, serve a co py of the notice o n that othe r person .

(4) A notice served o n a person pursuant to the

provisions of this section shall give particulars of the person's right

of appeal under section 19 and of the prov isions of s ubsection (5)

of th is sectio n.

(S) Subject to the proVISIonS of subseClion (4) of

section 19, upon expiry of. one month from the date of service of

the notice under subsection (2), o r a copy of the notice under

subsection (3) of this section, whic hever was the late r, the

competent aulhority may publish the proposed Slatement and , alter

publication, shal.l send a copy to that person and to any person o n

whom a copy of the notice was served under subsection (3) of this

sectio n.

(6) Nothing in thi s section shall restrict o r otherwise

prej udice the powers of the competen t authority uDder subsection

(4) o f section 15 of th is Act.

( I) Subject to the provisions of subsection (2) of this

section , information obtained by any person for the purposes of, or

pursuant to , any of the provisions of this Act, or of any rules or

regulations made thereunder, or in the discharge of MY functions

under any of the said provisions, or from an overseas regulatory

authori ty, shall be treated as confidential and protected by the duty

of professional secrecy, and shall nOI be disclosed to any other

person, not being a person who may lawfuUy obtain that

information for the purposes o f, or pursuant to, the provisions of

this Act, except with the conse nt of the person from whom he

o btained the infomaatio n. provided the infonnation relates solely to

that person.

(2) The provisions of s ubsection (I) of thi s section

s hal l not preclude the disclosure of informatio n -

(a) with a view to the institution of, or otherwise for

the purposes of, criminal proceedi ngs o r o f any proceedin gs by

the competent autho rity before an y co un unde r th is Act

(b) with a view to e nabling o r a..s isting the competent

authori ty in the performance o r disc harge of any o f its functio ns

unde r this Act;

(c) which has been made avai lab le to the public by

vinue of being disclosed o n any ci reu msttmce:s in which, o r for

an y purpose fo r which, di sclo~u re is no t precluded by this

section;

(d) in a summary Of collcction of informatio n formed

in such a way as nOl to enable the identity of any person to

whom the info rmation relates to be ascertained;

(e) to an a udi tor where the co mpetcnt authority

considers that such disclosure would ass ist the a ud itor in the

exercise of his functions under section 18 of this Act;

(t) in s uc h circ umstances and under such conditions

as may be prescribed;

(g) in response 10 a requesl from. o r fo r the purpose

of assisting, an overseas regulatory authority pursuant to

sectio n 17 of this Act, provided that

(i)

the competent aut ho rit y is satis fied th at the

overseas regu latory authority is s ubject to a duty of

professional SCCiecy which is at least equivalent to the

duty of professional semey to which the competent

authority is s ubject under the laws o f Malta; and

(u) the com petent authority obtains an unde rtaking in

writing from the overseas regUlatory authority that it

will use tile information only for the purposes for which

it was requested and will keep such information

confidential and will no t communicate it to anyone who

is not emplo yed by the overseas regulatory a uthority and

who is not s ubject to a du ty of professional secrecy in

respect of the said information

(h) to the Co uncil of the Malta Stoc k. Exchange and

the Central Bank. of Mal ta, where the co mpete nt a uthority

considers that such disclosure would assist the Council and the

Ba llk. in the exercise of their respecti\'e functions .

MISCELLANEOUS

Any member. officer or employee o f the competent E..elll$""'or

authori ty. and any other person appoilllcd to perform a function IiJltitll)'.

under this Ac t, or under any ru les or regUlatio ns made thereunder.

shall not be liable in damages for anything done o r omitted 10 be

done in the discharge or purported discharge of MY functioos under

this Act, or any rules or reguJations aforesaid. unless the act or

omission is shown 10 have been done or omitted to be done in bad

faith.

A notice or other document to be given or served under

this Act, or any rules or regulations made thereunder, shall be

deemed 10 have been duly given or served on a person if-

it has been deli vered to him; o r

(a)

(b) it has been left al the address fumi shed by him to

the competent authority, or to his last known address; or

(c) if it has been sent to him by post or by tclefax at

any of the aforesaid addresses; or

(d) in the case of a body of persons, whether

corporate or unincorporate. or of a scheme or of a llUst, if it has

been given or served in any of the manners aforesaid 10 o r o n a

secretary, clerk, manager, trustee or their equivalent, or [0 any

member ohlle governing body Of an appointed representative.

The EJI;change Control Act shall not apply to

transactions carried o ut by licence holders (o r by the companies or

tru sts of such licence holders as are collective investment schemes)

with persons not resident in Malta fo r the purposes of th e said Act

Provided th at a licence holder who is nOI resident in

Malta for the purposes of th e said Ac t shall be exempt from the

provisions of the said Act wi th respect 10 any stcps which may be

takcn as provi ded in subsectio n (3) of section 4 of th is Act. o r for

the purposes oft hc establishment of the li cence holdcr in Malta.

(I) Expatriate officers and employees of any licence

holder and Ihc licence holdcr s hall be eJl;cmpt from the provis ions of

the Social Security Act, ir. respect of re'lluncrati on paid or

attributcd [0 such officcrs and employces by thc licence ho lder for

services rendcred cJl;clus ivcly in a managcrial capacity o r in a

function requiring special expenise whic h is not generally available

in Malta.

(2)

In order to obtain the eJl:emplion provided for by

subsection (1) of this section, the licence holder shall apply to the

Department for Social Security identifying the officers and

emplo~ concerned together with such proof as the department

may require that the conditions of that subsection are satisfied.

Personal belongings and effects of an eJl:pauiate

(3)

officct or employee of a licence bolder imponed by him into Malta,

DOt later than six months Crom his fllSl. taking up residence. shall be

ellempt from cuscoms duty

Provided that duty shall become payable on anything

imported free of duty and subsequently sold, assigned or otherwise

tr.msferred 10 a person resident in Malta.

Furniture, equipment and other material required

(4)

by a licence bolder and imported into Malta for its own use and

purpose shall be exempt from customs duty

Provided that duty shall become payable on anything

imported free of duty and subsequently sold, assigned or otherwise.

tr.msferred to a person resident in Malta.

For the purposes of this section. "eltpatriate"

(S)

means an individual who is not a national of Malls., who has bcc:n

posted to Malta from abroad or recruited dir«:tly from abroad in

order to be employed by a licence holder, whose mission in Malta is

of a temponu)' nature and wbo has maintained lhe centre of his

economic interests outside Mal ta.

The Minister, acting on the advice of the competent Mlllis\et'.powa 10

authority. may by rules or Itgulalions make transitional provisions make trant;l;o.",1

for those persons who. on the dale of the coming into force of this __ ,.menu..

Act. were providing an invc:stmenl service or were in existence as a

collective in\"estment scheme and, without prejudice 10 the

generality of the foregoing. may. by such rules or regulalions, in

panicular,

(a) prescribe a period within which such persons must

apply for a licence under this Act

(b) allow such person 10 continue providing such

investment service 10 the extent of the service then provided

until such time as an invesunenl services licence is granted 10

him or refused or until expiry of the deadline provided in the

rules or regulations. whichever is the shorter period, and on

condition that such person has applied for an investment

services licence in accordance with the provisions of this Act

within the period referred 10 in parngraph (a) of this section;

(c) allow such person to continue C3IT)'ing on the

activities of a collective investment scheme. including the issue

or creation of units. to the ex tent of the activities then carried

on until such ti me as a collective investment scheme licence is

granted 10 him or refused or until expiry of the deadline

provided in the rules or regulations, whichever is the shone r

period. and on condition thal such person has applied for an

investment services licence in accordance with the provisions of

this Act within the period re ferred to in paragraph (a) of this

section.

1be enactments specified in the first eolumn o f the Third

Schedule [0 this Act shall have effect s ubjeclto the amendments set

out against them in the second column of that Schedule.

SCHEDULES