ACT No. IV of 2005 AN ACT to Prevent Financial Markets Abuse BE IT enacted by the President, by and with the advice and consent of the House of Representatives, in this present Parliament assembled, and by the authority of the same, as follows>-

I assent.

(L.S.)

E DWARD F ENECH A DAMI

President

22nd March, 2005

ACT No. IV of 2005

AN ACT to Prevent Financial Markets Abuse

BE IT enacted by the President, by and with the advice and consent

of the House of Representatives, in this present Parliament assembled,

and by the authority of the same, as follows>-

PART I

PRELIMINARY

(1) The short title of this Act is the Prevention of Financial Short title and

coming into force.

Markets Abuse Act, 2005.

(2) The provisions of this Act shall come into force on such

date as the Minister responsible for finance may, by notice in the

Government Gazette, appoint, and different dates may be so appointed

for different purposes thereof.

(1) In this Act, unless the context otherwise requires -

Interpretation.

“accepted market practices” means practices that are

reasonably expected in one or more financial markets and are

accepted by the competent authority in accordance with guidelines

adopted by the Commission in accordance with the procedure laid

down in article 17 (2) of the Market Abuse Directive<

“Commission Regulation (EC) No 2273#2003” means

Commission Regulation (EC) No 2273#2003 of 22nd December,

2003, implementing the Market Abuse Directive as regards

exemptions for buy-back programmes and stabilisation of financial

instruments<

“the Community” means the European Community

established by the Treaty of Rome in 1957 and amended

institutionally and otherwise in 1986 by the Single European Act,

in 1993 by the Treaty on European Union, in 1997 by the Treaty

of Amsterdam and in 2001 by the Treaty of Nice, and as amended

by accession agreements and as may be further amended from time

to time<

“company” means any company, statutory body or other entity

which issues financial instruments<

“the competent authority” means the Malta Financial Services

Authority established by the Malta Financial Services Authority

Act as appointed in terms of article 2 of the Financial Markets Act

and article 2A of the Investment Services Act<

“counsel or procure” includes entice, encourage, advise,

induce or recommend, and their grammatical derivatives shall be

construed accordingly<

“credit institution” shall mean any person as defined in article

1(1) of Directive 2000#12#EC of the European Parliament and of

the Council as amended from time to time<

“EEA State” means any State which is a contracting party to

the agreement on the European Economic Area signed at Oporto

on the 2nd May, 1992 as adjusted by the Protocol signed at Brussels

on 17th March, 1993 and as amended by any subsequent acts<

“financial instruments” shall have the meaning assigned to it

in article 2 of the Financial Markets Act<

“foreign authority” means the single administrative authority

appointed by any Member State or EEA State other than Malta, to

ensure that the provisions adopted pursuant to the Market Abuse

Directive are applied<

“implementing measures” means any European Union acts,

regulations or directives implementing the Market Abuse Directive

and as amended from time to time, including Commission Directive

2003#124#EC of 22nd December, 2003, Commission Directive

2003#125#EC of 22nd December, 2003, Commission Regulation

(EC) No 2273#2003 of 22nd December, 2003 and Commission

Directive 2004#72#EC of 29th April, 2004<

“inside information” means information of a precise nature

which has not been made public, relating, directly or indirectly, to

one or more issuers or to one or more financial instruments,

including information regarding any takeover offer for a company,

and which, if it were made public, would be likely to have a

significant effect on the prices of those financial instruments or on

the price of related derivative financial instruments< being

information which a reasonable investor would be likely to use as

part of the basis of his investment decisions.

For the purposes of this definition, information shall be

deemed to be of a precise nature if it indicates a set of circumstances

which exists or may reasonably be expected to come into existence

or an event which has occurred or may reasonably be expected to

do so and if it is specific enough to enable a conclusion to be drawn

as to the possible effect of that set of circumstances or event on the

prices of financial instruments or related derivative financial

instruments< for persons charged with the execution of orders

concerning financial instruments, inside information shall also

mean information conveyed by a client and related to the client’s

pending orders, which is of a precise nature, which relates directly

or indirectly to one or more issuer or to one or more financial

instruments, and which, if it were made public, would be likely to

have a significant effect on the prices of those financial instruments

or on the price of related derivative financial instruments< being

information which a reasonable investor would be likely to use as

part of the basis of his investment decisions<

“investment firm” shall have the same meaning as that

assigned to it in article 1(2) of Council Directive 93#22#EEC of the

10th May, 1993 on investment services in the securities field<

“Investment Services Directive” means Council Directive

93#22#EEC of the 10th May, 1993 on investment services in the

securities field as amended from time to time and as superseded

by Directive 2004#39#EC of the European Parliament and of the

Council of the 21st April, 2004 on markets in financial instruments<

“issuer” means any person who issues one or more financial

instruments<

“Listing Authority” means the Listing Authority in terms of

article 2 of the Financial Markets Act<

“market abuse” means both the prohibited use of inside

information and the practice of market manipulation<

“Market Abuse Directive” means Directive 2003#6#EC of the

European Parliament and of the Council of 28th January, 2003 on

insider dealing and market manipulation and includes any

implementing measures issued thereunder<

“the Minister” means the Minister responsible for finance<

“Member State” means a Member State of the Community<

“person closely associated with a person discharging

managerial responsibilities within an issuer” means>-

(a) the spouse of the person discharging managerial

responsibilities, or any common law spouse or partner of that

person considered as equivalent to the spouse by the law of

that person’s domicile<

(b) dependent children of the person discharging

managerial responsibilities, according to the law of that

person’s domicile<

(c) other relatives of the person discharging managerial

responsibilities, who have shared the same household as that

person for at least one year on the date of the transaction

concerned< or

(d) any legal person, trust or partnership, whose

managerial responsibilities are discharged by a person referred

to in (a), (b) and (c)< or by a person discharging managerial

responsibilities within an issuer< or which is directly or

indirectly controlled by such a person, or that is set up for the

benefit of such a person, or whose economic interests are

substantially equivalent to those of such person<

“person discharging managerial responsibilities within an

issuer” means a person who is>

(a) a member of the administrative, management or

supervisory bodies of the issuer< or

(b) a senior executive, who is not a member of the

bodies as referred to in paragraph (a), having regular access

to inside information relating, directly or indirectly, to the

issuer, and the power to make managerial decisions affecting

the future developments and business prospects of the issuer<

“person professionally arranging transactions” means an

investment firm or a credit institution<

“public employee” means -

(a)

a public officer<

(b) a member, officer or employee of the Malta

Financial Services Authority or the Central Bank of Malta<

“recognised investment exchange” means a person in respect

of whom the competent authority has issued a recognition order in

terms of article 4 of the Financial Markets Act”<

“regulated market” means>

(a) in the case of Malta, a recognised investment

exchange which appears on the list of regulated markets

prepared and published by the European Commission in terms

of the Investment Services Directive< or

(b) in the case of any other Member State or EEA State,

any entity which appears on the list of regulated markets

prepared and published by the European Commission in terms

of the Investment Services Directive<

“share” has the same meaning in relation to companies not

incorporated under the Companies Act as it has in relation to Cap. 386.

companies so incorporated<

“takeover offer for a company” means an offer made>

(a) to all the holders of the shares in the company to

acquire those shares or a specified proportion of them<

(b) to all the holders, other than the person making the

offer and his nominees, of the shares in the company to acquire

those shares or a specified proportion of them<

(c) to all the holders of a particular class of those shares

going to acquire the shares of that class or a specified

proportion of them< or

(d) to all the holders, other than the person making the

offer and his nominees, of a particular class of those shares to

acquire the shares of that class or a specified proportion of

them<

“Tribunal” means the Financial Services Tribunal established

in terms of article 21 of the Malta Financial Services Act.

(2) In this Act and in any regulations or rules made

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

texts, the English text shall prevail.

(3) Save where the context otherwise requires, words and

expressions used in this Act shall have the same meaning and the same

interpretation as the meanings and interpretations given to those words

and expressions in the Companies Act.

PART II

GENERAL PROVISIONS

The purpose of this Act is to safeguard the integrity of Maltese

and Community financial markets and to enhance investor confidence

in those markets. For this object, this Act transposes and implements

the Market Abuse Directive and its Implementing Measures, and

consequently this Act and any regulations adopted thereunder, shall be

interpreted and applied accordingly.

(1) The provisions of this Act shall apply to financial

instruments admitted to trading on a regulated market in Malta or in

any other Member State or EEA State or for which a request for

admission to trading on such a market has been made. The fact that the

transaction itself does not take place on such regulated market or

constitutes an off-exchange deal in terms of the Off-Exchange Trading

Regulations, 2004 shall not exclude the applicability of this Act to such

transaction.

(2) Article 6 of this Act shall also apply to any financial

instrument not admitted to trading on a regulated market in Malta or

any other Member State, but whose value depends on a financial

instrument as referred to in sub-article (1) hereof.

(3) The provisions of this Act shall not apply to transactions

carried out in pursuit of monetary, exchange-rate or public debt-

management policy by Malta, by the European System of Central Banks,

by officers or employees of the Central Bank of Malta, or by any other

officially designated body, or by any person acting on their behalf.

(4) The provisions of this Act shall not be deemed to prohibit

an individual from doing anything for the purposes of stabilising the

back” programmes provided it is done in accordance with Commission

Regulation (EC) No 2273#2003 implementing article 8 of the Market

Abuse Directive.

(5) The provisions of article 9 shall not apply to any issuer

who has not requested or approved admission of his financial instruments

to trading on a regulated market in Malta or in any other Member State

or EEA State.

The prohibitions and requirements laid down in this Act shall Jurisdiction.

apply to acts carried out>-

(a) by any person in Malta or outside Malta concerning

financial instruments that are admitted to trading on a regulated

market in Malta, including admission to a recognised investment

exchange situated or operating in Malta or for which a request for

admission to trading on such market in Malta has been made< or

(b) by any person in Malta concerning financial instruments

that are admitted to trading on a regulated market in any other

Member State or EEA State or for which a request for admission

to trading on such market has been made.

PART III

MARKET ABUSE AND PREVENTIVE MEASURES

(1) No person shall use inside information to trade in any Prohibited use of

financial instrument admitted to a regulated market or in any other way inside information.

to acquire or dispose of, or attempt to acquire or dispose of such financial

instrument, whether for his own account or for the account of a third

party, either directly or indirectly, if he is in possession of information

related to such financial instrument by virtue of >

(a) his membership of the administrative, management or

supervisory bodies of the issuer<

(b) his holding in the capital of the issuer<

(c) his having access to the information through the exercise

of his employment, profession or duties< or

(d) his criminal activities.

(2) Any person who possesses inside information by virtue

of any of the reasons listed in sub-article (1) (a) to (d) shall be prohibited

from>

(a) disclosing inside information to any other person unless

such disclosure is made in the normal course of the exercise of his

employment, profession or duties, whether or not he knows or has

reasonable cause to believe that such person or any other person

will make use of the information for the purpose of dealing<

(b) recommending or inducing another person, on the basis

of inside information, to acquire or dispose of financial instruments

to which that information relates<

(c) counselling or procuring any other person to deal, on a

regulated market in those financial instruments.

(3) The prohibitions of sub-articles (1) and (2) shall also

apply to an individual who is in possession of inside information even

if this is not derived by virtue of any of the circumstances listed in sub-

article (1) (a) to (d), in the event that such individual obtained or received

such information directly or indirectly, from another person where the

individual knew that he was receiving inside information or had

reasonable cause to believe or ought reasonably to have known that he

was receiving inside information.

(4) Where the person referred to in sub-article (1) is a legal

person, the prohibition laid down in that sub-article shall also apply to

the natural persons who take part in the decision to carry out the

transaction for the account of the legal person concerned.

(5) This article shall not apply to transactions conducted in

the discharge of an obligation that has become due to acquire or dispose

of financial instruments where that obligation results from an agreement

such as an agreement granting a share option concluded before the person

concerned possessed inside information.

(6) In relation to derivatives on commodities, inside

information shall mean information of a precise nature which has not

been made public, relating, directly or indirectly, to one or more such

derivatives and which users of markets on which such derivatives are

traded would expect to receive in accordance with accepted market

practices on those markets. Users of markets on which derivatives on

commodities are traded, are deemed to expect to receive information

relating, directly or indirectly, to one or more such derivatives which is

routinely made available to the users of those markets or required to be

disclosed in accordance with legal or regulatory provisions, market rules,

contracts or customs on the relevant underlying commodity market or

commodity derivatives market.

(7) The provisions of this article shall also apply to>

(a) any public employee or former public employee who

holds inside information by virtue of his position or former position

as a public employee< or

(b) any person who directly or indirectly obtained or

received information from a public employee or former public

employee who he knows or has reasonable cause to believe held

the information by virtue of any such position.

Public institutions officially disseminating statistics liable to Fair disclosure.

have a significant effect on financial markets, shall disseminate them in

a fair and transparent way.

(1) No person shall manipulate a regulated market by Market

manipulation.

disseminating false, exaggerated or misleading information, spreading

false rumours, or putting into effect simulated or artificial operations or

transactions or orders as provided for in this article.

(2) A person shall be deemed to have committed market

manipulation if he is responsible for >

(a)

transactions or orders to trade>-

(i) which give, or are likely to give, false or misleading

signals as to the supply of, demand for or price of financial

instruments< or

(ii) which secure, by a person, or persons acting in

collaboration, the price of one or several financial instruments

at an abnormal or artificial level>

Provided that no market manipulation shall be deemed

to have been committed where the person who entered into

the transactions or issued the orders to trade establishes that

his reasons for so doing are legitimate and that these

transactions or orders to trade conform to accepted market

practices on the regulated market concerned<

(b) transactions or orders to trade which employ

fictitious devices or any other form of deception or

contrivance<

(c) dissemination of information through the media,

including the Internet, or by any other means, which gives,

or is likely to give, false or misleading signals as to financial

instruments, including the dissemination of rumours and false

or misleading news, where the person who made the

dissemination knew, or ought to have known, that the

information was false or misleading.

(3) Without prejudice to the generality of sub-article (2)

above, the following conduct shall be deemed to amount to market

manipulation>

(a) conduct by a person, or persons acting in collaboration,

to secure a dominant position over the supply of or demand for a

financial instrument which has the effect of fixing, directly or

indirectly, purchase or sale prices or creating other unfair trading

conditions<

(b) the buying or selling of financial instruments at the close

of the market with the effect of misleading investors acting on the

basis of closing prices<

(c) taking advantage of occasional or regular access to the

traditional or electronic media by voicing an opinion about a

financial instrument, or indirectly about its issuer, while having

previously taken positions on that financial instrument and profiting

subsequently from the impact of the opinions voiced on the price

of that instrument, without having simultaneously disclosed that

conflict of interest to the public in a proper and effective way< or

(d) engaging in any activity so as to otherwise manipulate

the financial instruments market by the employment of artificial

devices, fictitious transaction or other deceptive or manipulative

conduct including new patterns of activity which may arise from

time to time that in practice constitute market manipulation.

(1) An issuer shall be obliged to inform the general public

of inside information which directly concerns the said issuer.

(2) An issuer may delay public disclosure of inside

information at his own responsibility such as not to prejudice his

legitimate interests and related obligations.

(3) Whenever an issuer, or a person acting on his behalf or

for his account, discloses any inside information to any third party in

the normal exercise of his employment, profession or duties he must

make complete and effective public disclosure of that information,

simultaneously in the case of an intentional disclosure and promptly in

the case of a non-intentional disclosure>

Provided that the provisions of this sub-article shall not apply

if the person receiving the information owes a duty of confidentiality,

irrespective of whether such duty is provided for by law or arises from

articles of association or a contract.

(4) Issuers or persons acting on their behalf or for their

account shall draw up a list of those persons working for them, under a

contract of employment or otherwise, who have access to inside

information. Issuers and persons acting on their behalf or for their

account shall regularly update this list and transmit it to the competent

authority whenever the latter requests it.

Any person discharging managerial responsibilities within Duties of persons

with managerial

an issuer of financial instruments and, where applicable, persons closely responsibilities

associated with them, shall notify to the competent authority the within issuer and

persons closely

existence of transactions conducted on their own account relating to associated to them.

shares of the said issuer or to derivatives or other financial instruments

linked to them.

Any person professionally arranging transactions in financial Duties of

investment firms

instruments who has a reasonable suspicion that a transaction might and credit

constitute the prohibited use of inside information or market institutions.

manipulation, shall be obliged to notify the competent authority without

delay.

Any person who produces or disseminates research Duties of

concerning financial instruments or issuers of financial instruments and journalists,

researchers and

any person who produces or disseminates other information disseminators of

recommending or suggesting investment strategy, intended for financial

recommendations.

distribution channels or for the public, shall take reasonable care to

ensure that such information is fairly presented and shall disclose his

interests or indicate conflicts of interest concerning the financial

instruments to which that information relates.

(1) Without prejudice to any other functions of the Investigations into

competent authority under this Act or any other law, the competent market abuse.

authority shall have the function of monitoring any regulated market in

Malta and of detecting instances of market abuse.

(2) Where the competent authority suspects that

circumstances may exist to indicate that the conduct of a person amounts

to market abuse, it shall in terms of its powers under this Part, cause an

investigation to be carried out with the purpose of determining whether

or not the said behaviour amounts to market abuse.

(3) A foreign authority may request that the competent

authority carry an investigation in Malta and may further request that

its officials be allowed to accompany the officials of the competent

authority during the course of the investigation.

(4) The competent authority may refuse to act on a request

made in pursuance of sub-article (3) hereof only where>

(a) such an investigation might adversely affect the

sovereignty, security or public policy of Malta<

(b) judicial proceedings have already been initiated in

respect of the same actions and against the same person before the

Courts of Malta< or

(c) a final judgment has already been delivered by the Courts

of Malta in relation to such person for the same actions in Malta.

In any of the cases above-mentioned, the competent authority shall

notify the requesting foreign authority accordingly, providing

information, as detailed as possible, on those proceedings or judgment.

(5) Upon receipt of a request in terms of sub-article (3), the

investigation shall be subject to the overall control of the competent

authority and be subject to the provisions of this Act and the laws of

(1) Without prejudice to any powers of the competent

authority arising under any other law, in the exercise of its functions

under this Act the competent authority shall have the power to have

access to any documentation in any form whatsoever and to receive a

copy of it and to demand the aforesaid documentation from any person,

including>

(a) any person who is or was carrying on, or who appears

to be or to have been carrying on a transaction or activity regulated

or prohibited by any of the provisions of this Act<

(b) any other person who appears to be in possession of

relevant information or documentation< or

(c) any persons who are successively involved in the

transmission of orders or conduct of the operations concerned, as

well as their principals.

(2) The competent authority may, by notice in writing,

require any person referred to in sub-article (1)>

(a) to furnish to the competent authority, at such time and

place and in such form as it may specify, such documentation as it

may require including existing telephone and existing data traffic

records< and

(b) to furnish to the competent authority any aforesaid

documentation verified in such manner as it may specify.

In both of the above cases, the person addressed shall comply with

the request of the competent authority promptly by providing the

competent authority with any documentation in his possession.

(3) The competent authority may take copies of any

documentation furnished or provided to it or to which it has access

under this article.

(4) Where the person required to provide documentation

under this article does not have the relevant documentation, he shall be

obliged to promptly disclose to the competent authority where, to the

best of his knowledge, that documentation may be found and the

competent authority may require any person, whether indicated as

aforesaid or not, who appears to it to be in possession of it to provide

such documentation.

(5) Any person requested to provide information by virtue

of sub-article (2), in particular the directors and managers, by whatever

name designated, or any other persons who are or have been in charge

of the operations or activities at issue shall assist and shall promptly

collaborate with the competent authority in order to enable it to discharge

its functions, and shall collate and transmit without any undue delay

such information as the competent authority may reasonably request

from time to time.

(1) Without prejudice to any powers of the competent Power to demand

authority arising under any other law, in the exercise of its functions information

assistance and to

and powers under this Act the competent authority shall have the power summon persons for

to demand information in any form whatsoever and to receive a written hearing.

statement of it and to demand by notice in writing the aforesaid

information promptly from any person. In particular, the competent

authority may require any person referred to in sub-article (1) of article

14>

(a) to furnish to the competent authority, at such time and

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

may require<

(b) to furnish to the competent authority any information in

the form of a written statement or any information verified in such

manner as it may specify<

(c) to attend before the competent authority, or before a

person appointed by it as an inspector in terms of article 16, at

such time and place as it may specify, to answer questions and

provide information and documentation< and

(d) to give the competent authority any assistance which it

may require and which that person is reasonably able to give.

(2) Any person requested to provide information by virtue

of sub-article (1), in particular the directors and managers, by whatever

name designated, or any other persons who are or have been in charge

of the operations or activities at issue shall assist and shall promptly

collaborate with the competent authority in order to enable it to discharge

its functions, and shall collate and transmit without any undue delay

such information as the competent authority may reasonably request

from time to time.

(3) Where the person required to provide information under

this article does not have the requested or relevant information, he shall

promptly disclose to the competent authority where, to the best of his

knowledge, that information may be found and the competent authority

may require any person, whether indicated as aforesaid or not, who

may be in possession of it to provide such information.

(1) (a) Without prejudice to any powers of the competent

authority arising under any other law, in the exercise of its powers under

this Act, the competent authority may either act directly or it may act

indirectly by appointing an inspector or inspectors being any officer or

employee of the competent authority or any other person whom the

competent authority deems competent for this purpose to investigate

and report on the affairs of any person whose affairs or actions are

being investigated in relation to a possible breach of this Act.

(b) When appointing an inspector the competent authority

may direct that the investigation shall be carried out within such time

and shall be confined to such specific or general matters as the competent

authority may deem fit.

(2) In the exercise of his functions, an inspector upon

producing, if required, evidence of his authority shall have the power>-

(a) to investigate the affairs of any person mentioned in

articles 14 and 15 if he thinks it necessary or expedient for the

purposes of an investigation under this Act<

(b) to exercise all the powers, conferred on the competent

authority by articles 14 and 15<

(c) to carry out on-site inspections and to have reasonable

access and entry to the business premises, offices, documentation

and other information necessary or expedient for the purposes of

an investigation under this Act<

(d) to enter premises occupied by a person for the purpose

of obtaining there the information or documents required by the

notice in terms of articles 14 or 15, or otherwise for the purpose of

the investigation, and of exercising any of the powers conferred

by the said articles>

Provided that where the inspector has reasonable cause to

believe that if any notice as is referred to in articles 14 or 15 were

served it would not be complied with or that any documents to which it

could relate would be removed, tampered with or destroyed, the inspector

may enter any premises referred to in sub-article (2) for the purpose of

obtaining there any information or documents that could have been

required under such notice referred to in articles 14 or 15.

(3) An inspector appointed in terms of this article shall>

(a) have the power to make interim reports and on the

conclusion of his investigation he shall make a final report to the

competent authority if so directed by the competent authority< and

(b) be subject to professional secrecy.

(4) Where the competent authority has appointed a person

as inspector under this article, such person shall, for the purposes of

carrying out his functions under his appointment, have all the powers

conferred on the competent authority by this article and a requirement

made by him shall be deemed to be and shall have the same force and

effect as a requirement of the competent authority.

(5) For the purposes of any action taken under the provisions

of this article, the competent authority may request the assistance of the

Commissioner of Police, who may for such purpose exercise such

powers as are vested in him by law in relation to the investigation of

criminal offences.

(6) In the event that it results that the investigated person

may have been in breach of this Act, the competent authority shall have

power to order that all reasonable expenses incurred as a result of an

investigation pursuant to this article be paid by such person. Any such

order which shall be communicated to the person concerned by a notice

for payment shall>

(a)

be in writing< and

(b) require the addressed person to pay the expenses of and

incidental to the investigation before the end of such period being

not less than fourteen days from the date of service of the notice,

as may be specified in the notice>

Provided that any person who feels aggrieved by an order

served on him in terms of this sub-article may appeal to the Tribunal

against the decision of the competent authority in accordance with article

23 of this Act.

(1) Without prejudice to any powers of the competent

authority arising under any other law, in the exercise and for the purposes

of its functions under this Act and for the better implementation thereof,

the competent authority shall have the power to issue such orders by

notice in writing as it may deem appropriate and any person to whom

the order is given shall comply with and otherwise give effect to any

such order promptly or within the time and in the manner otherwise

stated in the order.

(2) An order by the competent authority under this article

may require anything to be done or be omitted to be done, or impose

any prohibition, restriction or limitation, or any other requirement, and

confer powers, with respect to any transaction or other act, or to any

assets, or to any other thing whatsoever. Without prejudice to the

generality of the aforesaid, an order may>

(a) require the cessation of any practice that is contrary to

the provisions of this Act, or of any rules or regulations issued

thereunder<

(b) require the suspension or discontinuance of trading of

the financial instruments concerned, including in particular a

suspension or discontinuance of trading in exercise of the powers

assigned to the competent authority by articles 17 and 18 of the

Financial Markets Act< and

(c) give effect to a temporary prohibition of professional

activity, in particular in the exercise of the powers assigned to the

competent authority by article 7 of the Investment Services Act as

applicable.

(3) The power to issue orders under this article shall include

the power to vary, alter, add to or withdraw any such order, as well as

the power to issue new or further orders.

(4) Where under any of the provisions of any order issued

pursuant to this article, a person is prohibited from carrying out any act,

he shall be prohibited from doing any such act directly or indirectly,

and whether personally or through the use of intermediation of another

person.

(5) For the better information of the public, where the

competent authority is satisfied that the circumstances so warrant, it

may at any time>-

(a) make public any order it has given under any of the

provisions of this article< and, or

(b) issue a public statement regarding any matter falling

within its functions or powers under this Act.

(6) A person who feels aggrieved by an order served on

him in terms of this article may appeal to the Tribunal against the decision

of the competent authority in accordance with article 23 of this Act.

(1) Where, in the course of an investigation conducted Attachment orders.

pursuant to this Act, the Attorney General has upon information received

from the competent authority reasonable cause to suspect that a person

(hereinafter referred to as “the suspect”) may be responsible for a breach

of this Act, the Attorney General may apply to the Criminal Court for

an order (hereinafter referred to as an “attachment order”)>

(a) attaching in the hands of such persons (hereinafter

referred to as “the garnishees”) as are mentioned in the application

all moneys and other movable property due or pertaining or

belonging to the suspect<

(b) requiring the garnishee to declare in writing to the

Attorney General, not later than twenty-four hours from the time

of service of the order, the nature and source of all money and

other movable property so attached< and

(c) prohibiting the suspect from transferring or otherwise

disposing of any movable or immovable property.

(2) Before making an attachment order, the Criminal Court

may require hearing the Attorney General in chambers and shall not

make such order unless it concurs with the Attorney General that there

is reasonable cause as provided in sub-article (1).

(3) The provisions of paragraphs (a), (b) and (e) of sub-

article (1) of article 381 and of sub-article (1) of article 382 of the Code

of Organization and Civil Procedure shall, mutatis mutandis, apply to Cap. 12.

the attachment order.

(4) An attachment order shall be served on the garnishee

and on the suspect by an officer of the Executive Police not below the

rank of inspector.

(5) An attachment order shall, unless it is revoked earlier

by the Attorney General by notice in writing served on the suspect and

on the garnishee in the manner provided for in sub-article (4), cease to

be operative on the expiration of thirty days from the date on which it is

made< and the court shall not make another attachment order with respect

to that suspect unless it is satisfied that substantially new information

with regard to the breach of this Act is available>

Provided that the said period of thirty days shall be held in

abeyance for such time as the suspect is away from Malta and the

Attorney General informs of this fact the garnishee by notice in writing

served in the manner provided for in sub-article (4).

(6) In the course of any investigation of an offence in terms

of article 24 of this Act the Executive Police may request to hear on

oath any person who they believe may have information regarding such

offence< and the Magistrate shall forthwith hear that person on oath.

(7) For the purpose of hearing on oath a person as provided

in sub-article (6) the magistrate shall have the same powers as are by

law vested in the Court of Magistrates (Malta) or the Court of Magistrates

(Gozo) as a court of criminal inquiry as well as the powers mentioned

in article 554 of the Criminal Code< provided that such hearing shall

always take place behind closed doors.

(1) (a) Where a person (hereinafter referred to as “the

person charged”) has been charged either criminally or administratively

with being in default of any provision of this Act and upon receiving a

request from the competent authority, the Attorney General may where

he deems it appropriate request that the Criminal Court issue a written

order to any person (hereinafter referred to as a “ freezing order”)>

(i) attaching in the hands of third parties all moneys and

other movable property due or pertaining to the person charged<

and

(ii) prohibiting the person charged from transferring,

pledging, hypothecating or otherwise disposing of any movable

or immovable property>

Provided that the Criminal Court shall in such order determine

what moneys may be paid to or received by the person charged during

the subsistence of such order, specifying the sources, manner and other

modalities of payment, including salary, wages, pension and social

security benefits payable to the person charged, to allow him and his

family a decent living in the amount, where the means permit, of six

thousand liri every year>

Provided further that the Criminal Court may also -

(i) authorise the payment of debts which are due by

the person charged to bona fide creditors and which were

contracted before such order was made< and

(ii) on good grounds authorise the person charged to

transfer movable or immovable property.

(b) Any addressee shall promptly comply with any written

order issued by the Criminal Court in accordance with the provisions of

this article with regard to such funds and assets.

(2) A freezing order shall -

(a) become operative and binding on all third parties

immediately it is made, and the Registrar of the Court shall cause

a notice thereof to be published without delay in the Gazette, and

shall also cause a copy thereof to be registered in the Public Registry

in respect of immovable property< and

(b) remain in force until the final determination of the

administrative or criminal proceedings against the person charged,

as the case may be.

(3) The Criminal Court may for particular circumstances

vary such freezing order, and the provisions of the foregoing sub-articles

shall apply to such order as so varied.

(4) To the extent possible, a freezing order shall contain

the name and surname of the person charged, his profession, trade or

other status, father’s name, mother’s name and maiden surname, place

of birth and place of residence and the number of his identity card or

other identification document, if any.

(5) Where any money is or becomes due to the person

charged from any person while such order is in force, such money shall,

unless otherwise directed in the freezing order, be deposited in a bank

to the credit of the person charged.

(6) When such freezing order ceases to be in force as

provided in sub-paragraph (b) of sub-article (2) hereof, the Registrar of

the Court shall cause a notice to that effect to be published in the Gazette,

and shall enter in the Public Registry a note of cancellation of the

registration of that order.

(7) The competent authority shall liaise with the Attorney

General on matters arising under this article and article 18 of this Act

and may, exchange information, subject to the obligation of professional

secrecy.

(1) For the purpose of securing compliance with this Act,

the competent authority may coordinate its efforts and exchange

information with and otherwise collaborate with>

(a) any body or authority formed or established under

Maltese law on matters in respect of which such body or authority

may have a regulatory, supervisory, judicial or licensing function

in terms of law, including in particular the Listing Authority within

the meaning of the Financial Markets Act and with the Registrar

of Companies<

(b) any authority, foreign authority or body carrying out

similar or equivalent functions or which has the responsibility to

monitor the market and to detect, prevent or prosecute acts related

to market abuse< and

(c) any other local or foreign supervisory, enforcement or

judicial authorities whose functions include the detection,

prevention or prosecution of acts related to market abuse.

(2) The competent authority shall exercise powers by virtue

of this article>

(a) for preventing, investigating or detecting activities which

amount or are likely to amount to market abuse under Maltese or

foreign law<

(b) where the assistance is requested by a foreign authority

for the purposes of the exercise of one or more of its regulatory

functions under the Market Abuse Directive<

(c) where so required within the terms of Malta’s

international commitments< or

(d) where so required within the terms of undertakings

assumed in bilateral or multilateral agreements for the exchange

of information and other forms of collaboration with overseas

regulatory authorities including a request arising under a

memorandum of understanding concluded with the competent

authority.

(3) Upon receipt of a request from a foreign authority for

the purpose of carrying out its duties in the investigation and detection

in terms of the Market Abuse Directive, the competent authority shall

immediately take the necessary measures in order to gather the

information required by the foreign authority. If the competent authority

is not able to supply the required information immediately, it shall notify

the requesting foreign authority of the reasons.

(4) The competent authority may refuse to act on a request

for information where>

(a) communication might adversely affect the sovereignty,

security or public policy of Malta<

(b) judicial proceedings have already been initiated in

respect of the same actions and against the same persons before

the courts of Malta< or

(c) where a final judgment has already been delivered in

relation to such persons for the same actions in Malta.

In any case above-mentioned, the competent authority shall notify

the requesting foreign authority accordingly, providing as detailed

information as possible on those proceedings or the judgment.

(5) Where the competent authority is convinced that acts

contrary to the provisions of the Market Abuse Directive are being, or

have been, carried out on the territory of another Member State or EEA

State, it shall give notice of that fact to the relevant foreign authority in

as specific a manner as possible.

(6) Any person, body or authority receiving information

exchanged pursuant to this article shall be subject the obligation of

professional secrecy. Without prejudice to the obligations to which they

are subject in judicial proceedings under criminal law, when the relevant

person, body or authority receives information pursuant to this article,

it may use it only for the exercise of its functions within the scope of

this Act and in the context of administrative or judicial proceedings

specifically related to the exercise of those functions>

Provided that where the foreign authority communicating

information consents thereto, the competent authority receiving the

information may use it for other purposes or forward it to any other

foreign authority.

(1) For the better carrying out of the provisions of this Act Power of competent

and to better implement the provisions of the Market Abuse Directive, authority

rules.

the competent authority may, from time to time, issue rules which shall

be binding on persons specified therein and such rules shall be published

in the Gazette.

(2) Without prejudice to the generality of sub-article (1)

hereof, with a view to ensuring compliance with paragraphs 1 to 5 of

Article 6 of the Market Abuse Directive, the competent authority may

issue rules and take all necessary measures to ensure the proper

dissemination of timely and correct information to the public.

(1) Where the competent authority is satisfied that a

person’s conduct amounts to a breach of any of the provisions of this

Act, regulations or rules issued thereunder, the competent authority may

by notice in writing and without recourse to a court hearing impose on

any such person an administrative sanction, consisting of a fine which

may not exceed forty thousand liri.

(2) A person upon whom a notice is served may apply to

the Tribunal to appeal against the decision of the competent authority

in accordance with article 23 of this Act.

(3) Upon the conclusion of any appeal proceedings in terms

of article 23 of this Act, or the lapse of time required to lodge such an

appeal, the competent authority may, by means of a public statement,

disclose the name of the person sanctioned, the particular breach of the

provision of this Act, regulations or rules issued thereunder, and the

administrative sanction imposed. The competent authority shall withhold

such public disclosure where it deems that such disclosure would

seriously jeopardise the financial markets or cause disproportionate

damage to the parties involved.

(4) Where a notice as referred to in sub-article (1) of this

article has not been appealed or, where such notice has been appealed

within fifteen days of the determination of such appeal, the

administrative sanction as contained in the notice or as varied by the

decision of the Tribunal shall be due to the competent authority and

upon the service of a copy of the notice or the decision as the case may

be, by means of a judicial act on the person indicated in the notice or

decision, the said notice or decision shall constitute an executive title in

favour of the competent authority for all effects and purposes of Title

VII of Part I of Book Second of the Code of Organization and Civil

Procedure.

(5) The imposition by the competent authority of an

administrative sanction in terms of this article shall be without prejudice

to any other consequences of the act or omission of the offender under

civil or criminal law>

Provided that in all cases where the competent authority

imposes an administrative sanction consisting of a fine in respect of

anything done or omitted to be done by any person and such act or

omission also constitutes a criminal offence, no proceedings may be

taken or continued against the said person in respect of such criminal

offence.

(1) The provisions of article 21 of the Malta Financial Appeals.

Services Authority Act shall apply mutatis mutandis to appeals that

may be brought before the Tribunal under this Act.

(2) An appeal shall lie to the Tribunal against any decision

or action taken by the competent authority with respect to>

(a)

any administrative sanction imposed under article 22<

or

(b) any order in writing issued in terms of sub-article (6) of

article 16 or in terms of article 17.

(1) Any person who contravenes or fails to comply with Offences,

any of the provisions of articles 6, 8, 14, 15, 16, 18 or 19 of this Act, punishments

remedies.

shall be guilty of an offence.

(2) Any person who for the purposes of, or pursuant to, any

of the provisions of this Act or of any rules or regulations made

thereunder, or any condition, obligation, requirement, directive or order

made or given as aforesaid, furnishes information or makes a statement

which he knows to be inaccurate, false or misleading in any material

respect, or recklessly furnishes information or makes a statement which

is inaccurate, false or misleading in any material respect, shall be guilty

of an offence.

(3) Any person who by any statement, promise or forecast

which he knows to be misleading, false or deceptive, or by any dishonest

concealment of material facts, or by the reckless making (whether

dishonest or otherwise) of any statement, promise or forecast which is

misleading, false or deceptive, induces or attempts to induce another

person to enter into or offer to trade in financial instruments shall be

guilty of an offence.

(4) Any person who with intent to avoid detection of the

commission of an offence under this Act removes, destroys, conceals

or fraudulently alters any book, document or other paper, shall be guilty

of an offence.

(5) A person found guilty of an offence under the provisions

of sub-articles (2) to (4) of this article or under the provisions of articles

6, 8, 14, 15 or 16 of this Act shall be liable on conviction to a fine

(multa) of not less than one thousand liri and not exceeding four hundred

thousand liri or up to three times the profit made or the loss avoided by

virtue of the offence, whichever is the greater, or to imprisonment for a

term not exceeding seven years or to both such fine and imprisonment.

(6) Any person who acts in contravention of an attachment

order mentioned in article 18 shall, on conviction, be liable to a fine

(multa) not exceeding five thousand liri or to imprisonment for a period

not exceeding twelve months or to both such fine and imprisonment>

Provided that where the offence consists in the payment or

delivery to any person by the garnishee of any moneys or other movable

property attached as provided in sub-paragraph (a) of sub-article (1) of

article 18 or in the transfer or disposal by the suspect of any movable or

immovable property in contravention of sub-paragraph (c) of sub-article

(1) of article 18, the fine shall always be at least twice the value of the

money or property in question.

(7) Any addressee of an order regarding the freezing of funds

who acts in contravention of a court order mentioned in article 19 shall

on conviction, be liable to a fine (multa) not exceeding five thousand

liri or to imprisonment for a period not exceeding twelve months, or to

both such fine and imprisonment, and any act so made in contravention

of such court order shall be null and without effect at law.

(8) A person whose actions are found to amount to market

abuse whether under criminal or administrative proceedings under this

Act shall be liable to pay compensation to any person suffering a loss

from such action in the amount as may be determined by the Tribunal.

(9) Any person suffering a loss as a consequence of a

transaction in relation to financial instruments, entered into with a person

whose actions have been determined as amounting to market abuse under

this Act, may apply for compensation, payable to him by the said person,

to the Tribunal. On such application, the Tribunal shall determine the

extent to which the applicant suffered a loss and the applicable amount

of compensation which is due to him>

Provided that an action for compensation shall be barred by

the lapse of two years from the date on which the administrative decision

or judgement finding that person liable to pay compensation has

committed market abuse has become final and conclusive>

Provided further that the right to claim compensation under

this sub-article shall not prejudice the rights of the person claiming

compensation under any other law.

(10) There shall be an appeal on questions of law only from

a decision of the Tribunal taken pursuant to this article to the Court of

Appeal (Inferior Jurisdiction).

(11) Where the Tribunal has determined an amount of

compensation to be paid in terms of sub-article (9) of this article and

where this decision has not been appealed or, where such decision has

been appealed within fifteen days of the determination of such appeal,

the compensation as determined in the decision of the Tribunal shall be

due and upon the service of a copy of notice of the decision by means

of a judicial act on the person indicated in the decision, the decision

shall constitute an executive title for all effects and purposes of Title

VII of Part I of Book Second of the Code of Organization and Civil Cap. 12.

Procedure.

(1) The Minister may, acting on the advice of the competent Minister’s

make regulations.

authority, make regulations for the purposes of prescribing the price

stabilisation operations permitted by this Act, and such regulations may Cap. 370.

be prescribed for particular categories of financial instruments or dealers,

and different regulations may be prescribed for different categories of

financial instruments or dealers.

(2) The Minister may, acting on the advice of the competent

authority, make regulations to better implement the provisions of this

Act and to better transpose the Market Abuse Directive and any

implementing measures. In particular the Minister may prescribe

regulations under this Act to better regulate or define> -

(a) the duties of issuers of financial instruments, in terms

of article 9 of this Act and the relevant implementing measures<

(b) the duties of persons with managerial responsibilities

within an issuer and persons closely associated to them, in terms

of article 10 of this Act and the relevant implementing measures<

(c) the duties of persons professionally arranging

transactions in financial instruments in terms of article 11 of this

Act and the relevant implementing measures<

(d) the duties of fair presentation of financial information

and the indication of conflicts of interests in terms of article 12 of

this Act and the relevant implementing measures<

(e) the proper application of the prohibition of market

manipulation in terms of article 8 of this Act and acceptable market

practices and manipulative behaviour in terms of the relevant

implementing measures< and

(f) the imposition of administrative penalties by the

competent authority in terms of article 22 of this Act.

(3) Regulations made under this article may establish

offences and may impose administrative sanctions or other

administrative measures in respect of any contravention thereof or failure

of compliance therewith, not exceeding>

(a) in the case of a criminal infringement, a fine (multa) of

forty thousand liri or imprisonment for a term not exceeding one

year, or both such fine and imprisonment, as the case may be< or

(b) in the case of an administrative infringement, a fine of

forty thousand liri.

(4) Regulations made under this article may also provide

for the assignment of power and authority to the competent authority in

order to enable it to ensure that the provisions of the regulations are

properly implemented.

PART V

MISCELLANEOUS PROVISIONS

No transaction shall be deemed to be void or voidable by

reason only that it was entered into in contravention of the provisions

of this Act.

Rules and regulations made under this Act and any

amendment or revocation of such rules and regulations, may be

published in the English language only.

No proceedings for an offence under this Act shall be

commenced without the consent of the Attorney General.

(1) The Insider Dealing and Market Abuse Offences Act

is hereby repealed without prejudice to anything done or which may be

done under that Act.

(2) Subject to sub-article (1) hereof, unless the context

otherwise requires, any reference to the Insider Dealing and Market

Abuse Offences Act used in any law, regulation, rule or other document

before the coming into force of this Act, shall be deemed to be a reference

to this Act.

The Financial Markets Act, hereinafter in this article referred

to as “the principal Act”, shall be amended as follows>-

(1) (a) Any reference to “securities”, other than as used

in the term “central securities depositary”, wherever used in the

principal Act or in any regulation issued thereunder before the

coming into force of this Act, shall be substituted by the word

“financial instruments”.

(b) Any reference to “securities” other than as used in

the term “central securities depositary”, in any guideline, directive,

rule, licence, approval, authorization, appointment, notice, decision

or any other act made or issued under the principal Act before the

coming into force of this Act, shall be read and interpreted as

referring to “financial instruments”<

(2) Article 2 of the principal Act shall be amended as Amendment of

article 2 of the

follows>

principal Act.

(a) for the definition of “central securities depository” there

shall be substituted the following>

“ “central securities depository” means the depository

or register for financial instruments established in accordance

with regulations governing the authorization, operations,

functions and supervision of the depository or register as may

be made by the Minister acting on the advice of the competent

authority, which regulations may also provide for transitional

arrangements<”

(b) for the definition of “market abuse” there shall be

substituted the following>

“ “market abuse” means conduct amounting to the

prohibited use of inside information or market manipulation

in terms of the Prevention of Market Abuse Act.”<

(c) for the definition of “securities” there shall be substituted

the following -

“ “securities” means >-

(a) shares or stock in companies and other

securities equivalent to shares in companies<

(b) bonds, debentures and other forms of

securitised debt which are negotiable on the capital

market< and

(c) any other securities normally dealt in giving

the right to acquire any such transferable securities by

subscription or exchange or giving rise to a cash

settlement excluding instruments of payment< and

(d) immediately after the definition “Exchange”,

there shall be inserted the following new definition -

“financial instruments” means any of the

following instruments issued or to be issued by a

commercial partnership, a corporate body

established by law, the Government of Malta or

other issuers>-

(a)

securities<

(b) units in collective investment

undertakings or schemes as defined in the

Investment Services Act<

(c) money-market instruments, including

those classes of instruments which are normally

dealt in on the money market, such as treasury bills,

certificates of deposit and commercial papers and

excluding instruments of payment<

(d) derivatives including>

(i) futures and foreign exchange

contracts entered into for investment purposes

or foreign exchange acquired or held for

investment purposes, including equivalent

cash-settled instruments<

(ii) rights under a contract for

differences or under any other contract the

purpose or intended purpose of which is to

secure a profit or avoid a loss by reference to

fluctuations in the value or price of property

of any description or in an index or other factor

designated for that purpose in the contract<

(iii) options to acquire or dispose of

any instrument falling into these categories,

including equivalent cash-settled instruments,

specifically including options on currency and

on interest-rates< and

(iv)

derivatives on commodities<

(e) warrants, certificates or other instruments,

including any record whether or not in the form of a

document, entitling the holder to subscribe for, acquire,

sell or otherwise dispose of, underwrite or convert any

instrument or an interest in any instrument falling within

this definition or for any currency<

(f) certificates or other instruments which confer

property rights in respect of any instrument falling within

this definition<

(g) financial instrument as defined by Directive

2003#6#EC of the European Parliament and of the

Council of 28 January 2003 on Insider Dealing and

Market Manipulation (market abuse) including, inter alia,

any other instrument admitted to trading on a regulated

market in a State to which the said Directive applies or

for which a request for admission to trading on such a

market has been made in terms of the aforesaid

Directive.”<

(3) Article 3 of the principal Act shall be amended as Amendment of

article 3 of the

principal Act.

(a) the present paragraph (i) shall be re-numbered as

paragraph (j)<

(b) immediately after paragraph (h) there shall be

inserted a new paragraph (i) as follows>-

“(i) exemptions from the requirement for a

recognition order under sub-article (1) of article 4 of the

Act which may be subject to such variations, additions,

adaptations and modifications as may be prescribed and

which may be subject to such conditions or other

requirements, including other forms of authorisation and

notification procedures, as may be prescribed.”< and

(c) For the marginal note there shall be substituted the

following>

“Minister’s power to issue regulations.”<

(4) For article 36 of the principal Act there shall be Amendment of

article 36 of the

substituted the following>-

principal Act.

“36. Where the Exchange or any recognised investment

exchange suspects that there may exist circumstances to

indicate that any violation of the provisions of the Prevention

of Financial Markets Abuse Act may have been committed,

is being committed or is likely in the circumstances to be

committed, it shall without undue delay report such suspicion

to the competent authority.”< and

(5) Article 2 of the Schedule to the principal Act shall be

amended as follows>

(a) for the definition “securities”, there shall be

substituted by the following>–

“ “securities” shall have the meaning assigned to it

in Article 2 of the Act.” < and

(b) immediately after the definition “Committee”, there

shall be inserted the following new definition -

“ “financial instruments” shall have the meaning

assigned to it in article 2 of the Act.”.

Passed by the House of Representatives at Sitting No. 250 of 16th March,

2005. A NTON T ABONE

Speaker

R ICHARD J. C AUCHI

Clerk to the House of Representatives

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press