ATT Nru. V ta’ l-2006 ACT No. V of 2006 ATT ma]ru[ b’li[i mill-Parlament ta’ AN ACT enacted by the Parliament of Malta.

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 17,907, 11 ta’ April, 2006

Taqsima A

MALTA

ATT Nru. V ta’ l-2006

ACT No. V of 2006

ATT ma]ru[ b’li[i mill-Parlament ta’

AN ACT enacted by the Parliament of

Malta.

Malta.

ATT biex jipprovdi dwar securitisation,

AN ACT to provide for securitisation, to

biex jirregola l-li[ijiet e\istenti

regulate existing laws in support of

f ’sostenn tas-securitisation u biex

securitisation and to introduce new

jintrodu`i regoli [odda dwar il-

rules on securitisation vehicles.

mezzi tas-securitisation.

E DWARD F ENECH A DAMI

(L.S.)

President

11th April, 2006

ACT No. V of 2006

AN ACT to provide for securitisation, to regulate existing laws in support

of securitisation and to introduce new rules on securitisation

vehicles.

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

GENERAL

(1) The short title of this Act is the Securitisation Act, 2006. Short title and

commencement.

(2) This Act shall come into force on such date as the

Minister responsible for finance may by notice in the Gazette appoint,

and different dates may be so appointed for different provisions and

different purposes of this Act.

In this Act, unless the context otherwise requires>-

Interpretation.

“the competent authority” means the body appointed by Order

of the Minister to be published in the Gazette, to carry out the

functions of the competent authority under this Act and to perform

such other functions as the Minister may consider appropriate in

relation to the operation of this Act<

“financial instruments” has the same meaning assigned to it

by the Financial Markets Act<

“investment company” means an investment company with

fixed share capital or an investment company with variable share

capital, which respective terms shall have the same meaning

respectively assigned to them in the Companies Act<

“the Minister” means the Minister responsible for finance<

“originator” or “assignor” means a person, including

Government or any Local Council, who>

(a) transfers by any means securitisation assets to a

securitisation vehicle, or

(b) enters into any arrangement with a securitisation

vehicle for the purpose of transferring any risk in whole or in

part to the securitisation vehicle, or

(c) obtains a loan or other facility from a securitisation

vehicle, such loan or facility being secured directly or

indirectly over securitisation assets, and the term originator

or assignor shall also include all its subsidiary undertakings

or affiliates<

“receivable” means a right to receive payment of a monetary

sum whatsoever, including a right to receive payment of future

undetermined sums from debtors who are not yet determined<

“risks” means any risks whatsoever, including those arising

from any rights relating to assets, whether movable or immovable,

tangible or intangible, future or existing, risks resulting from any

obligations or activities of third parties and risks arising from any

event or circumstance<

“securities” has the same meaning assigned to it by the

Financial Markets Act<

“securitisation” means a transaction or an arrangement

whereby a securitisation vehicle, directly or indirectly>

(a) acquires securitisation assets from an originator

by any means, or

(b) assumes any risks from an originator by any means,

or

(c) grants secured loan or other secured facility or

facilities to an originator,

and finances any or all of the above, directly or indirectly, in whole

or in part, through the issue of financial instruments, and includes

any preparatory acts carried out in connection with the above<

“securitisation asset” means any asset, whether existing or

future, whether movable or immovable, and whether tangible or

intangible, and where the context so allows, includes risks<

“securitisation creditors” means all creditors or classes of

creditors of a securitisation vehicle, in relation to a securitisation

transaction, whose credit is secured by any means whatsoever,

whether by security collateral or title transfer collateral, including,

without prejudice to the generality of the foregoing, the originator,

any person holding one or more financial instruments issued by

the securitisation vehicle, other than a shareholder of the

securitisation vehicle, if applicable, any lender, hedge counterparty,

liquidity provider and credit support provider of the securitisation

vehicle and any trustee acting on any of their behalf<

“securitisation vehicle” means a vehicle as referred to in article

3<

“security collateral” means collateral provided by a collateral

provider by way of security in favour of, or to, a collateral taker,

and where the full ownership of the collateral remains with the

collateral provider, when the security right is established<

“title transfer collateral” means collateral provided by a

collateral provider, including by repurchase agreements and

assignments by way of security, whereby the collateral provider

transfers full ownership of the collateral to a collateral taker for

the purpose of securing or otherwise covering the performance of

any obligation<

“underlying debtor” means, where applicable, a person whose

obligation towards an originator has been the object of a

securitisation transaction<

“writing” shall have the same meaning assigned to it in the

Interpretation Act and shall include facsimile transmissions and

electronic mail communications.

PART II

SECURITISATION VEHICLES

(1) A securitisation vehicle may be>

(a)

a company, including an investment company<

(b) a commercial partnership<

(c)

a trust created by a written instrument< or

(d) any other legal structure which the competent authority

may, by notice, permit to be used for a securitisation transaction,

established under the laws of Malta or those of a jurisdiction recognised

by the competent authority.

(2) When a securitisation vehicle is established under this

Act>

(a) the objects and purposes of such vehicle shall be limited

to such matters which are necessary to carry out all or any

transactions intended or required to implement or participate in a

securitisation transaction and all related and ancillary acts

including, without limitation, the acquisition, management and

collection of credits and other receivables or other securitisation

assets, the assumption of risks, the granting of secured loans, the

issue of financial instruments or the borrowing of funds to finance

the acquisition of assets or assumption of risks, the engagement of

service providers to administer or support its activities and the

entering into derivative instruments< and

(b) its constitutive document shall state expressly that it is

a vehicle established subject to the provisions of this Act.

(1) A securitisation transaction may take place through the

use of more than one securitisation vehicle, whether established under

the laws of Malta or otherwise, and the provisions of this Act shall be

construed accordingly.

(2) Securitisation vehicles established under this Act may

not carry on any trade or business, other than that relating or ancillary

to the securitisation transaction.

Notwithstanding the provisions of any other law, and Securitisation

whatever the nature of the securitisation assets acquired or risks assumed vehicle

to obtain any

by the securitisation vehicle, the securitisation vehicle shall not be licence.

required to obtain any licence, permit or authorisation other than as

provided in this Act or in regulations made under the same Act and in

particular, but without limitation to the generality of the foregoing, shall

not require any licence under the Investment Services Act, the Banking (Cap. 370)

Act, the Financial Institutions Act, and the Insurance Business Act. (Cap. 371)

The issuing and offering of financial instruments by a securitisation (Cap. 376)

vehicle shall however still continue to be governed by the relevant

(Cap. 403)

provisions of the Companies Act and the Investment Services Act>

Provided that nothing contained in this article shall affect any of

the provisions of the Income Tax Acts.

Securitisation vehicles shall not be considered to be collective Securitisation

vehicles not be

investment schemes as defined in the Investment Services Act>

considered as

collective

investment

Provided that the competent authority may designate by notice

schemes.

that certain categories of securitisation vehicles shall be collective

investment schemes, and in such a case the competent authority may

determine the extent to which the provisions of the Investment Services

Act, shall apply to the said categories of securitisation vehicles.

No proceedings taken in relation to the originator under the Securitisation

Companies Act, or any other law, including any dissolution and winding- vehicle

independent from

up proceedings, any company recovery procedure, any company originator.

reconstruction and any proceedings affecting creditors’ rights generally

shall have any effect on>

(a)

the securitisation vehicle<

(b) any securitisation assets acquired or risks assumed by

the securitisation vehicle, as well as any cashflow or other asset of

the securitised vehicle<

(c) any payments due by the underlying debtors in

connection with the securitised assets.

(1) The securitisation vehicle may delegate the management

responsibility for the day to day administration of the securitisation

duties and functions

vehicle or of the assets or risks thereof, including the collection of any

claims, to any third party, including the originator.

(2) When such administration has been delegated by the

securitisation vehicle to the originator, the latter shall not require any

licence from or other recognition by the competent authority under any

applicable law.

(3) Unless the agreement between the securitisation vehicle

and such person specifically provides otherwise, the person delegated

with such administration shall be obliged to segregate such assets from

his own and those of other customers. Such segregation shall clearly

identify the receivables or securitisation assets which belong to the

securitisation vehicle and such person shall keep detailed records of all

assets received and disposed of.

(4) Any assets held by any such third party for a

securitisation vehicle shall be considered as being held on trust by such

third party for the benefit of the securitisation vehicle.

PART III

THE TRANSFER OF SECURITISATION ASSETS

(1) The originator and the securitisation vehicle shall be at

securitisation assets.

liberty to select any method of transferring the securitisation assets,

including, without limitation, by novation, sale, assignment and

declaration of trust.

(2) Subject to the other provisions of this Act, such transfer

of securitisation assets from an originator to a securitisation vehicle

shall be valid and enforceable in accordance with its terms and with

this Act and shall not be subject to re-characterisation for any reason

whatsoever.

(3) The provisions set out in this Act shall apply mutatis

mutandis to all transfers made by an originator to a securitisation vehicle

or securitisation creditors, as well as to all transfers made by a

securitisation vehicle to other securitisation vehicles or securitisation

creditors.

(1) When a securitisation asset is assigned to a securitisation

vehicle in accordance with this Act, such assignment shall be treated as

final, absolute and binding on the originator, the securitisation vehicle

and on all third parties and such assignment shall not be>

(a) subject to annulment, rescission, revocation or

termination, variation or abatement by any person and for any

reason whatsoever<

(b) subject to any rights of the creditors of the originator

for any reason whatsoever<

(c) subject to any rights of a liquidator, provisional

administrator, receiver, curator, controller, special controller of

the originator or other similar officer of the originator for any reason

whatsoever.

(2) The provisions of subarticle (1) hereof shall apply

notwithstanding any underlying contractual or statutory prohibition or

restriction on the originator to assign in whole or in part the securitisation

asset to any third party. The Minister, acting on the advice of the

competent authority, may by notice declare types of contracts to which

this provision shall not apply.

(3) The provisions of subarticles (1) and (2) hereof shall

not apply>

(a) when there is fraud on the part of the securitisation

vehicle, or

(b) in respect of any assignment entered into at a time at

which the securitisation vehicle knew or ought to have known that

an application for the dissolution and winding up of the originator

by reason of insolvency was pending, or that the originator had

taken formal steps under any applicable law to bring about its

dissolution and winding up by reason of insolvency>

Provided that, unless the securitisation vehicle had actual

knowledge of such matter, for the purposes of subarticle (3)(b)

hereof, it shall be deemed that the securitisation vehicle could not

have known that an application for the dissolution and winding up

of the originator by reason of insolvency was pending, or that the

originator had taken formal steps under any applicable law to bring

about its dissolution and winding up by reason of insolvency, if no

document or other record was registered to this effect with the

Registrar of Companies and was publicly accessible.

(4) In case of an assignment in favour of a securitisation

vehicle, it shall not be required that the assignment have a price, or

when a price is agreed, a fixed or determinate price. It shall also be

lawful for the consideration to be determinable by reference to any

formula as may be agreed, or be in consideration of and in accordance

with the terms of a securitisation transaction.

(5) Unless the terms of any transfer to a securitisation

vehicle provides otherwise, or the securitisation vehicle expressly

assumes any obligation, the underlying debtor shall have no right or

claim against the securitisation vehicle in connection with any obligation

relating to the securitisation assets. The underlying debtor shall continue

to enjoy all rights under the assigned contract against the originator

who shall remain solely responsible for the performance of all obligations

thereunder.

(6) An assignment in favour of a securitisation vehicle is

not valid unless it is evidenced in writing. The assignment of assets to

a securitisation vehicle is complete and the ownership of the asset is

ipso jure acquired by the securitisation vehicle as soon as the assignment

is reduced to writing in accordance with this Act and the provisions of

articles 1469 of the Civil Code shall not apply.

(1) The assignment of a securitisation asset to a

securitisation vehicle shall be valid and effective if the assignment

securitisation assets.

identifies at least two of the following features of the class of receivables

being subject to the assignment>

(a)

the type of debt or asset or contract giving rise to the

debt<

(b) the class or type of debtors<

(c)

the repayment period when the debts fall due<

so as to enable any interested party to reasonably determine which

receivables are included in the assignment and it shall not be necessary

to specify the name of the debtor or debtors, the date or the amount of

any particular debt.

(2) Where the parties to an assignment claim that a debt is

not included in the assignment, the matter shall be resolved as provided

for in the assignment, and the aggregate price, if any, for the transfer

shall be adjusted, if the claim is justified, by the value of the disputed

debt being reduced therefrom, and such adjustment shall not in any

way affect the validity or effects of the assignment of other receivables.

(1) It shall be lawful for future receivables of an originator,

including future claims against future debtors, to be the subject matter

of an assignment in favour of a securitisation vehicle. Such an

assignment shall be valid and effective if it identifies at least one of the

features of the class of receivables being subject to the assignment from

each of the Features A and Features B, listed in sub-article (2) hereof,

in order to enable any interested party to reasonably determine which

receivables are included in the assignment and it shall not be necessary

to specify the name of the debtor or debtors, the date or the amount of

any particular debt.

(2) There shall be indicated as>

Features A -

(a)

the type of debt or asset or contract giving rise to the

debt<

(b) the class or type of debtors<

(c) the assets, including future assets, which give rise to the

receivables< and

Features B -

(a)

the time period during which the debt may arise<

(b) the repayment period when the debts may fall due.

(3) An assignment of one or more future receivables is

deemed to be effective at the time of the conclusion of the original

contract of assignment between the assignor and the assignee, without

a new act of transfer being required to assign each such receivable on it

coming into existence.

(4) A notice of assignment duly given in terms of this Act

at the time of the securitisation transaction shall be valid and effective

in relation to the future receivable and need not be repeated once the

receivable comes into existence.

(5) It shall also be lawful for future receivables to be the

subject of any security collateral or title transfer collateral.

(1) Notwithstanding the provisions of the Civil Code, in Form of

case of an assignment of a securitisation asset to a securitisation vehicle, notification.

the debtor will be deemed to be notified of the assignment upon one of

the following events taking place at the option of the assignor or assignee>

(a)

on notification to the debtor in writing by any means< or

(b) on the publication of a notice as follows>

(i) in a daily newspaper circulating wholly or mainly

in Malta, or

(ii) where it appears that the majority of the debtors

reside outside Malta, in a daily newspaper circulating wholly

or mainly in such other jurisdiction outside Malta, or

(c) where there is doubt as to where the majority of the

debtors reside, in a daily newspaper which has wide international

circulation.

(2) Such notification shall be effective for all the purposes

and effects of the Civil Code with regard to third parties, including the

debtor, as follows>

(a) if notification is made in terms of article 187 of the Code

of Organisation and Civil Procedure, on the date of service and

the provisions of the Code of Organisation and Civil Procedure

shall determine such date of service< or

(b) if notification is made by mail, two days after despatch

by mail by the assignor or assignee of the notice in writing to the

debtor’s last known address< or

(c) if notification is made by publication in a newspaper,

the time of the opening of business in the place of publication of

the notice in the newspaper< or

(d) if notification is made by any electronic means, one day

after despatch of the electronic notification,

as the case may be, unless the said notice expressly mentions a later

date for the effects to commence.

(3) The same rules shall apply, mutatis mutandis, to

notifications required in relation to the pledge of securitisation assets,

and article 1966 of the Civil Code shall be construed accordingly.

(4) If, during the period between the date of assignment of

the securitisation assets and the notification as per the above sub-articles,

the assignor shall have become insolvent, such insolvency shall not

have any effect on the said assignment and any notification of the

assignment made in accordance with the above sub-articles shall be

valid and effective.

(5) The notice of assignment shall identify the features of

the class of receivables as set out in articles 11 or 12, as the case may

(1) The following provisions of the Civil Code shall not Modification of

certain provisions of

apply in case of an assignment of a securitisation asset to a securitisation the Civil Code.

vehicle>

(a)

articles 1483 (1)<

(b) article 1056 (1)< and

(c)

article 2013 (3).

(2) The following provisions of the Civil Code shall apply

subject to the modifications herein stated>

(a) article 1968(1) of the Civil Code shall not apply, and

where the thing pledged to the securitisation vehicle is a debt, the

securitisation vehicle shall, unless otherwise agreed with the

originator, be responsible for the collection of such debt on maturity

and the securitisation vehicle may place the moneys or other things

received either as agreed or, failing such agreement, may hold the

same as security for the debt until due<

(b) without prejudice to the right of the parties to assign rights

by means of public deeds and register the same in accordance with

articles 2051 and 2052 of the Civil Code, when a right arising from

a public deed, including any hypothecary rights, is transferred to or

from a securitisation vehicle, article 1470(2) shall not apply< and

(c) articles 1980 to 1984 of the Civil Code shall not apply

and a securitisation vehicle shall have a right of use over and the

right to sub-pledge any securitisation assets which have been

pledged, assigned or delivered to it for the purpose of a

securitisation transaction.

(3) For the purposes of article 1475 of the Civil Code and

for the purposes of a securitisation transaction -

(a) unless the assignment expressly provides otherwise, the

assignment of a debt shall also include every suretyship, warranty

or indemnity for the payment of the debt<

(b) the assignment of a debt shall include every suretyship,

warranty or indemnity, accessory to the debt and this

notwithstanding any contractual prohibition or restriction against

such assignment of the debt in the contract of suretyship, guarantee

or indemnity. The Minister, acting on the advice of the competent

authority, may by notice declare types of suretyships, guarantees

or indemnities to which this provision will not apply< and

(c) any notices of assignment made to the debtor or class of

debtors in accordance with this Act, shall have effect in relation to

all persons granting any suretyship, guarantee or indemnity without

the need of further notice or other formalities in their regard.

(1) Any and all risks can be assumed by a securitisation

vehicle and securitised in accordance with this Act.

(2) The securitisation vehicle may assume risks by acquiring

assets, guaranteeing or assuming obligations, entering into derivative

contracts or by committing itself in any other way.

(3) Unless the parties expressly determine otherwise in

writing, an assumption of risk and any hedging or derivative transaction

or product entered into in the context of a securitisation transaction for

whatever reason shall not be deemed to be a contract of insurance for

all effects and purposes at law.

(1) Unless otherwise specifically determined in writing in

the terms of issue of securities>

(a) holders of securities issued by a securitisation vehicle

shall have a privilege over the securitisation assets and such

privilege shall rank prior to all other claims at law, except for other

securitisation creditors who enjoy a prior ranking granted to them

with the consent or knowledge of the said holders< and

(b) the said privilege extends to the proceeds derived from

the securitisation assets, to any funds received in payment and to

the assets, if any, in which they are invested.

(2) If an acquisition vehicle is used in a securitisation

transaction and such vehicle is different from the securities issuing

vehicle, the said privilege shall arise over the securitisation assets of

the acquisition vehicle.

(3) The said privilege arises by operation of law and does

not need to be registered in any register.

(4) The conditions of issuance of any financial instruments

by the securitisation vehicle shall be binding upon the securitisation

vehicle, the securitisation creditors or other persons who have given

their consent thereto, including in the case when the securitisation vehicle

is placed under any dissolution and winding-up proceedings, company

recovery procedure, company reconstruction or any proceedings

affecting creditors’ rights generally.

(5) It shall not be lawful for any person, other than a

securitisation creditor, to demand the issuance or enforcement of any

precautionary act or warrant against the securitisation vehicle, except

when the court is satisfied that there has been fraud on the part of the

securitisation vehicle.

(1) Parties to a securitisation transaction shall be free to Private International

Law rules.

choose any law to govern contracts relating to or ancillary to a

securitisation transaction.

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

authority, may make rules on the law applicable to matters relating or

ancillary to securitisation transactions, where the law of a country,

other than Malta, may be applicable including, without limitation>

(a)

rules on the proper law of any contract<

(b) formal and material validity of any contract<

(c) rights of third parties upon the completion of any

contract<

(d) proprietory issues relating to securitisation transactions<

and

(e)

the priorities of rights of third parties.

PART IV

REGULATION OF SECURITISATION VEHICLES

No vehicle established under the laws of Malta shall Securitisation

vehicles.

commence business as a securitisation vehicle in or from within Malta

unless it has given notice on the appropriate form to the competent

authority that it intends to enter into one or more securitisation

transactions.

Public securitisation

(1) For the purposes of this article>

(a) a public securitisation vehicle shall mean a securitisation

vehicle which issues or which is desirous of issuing financial

instruments to the public on a continuous basis< and

(b) the term “issuing financial instruments to the public”

shall have the same meaning assigned to the term “offers made to

the public”, as set out in article 2(3) of the Companies Act.

(2) A public securitisation vehicle shall, before issuing

financial instruments to the public, apply in writing to the competent

authority for a licence under this Act.

(3) All applications for a licence for public securitisation

vehicles shall be in such form and accompanied by such information,

and shall conform with such requirements as may be prescribed from

time to time by directive and an application may only be withdrawn by

written notice to the competent authority at a time before it has been

granted or refused.

(4) The competent authority shall have the power to require

any public securitisation vehicle to provide such information as it shall

deem necessary for the purposes of determining an application for a

licence or for the purposes of determining whether to restrict or revoke

a licence.

(5) No public securitisation vehicle shall be granted a licence

unless>

(a) the public securitisation vehicle has an adequate

organisation and adequate resources to exercise its business<

(b) all persons who will effectively direct the business of

the public securitisation vehicle are suitable persons to ensure its

prudent management< and

(c) the public securitisation vehicle satisfies such other

conditions as may be laid down by directives issued by the

competent authority.

(6) The competent authority shall determine each

application for a licence within one month of receipt of the application

or, if the application does not comply with subarticle (3) of this article,

or additional information is required, within one month of compliance

with the said subsection or the furnishing of the information as the case

may be, whichever be the later. In any event an application shall be

determined within two months of its receipt.

(7) The competent authority shall determine an application

by doing any of the following>

(a)

granting a licence without conditions<

(b) granting a licence subject to such conditions as it may

deem appropriate<

(c) refusing to grant a licence> and if it refuses an application

it shall inform the applicant, in writing, of the reasons for the refusal.

(8) Where the competent authority for any reason fails to

determine an application for a licence within the time prescribed under

subarticle (6) of this article, such fact shall be deemed to constitute a

refusal to grant a licence.

(9) (a) Without prejudice to any of the powers conferred

on it by this Act, the competent authority may, whenever it deems it

necessary, give, by notice in writing, such directives as it may deem

appropriate in the circumstances< and any person to whom or to which

the notice is given shall obey, comply with and otherwise give effect to

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

directive.

(b) The power to give directives under this subarticle

shall include the power to vary, alter, add to or withdraw any directive,

as well as the power to issue new or further directives.

(c) Where the competent authority is satisfied that the

circumstances so warrant, it may at any time make public any directive

it has given under any of the provisions of this subarticle.

(10) A licence shall automatically cease to have any effect

if the holder>

(a)

renounces its licence< or

(b) does not commence business pursuant to the licence

within twenty-four months of its issue or within such other period

of time as may be specified in the licence< or

(c)

is declared bankrupt or goes into liquidation.

(11) The competent authority may impose restrictions on a

licence or may revoke a licence in any of the following circumstances>

(a) if any document or information accompanying such an

application for a licence or any information given in connection

therewith is false in any material particular or if the holder of a

licence conceals from, or fails to notify to the competent authority

any document or information or change therein which it was its

duty to reveal or notify under this Act< or

(b) if the holder fails to comply with any of the provisions

of this Act or a directive issued thereunder or with the conditions

under which the licence is granted< or

(c) if the holder is likely to become unable to meet its

obligations.

(12) The competent authority shall have the power to vary

or remove any restrictions imposed under the foregoing subarticle.

(13) Where the competent authority intends to restrict or

revoke a licence or to vary any restriction, it shall serve written notice

of its intention to the public securitisation vehicle< such notice shall

specify the grounds upon which the competent authority intends to take

action and shall specify a period in which the public securitisation vehicle

shall be entitled to make representations to the competent authority as

to why such action should not be taken. Unless the competent authority

decides that the matter is urgent, it shall not impose or vary any restriction

or revoke a licence before the expiry of such period.

(14) Any person who is aggrieved by a decision of the

competent authority>

(a)

to refuse an application for a licence<

(b) to impose any condition on the grant of a licence<

(c)

to impose or vary a restriction<

(d) to revoke a licence< or

(e) by failure of the competent authority to determine an

application for a licence under sub-article (7) of this article,

may appeal against the decision to the Financial Services Tribunal within

such period and under such conditions as established under the Malta

Financial Services Authority Act.

(15) Any person who contravenes or fails to comply with

the provisions of subarticle (2) of this article, or contravenes or fails to

comply with any condition, obligation, requirements, directive or order

made or given under this article, shall be guilty of an offence.

(16) A person guilty of an offence under the provisions of

subarticle (15) of this article shall, on conviction, be liable to a fine

(multa) not exceeding fifty thousand Maltese liri. No proceedings for

an offence under this article shall be commenced without the consent

of the Attorney General.

(1) For the better carrying out of the provisions of this Act, Rules.

the competent authority may, from time to time, issue and publish rules

as may be necessary or appropriate in connection with securitisation

transactions. The rules shall be binding on securitisation vehicles and

securitisation creditors and other persons as may be specified therein.

(2) In addition and without prejudice to the generality of

the foregoing, the competent authority may issue rules as it shall deem

fit for>

(a) the purpose of establishing conditions which need to be

satisfied by a public securitisation vehicle in order to obtain a

licence under this article<

(b) the regulation of the custody of assets and financial

instruments of the public securitisation vehicle< and

(c) the purposes of requiring any periodical statements of

the public securitisation vehicles.

PART V

MISCELLANEOUS

(1) Any data or information which is transferred between Professional

secrecy,

persons within the context of a securitisation transaction shall confidentiality and

accordingly be transferable without any restriction or limitation, although data protection.

such data or information shall retain its secret or confidential status for

other effects and purposes.

(2) Within the context of a securitisation transaction, in so

far as obligations arising from the Data Protection Act are concerned>

(a) any transfer of personal data shall be deemed to be for a

purpose that concerns a legitimate interest of the transferor and

transferee of such data, unless it is shown that such interest is

overridden by the interest to protect the fundamental rights and

freedoms of the data subject and in particular the right to privacy<

and

(b) any transfer of personal data to a third country that does

not ensure an adequate level of protection within the meaning of

article 27 (2) of the Data Protection Act shall not require the

authorisation of the Data Protection Commissioner, where the

controller provides adequate safeguards, which may result

particularly by means of appropriate contractual provisions, with

respect to the protection of the privacy and fundamental rights and

freedoms of individuals and with respect to their exercise.

(3) For the purposes of the foregoing paragraphs, data or

information which is transferred between persons within the context of

a securitisation transaction shall be deemed to include data or information

transferred between the originator and the securitisation vehicle, or

between one securitisation vehicle and another, or between the

securitisation vehicle and any person delegated with administration

duties and functions, or between the securitisation vehicle and a

representative of the investors, or between the originator or securitisation

vehicle and any credit rating agencies, or between the originator or the

securitisation vehicle and any counter-party in a derivative contract,

lender, liquidity provider or credit support provider.

(1) Notwithstanding the provisions of any other law, it shall

be lawful>

(a) for the constitutive documents of the securitisation

vehicle>

(i) to vest the power to appoint directors in any

securitisation creditor or class thereof, to the exclusion of other

persons<

(ii) to vest the power to demand or place the

securitisation vehicle under any dissolution and winding-up

proceedings, company recovery procedure, company

reconstruction or any proceedings affecting creditors’ rights

generally, in any securitisation creditor or class thereof, to

the exclusion of other persons<

(b) for the securitisation vehicle to enter into any agreement

which contains provisions by which securitisation creditors or any

shareholder of the securitisation vehicle, including the originator,

accept to restrict or waive their right to commence the process

leading to dissolution and consequential winding-up proceedings,

company recovery procedure, company reconstruction or any

proceedings affecting the rights pertaining to creditors generally

in connection with a securitisation vehicle, or to transfer such a

right to any person< and

(c) for the securitisation vehicle to enter into an agreement

with the originator to the effect that the originator is given rights

by the securitisation vehicle over all or part of the securitisation

assets of the securitisation vehicle which may be available after

payment of the securitisation creditors.

(2) The provisions of article 110(1) of the Companies Act

shall not apply to the provision of financial assistance by a securitisation

vehicle, unless the securitisation vehicle is constituted as a public limited

liability company.

(3) Unless otherwise provided for in the constitutive

documents of the securitisation vehicle, a securitisation vehicle shall

have the power to issue financial instruments whose value or yield is

linked to specific compartments, assets or risks, or whose repayment is

subject to the repayment of other instruments, certain claims or certain

categories of shares. If the acquisition vehicle is different from the issuing

vehicle, the value, yield and the conditions of repayment may also be

linked to the assets and the liabilities of the acquisition vehicle. Holders

of such financial instruments shall enjoy the privilege arising by virtue

of article 16(1) of this Act.

(4) Any contract entered into in connection with a

securitisation transaction shall be valid and enforceable in accordance

with its terms, and where the parties agree in writing as to the effects

that will arise on the occurrence of a specified event, it shall not be

necessary for either party to obtain any court judgement or declaration

confirming that the specified event has occurred or otherwise.

(5) The provisions of Title XVII of the Civil Code or of

any other part of the Civil Code or of any other law in so far as they

limit or restrict the charging of interest and compound interest shall not

apply to debts or any other obligations arising within the context of a

securitisation transaction under this Act< and it shall be lawful for the

amount of interest due in respect of any such debt or other obligation to

exceed the amount of capital due in respect of any such debt or

obligation.

(6) No court or arbitral tribunal may grant or sanction any

moratorium or stay whatsoever in connection with a securitisation

vehicle.

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

authority, may make regulations as may be required for carrying into

effect any of the provisions of this Act and may amend or revoke such

regulations.

(2) Regulations made under any of the provisions of this

Act may be made in the English language only.

This Act shall only apply to securitisations or securitisation

transactions where>

(a) the value of the securitisation transaction or the value

of the financial instruments issued by the securitisation vehicle

exceeds such minimum value as may be stated in a notice issued

by the competent authority from time to time, or

(b) a specific securitisation transaction has been otherwise

approved in writing by the competent authority.

In this Act and in any rules made thereunder, if there is any

conflict between the English and Maltese text, the English text shall

prevail.

PART VI

AMENDMENTS TO OTHER LAWS

(1) Immediately after article 1484 of the Civil Code, there

shall be inserted the following new article 1484A>

1484A. (1) In the case of an assignment of one or

“Factoring.

more debts where>

(a)

the assignor is a trader<

(b) the debts being assigned arise out of or in

connection with the trade or business being carried out

by the trader< and

(c) the assignee is a person licensed to carry out

the business of banking or the business of factoring under

the applicable laws of Malta, or the equivalent laws in a

jurisdiction recognised by the competent authority

appointed in terms of the Banking Act.

such assignment of debts shall be governed by the provisions

of this Sub-Title, as varied by this article.

(2) Classes of existing debts may be assigned provided

that the debtor be identified in the contract of assignment.

(3) Future debts, or classes thereof, may also be

assigned provided that the debtor and the latest date by which

the future debts shall come into existence be identified in the

contract of assignment. In such cases an assignment is

effective at the time of the conclusion of the contract without

a new assignment being required when such debt comes into

existence.

(4) In the case of the assignment of debts referred to

in this article, the assignee may not, in regard to third parties,

exercise the rights assigned to him except after due notice of

the assignment has been given to the debtor by the assignee

himself or by the assignor and, in the case of an assignment

of future debts, or of classes thereof, no further notice shall

be required when the future debt comes into existence.

(5) Notice of an assignment may be evidenced in

writing by any means, including by a notice sent to the debtor

together with the document evidencing the debt and need not

be signed by the assignor or the assignee.

(6) The assignment need not state a fixed price nor

need the price be in money. The price may also be determined

by reference to any formula or method agreed between the

parties.

(7) The assignor shall be answerable for the solvency,

whether present or future, of the debtor, to the extent of the

warranty in whole or in part.

(8) In the event of insolvency or bankruptcy of the

assignor, the assignment of future debts which have not yet

come into existence on the date a winding-up or bankruptcy

order is made by a Court, may be rescinded by the liquidator

or the curator of the assignor. The right of recission of the

assignment of future debts shall be conditional on the refund

of any consideration paid by the assignee to the assignor for

such future debts.

(9) Articles 1483(1), 1506(1), 2013(3) shall not apply

to assignment of existing or future debts, or classes thereof,

governed by this article.

(10) All the above provisions shall apply mutatis

mutandis to the pledging of debts referred to in this article

and the provisions of Title XXI of Part II of Book Second of

the Civil Code shall be construed accordingly.

(11) Articles 1980 to 1984 of this Code shall not apply

and an assignee shall have a right of use over, and the right to

sub-pledge, debts which have been assigned to him.”.

(2) Immediately after article 1996 of the Civil Code, there shall

be inserted the following new article 1996A>

1996A. It shall be lawful for a creditor to agree to

subordinate, waive or otherwise modify his rights of payment,

enforcement, ranking and other similar rights to the rights of

other creditors and any such agreement shall be binding on

the parties to the contract, whether before or after the

insolvency of any party to the contract.”.

Immediately after article 84B of the Companies Act, there

shall be inserted the following new article 84C>

84C. (1) The Minister, in consultation with the

Minister responsible for finance and acting on the advice of

securitisation the competent authority under the Securitisation Act, may

make regulations which provide for the formation,

constitution, authorisation and regulation of cell companies,

and which make it possible for a securitisation vehicle to

convert into a cell company and for all matters that may arise

in connection therewith.

(2) For the better carrying out of the provisions

of this section, and without prejudice to the generality of the

foregoing, the Minister, acting as aforesaid, may, by such

regulations, in particular>

(a) make provision regarding the contents of the

memorandum and articles of association of a cell

company, including provision for the creation by the cell

company of any one or more cells, and for segregating

and protecting the cellular and other assets of the

company, and establish reporting and other disclosure

requirements<

(b) exempt or provide for the exemption of such

company from any of the provisions of this Act or of

any other law in force, subject to such modifications,

variations and conditions as may be specified<

(c) make provision for the manner and the form

whereby a cell company may create and issue cell shares

and to make any provision relating to the assets of the

cell company, including the requirement that the assets

of a cell company should be of a specified class or

description, or any other requirements in respect of the

quality, nature and extent of such assets<

(d) make provision allowing cells or the cellular

assets attributable to any cell of a cell company to be

transferable to any other person<

(e) make provision for considering individual

cells as separate and distinct entities for such purposes

as may be established<

(f) provide for any matter consequential,

incidental to or connected with any of the above matters.

(3) For the purposes of this article, “securitisation

vehicle” has the same meaning assigned to it in the

Securitisation Act.”.

Passed by the House of Representatives at Sitting No. 375 of 5th April, 2006.

A NTON T ABONE

R ICHARD J. C AUCHI

Clerk to the House of Representatives