ACT No. XX of 2007 AN ACT to amend various financial services laws. (financialauthority)

I assent.

E DWARD F ENECH A DAMI

(L.S.)

President

3rd August, 2007

ACT No. XX of 2007

AN ACT to amend various financial services laws.

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>-

The short title of this Act is the Various Financial Services Short title.

Laws (Amendment) Act, 2007.

PART I

(Article 155)

The immovable property devolving in favour of the MSE (Holdings) Limited

consisting of offices and premises known as the “Malta Stock Exchange” or “Borza

ta’ Malta”, with all the buildings and improvements thereon, including all rights and

appurtenances relating thereto, formerly known as the “Post Office Central Mailing

Room”, formerly also known as the “Barrakka Garrison Church”, situated at Castille

Place, Valletta, without an official number, together with its surrounding garden,

measuring approximately one thousand one hundred and thirty square metres (1130

m 2 ) and is bounded altogether on the North-East and the North-West by Castille Place

and the South-East by the Upper Barrakka Gardens, as better described in the

emphyteutical lease between the Malta Stock Exchange and the Commissioner of Lands

acting on behalf of the Government of Malta, signed on the 11 December 2007 in the

acts of Vincent Miceli, Notary Public in Malta at the Lands Department.

Passed by the House of Representatives at Sitting No.553 of 18th July, 2007.

A NTON T ABONE

Speaker

R ICHARD J. C AUCHI

Clerk to the House of Representatives

(1) This Part amends and shall be read and construed as one Malta

Amendment

with the Malta Financial Services Authority Act, hereinafter in this Part Services

Act.

referred to as “the principal Act”.

(2) The provisions of this Part shall come into force on the

date of publication of this Act.

In the definition “financial services” in article 2 of the principal Amendment of

article 2 of the

Act, for the words “be placed by the Minister under the supervisory and principal Act.

regulatory authority of the Authority<”, there shall be substituted the

words “be placed under the supervisory and regulatory competence of

the Authority by the Minister or by any other law<”.

Article 4 of the principal Act shall be amended as follows>

(a) in paragraph (c) of sub-article (1) thereof, for the words

“and guidelines to”, there shall be substituted the words “and

guidance to”< and

(b) in sub-article (4) thereof, for the words “international

commitments.” there shall be substituted the words “international

commitments including its obligations under the Treaty within the

meaning of the European Union Act.”.

Article 16 of the principal Act shall be amended as follows>

(a) for sub-article (2) thereof, there shall be substituted the

following> -

“(2) The Authority may>

(a) issue Rules regulating the procedures and

duties of persons licensed or authorised by it, or falling

under its regulatory or supervisory functions and such

Rules may>

(i) provide for the returns, statements and

notices to be made or given for any purposes in

regard to which the Authority exercises supervisory

or regulatory functions under this or any other Act,

and the form and contents thereof< and

(ii) prescribe the information that such

persons are to submit to the Authority<

(b) issue an order in writing requiring a holder of

a licence or other authorisation, and, or any official

thereof, to do or to refrain from doing any act, including

such prohibitions, restrictions and conditions as may be

specified in the notice< and any such order may be issued

in respect of specific cases or classes of cases< any holder

of the licence or other authorisation and, or the official

to whom the notice is addressed shall obey, comply with

and give effect to any such order within the time and

manner stated in the order.”<

(b) sub-article (3) thereof shall be amended as follows>

(i) for the words “or any directives or guidelines” there

shall be substituted the words “or any orders or Rules”<

(ii) for the words “in writing impose” , there shall be

substituted the words “in writing and without recourse to a

court hearing impose”< and

(iii) for the words “penalty and the provisions of article

6(9) and (11) of the Investment Services Act shall apply

mutatis mutandis.”, there shall be substituted the words

“penalty which may not exceed forty thousand liri.”<

(c) sub-articles (4) and (5) thereof shall be re-numbered as

sub-article (5) and (6)<

(d) immediately after sub-article (3) thereof there shall be

inserted the following new sub-article (4)>

“(4) Where a notice as referred to in sub-article (3) of

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

been appealed, within fifteen days of the determination by

the Tribunal of such appeal, the administrative penalty as

contained in the notice or as reduced or increased by the

decision of the Tribunal shall be due to the competent

authority. Upon the service of a copy of the notice of 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 for all effects and

purposes of Title VII of Part I of Book Second of the Code of

Organization and Civil Procedure.”< and(e) sub-article (6)

as re-numbered shall be amended as follows>

(i) for the words “of the provisions of sub-article

(4), the following rules”, there shall be substituted the

words “of sub-article (5), the following provisions”< and

(ii) in paragraphs (a) and (b), for the words “in

sub-article (4)” there shall be substituted the words “in

sub-article (5)”.

In sub-article (1) of article 17 of the principal Act, for the Amendment of

article 17 of the

words “who had divulged the information.”, there shall be substituted principal Act.

the words “who had divulged the information. For the purposes of this

sub-article,““employees” and”“officials” shall include former

employees and officials.”.

Immediately after article 17 of the principal Act there shall be Addition of new

articles 17A and

inserted the following new articles>

17B to the principal

Act.

(1) Where, upon information received from the

Authority, the Attorney General has reasonable cause to suspect

that a person (hereinafter referred to as “the suspect”) is guilty of

a breach of this Act or of any other 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 article 381(1)(a), (b) and (e) and

of article 382(1) of the Code of Organization and Civil

Procedure shall, mutatis mutandis, apply to 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) Where an attachment order has been made or

applied for, whosoever, knowing or suspecting that the

attachment order has been so made or applied for, makes any

disclosure likely to prejudice the effectiveness of the said order

or any investigation connected with it shall be guilty of an

offence and shall, on conviction, be liable to a fine (multa)

not exceeding five thousand liri or to imprisonment not

exceeding twelve months, or to both such fine and

imprisonment>

Provided that in proceedings for an offence under this

subarticle, it shall be a defence for the accused to prove that

he did not know or suspect that the disclosure was likely to

prejudice the investigation or the effectiveness of the

attachment order.”<

(1) (a) Where a person (hereinafter referred

to as “the person charged or accused”) has been charged with

a criminal offence, the Attorney General may apply to the

Criminal Court for an order (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 or accused< and

(ii) prohibiting the person charged or

accused 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 or accused 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 or accused, 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 or

accused to bona fide creditors and which were

contracted before such order was made< and

(ii) on good grounds authorise the

person charged or accused 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 regards 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-article (2)(b), 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 Authority shall liaise with the Attorney General on

matters arising under this article and article 17A and may exchange

information, subject to the obligation of professional secrecy.”.

(8) Any person who acts in contravention of a court order

mentioned in sub-article (1) shall be guilty of an offence and 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 the court may

order the person so found guilty to deposit in a bank to the credit

of the accused the amount of moneys or the value of other movable

property paid or delivered in contravention of that court order.

8. Immediately after sub-article (3) of article 20 of the principal Amendment of

article 20 of the

Act there shall be inserted the following new sub-articles>

principal Act.

“(4) In furtherance of his functions under this article,

the Consumer Complaints Manager shall, whenever the

circumstances of a complaint so warrant, encourage the

parties to the dispute, to reach an out-of-court settlement of

the consumer dispute.

(5) The Consumer Complaints Manager shall, to the

extent possible, assist and cooperate with bodies responsible

for out-of-court settlement of consumer disputes in Malta and

in other Member States and EEA States in the resolution of

local and cross-border consumer disputes concerning financial

services.”.

9. Articles 20A, 20B and 20C of the principal Act shall be re- Re-numbering of

articles 20A, 20B

numbered as articles 20B, 20C and 20D respectively.

and 20C.

10. Immediately after article 20 of the principal Act, there shall Addition of new

article 20A.

be inserted the following new article 20A>

“Power to

The Minister, acting on the advice of the

make

competent authority, may make regulations to transpose,

regulations.

implement and give effect to the provisions and requirements

of Directives, Regulations and any other legislative measures

of the European Union requiring transposition and, or

implementation, as they may be amended from time to time,

including any implementing measures that have been or may

be issued thereunder<”.

Article 21 of the principal Act shall be amended as follows>

11. (a) sub-article (8) thereof shall be re-numbered as sub-article

(13)<

(b) sub-article (10) thereof shall be re-numbered as sub-

article (11)<

(c) sub-article (11) thereof shall be re-numbered as sub-

article (8)<

(d) in sub-article (8) thereof as re-numbered, for the words

“An appeal to” there shall be substituted the words “An appeal

within the terms of sub-article (9) of this article to”<

(e)

sub-article (12) thereof shall be re-numbered as sub-

article (10)<

(f) immediately after sub-article (11) as re-numbered, there

shall be inserted the following new sub-article (12)>

“(12) (a) All evidence must be relevant to the matter

in issue between the parties.

(b) In all cases the Tribunal shall require the best

evidence that the party may be able to produce.

(c) The Tribunal shall disallow any evidence which

it considers to be irrelevant or superfluous, or which it does

not consider to be the best which the party can produce.”<

(g) sub-article (13) thereof shall be re-numbered as sub-article (15)<

(h) in sub-article (14) thereof, immediately after the words

“to the Court of Appeal.” there shall be added the words “An appeal

shall be made by not later than twenty days from the date of the

decision of the Tribunal.”<

(i) in sub-article (15) as re-numbered for the words “the

procedure for” there shall be substituted the words “the procedure

and fees for”< and

(j) sub-articles (15), (16) and (17) thereof shall be re-numbered

as sub-articles (16), (17) and (18) respectively.

PART II

12. (1) This Part amends and shall be read and construed as Amendment of the

Financial Markets

one with the Financial Markets Act, hereinafter in this Part referred to Act,Cap. 345.

as “the principal Act”.

(2) The provisions of this Part shall come into force on the

st

1 November, 2007.

13. For the long title to the Act there shall be substituted the Amendment of the

long title to the Act.

following>

“To provide for the authorisation of regulated markets, central

securities depositories and for the orderly trading in transferable

securities and to provide for matters ancillary or incidental thereto

or connected therewith.”.

14. In the “Arrangement of Act”, for the words “Recognised Amendment of

“Arrangement of

Investment Exchanges”, there shall be substituted the words “Regulated Act”, and of the

Markets”, and for the words “Recognised Investment Exchange” and, principal Act.

or”“Recognised Investment Exchanges”, wherever they appear in the

principal Act, there shall be substituted the words “Regulated Market”

and, or”“Regulated Markets”, as the case may be, and for the words

“Malta Stock Exchange”, there shall be substituted the words “central

securities depository”.

15. Article 2 of the principal Act shall be amended as follows>

Amendment of

article 2 of the

principal Act.

(a)

article 2 thereof shall be re-numbered as sub-article (1)

thereof<

(b) in sub-article (1) as re-numbered>

(i) the definition “Bor]a” shall be deleted<

(ii) for the definition “bye-laws”, there shall be

substituted the following>

“ “bye-laws” means the bye-laws made in terms of

article 4C<”<

(iii) in the definition “Central Bank”, for the words

“Bank of Malta,” there shall be substituted the words “Bank

of Malta as defined by the Central Bank of Malta Act<”<

(iv) for the definition “central securities depository”

there shall be substituted the following<

“ “central securities depository” means a person

authorised in terms of Part IV of this Act to provide one

or more of the functions stipulated in article 26<”<

(v) immediately after the definition “central securities

depository”, there shall be inserted the following new

definition>

“ “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<”<

(vi) the definition “Chairman” shall be deleted<

(vii) the definition “corporate body” shall be deleted<

(viii) the definition “Council” shall be deleted<

(ix) the definition “Exchange” shall be deleted<

(x) immediately after the definition “competent

authority”, there shall be inserted the following new

definitions>

“ “designated financial instruments” refers to the

instruments regulated by the provisions of article 28<

“the Directive” means Directive 2004#39#EC of the

European Parliament and of the Council of 21 April 2004

on markets in financial instruments amending Council

Directives 85#611#EEC and 93#6#EEC and Directive

2000#12#EC of the European Parliament and of the

Council and repealing Council Directive 93#22#EEC, as

amended from time to time, and includes any

implementing measures that have been or may be issued

thereunder<

“EEA State” means a State which is a contracting

party to the agreement on the European Economic Area

signed at Oporto on the 2 nd May, 1992 as amended by

the Protocol signed at Brussels on the 17 th March, 1993

and as amended by any subsequent acts<

“European regulatory authority” means the body

or bodies designated by a Member State or EEA State in

accordance with Article 48 of the Directive to carry out

each of the duties provided for under the different

provisions of the Directive<”<

(xi) for the definition “financial instruments”, there

shall be substituted the following>

“ “financial instruments” shall have the same

meaning assigned to the term “instruments” in the

Second Schedule to the Investment Services Act<”<

(xii) immediately after the definition “financial

instruments”, there shall be inserted the following new

definition>

“ “Financial Market Rules” refers to Rules issued

by the competent authority under various articles of this

Act”<

(xiii) the definition “financial year” shall be deleted<

(xiv) the definition “insider dealing” shall be deleted<

(xv) in the definition “Listing Authority”, the words

“, provided that until such time as the Minister makes such

appointment any reference to the Listing Authority shall be

interpreted as a reference to the Council” shall be deleted<

(xvi) immediately after the definition “market abuse”,

there shall be inserted the following new definition>

“ “Market operator” means a person who manages

and, or operates the business of a regulated market. The

market operator may be the regulated market itself<”<

(xvii) immediately after the definition “members”

there shall”be inserted the following new definition>

“ “Member State” means a Member State of the

European Communities<”<

(xviii) immediately after the definition “Minister”,

there shall be inserted the following new definition>

“ “multilateral system” includes all those markets

that are composed of a set of bye-laws and a trading

platform as well as those that only function on the basis

of a set of bye-laws but excludes bilateral systems where

a person enters into every trade on own account and not

as a riskless counterparty interposed between buyer and

seller<”<

(xix) the definition “official list” shall be deleted<

(xx) the definition “orderly” shall be deleted<

(xxi) immediately after the new definition “multilateral

system” there shall be inserted the following new definition>

“ “overseas regulatory authority” means an

authority in a country or territory outside Malta that is

not a Member State or EEA State which exercises any

regulatory or supervisory function in relation to financial

services corresponding to a function of the competent

authority as defined in the Malta Financial Services

Authority Act<”<

(xxii) immediately after the definition “recognised

list”, there shall be inserted the following new definition>

“ “regulated market” means a multilateral system

operated by a market operator, which brings together or

facilitates the bringing together of multiple third-party

buying and selling interests in financial instruments in

the system within the meaning of the Directive. For the

purposes of this definition, “buying and selling interests”

includes orders, quotes and indications of interest<”<

(xxiii) the definition “securities” shall be deleted<

(xxiv) the definition “statute” shall be deleted<

(xxv) the definition “stockbroker” shall be deleted<

(xxvi) immediately after the definition “related

company”, there shall be inserted the following new

definition>

“ “Takeover Bids Directive” means Directive

2004#25#EC of the European Parliament and of the

Council of 21 April 2004 on takeover bids, as amended

from time to time, and includes any implementing

measures that have been or may be issued thereunder<”<

(xxvii) in the definition “trading”, for the words

“financial instruments< and”, there shall be substituted the

words “financial instruments<”<

(xxviii) immediately after the definition “trading”,

there shall be inserted the following new definitions>

“ “transferable securities” has the same meaning

as that given to the term in the Schedule to the Investment

Services Act<”<

“ “Transparency Directive” means Directive

2004#109#EC of the European Parliament and of the

Council of 15 December 2004 on the harmonisation of

transparency requirements in relation to information

about issuers whose securities are admitted to trading

on a regulated market and amending Directive

2001#34#EC, as amended from time to time, and includes

any implementing measures that have been or may be

issued thereunder<”<

(xxix) in the definition of “tribunal”, the proviso shall

be deleted and for the words” “Act>”, there shall be substituted

the words “Act.”<

(c) immediately at the end of the definition “tribunal”, there

shall be inserted the following new sub-article (2)>

“(2) The objective of this Act is, in part, to transpose

and implement the provisions of the Directive, and

consequently this Act and any regulations adopted thereunder

shall be interpreted and applied accordingly.”.

Article 3 of the principal Act shall be amended as follows>

16. (a) in paragraph (a) thereof, for the words “by an investment

exchange if it is to qualify as a recognised investment exchange

and in respect of which the competent authority may make an order

hereinafter in this Act referred to a “recognition order” under this

part of the Act”, there shall be substituted the words “by a market

if it is to qualify as a regulated market in respect of which an

authorisation may be issued by the competent authority”<

(b) in paragraph (b) thereof, for the words “including

reporting requirements”, there shall be substituted the words

“including reporting and transparency requirements”<

(c) in paragraph (c) thereof, for the words “a recognition

order or”, there shall be substituted the words “an authorisation

or”<

(d) for paragraph (d) thereof there shall be substituted the

following>

“(d) requirements for the regulation and supervision

of market operators and, or regulated markets<”<

(e) in paragraph (e) thereof, for the words “complaints

about”, there shall be substituted the words “complaints about

market operators and, or”<

(f) in paragraph (f) thereof, for the words “the rules of a

recognized investment exchange by persons subject to such rules<”,

there shall be substituted the words “the bye-laws of regulated

markets by persons subject to such bye-laws<”<

(g) for paragraph (g) thereof there shall be substituted the

following>

“(g) arrangements for the scrutiny of practices of

market operators and, or bye-laws and practices of regulated

markets and for preventing restrictive practices in terms of

the Competition Act and any regulations made thereunder<”<

and

(h) in paragraph (i) thereof, for the words “for a recognition

order under”, there shall be substituted the words “for an

authorisation under”.

Article 4 of the principal Act shall be amended as follows>

17. Amendment of

article 4 of the

principal Act.

(a) in paragraph (a) of sub-article (1) thereof, for the words

“of an investment exchange in or from within Malta unless such

person is in possession of a recognition order”, there shall be

substituted the words “of a regulated market in or from within

Malta unless such person is in possession of an authorisation”<

(b) in paragraph (b) of sub-article (1) thereof, for the words

“for a recognition order under this Part of the Act declaring it to be

a recognised”, there shall be substituted the words “for an

authorisation under this Part of the Act declaring it to be an

authorised”<

(c) immediately after paragraph (b) of sub-article (1) thereof,

there shall be inserted the following new paragraphs (c) and (d)>

“(c) A regulated market shall only be authorised

where the competent authority is satisfied that both the market

operator and the systems of the regulated market comply

with the applicable requirements laid down in this Act and

any regulation or Financial Market Rules made thereunder.

(d) Where a regulated market is a legal person

and is managed or operated by a market operator other

than the regulated market itself, the competent authority

shall establish by means of Financial Market Rules how

the different obligations imposed on the market operator

under the Directive are to be allocated between the

regulated market and the market operator.”<

(d) for sub-article (2) thereof, there shall be substituted the

following new sub-article>

“(2) (a) The market operator of the regulated market

shall provide all information, necessary to enable the

competent authority to satisfy itself that the regulated market

has established, at the time of initial authorisation, all the

necessary arrangements to meet its obligations under the Act

or any regulations or Financial Market Rules made thereunder.

(b) An application shall be made in such a manner as

the competent authority may establish by Financial Market

Rules and shall be accompanied by>

(i) a programme of operations setting out inter

alia the types of business envisaged<

(ii) a full description of the organisational

structure and the proposed bye-laws or similar

arrangements of the applicant<

(iii) detailed information as required by the

competent authority on the>

(a) persons who effectively direct the

business and the operations of the regulated market<

(b) those persons who own the regulated

market< and

(c)

the market operator< and

(iv) any other information required by the

competent authority.”<

(e) sub-articles (3) to (11) shall be re-numbered as sub-

articles (4) to (12) respectively<

(f) immediately after sub-article (2) thereof, there shall be

inserted the following new sub-article (3)>

“(3) The market operator shall notify the competent

authority immediately of any changes or corrections to the

information provided in terms of sub-article (2) of this article>

Provided that in the case of changes to the persons who

effectively direct the business and the operations of the

regulated market the prior authorisation of the competent

authority shall be requested>

Provided further that where there are objective and

demonstrable grounds for believing that the appointment or

election of an officer poses or may pose a material threat to

the sound and prudent management and operation of the

regulated market, the competent authority shall refuse to

approve such appointment or election.”<

(g) in sub-article (4) thereof as re-numbered, for the words

“The competent authority may issue directives setting out ––”,

there shall be substituted the words “For the better carrying out of

the provisions of this Act, the competent authority may, from time

to time, issue and publish Financial Market Rules which shall be

binding on regulated markets and others as may be specified therein.

Such Financial Market Rules may lay down additional requirements

and conditions in relation to activities of regulated markets, the

conduct of their business, their relations with customers, the public

and other parties, their responsibilities to the competent authority,

reporting requirements, financial resources, capital adequacy and

related requirements, and any other matters as the competent

authority may consider appropriate including –”<

(h) in sub-article (6) thereof as re-numbered, for the words

“Different directives may be issued by the competent authority

under sub-article (3)” there shall be substituted the words “Different

Financial Market Rules may be issued by the competent authority

under sub-article (4)”<

(i) in sub-article (8) thereof as re-numbered, for the words

“and subject to any directives issued under article 4(3) make or

refuse to make a recognition order.”, there shall be substituted the

words “and subject to any Financial Market Rules issued under

sub-article (4) make or refuse to issue an authorisation. Where the

competent authority issues an authorisation, the market operator

shall be responsible for ensuring that the provisions of the Act,

regulations and Financial Market Rules made thereunder and any

implementing measures issued by the European Commission in

terms of the powers conferred to it by the Directive, which are

applicable to regulated markets, are complied with.”<

(j) in sub-article (9) thereof as re-numbered, for the words

“A recognition order”, there shall be substituted the words “An

authorisation”<

(k) in sub-articles (10) and (11) thereof as re-numbered, for

the words “for a recognition order” wherever they occur, there

shall be substituted the words “for an authorisation”< and

(l) in sub-article (12) thereof as re-numbered, for the words

“A recognition order”, there shall be substituted the words “An

authorisation”.

18. Immediately after article 4 of the principal Act there shall be Addition

articles 4A, 4B and

inserted the following new articles 4A, 4B and 4C>

4C to the principal

Act.

4A. Without prejudice to any relevant provisions of

Directive

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

Council of 28 th January 2003 on insider dealing and market

manipulation, the public law within the meaning of the

Directive governing the trading conducted under the systems

of the regulated market shall be that of Malta when Malta is

the home Member State.

4B. (1) Persons who are in a position to exercise,

directly

or indirectly, significant influence over the

management management of the regulated market must be fit and proper.

(2) No person shall acquire a direct or indirect

holding in a regulated market and, or the market operator

which represents ten (10) per cent or more of the share

capital issued by such body or of the voting rights

attaching to such share capital or which makes it possible

to exercise a significant influence over the management

of the regulated market (“qualifying shareholding”) or

increase such qualifying shareholding so that the

proportion of the voting rights or of the share capital

held by him in the regulated market reaches or exceeds

twenty (20) per cent, thirty three (33) per cent or fifty

(50) per cent unless the competent authority has been

notified of that intention by such person or by the relevant

regulated market and the competent authority has

approved the acquisition of or increase in such qualifying

shareholding.

(3) The competent authority shall refuse to

approve any changes to controlling interests as proposed

by the regulated market and, or the market operator in

terms of sub-article (2) of this article where there are

objective and demonstrable grounds for believing that

they would pose a threat to the sound and prudent

management of the said regulated market.

(4)

The market operator of a regulated market

shall>

(a) provide the competent authority with,

and make public, information regarding the

ownership of the regulated market and, or the

market operator, and in particular, the identity and

scale of interests of any parties in a position to

exercise significant influence over the management<

(b) inform the competent authority of and

make public, any transfer of ownership which gives

rise to a change in the identity of the persons

exercising significant influence over the operation

of the regulated market.

4C. (1)

Regulated markets shall be obliged to>

Regulated

market bye-

laws and

arrangements.

(i) have clear and transparent bye-laws

regarding the admission of financial instruments to

trading which shall ensure that any financial

instruments admitted to trading on the regulated

market are capable of being traded in a fair, orderly

and efficient manner and, that transferable securities

are freely negotiable>

Provided that in the case of derivatives such

requirements shall also ensure that the design of

the derivative contract allows for its orderly pricing

as well as for the existence of effective settlement

conditions<

(ii) have effective arrangements to verify

that issuers of transferable securities that are

admitted to trading comply with their obligations

under European Community Law in respect of

initial, ongoing or ad hoc disclosure obligations<

(iii) establish arrangements which facilitate

its members or participants in obtaining access to

information which has been made public under

European Community law<

(iv) establish the necessary arrangements to

review regularly the compliance with admission

requirements of the financial instruments which are

admitted to trading.

(2) A transferable security that has been admitted

to trading on a regulated market can subsequently be

admitted to trading on other regulated markets, even

without the consent of the issuer and in compliance with

the relevant provisions of Directive 2003#71#EC of the

European Parliament and of the Council of 4 November,

2003 on the prospectus to be published when securities

are offered to the public or admitted to trading, and

amending Directive 2001#34#EC and any implementing

measures that have been or may be issued thereunder.

(3) The issuer shall be informed by the regulated

market of the fact that its transferable securities are traded

on that regulated market. The issuer shall not be subject

to any obligation to provide information required under

paragraph (ii) of sub-article (1) of this article directly to

any regulated market which has admitted the issuer’s

transferable securities to trading without its consent.

(4) In complying with the provisions of this article

regulated markets shall also comply with the applicable

provisions of Commission Regulation (EC) no

1287#2006 of 10 th August 2006 implementing Directive

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

Council as regards record-keeping obligations for

investment firms, transaction reporting, market

transparency, admission of financial instruments to

trading, and defined terms for the purposes of that

Directive on pre and post trade transparency and

admission to trading as may be amended from time to

time.”.

Article 5 of the principal Act shall be amended as follows>

19. (a) in the marginal note thereof, for the word “Directives.”,

there shall be substituted the words “Financial Market Rules.”<

(b) in sub-article (1) thereof, for the words “may issue

directives”, there shall be substituted the words “may issue

Financial Market Rules”<

(c) for sub-article (2) thereof, there shall be substituted the

following>

“(2) Any Financial Market Rules issued by the

competent authority may require information to be given in a

specified form and to be verified in a specified manner and

any information so required shall be provided promptly.”<

and

(d) sub-article (3) thereof shall be deleted.

20. Article 6 of the principal Act shall be amended as follows>

(a) in the marginal note thereof, for the words “modification

of directives.”, there shall be substituted the words “modification

of Financial Market Rules.”<

(b) sub-article (1) thereof shall be amended as follows>

(i) for the words “any of the directives”, there shall be

substituted the words “any of the Financial Market Rules”,

and for the words “specified in the directive”, there shall be

substituted the words “specified in the Financial Market Rule”<

(ii) in paragraph (a) thereof, for the words “the

directives”, wherever they appear, there shall be substituted

the words”“the Financial Market Rules”<

(iii) in paragraph (b) thereof, for the words “the

directive”, there shall be substituted the words “the Financial

Market Rule”, and for the words “such directives”, there shall

be substituted the words “such Financial Market Rules”< and

(c) in sub-article (2) thereof, for the words “A directive

issued”, there shall be substituted the words “A Financial Market

Rule issued”.

Article 7 of the principal Act shall be amended as Amendment of

article 7 of the

principal Act.

(a)

sub-article (1) thereof shall be amended as follows>

(i) in paragraph (a) thereof, for the words “for

recognition”, there shall be substituted the words “for

authorisation”<

(ii) in sub-paragraph (ii) of paragraph (b) thereof, for

the words “or any other requirement whatsoever.”, there shall

be substituted the words “or any other requirement

whatsoever<”<

(b) immediately after sub-paragraph (ii) of paragraph (b)

of sub-article (1) thereof, there shall be inserted the following new

sub-paragraph (iii)>

“(iii) requiring the cessation of any practice that is

contrary to the provisions adopted in the implementation of

the Directive.”.

Article 8 of the principal Act shall be amended as follows>

(a) in the marginal note thereof, for the words “of

recognition order.”, there shall be substituted the words “of an

authorisation.”<

(b) in sub-article (1) thereof, for the words “A recognition

order”, there shall be substituted the words “An authorisation”<

(c)

sub-article (2) thereof shall be amended as follows>

(i) in paragraph (a) thereof, for the words “for

recognition”, there shall be substituted the words “for

authorisation”<

(ii) in paragraph (b) thereof, for the words “under this

Act,” there shall be substituted the words “ under this Act,

or”<

(iii) immediately after paragraph (b) thereof, there shall

be inserted the following new paragraphs (c), (d) and (e)>

“(c) does not make use of the authorisation within

twelve months, expressly renounces the authorisation

or has not operated for the preceding six months, or

(d) has obtained the authorisation by making false

statements or by any other irregular means< or

(e) no longer meets the conditions under which

authorisation was granted,”<

(iv) in the paragraph immediately following the new

paragraph (e) thereof, for the words “the recognition order”,

wherever these appear, there shall be substituted the words

“the authorisation”<

(d) in sub-article (3) thereof, for the words “revoking a

recognition order”, there shall be substituted the words “revoking

an authorisation”<

(e)

sub-article (4) thereof shall be deleted<

(f) sub-article (5) thereof shall be renumbered as sub-article

(4).

Article 10 of the principal Act shall be amended as follows> Amendment

article 10 of the

principal Act.

(a) the words “rules or bye-laws” wherever they appear,

shall be substituted the words “bye-laws”<

(b) in paragraph (c) thereof, for the words “on the

exchange”, there shall be substituted the words “on the regulated

market”.

Immediately after Article 10 of the principal Act there shall Addition of new

article 10A to the

be inserted the following new article 10A>

principal Act.

10A (1) Regulated markets shall offer all their

members or participants the right to designate the systems

settlement of

transactions.

for the clearing and settlement of transactions in financial

instruments undertaken on that regulated market subject to>

(a) such links and arrangements between the

designated clearing and settlement system and any other

system or facility as are necessary to ensure the efficient

and economic settlement of the transaction in question<

and

(b) agreement by the competent authority

responsible for the supervision of the regulated market

that technical conditions for the clearing and settlement

of transactions concluded on the regulated market

through a clearing and settlement system other than that

designated by the regulated market are such as to allow

smooth and orderly functioning of financial markets.

(2) Regulated markets shall not be prohibited

from entering into appropriate arrangements with a central

counterparty or clearing house and a clearing and settlement

system of another Member State or EEA State with a view to

providing for the clearing and, or settlement of some or all

trades concluded by market participants under their systems>

Provided that the competent authority may prohibit a

regulated market from entering into such arrangements where

it considers this is necessary to maintain the orderly

functioning of that regulated market.”.

Article 11 of the principal Act shall be amended as follows> Amendment of

article 11 of the

principal Act.

(a) in paragraph (a) thereof, for the words “to the official

lists and to any other recognised list”, there shall be substituted

the words “to any recognised list”<

(b) for paragraph (b) thereof there shall be substituted the

following>

“(b) to make Listing Rules for the better

implementation and purposes of this Part of this Act<”<

(c) in paragraph (c) thereof, immediately after the words

“remain listed”, there shall be inserted the following new words

“and to monitor the timely disclosure of information by issuers or

any other person subject to the Listing Rules with the objective of

ensuring effective and equal access to the public in Malta and in

all Member States or EEA States where the transferable securities

are traded<”<

(d) for paragraph (d) thereof there shall be substituted the

following new paragraphs (d) and (e)>

“(d) to act as the central competent administrative

authority responsible for carrying out the obligations provided

for in the Transparency Directive and for ensuring that the

provisions adopted pursuant to this Directive are applied and

to issue rules in furtherance of its responsibility under any

provisions of the said Directive which rules shall be binding

on issuers, shareholders and any other person as may be

indicated in the said rules<

(e) to act as the authority competent to supervise bids for

the purpose of the Listing Rules made or introduced pursuant to

the Takeover Bids Directive.”.

Article 12 of the principal Act shall be amended as follows>

(a)

sub-article (1) thereof shall be amended as follows>

(i) in paragraph (a) thereof, for the words “trading on

the Official List or on any other recognised list unless the

Listing Authority shall have first authorised the admissibility

of such financial instruments to listing in accordance with

any rules made under article 13.”, there shall be substituted

the words “trading on any recognised list unless the Listing

Authority shall have first authorised the admissibility of such

financial instruments to listing in accordance with any Listing

Rules made under article 13.”<

(ii) in paragraph (b) thereof, for the words “to listing

on the official list or on any other recognised list.”, there shall

be substituted the words “to listing on any recognised list.”<

(b) sub-article (2) thereof shall be amended as follows>

(i) for the words “The Exchange and every recognised

investment exchange may admit to listing and trading to the

official list or, as the case may be, to the recognised list

concerned”, there shall be substituted the words “Every

regulated market may admit to listing and trading to the

recognised list concerned”<

(ii) in paragraph (b) thereof, for the words “to the

official list or to any other recognised list”, there shall be

substituted the words “to any recognised list”<

(iii) in the proviso to paragraph (b) thereof, the words

“the Exchange and” shall be deleted.

Article 13 of the principal Act shall be amended as follows> Amendment of

article 13 of the

principal Act.

(a) in the marginal note thereof, for the words “Listing rules”

there shall be substituted the words “Listing Rules”<

(b) for the words “listing rules” wherever they appear in

the said provision and in the Act there shall be substituted the

words “Listing Rules”<

(c) in paragraph (a) thereof, for the words “to the official

list or to any other recognised list”, there shall be substituted the

words “to any recognised list”<

(d) in paragraph (d) thereof, for the words “in any listing

particulars, prospectus” there shall be substituted the words “in

any prospectus”<

(e) in paragraph (e) thereof, for the words “of any listing

particulars, prospectus” there shall be substituted the words “of

any prospectus”<

(f) in paragraph (f) thereof, for the words “the rules the

publication” there shall be substituted the words “the Listing Rules

the publication”, and for the words “on the official list or on any

recognised list”, there shall be substituted the words “on any

recognised list”<

(g) in paragraph (g) thereof, for the words “the Listing

Authority, the Exchange and other recognised investment

exchanges”, there shall be substituted the words “the Listing

Authority and regulated markets”<

(h) paragraph (i) thereof shall be renumbered as paragraph

(j)< and

(i) immediately after paragraph (h) thereof, there shall be

inserted the following new paragraph (i)>

“(i) transposing, implementing and giving effect to the

provisions, requirements, obligations, commitments and

measures of the European parliament and of the Council issued

in relation to the regulation of admissibility to listing of

financial instruments on regulated markets and, or the

regulation of issuers or any other person subject to the Listing

Rules, arising out of membership of, affiliation to or

relationship with international or regional organisations or

groupings of countries or out of any treaty, convention or

other international agreement whether bilateral, regional or

multilateral, to which Malta is a party<”.

In sub-article (2) of article 14 of the principal Act for the

words “such rules of procedure as set out”, there shall be substituted

the words “such procedure as is set out”.

Article 15 of the principal Act shall be amended as follows>

(a)

sub-article (2) thereof shall be deleted<

(b) sub-articles (3) and (4) thereof shall be respectively

renumbered as sub-articles (2) and (3)< and

(c) in paragraph (a) of sub-article (2) as re-numbered, and

wherever it appears in the Act for the words “listing rule” there

shall be substituted the word “Listing Rule”.

Article 16 of the principal Act shall be amended as follows>

(a) for sub-article (1) thereof, there shall be substituted the

following>

“(1) The Listing Authority shall notify the applicant

of its decision regarding the approval of the prospectus within

ten working days of the submission of the draft prospectus.”<

(b)

for sub-article (2) thereof, there shall be substituted

the following>

“(2) The time limit referred to in sub-article (1) shall

be extended to twenty working days if the offer involves

transferable securities issued by an issuer which does not have

any transferable securities admitted to trading on a regulated

market and who has not previously offered transferable

securities to the public.”<

(c)

sub-articles (3), (4), (5), (6) and (7) thereof shall be

respectively renumbered as sub-articles (5), (6), (7), (8) and (9)<

and

(d) immediately after sub-article (2) thereof, there shall be

inserted the following new sub-articles (3) and (4)>

“(3) (a) If the Listing Authority finds, on reasonable

grounds, that the documents submitted to it are incomplete or

that supplementary information is needed, the time limits

referred to in sub-articles (1) and (2) shall apply only from

the date on which such information is provided by the

applicant.

(b) In the case referred to in sub-article (1) the

Listing Authority should notify the applicant if the

documents are incomplete within ten working days of

the submission of the application.

(4) If the Listing Authority fails to give a decision on

the prospectus within the time limits mentioned in sub-articles

(1) and (2), this shall not be deemed to constitute approval of

the prospectus.”< and

(e) in sub-article (6) as re-numbered, for the words “with

sub-article (5)”, there shall be substituted the words “with sub-

article (7)”.

Sub-article (1) of article 17 of the principal Act shall be Amendment of

article 17 of the

amended as follows>

principal Act.

(a) in paragraph (a) thereof, for the words “at the request of

the Exchange or another” there shall be substituted the words “at

the request of a”<

(b) for paragraph (b) thereof, there shall be substituted the

following>

“(b) Without prejudice to the right of the Listing

Authority under paragraph (a) of this article to demand

suspension or removal of an instrument from trading, the

market operator of the regulated market may suspend or

remove from trading a financial instrument which no longer

complies with the bye-laws of the regulated market unless

such a step would be likely to cause significant damage to the

investors’ interests or the orderly functioning of the market.

The market operator of a regulated market that suspends or

removes from trading a financial instrument shall make public

this decision and communicate the relevant information to

the Listing Authority. The Listing Authority shall inform the

European regulatory authorities of the other Member States

or EEA States of this decision.”<

(c) immediately after paragraph (b) thereof, there shall be

inserted the following new paragraph (c)>

“(c) When the Listing Authority demands the

suspension or removal of a financial instrument from trading

on one or more regulated markets, it shall immediately make

public its decision and inform the European regulatory

authorities of the other Member States or EEA States.”.

Article 18 of the principal Act shall be amended as follows>

(a) in paragraph (b) of sub-article (3) thereof, for the words

“the interest of the Exchange or of any” there shall be substituted

the words “the interest of a”<

(b) in sub-article (7) thereof, for the words “to the official

list or such other recognised list”, there shall be substituted the

words “to any recognised list”.

Article 19 of the principal Act shall be amended as follows>

(a) in the marginal note thereof, for the words “Penalty or

censure in”, there shall be substituted the words “Penalty in”<

(b) in sub-article (1) thereof>

(i) in paragraph (a) thereof, for the words “instruments,

or” there shall be substituted the words “instruments,”<

(ii) in paragraph (b) thereof, for the words “to listing<”

there shall be substituted the words “to listing, or”<

(iii) immediately after paragraph (b) thereof, there shall

be inserted the following new paragraph (c)>

“(c)

any other person subject to the Listing

Rules,”<

(iv) for the words “not exceeding twenty thousand

liri.”, there shall be substituted the words “not exceeding forty

thousand liri.”<

(c)

sub-article (2) thereof shall be deleted<

(d) sub-articles (3), (4), (5) and (6) thereof shall be re-

numbered as sub-article (2),(3), (4) and (5) respectively<

(e) in sub-article (5) thereof as re-numbered, for the words

“of sub-article (5)” there shall be substituted the words “of sub-

article (4)”.

Article 20 of the principal Act shall be amended as follows> Amendment of

article 20 of the

principal Act.

(a) in the marginal note thereto, for the words “Notice of

penalty or censure.” there shall be substituted the words “Notice

of penalty.”<

(b) sub-article (3) and (5) thereof shall be deleted<

(c) sub-article (4) and (6) thereof shall be re-numbered as

sub-articles (3) and (4) respectively.

Article 22 of the principal Act shall be amended as follows> Amendment of

article 22 of the

principal Act.

(a) for the words “(c) to the Exchange or to such other

recognised investment exchange in relation to any financial

instruments listed on the Exchange or on the other recognised

investment exchange concerned”, there shall be substituted the

words “(c) to regulated markets in relation to any financial

instruments listed on the regulated markets concerned”<

(b) for paragraph (a) thereof, there shall be substituted the

following>

“(a) if the Listing Authority delegates any of its powers

to impose an administrative penalty under article 19(1) and

(2) to the regulated markets concerned, article 19(3) and article

20 shall apply mutatis mutandis to the regulated markets

concerned”<

(c) the proviso to paragraph (b) thereof shall be amended

as follows>

(i) for the words “under article 19(1), (2) and (3) as

aforesaid neither the Listing Authority nor the Exchange or

other recognised investment exchange concerned”, there shall

be substituted the words “under article 19(1) and (2) as

aforesaid neither the Listing Authority nor the regulated

markets concerned”< and

(ii) for the words “Authority or the Exchange or

recognised investment exchange concerned as the case may

be,” , there shall be substituted the words “Authority or the

regulated markets concerned,”.

For Part IV of the principal Act there shall be substituted the

following>

“PART IV

CENTRAL SECURITIES DEPOSITORY

24. (1) No person shall operate a central securities

Authorisation

requirement.

depository or shall provide, or hold itself out to be or provide,

the service of a central securities depository in or from Malta

unless such person is in possession of a written authorisation

issued by the competent authority under this Part.

(2) Any body corporate or unincorporate may

apply in writing to the competent authority for an

authorisation under this Part, authorizing it to act as a

central securities depository for the purposes of this Act.

(3) Authorisation to act as a central securities

depository may be granted only where the competent

authority is satisfied that the applicant complies and will

be in a position to comply with the applicable

requirements laid down in this Act and regulations and

Financial Market Rules issued hereunder.

(4) Nothing in this Act or in any regulation made

hereunder shall be construed as enabling or empowering

a central securities depository to perform a function or

activity which requires an approval or authorisation in

terms of the Central Bank of Malta Act or any other

law.

25. (1) In determining an application the

competent authority shall have regard to such

information and other factors as it may consider relevant

or material to the application.

(2) The competent authority may, upon receipt

of an application duly made in accordance with this Part

grant or refuse to grant an authorisation. Where the

competent authority issues an authorisation, the central

securities depository shall be responsible for ensuring

that the provisions of the Act, regulations made

thereunder and Financial Market Rules issued by the

competent authority, which are applicable to central

securities depositories are complied with.

(3) An authorisation shall state the date on which

it shall take effect.

(4) Where the competent authority refuses an

application for an authorisation it shall give the applicant

a notice to that effect stating the reasons for the refusal.

(5) If the competent authority refuses an

application for an authorisation the applicant shall have

a right of appeal to the Tribunal in accordance with Part

VI of this Act.

(6) An authorisation may, in accordance with such

regulations as may be prescribed, be varied, suspended

or revoked by the competent authority.

(7) An authorisation issued to a central securities

depository under this article shall identify the financial

instruments, designated or otherwise, which the central

securities depository would be authorised to provide

services to and shall further identify the functions it is

authorised to carry out.

26. Without prejudice to any other power or function

conferred

on it by law or regulation, the functions of a central

securities depository may include the following>

(a) provision of custody or depository facilities

in respect of financial instruments<

(b) maintenance of registers of members and

holders of financial instruments and recording of

transactions and holdings in financial instruments<

(c) provision, management and administration of

a securities clearing and settlement system in respect of

financial instruments, including the provision of access

and interoperable links between such a system and other

securities clearing and settlement systems, central

securities depositaries, central counterparties and

clearing houses, and other services ancillary to the above<

(d) authentication of register of members or

holders of designated financial instruments or of any

extract thereof< and

(e) such other ancillary or consequential functions

related to the above including any preparatory and other

related corporate administrative services in relation to

issues of financial instruments which are listed or to be

listed, as may be established by Financial Market Rules>

Provided that no central securities depository may

be authorised to carry out solely ancillary or

consequential functions.

27. (1) An authorisation may be revoked by an order

authorisation. issued in writing by the competent authority at the request, or

with the consent, of the central securities depository or

otherwise as provided in this Act.

(2) An authorisation may be revoked by an order

issued in writing without the consent of a central

securities depository, if it appears to the competent

authority that the central securities depository>

(a) is failing, or has failed, to satisfy the

requirements for authorisation under this Act,

regulations or Financial Market Rules made

hereunder< or

(b) is failing or has failed, to comply with

any other obligation imposed on it by or under this

Act, regulations or Financial Market Rules made

hereunder< or

(c) does not make use of the authorisation

within 12 months, expressly renounces the

authorisation or has not operated for the preceding

six months< or

(d) has obtained the authorisation by making

false statements or by any other irregular means<

or

(e) no longer meets the conditions under

which authorisation was granted.

(3) An order under sub-articles (1) and (2)

revoking an authorisation hereinafter referred to as a

“revocation order” shall specify the date on which it is

to take effect.

(4) A revocation order may contain such transitional

provisions and other terms and conditions as the competent

authority may consider necessary or expedient.

(5) If a revocation order is issued, a central

securities depository shall have a right of appeal to the

Tribunal in accordance with Part VI.

28. (1) Notwithstanding the provision of any other

law, the title to and rights in respect of designated financial

instruments, the register of which is maintained in a central

securities depository, may be created and, or transferred by

an entry on the register maintained in a central securities

depository and no instrument in writing shall be required for

this purpose.

(2) Notwithstanding the provisions of any other

law, the title to and rights in respect of designated

financial instruments, the register of which is maintained

in a central securities depository, may be held or

evidenced in a dematerialised or uncertificated form.

(3) The provisions of article 1966 (3) and (4) of

the Civil Code shall not apply in respect of designated

financial instruments and the privilege referred to in Title

XXI of Part II of Book Second of the said Code shall

arise where the pledge has been duly registered with a

central securities depository.

(4) The authentic record of members and holders

of financial instruments and of transactions and holdings

of a designated financial instrument may be held,

maintained and evidenced by a central securities

depository duly authorised in terms of this Part.

(5) The register and documents kept by a central

securities depository in respect of designated financial

instruments shall , at a reasonable cost, be open for

inspection by any person as may be prescribed by

regulations which shall establish which records and

registers held by a central securities depository will be

open to public inspection and under what conditions.

29. The provisions of articles 4B, 6, 7, and 9 of Part II

of this Act shall apply mutatis mutandis to central securities

depositories authorised under this Part.

30. (1) The Minister, acting on the advice of the

competent authority, may make regulations setting out>

(a) the requirements and conditions which must

be satisfied by a person if it is to provide the services of

a central securities depository in respect of which the

competent authority may issue an ‘authorisation’ under

this Act<

(b) the requirements which a central securities

depository must continue to satisfy if it is to remain

authorised, including the amount of fees to be payable

to the competent authority<

(c) the circumstances and the manner in which

an authorisation or the requirements and conditions to

which it is subject may be varied, suspended or revoked<

(d) requirements for the authorisation, operation,

functions, regulation and supervision of a central

securities depository<

(e) requirements for the creation, holding or

evidencing of title to and rights in respect of Financial

Instruments in a dematerialised or uncertificated form<

(f) arrangements for the investigation of

complaints and or grievances about central securities

depositories and remedies in respect thereof<

(g) arrangements for the ascertainment of

compliance by central securities depositories and the

scrutiny of rules and requirements of central securities

depositories<

(h) exemptions from the requirement for an

authorisation 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<

(i) the categories or classes of financial

instruments which, for the purpose of the Act, qualify

as designated financial instruments<

(j) prescribing anything that is incidental to or

connected with any of the above matters.

(2) Regulations made under this article may be made

subject to such exemptions or conditions as may be specified

therein, may make different provision for different categories

or classes of financial instruments and for different

circumstances or purposes.

31. The competent authority may from time to time

issue Financial Market Rules which shall be binding on central

securities depositories authorised under this Part and on others

as may be specified, and such Rules may be issued in respect

of any matter raised in this Part, including Rules for the better

regulation of and for securing compliance by central securities

depositories and their officials with the requirements and

obligations arising under this Act or regulations made

thereunder.”.

Article 32 of the principal Act shall be amended as follows: Amendment

of article 32

of the

principal

Act.

(a)

in sub-article (1) thereof>

(i) in paragraph (i) thereof, for the words “any

recognised investment exchange”, there shall be substituted

the words “any regulated market or central securities

depository”<

(ii) in paragraph (iii) thereof, for the words “a

recognised investment exchange or any other person who is

or was involved in the operations of a recognised investment

exchange”, there shall be substituted the words “a regulated

market or central securities depository, or any other person

who is or was involved in the operations of a regulated market

or central securities depository”<

(iii) immediately after paragraph (iv) thereof, there

shall be added the following new paragraphs (v) and (vi)>

“(v) any auditor of a regulated market who

appears to be in possession of relevant information<

(vi) any other person who appears to be in possession

of relevant information<”<

(iv) in paragraph (a) thereof, for the words “as it

may require<”, there shall be added the words”“as it may

require, including the power to require existing telephone

and existing data traffic records<”<

(b) sub-articles (4) to (8) thereof shall be deleted.

Article 33 of the principal Act shall be amended as follows>

281. (a) in sub-article (1) thereof, for the words “article 32(1)(i)

to (iv) there shall be substituted the words “article 32(1)(i) to (vi)<

(b) in paragraph (b) of sub-article (2) thereof, for the words

“competent authority by article 32, including the power to apply

to the Court of Appeal in the circumstances described in sub-article

(4) of that article, and any”, there shall be substituted the words

“competent authority by article 32, and any”<

(c) sub-articles (4) and (5) thereof shall be renumbered as

sub-articles (5) and (6) respectively<

(d) immediately after sub-article (3) thereof there shall be

added the following new sub-article (4)>

“(4) For the purposes of this article inspectors may

include an advocate, a person authorised to carry on the

profession of accountant or auditor in terms of the

Accountancy Profession Act, or a person considered by the Cap.281.

competent authority as possessing suitable expertise to

exercise such function.”.

Immediately after article 34 of the principal Act there shall Addition of new

article 34A to the

be inserted the following new article>

principal Act.

34A. Any decision taken under this Act by the

competent authority in terms of any provisions which

transpose the Directive, including any regulations, Financial

Market Rules or administrative provisions made thereunder

for the said transposition, shall state the grounds on which

such a decision has been based.”.

Article 35 of the principal Act shall be amended as follows> Amendment of

article 35 of the

principal Act.

(a) for the words “any rules or bye-laws”, there shall be

substituted the words “any bye-laws”< and

(b) for the words “the rules and bye-laws”, there shall be

substituted the words “the bye-laws”.

Article 36 of the principal Act shall be amended as follows> Amendment of

article 36 of the

principal Act.

(a) for the marginal note thereof, there shall be substituted

the following “Report on market abuse.”< and

(b) the words “the Exchange or” shall be deleted.

Article 37 of the principal Act shall be amended as follows> Amendment of

article 37 of the

principal Act.

(a) in the marginal note thereof, for the words “Co-operation

with overseas regulatory authority.”, there shall be substituted the

words “Co-operation with European regulatory authorities.”<

(b) sub-article (1) thereof shall be renumbered as sub-article (11)<

(c) sub-article (2) thereof shall be deleted and there shall

be inserted the following new sub-articles as follows>

“(1) The competent authority shall act as the contact

point in terms of and for the purposes of sub-article (1) of

article 56 of the Directive.

(2) The competent authority shall cooperate with other

European regulatory authorities whenever necessary for the

purpose of carrying out its duties under the Directive. It shall

render the necessary assistance to other European regulatory

authorities, in particular by exchanging information and

cooperating in any investigatory or supervisory function. In

terms of the Directive, the competent authority may use its

powers for the purposes of cooperation even in cases where

the conduct under investigation does not constitute an

infringement of any provisions of this Act, regulations or

Financial Market Rules issued thereunder.

(3) Upon receipt of a request from European regulatory

authorities designated as contact points within the individual

Member States or EEA States under sub-article (1) of Article

56 of the Directive, the competent authority shall immediately

take the necessary measures in order to gather the information

required for the carrying out of their duties pursuant to the

Directive. If the competent authority is not able to supply the

required information immediately, it shall notify the

requesting European regulatory authority of the reasons.

(4) At the time of communicating information to the

European regulatory authorities, whether designated as contact

points or not, the competent authority may stipulate that the

information must not be disclosed without its express

agreement, in which case such information may be exchanged

solely for the purposes for which the competent authority had

given its agreement.

(5) Where a European regulatory authority exchanging

information with the competent authority stipulates at the time

of communication of the information that such information

must not be disclosed without its express agreement, such

information may be used by the competent authority solely

for the purposes for which the European regulatory authority

would have given its agreement.

(6) Information received by the competent authority

from contact points in the other Member States or EEA States

may be transmitted to other bodies or natural or legal persons,

provided that>

(a) the express agreement of the contact points which

disclosed the information is obtained< and

(b) the information is used solely for the purposes for which

the contact points gave their agreement>

Provided further that in duly justified circumstances the

competent authority can transmit information to other bodies or

natural or legal persons without satisfying the conditions in

paragraphs (a) and (b) of this sub-article, in which case the

competent authority shall immediately inform the contact point

that sent the information.

(7) Where the competent authority receives

confidential information from contact points in the other

Member States or EEA States or from overseas regulatory

authorities under articles 37C of this Act, or when other bodies

or natural or legal persons receive confidential information

from the competent authority, they may only use such

confidential information in the course of their duties, in

particular>

(a) to monitor the proper functioning of trading venues

within the meaning of the Directive<

(b) to impose penalties or adopt other administrative

measures and to consider representations received in their regard<

(c)

in appeals under article 42 of this Act< or

(d) to investigate complaints received from consumers in

terms of article 20 of the Malta Financial Services Authority Act. Cap. 330.

(8) Without prejudice to the powers of the competent

authority under this Act or any other law, where the competent

authority has good reason to suspect that acts contrary to the

provisions of the Directive are being or have been carried out

on the territory of another Member State or EEA State by

entities not subject to its supervision, it shall notify this in as

specific a manner as possible to the contact point in the other

Member State or EEA State.

(9) Where the information in the possession of the

competent authority had originated from a European

regulatory authority or an overseas regulatory authority, it

may not be disclosed to a European regulatory authority or to

any other third party without the express agreement of the

European regulatory authority or the overseas regulatory

authority which had transmitted it and, where appropriate,

solely for the purposes for which that authority had given its

agreement.

(10) Where a European regulatory authority suspects

that acts carried out by entities not subject to its supervision

and which are contrary to the provisions of the Directive are

being or have been carried out in Malta and notifies the

competent authority to this effect, the competent authority

shall take appropriate action. The competent authority shall

inform the notifying European regulatory authority of the

outcome of any such action and, to the extent possible, of

significant interim developments>

Provided that any such action taken by the competent authority

shall be without prejudice to the powers and functions of the

European regulatory authority that has forwarded the information.”<

(d) sub-article (11) as re-numbered shall be amended as

follows>

(i) for the words “an overseas regulatory authority”

there shall be substituted the words “a European regulatory

authority”<

(ii) paragraph (c) thereof shall be re-numbered as

paragraph (e)<

(iii) immediately after paragraph (b) thereof there shall

be inserted the following new paragraphs>

“(c)

the powers to issue directives under article

5<

(d) the powers of entry under article 34<”<

(iv) in paragraph (e) thereof, as re-numbered, for the

words “overseas regulatory authority” there shall be

substituted the words “European regulatory authority”.

Immediately after article 37 of the principal Act there shall

be inserted the following new articles>

37A. (1) The competent authority may request the

co-operation

of a European regulatory authority in supervisory

functions, on-

functions or for on-site verifications or investigations, and a

verifications European regulatory authority may likewise request the co-

investigations. operation of the competent authority in the performance of

its supervisory functions or in verifications or investigations.

(2) In the exercise of such co-operation between

the competent authority and European regulatory authorities

the provisions of article 17A of the Investment Services Act

shall apply mutatis mutandis.

37B. The competent authority may refuse to act on a

request for co-operation in carrying out supervisory functions,

on-site verifications or investigations in terms of article 37A

or to exchange information with European regulatory

authorities designated as contact points under article 56(1) of

the Directive, in the circumstances laid down in Article 17B

of the Investment Services Act.

37C. (1) Co-operation agreements with overseas

Co-operation

with overseas

regulatory

authorities or other authorities, bodies and natural

or legal persons in a country that is not a Member State or

EEA State may be entered into only if the information

disclosed is subject to guarantees of professional secrecy at

least equivalent to those required under article 38 of this Act.

Such exchange of information must be intended for the

performance of the functions of those overseas regulatory

authorities or other authorities, bodies and natural or legal

persons>

Provided that the transfer of personal data to countries

that are not Member States or EEA States shall be in

accordance with the provisions of Chapter IV of Directive

95#46#EC of the European Parliament and of the Council of

24 October 1995 on the protection of individuals with regard

to the processing of personal data and on the free movement

of such data.

(2) In the conclusion of co-operation agreements

providing for the exchange of information with overseas

regulatory authorities, other authorities or with bodies and

natural or legal persons in countries that are not Member States

or EEA States, the provisions of sub-article (2) of article 17D

of the Investment Services Act shall apply mutatis mutandis.

(3) Where the information in the possession of

the competent authority had originated from a European

regulatory authority or an overseas regulatory authority, it

may not be disclosed to an overseas regulatory authority or

to any other third party without the express agreement of the

European regulatory authority or the overseas regulatory

authority which had transmitted it and, where appropriate,

solely for the purposes for which that authority had given its

agreement.

(4) Without prejudice to the foregoing provisions

of this article, at the request of, or for the purposes of assisting

an overseas regulatory authority, the competent authority may

exercise the powers listed in sub-article (11) of article 37 of

the Investment Services Act, and for the purposes of this sub-

article the words “European regulatory authority” shall be

read as “overseas regulatory authority.”.

For article 38 of the principal Act there shall be substituted

the following>

“(1) Regulated markets, central securities depositories, the

Listing Authority, the competent authority, their respective

members, officers, employees or agents, as well as auditors,

inspectors and experts, as the case may be, engaged in terms and

for the purposes of any of the provisions of this Act –

(a) shall deal with all documents and other information

relating to the relevant regulated market or to dealings

therewith or therein, or otherwise obtained for the purposes

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

regulations made thereunder and not yet officially divulged,

as confidential and protected by the duty of professional

secrecy, and shall not disclose the same to any other person<

(b) are prohibited from using such documents and

information and all other matters which are confidential and

protected by the duty of professional secrecy and which come

to their knowledge by virtue of their position, in order to secure

any advantage for themselves or for any third parties whether

such third parties are connected or not with the financial

instruments market.

(2) Article 26 of the Investment Services Act shall apply

mutatis mutandis to regulated markets, the Listing Authority, the

competent authority, their respective members, officers, employees

or agents, as well as auditors, inspectors and experts engaged for

the purposes of any of the provisions of this Act, bound by the

obligation of confidentiality in terms of sub-article (1) of this article.

(3) Any person who acts in contravention of this article

shall, without prejudice to the provisions of the Prevention of

Financial Markets Abuse Act, be guilty of an offence against this Cap. 476.

Act, and shall on conviction be liable to a fine (multa) of five

thousand liri or to a term of imprisonment not exceeding two years

or to both such fine and imprisonment.

(4) Any person other than those mentioned in sub-

articles (1) and (2) who acquires any documents or any other

information to which the said sub-articles relate and who uses such

documents or information, with intent to secure advantage either

for himself or any other person, shall, without prejudice to the

Prevention of Financial Markets Abuse Act, be guilty of an offence Cap. 476.

against this Act and shall on conviction be liable to the same penalty

established for an offence against the provisions of this article.”.

Article 39 of the principal Act shall be amended as follows> Amendment of

article 39 of the

principal Act.

(a)

sub-article (1) thereof shall be amended as follows>

(i) in paragraph (a) thereof, for the words “or the rules

or bye-laws of a recognised investment exchange or will

contravene or fail to comply with any obligation, requirement,

directive or order made or given under any of the provisions

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

bye-laws of a recognised investment exchange<”, there shall

be substituted the words “or the bye-laws of a regulated market

or will contravene or fail to comply with any obligation,

requirement, Financial Market Rule, Listing Rule, directive

or order made or given under any of the provisions of this

Act, the regulations made thereunder or the bye-laws of a

regulated market<”<

(ii) in paragraph (b) thereof, for the words

“requirement, directive, or order”, there shall be substituted

the words “requirement, directive, Financial Market Rule,

Listing Rule or order”<

(b) in paragraph (a) of sub-article (2) thereof for the words

“the rules of a recognised investment exchange or any obligation,

requirement, directive, or order made or given under any of the

provisions of this Act or under the rules or bye-laws of a recognised

investment exchange<”, there shall be substituted the words “the

bye-laws of a regulated market or any obligation, requirement,

Financial Market Rule, Listing Rule, directive or order made or

given under any of the provisions of this Act or under the bye-

laws of a regulated market<”<

(c) in paragraph (a) of sub-article (3) thereof, for the words

“the rules or bye-laws of a recognised investment exchange or any

obligation, requirement, directive, or order made or given under

any of the provisions of this Act, the regulations made thereunder

or the rules or bye-laws of a recognised investment exchange<”,

there shall be substituted the words “the bye-laws of a regulated

market or any obligation, requirement, Financial Market Rule,

Listing Rule, directive or order made or given under any of the

provisions of this Act, the regulations made thereunder or the bye-

laws of a regulated market”<

Immediately after article 39 of the principal Act there shall

be inserted the following new article>

“Administrative

39A. (1) Where any person contravenes or fails to

comply with any provision of this Act, other than Part III

thereof, including failure to cooperate in an investigation, or

of any regulations, Financial Market Rules made thereunder

adopted in the implementation of the Directive, the competent

authority may by notice in writing and without recourse to a

court hearing impose on any such person or persons, as the

case may be, an administrative penalty which may not exceed

forty thousand liri.

(2) The competent authority may disclose to the

public any penalty imposed under the immediately preceding

sub-article>

Provided that the competent authority shall withhold such

publication where it deems that such disclosure would

seriously jeopardise the financial markets or cause

disproportionate damage to the parties involved.

(3) Persons upon whom notice is served under

sub-article (1) of this article shall have a right of appeal to the

Tribunal in accordance with article 43 of this Act.

(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

by the Tribunal of such appeal, the administrative penalty as

contained in the notice or as reduced or increased by the

decision of the Tribunal shall be due to the competent

authority. Upon the service of a copy of the notice of 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 for all effects and

purposes of Title VII of Part I of Book Second of the Code of

Organization and Civil Procedure.”.

Article 40 of the principal Act shall be amended as follows> Amendment of

article 40 of the

principal Act.

(a) in sub-article (1) thereof, for the words “order, directive,

rule or regulation”, there shall be substituted the words “order,

directive, Financial Market Rule, Listing Rule or regulation”<

(b) for sub-article (2) thereof there shall be substituted the

following>

“(2) Any person who knowingly or recklessly gives

the competent authority, any person appointed by it under

article 32(1)(c) or any inspector appointed under article 33,

information which is false or misleading shall be guilty of an

offence.”<

(c) for sub-article (3) thereof there shall be substituted the

following>

“(3) Any person who removes, destroys, conceals or

fraudulently alters any book, document or other paper,

including information stored in electronic format, which is

or is likely to be relevant to a request for information or

documentation or an inspection or an investigation in terms

of this Act, shall be guilty of an offence.”< and

(d) in sub-article (4) thereof, for the words “who

intentionally obstructs”, there shall be substituted the words “who

obstructs”.

Immediately after article 41 of the principal Act there shall Addition of new

article 41A.

be inserted the following new article 41A>

41A. If it appears to the competent authority or the

Listing Authority that a person has contravened any of the

provisions of this Act or of any regulations made under this

Act or has contravened or failed to comply with any condition,

obligation, requirement, Financial Market Rules, Listing

Rules or directives made or given under any of the provisions

of this Act, the competent authority or the Listing Authority,

as the case may be, may publish a statement to that effect.”<

Article 42 of the principal Act shall be amended as follows>

(a) in sub-article (1) thereof, for the words “articles 4(10),

16(7), 17(3), 18(6), 20(6) and 33(5)” there shall be substituted the

words “articles 4(11), 16(9), 17(3), 18(6), 20(4), 25(5), 27(5), 33(6)

and 39A”< and

(b) in sub-article (2) thereof, the words “from a decision of

the Council of the Malta Stock Exchange under paragraphs 5(1),

6(1) and 6(2) of the Statute as well as” shall be deleted.

Article 43 of the principal Act shall be amended as follows>

(a)

sub-article (1) thereof shall be amended as follows>

(i) paragraph (a) thereof shall be substituted by the

following>

“(a) that the competent authority, the Listing

Authority or the regulated market concerned, as the case

may be, has wrongly applied any of the provisions of

this Act, of the regulations made thereunder, or of the

bye-laws of the regulated market concerned< or”

(ii) in paragraph (b) thereof, for the words”“Listing

Authority, the Exchange or the recognised investment

exchange concerned,”, there shall be substituted the words

“Listing Authority or the regulated market concerned,”<

(b) in sub-article (2) thereof, for the words “from>

(a) a decision to discontinue the listing of any

financial instruments as is mentioned in article 18(5)<

and

(b) a decision to publish a statement of censure

under article 20>

Provided that a decision on any of the matters as is

referred to in paragraphs (a) and (b) shall become

operative”,

there shall be substituted the words “from a decision to

discontinue the listing of any financial instruments as is

mentioned in article 18 (5) in which case the decision shall

become operative”.

For article 44 of the principal Act there shall be substituted Substitution of

article 44 of the

the following>

principal Act.

“Applicability

44. Subject to article 43 of this Act, the provisions of

of the Malta article 21 of the Malta Financial Services Authority Act shall Cap. 330.

apply mutatis mutandis to appeals that may be brought before

the Tribunal under this article.”.

For article 45 of the principal Act there shall be substituted Substitution of

article 45 of the

the following>

principal Act.

45. (1) Quoted financial instruments may be traded

outside the regulated market on which they are listed.

(2) The Minister may make regulations to

establish conditions and procedures under which quoted

financial instruments may be traded outside the regulated

markets on which such quoted financial instruments are listed

and other than by means of facilities provided by any such

regulated markets.”.

In article 47 of the principal Act, for the words “with the Amendment of

article 47 of the

Exchange”, there shall be substituted the words “with a regulated principal Act.

market”.

Article 49 of the principal Act shall be amended as Amendment of

Article 49 of the

follows> –

principal Act.

(a) the said article 49 shall be re-numbered as sub-article

(1) of article 49<

(b) sub-article (1) as re-numbered shall be amended as

follows>

(i) in paragraph (a) thereof, for the words “of

recognised investment exchanges” there shall be substituted

the words “of regulated markets and central securities

depositories”<

(ii) in paragraph (c) thereof, the words “other than the

Exchange,” shall be deleted<

(iii) in paragraph (d) thereof, for the words “to which

Malta is a party.”, there shall be substituted the words “to

which Malta is a party<”<

(iv) immediately after paragraph (d) thereof, there shall

be inserted the following new paragraph (e)>

“(e) to transpose, implement and give effect to

the provisions and requirements of the Directive, as they

may be amended from time to time, including any

implementing measures that have been or may be issued

thereunder.”<

(c) immediately after sub-article (1) as re-numbered, there

shall be inserted the following new sub-articles>

“(2) Regulations made under this article, may be made

subject to such exemptions or conditions as may be specified

therein, may make different provision for different cases,

circumstances or purposes and may give to the competent

authority such powers of adaptation of the regulations as may

also be so specified.

(3) Where regulations have been issued in terms of

this article, the competent authority may issue Financial

Market Rules within the meaning of article 4 of this Act for

the better carrying out and to better implement the provisions

of the regulations.”.

For article 50 of the principal Act, there shall be substituted

the following>

“50. Notwithstanding anything contained in the Duty on

Documents and Transfers Act, or in any Act replacing that Act, no

duty shall be payable in accordance with that Act in respect of any

transfer of any financial instruments of a quoted company, or the

transfer of any financial instruments of the Government or any

body corporate established by law, where such transfer is made

either on a regulated market or outside the regulated market on

which they are listed in terms of article 45.”.

Article 51 of the principal Act shall be amended as follows>

(a) in sub-article (1) thereof, for the words “under article

33(4)”, there shall be substituted the words “under article 33(5)”<

and

(b) in sub-article (2) thereof, for the words “under article

33(4)”, there shall be substituted the words “under article 33(5)”.

In article 52 of the principal Act, for the words “or any rules Amendment of

article 52 of the

or regulations made thereunder” there shall be substituted the words principal Act.

“or any regulations or Financial Market Rules or Listing Rules made

Immediately after article 52 of the principal Act, there shall Addition of new

article 53 to the

be inserted the following new article 53>

principal Act.

53. The purpose of this Act is to regulate regulated

markets, central securities depositories, and to provide for

orderly trading in transferable securities and for matters

ancillary or incidental thereto or connected therewith, and to

implement the relevant provisions of the Directive which shall

be interpreted and applied accordingly.”.

The Schedule to the principal Act shall be repealed.

Repeal of Schedule

to the principal

Act.

PART III

(1) This Part amends and shall be read and construed as Amendment of the

one with the Investment Services Act, hereinafter in this Part referred Investment

Act,Cap. 370.

to as “the principal Act”.

(2) The provisions of this Part shall come into force on the

1 st November, 2007.

Article 2 of the principal Act shall be amended as follows>

Amendment of

article 2 of the

principal Act.

(a)

sub-article (1) thereof shall be amended as follows>

(i) immediately after the definition “collective

investment scheme licence” there shall be added the following

new definition>

“ “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<”<

(ii) in the definition “competent authority”, for the

words “of article 2A<” there shall be substituted the words

“of article 2A, which body shall also carry out the duties as

competent authority for all purposes of the Directive<”<

(iii) immediately after the definition “competent

authority” there shall be added the following new definitions>

“ “Directive” means Directive 2004#39#EC of the

European Parliament and of the Council of 21 April 2004

on markets in financial instruments amending Council

Directives 85#611#EEC and 93#6#EEC and Directive

2000#12#EC of the European Parliament and of the

Council and repealing Council Directive 93#22#EEC, as

amended from time to time, and includes any

implementing measures that have been or may be issued

thereunder<

(iv) immediately after the definition “ “document” or

“documentation” there shall be added the following new

definitions>

“ “EEA State” means a State which is a contracting

party to the agreement on the European Economic Area

signed at Oporto on the 2 nd May, 1992 as amended by

the Protocol signed at Brussels on the 17 th March, 1993

and as amended by any subsequent acts<”<

“ “European regulatory authority” means the body

or bodies designated by a Member”State or EEA State

in accordance with Article 48 of the Directive to carry

out each of the duties provided for under the different

provisions of the Directive<”<

(v) immediately after the definition “investment

services licence” there shall be added the following new

definition>

“ “Investment Services Rules” refers to Rules issued

by the competent authority under various articles of this

Act<”<

(vi) immediately after the definition “Malta’s

international commitments” there shall be added the following

new definition>

“ “Member State” means a Member State of the

European Communities<”<

(vii) for the definition “overseas regulatory authority”

there shall be substituted the following>

“ “overseas regulatory authority” means an

authority in a country or territory outside Malta that is

not a Member State or EEA State which exercises any

regulatory or supervisory function in relation to financial

services corresponding to a function of the competent

authority as defined in the Malta Financial Services

Authority Act<”<

(viii) in the definition “prescribed” for the words

“prescribed by rules or regulations” there shall be substituted

the words “prescribed by regulations”<

(ix) in the definition “recognised investment

exchange”, for the words “recognised investment exchange”,

there shall be substituted the words “regulated market”<

(b) immediately after sub-article (2) thereof there shall be

inserted the following new sub-article (3)>

“(3) The objective of this Act is, in part, to transpose

and implement the provisions of the Directive, and

consequently this Act and any regulations adopted thereunder

shall be interpreted and applied accordingly.”.

Article 6 of the principal Act shall be amended as follows>

Amendment of

article 6 of the

principal Act.

(a)

in sub-article (1) thereof>

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

(a)(i)<

(ii) in paragraph (a)(i) as re-numbered, for the words

“observe any rules and regulations made under this Act” there

shall be substituted the words “observe any Investment

Services Rules and regulations made under this Act”<

(iii) immediately after paragraph (a)(i) as re-numbered,

there shall be inserted the following new paragraph (a)(ii)>

“(ii) grant an investment services licence>

(a) if the applicant is a body corporate, unless

it has both its head office and registered office in

Malta<

(b) if the applicant is a body corporate with

no registered office under its national law, unless it

has its head office in Malta< or

(c) if the applicant is not a body corporate

unless the applicant’s head office is in Malta< ”<

(iv) paragraph (b) thereof shall be amended as follows>

(a) for the words “with any rules and regulations

made under this Act” there shall be substituted the words

“with any Investment Services Rules and regulations

made under this Act”<

(b) for the words “with the scheme.”, there shall

be substituted the words “with the scheme<”< and

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

inserted the following new paragraph (c)>

“(c) grant a licence to an applicant unless the

relevant European regulatory authorities have been

consulted in the instances referred to in article 17C of

this Act.”<

(b) in paragraph (b) of sub-article (2) thereof and

wherever else it appears in the principal Act, for the

word “guidelines”, there shall be substituted the words

“Investment Services Rules”<

(c)

for sub-article (9) thereof there shall be

substituted the following new sub-article>

“(9) The competent authority shall establish

a register of all holders of an investment services

licence. This register, which shall be publicly

available, shall also indicate the services in relation

to which each investment services licence was

issued and shall be updated on a regular basis.”<

and

(d)

sub-articles (10) and (11) thereof shall be

deleted.

Amendment of

Article 7 of the principal Act shall be amended as follows>

article 7 of the

principal Act.

(a) in paragraph (b) of sub-article (2) thereof, for the words

“of any rules or regulations made thereunder,”, there shall be

substituted the words “of any Investment Services Rules or

regulations made thereunder,”< and

(b) in paragraph (b) of sub-article (3) thereof, for the words

“of any rules or regulations made thereunder,”, there shall be

substituted the words “of any Investment Services Rules or

regulations made thereunder,”.

Article 12 of the principal Act shall be amended as Amendment of

article 12 of the

follows>

principal Act.

(a)

sub-article (1) thereof shall be amended as follows>

(i) for the words “may make rules or regulations to

give effect to the provisions of this Act, and without prejudice

to the generality of the foregoing may, by such rules or

regulations,” , there shall be substituted the words “may make

regulations to give effect to the provisions of this Act, and

without prejudice to the generality of the foregoing may, by

such regulations,”<

(ii) in paragraph (b) thereof, for the words “and to

regulate the management companies of such schemes< and to

make provisions on capital adequacy requirements”, there

shall be substituted the words “and to regulate the management

companies of such schemes<”<

(iii) in paragraph (f) thereof, for the words “to prescribe

rules governing the disclosure”, there shall be substituted the

words “to prescribe regulations governing the disclosure”<

(iv) in paragraph (h) thereof, for the words “or any

rules or regulations made under this article”, there shall be

substituted the words “or any regulations made under this

article”<

(v) in paragraph (j) thereof, for the words “applicable

to a licence holder<”, there shall be substituted the words

“applicable to a licence holder, as amended from time to

time, and including any implementing measures issued

thereunder<”<

(vi) paragraphs (k) and (l) thereof shall be re-numbered

as paragraphs (n) and (o)<

(vii) immediately after paragraph (j) thereof, there shall

be inserted the following new paragraphs>

“(k) transpose, implement and give effect to the

provisions and requirements of the Directive<

(l) establish financial resources requirements for

licence holders and to transpose, implement and give

effect to the provisions of Directive 2006#49#EC of the

European Parliament and of the Council of 14 June 2006

on the capital adequacy of investment firms and credit

institutions (recast), as may be amended from time to

time, and including any implementing measures issued

thereunder<

(m) provide for reporting and other requirements

and conditions which a person operating a multilateral

trading facility must satisfy, on a continuing and ongoing

basis and to establish the circumstances and the manner

in which requirements and conditions may be varied,

suspended or revoked, and to transpose the requirements

of the Directive thereon<”<

(b) sub-article (2)(A) thereof shall be amended as follows>

(i) for the words “Rules or regulations made”, there

shall be substituted the words “Regulations made”< and

(ii) in paragraph (a) thereof, for the words “under the

rules or regulations”, there shall be substituted the words

“under the regulations”<

(c) in sub-article (2)(B) thereof, for the words “Rules or

regulations made” there shall be substituted the words “Regulations

(d) sub-article (3) thereof shall be amended as follows>

(i) for the words “Rules or regulations made”, there

shall be substituted the words “Regulations made”< and

(ii) for the words “of the rules or regulations as”, there

shall be substituted the words “of the regulations as”<

(e) sub-articles (4) and (5) thereof shall be re-numbered as

sub-article (5) and (6) respectively<

(f) immediately after sub-article (3) thereof, there shall be

inserted the following new sub-article (4)>

“(4) Where regulations have been issued in terms of this

article, the competent authority may issue Investment Services

Rules within the meaning of article 6 of this Act for the better

carrying out and to better implement the provisions of the

regulations.”< and

(g) in sub-article (5) thereof, as re-numbered, for the words

“rules or regulations made” there shall be substituted the words

“Regulations made”.

In paragraph (a) of sub-article (1) of article 13 of the principal Amendment of

article 13 of the

Act, for the words “as it may require”, there shall be substituted the principal Act.

words “as it may require, including the power to require existing

telephone and existing data traffic records,”.

Immediately after sub-article (3) of article 14 of the principal Amendment of

article 14 of the

Act there shall be inserted the following new sub-article (4)>

principal Act.

“(4) For the purposes of this article inspectors may include

an advocate, a person authorised to carry on the profession of

accountant or auditor in terms of the Accountancy Profession Act, Cap. 281.

or a person considered by the competent authority as possessing

suitable expertise to exercise such function.”.

Sub-article (2) of Article 15 of the principal Act shall be Amendment of

article 15 of the

amended as follows>

principal Act.

(a) in paragraph (e) thereof, for the words “such other

person.”, there shall be substituted the words “such other person<”<

and

(b) immediately after paragraph (e) there shall be inserted

the following new sub-paragraphs (f) and (g)>

“(f) require the cessation of any practice that is contrary

to the provisions adopted in the implementation of the

Directive<

(g) require the removal of a financial instrument from

trading, on trading arrangements within the meaning of the

Directive, other than on regulated markets in terms of the

Financial Markets Act”.

Immediately after article 16 there shall be inserted the

following new articles>

“Administra-

16A. (1) Without prejudice to any other powers

tive penalties

assigned

to the competent authority in terms of this Act, where

a licence holder or the manager, secretary, director or any

other person responsible for a licence holder contravenes or

fails to comply with any of the conditions imposed in a licence,

and, or 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 Investment Services Rules issued

thereunder, including failure to cooperate in an investigation,

the competent authority may by notice in writing and without

recourse to a court hearing impose on the licence holder,

manager, secretary, director, and, or any other person as the

case may be, an administrative penalty which may not exceed

forty thousand liri.

(2) Investment Services Rules may provide for

the imposition of administrative penalties or other measures

that may be imposed by the competent authority on licence

holders or others, as may be specified, whether in the form of

a fixed penalty, a daily penalty, or both, for any breach of the

Rules.

(3) The imposition by the competent authority of

an administrative penalty in terms of this article shall be

without prejudice to any other consequence 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 penalty 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.

(4) Upon the conclusion of any appeal

proceedings in terms of article 19 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 Investment Services Rules issued

thereunder, and the penalty or administrative measure

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.

Obligation to

16B. Any decision taken under this Act by the

state grounds

competent

authority

in terms of any provisions which

for decisions.

transpose the Directive, including any regulations, Investment

Services Rules, or administrative provisions made thereunder

for the said transposition, shall state the grounds on which

such a decision has been based.”.

The sub-title “CO-OPERATION WITH OVERSEAS Amendment

title preceding

REGULATORY AUTHORITY” immediately preceding article 17 shall article 17 of the

be substituted by the new sub-title “CO-OPERATION WITH principal Act.

EUROPEAN REGULATORY AUTHORITIES AND OTHER

BODIES”

Article 17 of the principal Act shall be amended as follows> Amendment of

article 17 of the

principal Act.

(a) sub-article (1) thereof shall be re-numbered as sub-article

(11)<

(b) sub-article (2) thereof shall be deleted and there shall

be inserted the following new sub-articles as follows>

“(1) The competent authority shall act as the contact

point in terms of and for the purposes of sub-article (1) of

article 56 of the Directive.

(2) The competent authority shall cooperate with other

European regulatory authorities whenever necessary for the

purpose of carrying out its duties under the Directive. It shall

render the necessary assistance to other European regulatory

authorities, in particular by exchanging information and

cooperating in any investigatory or supervisory function. In

terms of the Directive, the competent authority may use its

powers for the purposes of cooperation even in cases where

the conduct under investigation does not constitute an

infringement of any provisions of this Act, regulations or

Investment Services Rules issued thereunder.

(3) Upon receipt of a request from European regulatory

authorities designated as contact points within the individual

Member States or EEA States under sub-article (1) of Article

56 of the Directive, the competent authority shall immediately

take the necessary measures in order to gather the information

required for the carrying out of its duties pursuant to the

Directive. If the competent authority is not able to supply the

required information immediately, it shall notify the

requesting European regulatory authority of the reasons.

(4) At the time of communicating information to the

European regulatory authorities, whether designated as contact

points or not, the competent authority may stipulate that the

information must not be disclosed without its express

agreement, in which case such information may be exchanged

solely for the purposes for which the competent authority had

given its agreement.

(5) Where a European regulatory authority exchanging

information with the competent authority stipulates at the time

of communication of the information that such information

must not be disclosed without its express agreement, such

information may be used by the competent authority solely

for the purposes for which the European regulatory authority

would have given its agreement.

(6) Information received by the competent authority

from contact points in the other Member States or EEA States

may be transmitted to other bodies or natural or legal persons,

provided that>

(a) the express agreement of the contact points

which disclosed the information is obtained< and

(b) the information is used solely for the purposes

for which the contact points gave their agreement>

Provided that in duly justified circumstances the

competent authority can transmit information to other

bodies or natural or legal persons without satisfying the

conditions in paragraphs (a) and (b) of this sub-article,

in which case the competent authority shall immediately

inform the contact point that sent the information.

(7) Where the competent authority receives

confidential information from contact points in the other

Member States or EEA States or from overseas regulatory

authorities or auditors under articles 17D and 18 of this Act ,

or when other bodies or natural or legal persons receive

confidential information from the competent authority, they

may only use such confidential information in the course of

their duties, in particular>

(a) to check that the conditions governing the

taking-up of the business of investment services licence

holders are met and to facilitate the monitoring, on a

non-consolidated or consolidated basis, of the conduct

of that business, especially with regard to the financial

resources requirements<

(b) to monitor the proper functioning of trading

venues within the meaning of the Directive<

(c) to impose penalties or adopt other

administrative measures and to consider representations

received in their regard<

(d) in appeals under article 19 of this Act< or

(e) to investigate complaints received from

consumers in terms of article 20 of the Malta Financial

Services Authority Act.

(8) Without prejudice to the powers of the competent

authority under this Act or any other law, where the competent

authority has good reason to suspect that acts contrary to the

provisions of the Directive are being or have been carried out

on the territory of another Member State or EEA State by

entities not subject to its supervision, it shall notify this in as

specific a manner as possible to the contact point in the other

Member State or EEA State.

(9) Where the information in the possession of the

competent authority had originated from a European

regulatory authority or an overseas regulatory authority, it

may not be disclosed to a European regulatory authority or to

any other third party without the express agreement of the

European regulatory authority or the overseas regulatory

authority which had transmitted it and, where appropriate,

solely for the purposes for which that authority had given its

agreement.

(10) Where a European regulatory authority suspects

that acts carried out by entities not subject to its supervision

and which are contrary to the provisions of the Directive are

being or have been carried out in Malta and notifies the

competent authority to this effect, the competent authority

shall take appropriate action. The competent authority shall

inform the notifying European regulatory authority of the

outcome of any such action and, to the extent possible, of

significant interim developments>

Provided that any such action taken by the competent

authority shall be without prejudice to the powers and

functions of the European regulatory authority that has

forwarded the information.”<

(c) sub-article (11) as re-numbered shall be amended as

follows>

(i) for the words “The competent authority may

exercise the following powers at the request of or for the

purposes of assisting an overseas regulatory authority>”, there

shall be substituted the words “Without prejudice to the

foregoing provisions of this article, the competent authority

may exercise the following powers at the request of or for the

purpose of assisting a European regulatory authority>”< and

(ii) in paragraph (g) thereof, for the words “overseas

regulatory authority”, there shall be substituted the words

“European regulatory authority”.

Immediately after article 17 there shall be inserted the

following new articles>

17A. (1) The competent authority may request the

supervisory cooperation of a European regulatory authority in carrying

out its supervisory functions or for an on-site verification or

verifications in an investigation>

investigations.

Provided that in the case of a person holding a licence or

other equivalent authorisation from a European Regulatory

Authority and who is a remote member within the meaning

of the Directive of a regulated market authorised in terms of

the Financial Markets Act, the competent authority may

communicate with such person directly, in which case the

competent authority shall inform the contact point of the home

Member State of such person accordingly.

(2) A European regulatory authority may request

the cooperation of the competent authority in carrying out its

supervisory functions or for an on-site verification or in an

investigation, in which case the competent authority shall,

within the framework of its powers>

(a) carry out the verifications or the investigation

itself< or

(b) allow the requesting authority to carry out the

verification or investigation< or

(c) allow inspectors or experts within the meaning

of article 14 of this Act to carry out the verification or

investigation.

17B. The competent authority may refuse to act on a

request for cooperation in carrying out an investigation, on-

site verification or supervisory function under article 17A of

this Act or to exchange information with European regulatory

authorities designated as contact points under sub-article (1)

of article 56 of the Directive only where>

(a) such an investigation, on-site verification,

supervisory function or exchange of information 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) 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 European regulatory

authority accordingly, providing as much detailed

information as possible for such refusal.

17C. (1)

Prior to granting a licence to an applicant

which is>

(a) a subsidiary of a person holding an investment

services licence or an equivalent authorisation or of a

credit institution authorised in another Member State or

EEA State< or

(b) a subsidiary of the parent undertaking of a

person holding an investment services licence or an

equivalent authorisation or of a credit institution

authorised in another Member State or EEA State< or

(c) controlled by the same natural or legal persons

which control a holder of an investment services licence

or the holder of an equivalent authorisation or a credit

institution authorised in another Member State or EEA

State,

the competent authority shall consult with the relevant

European regulatory authorities.

(2) Prior to granting a licence to an applicant which

(a) a subsidiary of a credit institution or insurance

undertaking authorised in another Member State or EEA

State< or

(b) a subsidiary of the parent undertaking of a

credit institution or insurance undertaking authorised in

another Member State or EEA State< or

(c) controlled by the same person, whether natural or

legal, who controls a credit institution or insurance undertaking

authorised in another Member State or EEA State,

the competent authority shall consult with the European

regulatory authority responsible for the supervision of credit

institutions or insurance undertakings.

(3) Consultation between the competent authority and

the European regulatory authorities shall in particular take

place when assessing the suitability of the shareholders or

members and the reputation and experience of persons who

effectively direct the business involved in the management

of another entity of the same group. The competent authority

shall exchange all information that is of relevance to the other

European regulatory authorities involved regarding the

suitability of shareholders or members and the reputation and

experience of persons who effectively direct the business, both

for the granting of a licence as well as for the ongoing

assessment of compliance with operating conditions.”.

Immediately after article 17C there shall be inserted the Addition

sub-title to the

following new sub-title “CO-OPERATION WITH OVERSEAS principal Act.

REGULATORY AUTHORITIES AND OTHER BODIES”, and

immediately thereafter there shall be added the following article> -

“Co-operation

17D. (1) Co-operation agreements with overseas

with overseas

regulatory authorities or other authorities, bodies and natural

or legal persons in countries that are not Member States or

EEA States may be entered into only if the information

disclosed is subject to guarantees of professional secrecy at

least equivalent to those required under article 26 of this Act.

Such exchange of information must be intended for the

performance of the functions of those overseas regulatory

authorities or other authorities, bodies and natural or legal

persons>

Provided that the transfer of personal data to countries

that are not Member States or EEA States shall be in

accordance with the provisions of Chapter IV of Directive

95#46#EC of the European Parliament and of the Council of

24 October 1995 on the protection of individuals with regard

to the processing of personal data and on the free movement

of such data.

(2) The competent authority may conclude co-

operation agreements providing for the exchange of

information with overseas regulatory authorities, other

authorities or with bodies and natural or legal persons in

countries that are not Member States or EEA States

responsible for>

(i) the supervision of credit institutions, other

financial organisations, persons holding a licence,

insurance undertakings and the supervision of financial

markets<

(ii) the liquidation and bankruptcy of persons

holding a licence or an equivalent authorisation and other

similar procedures<

(iii) carrying out statutory audits of the accounts

of persons holding a licence or an equivalent

authorisation and other financial institutions, credit

institutions and insurance undertakings, in the

performance of their supervisory functions, or which

administer compensation schemes, in the performance

of their functions<

(iv) overseeing the bodies involved in the

liquidation and bankruptcy of persons holding a licence

or an equivalent authorisation and other similar

procedures<

(v) overseeing persons charged with carrying out

statutory audits of the accounts of insurance

undertakings, persons holding a licence or an equivalent

authorisation, credit institutions and other financial

institutions.

(3) Where the information in the possession of the

competent authority had originated from a European

regulatory authority or an overseas regulatory authority, it

may not be disclosed to an overseas regulatory authority or

to any other third party without the express agreement of the

European regulatory authority or the overseas regulatory

authority which had transmitted it and, where appropriate,

solely for the purposes for which that authority had given its

agreement.

(4) Without prejudice to the foregoing provisions of

this article, at the request of, or for the purposes of assisting

an overseas regulatory authority, the competent authority may

exercise the powers listed in sub-article (11) of article 17,

and for the purposes of this sub-article the words “European

regulatory authority” shall be read as “overseas regulatory

authority”.”

Article 19 of the principal Act shall be amended as follows>

(a)

sub-article (2) thereof shall be amended as follows>

(i) in paragraph (c) thereof, for the words “under article

6(9)”, there shall be substituted the words “under article

16A<”<

(ii) in paragraph (f) thereof, for the words “article 11<

or”, there shall be substituted the words “article 11<”<

(iii) paragraph (g) thereof shall be re-numbered as

paragraph (h)<

(iv) immediately after paragraph (f) thereof there shall

be inserted the following new paragraph (g)>

“(g) any punishment or penalty imposed under

article 12(5)< or”<

(b) for sub-articles (3) thereof there shall be substituted the

following>

“(3) The provisions of article 21 of the Malta Financial

Services Authority Act shall apply mutatis mutandis to appeals

that may be brought before the Tribunal under this article.”<

and

(c)

sub-article (4) thereof shall be deleted.

Sub-article (1) of article 21 of the principal Act shall be Amendment of

article 21 of the

amended as follows>

principal Act.

(a) in paragraph (a) thereof, for the words “or of any rules

and regulations” there shall be substituted the words “or of any

Investment Services Rules and regulations”<

(b) in paragraph (a) thereof and wherever they appear in

the said provision for the words “requirement, directive,” there

shall be substituted the words “requirement, Investment Services

Rules, directive,”.

Article 22 of the principal Act shall be amended as follows> Amendment of

article 22 of the

principal Act.

(a)

in sub-article (1) thereof>

(i) for the words “as applied by article 17”, there shall

be substituted the words “as applied by articles 17 and 17D”<

(ii) for the words “of any rules or regulations made”,

there shall be substituted the words “of any regulations”<

(b) in sub-article (2) thereof, for the words “of any rules or

regulations made”, there shall be substituted the words “of any

regulations made”.

In article 23 of the principal Act, for the words “under article Amendment of

article 23 of the

12(4)”, there shall be substituted the words “under article 12(5)”.

principal Act.

Sub-article (1) of article 25 of the principal Act shall be Amendment of

article 25 of the

amended as follows>

principal Act.

(a) for the words “a licence has contravened any of the

provisions of this Act or of any rules and regulations”, there shall

be substituted the words “a licence, or any other person, has

contravened any of the provisions of this Act or of any regulations”<

and

(b) for the words “directive or order” there shall be

substituted the words “Investment Services Rules, directive or

order”.

Article 26 of the principal Act shall be amended as follows>

(a)

sub-article (1) shall be amended as follows>

(i) for the words “employees or agents” there shall be

substituted the words “employees or agents, as well as by

inspectors, auditors and experts engaged by the competent

authority”<

(ii) for the words “or of any rules or regulations made”,

there shall be substituted the words “or of any Investment

Services Rules or regulations made”<

(iii) in paragraph (c) thereof, for the words “an overseas

regulatory authority”, there shall be substituted the words “a

European regulatory authority or an overseas regulatory

authority”<

(iv) in paragraph (g) thereof, for the words “or criminal

nature.”, there shall be substituted the words “or criminal

nature>”<

(v) immediately after paragraph (g) thereof, there shall

be inserted the following two new provisos>

“Provided that this article shall not prevent the competent

authority from exchanging or transmitting confidential

information in accordance with the Directive and with other

Directives of the European Community applicable to licence

holders, credit institutions, pension funds, UCITS, insurance

and reinsurance intermediaries, insurance undertakings,

regulated markets or market operators>

Provided further that this article shall not prevent the

competent authority from using such information for other

purposes where the body or person communicating

information to the competent authority consents thereto.”<

(b) for sub-article (2) thereof there shall be substituted the

following>

“(2) Without prejudice to the cases covered by criminal

law, any confidential information received by bodies or natural

or legal persons within the meaning of Article 58 of the

Directive shall only be used in the performance of their duties

and for the exercise of their functions. In addition, such

information is to be used specifically for the purpose for which

such information was provided to them and, or in the context

of administrative or judicial proceedings specifically related

to the exercise of those functions>

Provided that where a body or person communicating

information to the competent authority consents thereto, such

information may be used by the competent authority for other

purposes.”< and

(c) immediately after sub-article (2) thereof, there shall be

inserted the following new sub-article (3)>

“(3) The provisions of this article and of articles 17

and 17D of this Act shall not preclude the competent authority

from transmitting to the Central Bank of Malta, the European

System of Central Banks and the European Central Bank, in

their capacity as monetary authorities, and, where appropriate,

to other public authorities responsible for overseeing payment

and settlement systems, confidential information intended for

the performance of their functions.”

In article 27 of the principal Act, for the words “any rules or Amendment of

regulations” wherever they appear in the said provision, there shall be article

principal Act.

substituted the words “any Investment Services Rules or regulations”.

In article 28 of the principal Act, for the words “or any rules Amendment of

article 28 of the

or regulations made” there shall be substituted the words “or any principal Act.

Investment Services Rules or regulations made”.

Deletion of article

Article 29 of the principal Act shall be deleted.

29 of the principal

Act.

For the First Schedule of the principal Act, there shall be

Amendment of the

First Schedule to the

substituted the following>

principal Act.

“FIRST SCHEDULE

(Article 2)

Services

1. Reception and Transmission of Orders in relation to one

or more instruments

The reception from a person of an order to buy, sell or subscribe

for instruments and the transmission of that order to a third party for

execution.

2. Execution of orders on behalf of other persons

Acting to conclude agreements to buy, sell or subscribe for one or

more instruments on behalf of other persons.

3. Dealing on own account

Trading against proprietary capital resulting in conclusion of

transactions in one or more instruments.

4. Management of Investments

Managing or agreeing to manage assets belonging to another person

if those assets consist of or include one or more instruments or the

arrangements for their management are such that the person managing

or agreeing to manage those assets has a discretion to invest any of

those assets in one or more instruments.

Management of Investments may also constitute the selection or

agreement to select, on a discretionary basis, instruments by reference

to which benefits are wholly or partly payable under a contract of

insurance falling within class III - linked long term of the Second

Schedule to the Insurance Business Act.

5. Trustee, Custodian or Nominee Services

(a) Acting as trustee, custodian or nominee holder of an

instrument, or of the assets represented by or otherwise connected with

an instrument, where the person acting as trustee, custodian or nominee

holder is so doing as part of his providing any investment service in

paragraphs 1, 2, 3, 4 or 6 of this Schedule>

Provided that for the purposes of this sub-paragraph any person

who is authorised or otherwise exempt from authorisation in the terms

of article 43 or 43A of the Trusts and Trustees Act shall not by virtue of

holding such assets be required to have a licence in terms of this

subparagraph if such person does not provide an investment service

and delegates all activities which are investment services in terms of

this Act to a person who is licenced to provide such services< or

(b) Holding an instrument or the assets represented by or

otherwise connected with an instrument as nominee, where the person

acting as nominee is so doing on behalf of another person who is

providing any investment service in this Schedule or on behalf of a

client of such person, and such nominee holding is carried out in relation

to such investment service>

Provided that for the purposes of this paragraph any person who is

authorised or otherwise exempt from authorisation in the terms of article

43 or 43A of the Trusts and Trustees Act shall not by virtue of holding

such assets be required to have a licence in terms of this Act.

(c) Acting as trustee or custodian in relation to a collective

investment scheme.

6. Investment Advice

Giving, offering or agreeing to give, to persons in their capacity as

investors or potential investors or as agent for an investor or potential

investor, a personal recommendation in respect of one or more

transactions relating to one or more instruments.

For the purposes of this paragraph, a “personal recommendation”

shall mean a recommendation presented as suitable for the person to

whom it is addressed, or which is based on a consideration of the

circumstances of that person, and must constitute a recommendation to

take one of the following steps>

(a) to buy, sell, subscribe for, exchange, redeem, hold or

underwrite a particular instrument<

(b) to exercise or not to exercise any right conferred by a

particular instrument to buy, sell, subscribe for, exchange, or redeem

an instrument<

(c) to select one or more instruments by reference to which

benefits are wholly or partly payable under a contract of insurance falling

within the meaning of class III ––‘linked long term’, of the Second

Schedule to the Insurance Business Act.

A recommendation is not a personal recommendation if it is issued

exclusively through distribution channels or to the public.

7. Underwriting of instruments and, or placing of instruments

on a firm commitment basis

The underwriting or placing of instruments such that the person

providing the service assumes the risk of bringing a new securities issue

to the market by buying the issue from the issuer thereby guaranteeing

the sale of a certain number of shares to investors

8. Placing of Instruments without a firm commitment basis

The marketing of newly-issued securities or of securities which

are already in issue but not listed, to specified persons and which does

not involve an offer to the public or to existing holders of the issuer’s

securities’– without assuming the risk of guaranteeing the sale of a

certain number of shares by buying the relative securities from the issuer.

9. Operation of a Multilateral Trading Facility

The operation of a multilateral system which brings together

multiple third party buying and selling interests in instruments – in the

system and in accordance with non-discretionary requirements–– in a

way that results in a contract.”.

For the Second Schedule of the principal Act, there shall be

substituted the following>

“SECOND SCHEDULE

(Article 2)

Instruments

Transferable Securities.

1. Those classes of securities which are negotiable on the capital

market and include>

(a) shares in companies and other securities equivalent to

shares in companies, partnerships or other entities, and depository

receipts in respect of shares<

(b) bonds or other forms of securitised debt, including

depository receipts in respect of such securities<

(c) any other securities giving the right to acquire or sell

any such transferable securities or giving rise to a cash settlement

determined by reference to transferable securities, currencies,

interest rates or yields, commodities or other indices or measures.

2. Money Market Instruments.

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.

3. Units in collective investment schemes.

4. Options, futures, swaps, forward rate agreements and any other

derivative contracts relating to securities, currencies, interest rates or

yields, or other derivative instruments, financial indices or financial

measures which may be settled physically or in cash.

5. Options, futures, swaps, forward rate agreements and any other

derivative contracts relating to commodities that must be settled in cash

or may be settled in cash at the option of one of the parties (otherwise

than by reason of a default or other termination event).

6. Options, futures, swaps, and any other derivative contracts

relating to commodities, that can be physically settled provided that

they are traded on a regulated market, within the meaning of the Financial

Markets Act and, or a Multilateral Trading Facility within the meaning Cap. 345.

of Schedule 1.

7. Options, futures, swaps, forwards and any other derivative

contracts relating to commodities, that can be physically settled, are

not for commercial purposes, are not included in article 6 of this

Schedule, and, which have the characteristics of other derivative

instruments, having regard to whether, inter alia, they are cleared and

settled throughout recognized clearing houses or are subject to regular

margin calls.

8. Derivative instruments for the transfer of credit risk.

9. 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 for

property of any description or in an index or other factor designated for

that purpose in the contract.

10. Options, futures, swaps, forward rate agreements and any

other derivative contracts relating to climatic variables, freight rates,

emission allowances or inflation rates or other official economic statistics

that must be settled in cash or may be settled in cash at the option of one

of the parties (otherwise than by reason of a default or other termination

event), as well as any other derivative contracts relating to assets, rights,

obligations, indices and measures not otherwise mentioned in this

Schedule, which have the characteristics of other derivative instruments,

having regard to whether, inter alia, they are traded on a regulated market

within the meaning of the Financial Markets Act or a Multilateral Trading

Facility within the meaning of the First Schedule, are cleared and settled

through recognized clearing houses or are subject to regular margin

calls.

11. Certificates or other instruments which confer property rights

in respect of any instrument falling within this Schedule.

12. Foreign exchange acquired or held for investment

purposes.”.

PART IV

(1) This Part amends and shall be read and construed as

one with the Banking Act, hereinafter in this Part referred to as “the

371. principal Act”.

(2) The provisions of this Part shall come into force on the

date of publication of this Act.

Article 2 of the principal Act shall be amended as follows>

(a)

in sub-article (1) thereof>

(i) immediately after the words “In this Act, unless the

context otherwise requires -” there shall be inserted the

following new definition>

“ “Advanced Measurement Approach” means an

approach as defined in a Banking Rule on capital

requirements<”<

(ii) for the definition “banking directive”, there shall

be substituted the following new definition>

“ “Banking Rule” means a Rule issued by the

competent authority under various articles of this Act<””,

and for the words “banking directive” and “banking

directives”, wherever they appear in the Act, there shall be

substituted the words “Banking Rule” and “Banking Rules”,

as the case may be<

(iii) immediately after the definition “business of

banking”, there shall be inserted the following new definition>

“ “Capital Adequacy Directive” means Directive

2006#49#EC of the European Parliament and of the

Council of 14 June 2006 on the capital adequacy of

investment firms and credit institutions, as may be

amended from time to time, and includes any

implementing measures that have been issued or may

be issued thereunder<”<

(iv) in the definition “company”, for the words “or a

company registered or incorporated outside Malta”, there shall

be substituted the words “or a company registered, licensed

or holding an equivalent authorisation in another country

outside Malta”, and for the word “registered or incorporated

under the laws of Malta<”, there shall be substituted the words

“registered or licensed under the laws of Malta<”<

(v) in the definition “competent authority”, for the

words “in article 3(1)<”, there shall be substituted the words

“in article 3(1) of this Act<”<

(vi) immediately after the definition “deposit”, there

shall be inserted the following new definition>

“ “Directive” means Council Directive 2006#48#EC

of 14 June 2006, relating to the taking up and pursuit of

the business of credit institutions (recast), as may be

amended or updated from time to time, and includes any

implementing measures that have been issued or may

be issued thereunder<”<

(vii) in the definition “director”, for the words

“registered or incorporated outside Malta”, there shall be

substituted the words “registered, licensed or holding an

equivalent authorisation outside Malta”<

(viii) immediately after the definition “director”, there

shall be inserted the following new definition>

“ “EEA State” means a State which is a contracting

party to the agreement on the European Economic Area

signed at Oporto on the 2 nd May, 1992 as amended by

the Protocol signed at Brussels on the 17 th March, 1993

and as amended by any subsequent acts<”<

(ix) for the definition “electronic money institutions

directive”, there shall be substituted the following new

definition>

“ “Electronic Money Rule” means a Rule issued

by the competent authority under various articles of this

Act<”,

and for the words “electronic money institutions directive”

and “electronic money institutions directives”, wherever they

appear in the Act, there shall be substituted the words

“Electronic Money Rule”<

(x) immediately after the definition “holding

company”, there shall be inserted the following new

definition>

“ “initial capital” means ordinary share capital and

reserves as defined in a Banking Rule on the application

procedures and requirements for authorisation<”<

(xi) for the definition “large exposures directive”, there

shall be substituted the following new definition>

“ “Large Exposures Rule” means a Rule as shall be

issued by the competent authority to regulate large

exposures<”,

and for the words “large exposures directive”, wherever they

appear in the Act, there shall be substituted the words “Large

Exposures Rule”<

(xii) immediately after the definition “licence”, there

shall be inserted the following new definition>

“ “Malta’s international commitments” means

Malta’s commitments, responsibilities and obligations

arising out of European Community law, or membership

of, or affiliation to, or relationship with, any international,

global or regional organisations or grouping of countries

or out of any treaty, convention or other international

agreement, however called, whether bilateral or

multilateral, to which Malta is a party<”<

(xiii) immediately after the definition “manager”, there

shall be inserted the following new definitions>

“ “material activities” means>

(i) activities of such importance that any

weakness or failure in the provision of these

activities could have a significant effect on the

licensed entity’s ability to meet its regulatory

responsibilities and, or to continue in business<

(ii) any other activities requiring a licence

from the supervisory authority<

(iii) any activities having a significant impact

on the entity’s risk management< and

(iv) the management of risks related to these

activities<

“Member State” means a Member State of the

European Communities<”

(xiv) immediately after the definition “officer”, there

shall be inserted the following new definitions>

“ “outsourcing” means a licensed entity’s use of a

third party (the outsourcing service provider) to perform

activities that would normally be undertaken by the

licensed entity, now or in the future. The supplier may

or may not be a licensed entity<

“outsourcing service provider” means the supplier

of goods, services or facilities, which may or may not

be an licensed entity, and which may be an affiliated

entity within a corporate group or an entity that is external

to the group<

“overseas regulatory authority” means an authority

which in a country or territory outside Malta exercises

any function corresponding to the functions of the

competent authority under this Act<”<

(xv) in the definition “subsidiary”, for the words “by

the Companies Act.”, there shall be substituted the words “by

the Companies Act<”<

(xvi) immediately after the definition “subsidiary”,

there shall be inserted the following new definition>

“ “third country” means a country that is not a

Member State or an EEA state.”<

(b) in the first proviso of sub-article (2) thereof, for the words

“acceptance of deposits of money for the purposes of this Act>”,

there shall be substituted the words “acceptance of deposits of

money for the purposes of this Act and any regulations or Banking

Rules made thereunder>”<

(c) immediately after sub-article (5) thereof, there shall be

inserted the following new sub-articles>

“ “(6) The objective of this Act is, in part, to

implement the provisions of the Directive and the Capital

Adequacy Directive, and shall be interpreted and applied

accordingly.

(7) In this Act and in any regulations made thereunder, if

there is any conflict between the English and the Maltese texts, the

English text shall prevail.”.

Article 3 of the principal Act shall be amended as follows>

(a) in sub-article (1) thereof, for the words “for the purposes

of this Act to carry out the functions of the competent authority

under this Act.”, there shall be substituted the words “for the

purposes of this Act and any regulations or Banking Rules made

thereunder to carry out the functions of the competent authority

under this Act and any regulations or Banking Rules made

thereunder.”< and

(b) for sub-article (2) thereof, there shall be substituted the

following new sub-article (2)>

“(2) (a) The Minister, acting on the advice of the

competent authority, may make regulations as may be required

to give effect to the provisions of this Act, and may by such

regulations transpose, implement and give effect to the

requirements of Directive 2006#48#EC of the European

Parliament and of the Council of 14 June 2006 relating to the

taking up and pursuit of the business of credit institutions

and the requirements of Directive 2006#49#EC of the European

Parliament and of the Council of 14 June 2006 on the capital

adequacy of investment firms and credit institutions.

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

authority, may in addition amend or revoke such regulations.”.

Article 4 of the principal Act shall be amended as follows>

Amendment of

article 4 of the

principal Act.

(a) in sub-article (1) thereof, for the words “functions

prescribed by this Act and to ensure that credit institutions carrying

on business in Malta comply with this Act, regulations and

directives issued under this Act”, there shall be substituted the

words “functions prescribed by this Act and any regulations,

Banking Rules, or Electronic Money Rules made thereunder and

to ensure that credit institutions carrying on business in Malta

comply with this Act, and any regulations, directives, Banking

Rules and Electronic Money Rules issued thereunder”<

(b) for sub-article (2) thereof, there shall be substituted the

following new sub-article>

“(2) The competent authority may make, amend or

revoke Banking Rules and Electronic Money Rules as may

be required for carrying into effect any of the provisions of

this Act and any regulations or Banking Rules and Electronic

Money Rules made thereunder.”,

(c) sub-articles (3) and (4) thereof shall be renumbered as

sub-articles (4) and (5)<

(d) immediately after sub-article (2) thereof, there shall be

inserted the following new sub-article (3)>

“(3) Banking Rules shall be binding on licence holders

and others as may be specified therein. Electronic Money

Rules may provide that any provision contained in any

Banking Rules, as may be specified, shall also apply to

electronic money institutions.”.

Article 5 of the principal Act shall be amended as follows>

Amendment of

article 5 of the

principal Act.

(a) sub-articles (2), (3), (4), (5) and (6) thereof shall be

renumbered as sub-articles (3), (4), (5), (6) and (7) respectively<

(b) immediately after sub-article (1) thereof, there shall be

inserted the following new sub-article (2)>

“(2) No credit institution licensed or holding an

equivalent authorisation outside Malta may open a branch,

agency or office or set up any subsidiary in Malta unless it is

in possession of a licence granted under this Act by the

competent authority>

Provided that a credit institution licensed or holding an

equivalent authorisation in a Member State or EEA state shall

be entitled to exercise their rights under European Community

Law.”<

(c)

in sub-article (5) thereof, as re-numbered>

(i) in paragraph (a) thereof, for the words “that does

not exceed two million five hundred thousand Maltese liri<”,

there shall be substituted the words “that does not exceed the

amount of two million five hundred and seventy five thousand

and eight hundred Maltese liri (six million Euro)<”<

(ii) in the proviso to paragraph (c) thereof, for the words

“subject to a maximum storage amount of not more than sixty

Maltese liri.”, there shall be substituted the words “subject to

a maximum storage amount of not more than sixty four

Maltese liri and forty cents (one hundred fifty Euro).”.

Article 7 of the principal Act shall be amended as follows>

(a)

in sub-article (1) thereof>

(i) for paragraph (a) thereof, there shall be substituted

the following new paragraph (a)>

“(a) its initial capital amounts to not less than two

million one hundred and forty six thousand and five

hundred Maltese liri (five million Euro) or in the case of

an electronic money institution, of four hundred and

twenty nine thousand and three hundred Maltese liri (one

million Euro)>

Provided that, without prejudice and subject to the

provisions of article 16A, the competent authority may

by a provision contained in a Banking Rule, increase

the amounts laid down in this paragraph, and such

amounts may be designated in such other currency as

may be specified in a Banking Rule<”<

(ii) in paragraph (d) thereof, for the words “the

provisions of this Act or any banking directive>”, there shall

be substituted the words “the provisions of this Act and any

regulations or Banking Rules made thereunder>”, and in the

first proviso immediately following, for the words “if the

applicant is a credit institution authorised in another country,”,

there shall be substituted the words “if the applicant is a credit

institution licensed or holding an equivalent authorisation in

another country,”<

(b) sub-article (2) thereof shall be repealed<

(c) sub-articles (3) and (4) thereof shall be renumbered as

sub-articles (2) and (3) respectively<

(d) immediately after sub-article (3) thereof, there shall be

inserted the following new sub-article (4)>

“(4) In granting a licence the competent authority may

subject it to such conditions as it may deem appropriate, and

having granted a licence it may, from time to time, vary or

revoke any condition so imposed or impose new conditions.”<

(e) in sub-article (5) thereof, for the words “prescribed under

sub-article (3),”, there shall be substituted the words “prescribed

under sub-article (2) of this article,”<

(f) immediately after sub-article (7) thereof, there shall be

inserted the following new sub-article (8)>

“(8) The competent authority shall notify the

Commission of the European Union of every licence issued

to a credit institution in terms of the Act and any regulations

or Banking Rules and Electronic Money Rules made

thereunder.”.

In sub-article (2) of article 7A of the principal Act, for the Amendment of

article 7A of the

words “shall not exceed five Maltese liri”, there shall be substituted the principal Act.

words “shall not exceed the amount of four Maltese liri and thirty cents

(ten Euro).”.

Article 8 of the principal Act shall be amended as follows>

(a) in sub-article (1) thereof, for the words “A company

incorporated outside Malta”, there shall be substituted the words

“A company licensed or holding an equivalent authorisation in

another country outside Malta”<

(b) in sub-article (2) thereof, for the words “in sub-article

(1) having”, there shall be substituted the words “in sub-article (1)

of this article having”<

(c) in sub-article (4) thereof, for the words “pursuant to sub-

article (3) unless it considers”, there shall be substituted the words

“pursuant to sub-article (3) of this article unless it considers”<

(d) in sub-article (5) thereof, for the words “pursuant to sub-

article (1) to provide”, there shall be substituted the words “pursuant

to sub-article (1) of this article to provide”<

(e) for sub-article (7) thereof, there shall be substituted the

following new sub-article>

“(7) The competent authority may by a Banking Rule

provide that the provisions of articles 20 to 24 of this Act

shall apply to representative offices in Malta in the same

manner as they apply to credit institutions subject to such

variations and conditions as may be established in the Banking

Rule.”<

(f) in sub-article (9) thereof, for the words “in sub-article

(1), order a company referred to in the said sub-article (1)”, there

shall be substituted the words “in sub-article (1) of this article,

order a company referred to in the said sub-article (1)”.

Article 9 of the principal Act shall be amended as follows>

(a) in paragraph (e) of sub-article (1) thereof, for the words

“a credit institution incorporated outside Malta”, there shall be

substituted the words “a credit institution licensed or holding an

equivalent authorisation in another country outside Malta”<

(b) in sub-article (2) thereof>

(i) in paragraph (a) thereof, for the words “notify under

this Act< or”, there shall be substituted the words “notify under

this Act or any regulations or Banking Rules or Electronic

Money Rules made thereunder< or”<

(ii) in paragraph (c) thereof, for the words “provisions

of this Act or with the conditions”, there shall be substituted

the words “provisions of this Act or any regulations or

Banking Rules or Electronic Money Rules made thereunder

or with the conditions”<

(c) in sub-article (3) thereof, for the words “pursuant to sub-

article (2) shall be such restrictions”, there shall be substituted the

words “pursuant to sub-article (2) of this Act shall be such

restrictions”, and for the words “the provisions of this Act and the

conditions,”, there shall be substituted the words “the provisions

of this Act and any regulations or Banking Rules and Electronic

Money Rules made thereunder and the conditions,”<

(d) in sub-article (6) thereof, for the words “A licence

granted to a branch of a credit institution incorporated outside Malta

may”, there shall be substituted the words “A licence granted for

the establishment in Malta of a branch of a credit institution licensed

or holding an equivalent authorisation in another country outside

Malta may”<

(e) in sub-article (7) thereof, for the words “a credit

institution incorporated in Malta”, there shall be substituted the

words “a credit institution licensed in Malta”, and after the words

“carrying on the business of banking.”, there shall be added the

new words “The competent authority shall notify the Commission

of the European Union of any revocation of a licence.”.

Article 11 of the principal Act shall be amended as follows> Amendment of

article 11 of the

principal Act.

(a) in sub-article (1) thereof, for the words “A credit

institution shall inform”, there shall be substituted the words “A

credit institution licensed in Malta shall inform”<

(b) in sub-article (2) thereof, for the words “no credit

institution incorporated in Malta”, there shall be substituted the

words “no credit institution licensed in Malta”.

Article 12 of the principal Act shall be amended as follows> Amendment of

article 12 of the

principal Act.

(a) in sub-article (1) thereof, for the words “Subject to sub-

articles (2) and (3), save with”, there shall be substituted the words

“Subject to sub-articles (2) and (3) of this article, save with”<

(b) for sub-article (2) thereof, there shall be substituted the

following new sub-article (2)>

“(2) A credit institution licensed or holding an

equivalent authorisation in another country outside Malta may

use the name used in the country where it is licensed or holds

an equivalent authorisation, save that, where there is a risk

that the use of such a name may be misleading, such credit

institution shall add such explanatory particulars to its name

as the competent authority shall direct.”.

Article 13 of the principal Act shall be amended as follows>

(a) in sub-article (2) thereof, for the words “a credit

institution authorised in another country or is a natural or legal

person controlling a credit institution authorised in another country,

the competent authority shall, prior to granting consent or otherwise

under the provisions of sub-article (1),”, there shall be substituted

the words “a credit institution licensed or holding an equivalent

authorisation in another country or is a natural or legal person

controlling a credit institution licensed or holding an equivalent

authorisation in another country, the competent authority shall,

prior to granting consent or otherwise under the provisions of sub-

article (1) of this article,”<

(b) in sub-article (3) thereof, for the words “Sub-article (1)

shall apply”, there shall be substituted the words “Sub-article (1)

of this article shall apply”<

(c) in sub-article (4) thereof, for the words “set out in sub-

article (1).”, there shall be substituted the words “set out in sub-

article (1) of this article.”<

(d) in paragraph (c) of sub-article (5) thereof, for the words

“undergo any re-construction<”, there shall be substituted the words

“undergo any re-construction< or”<

(e) in sub-article (6) thereof, for the words “set out in sub-

article (5).”, there shall be substituted the words “set out in sub-

article (5) of this article.”<

(f) in sub-article (7) thereof, for the words “the competent

authority may issue”, there shall be substituted the words “the

competent authority shall issue”< and

(g) in sub-article (9) thereof, for the words “sub-articles (1)

and (5)”, there shall be substituted the words “sub-articles (1) and

(5) of this article”, and for the words “imposed under this Act,”

there shall be substituted the words “imposed under this Act or

any regulations or Banking Rules and Electronic Money Rules

made thereunder,”.

In sub-article (4) of article 14 of the principal Act, for the Amendment of

words “make an order requiring such a person to cease to be a controller article

principal Act.

or”, there shall be substituted the words “make an order requiring such

a person to cease to be a controller or director or”.

Sub-article (1) of article 15 of the principal Act shall be Amendment of

article 15 of the

amended as follows>

principal Act.

(a) in the proviso to sub-paragraph (i) of paragraph (b)

thereof, for the words “exceed the sum of ten thousand Maltese

liri<”, there shall be substituted the words “exceed the sum of ten

thousand Maltese liri (twenty three thousand two hundred and

ninety Euro)<”< and

(b) in sub-paragraph (v) of paragraph (d) thereof, for the

words “own funds as established under article 17,” there shall be

substituted the words “own funds for the calculation of the capital

requirements under article 17 of this Act”.

Article 16A of the principal Act shall be amended as follows> Amendment

article 16A of the

principal Act.

(a) for sub-article (1) thereof, there shall be substituted the

following new sub-article (1)>

“(1) Without prejudice to the minimum level of the

capital requirements laid down in the Banking Rule issued in

terms of article 17 (1) of the Act, the own funds of a credit

institution may not fall below the amount of initial capital

established in its licence in terms of article 7 (1) (a) of the

Act or such higher amount as may be required by the

competent authority from time to time.”<

(b) sub-articles (2) and (3) thereof shall be re-numbered as

sub-articles (3) and (4) respectively<

(c) immediately after sub-article (1) thereof, there shall be

inserted the following new sub-article (2)>

“(2) A specific own funds requirement in excess of the

minimum level laid down in the above mentioned sub-article

shall be imposed by the competent authority at least on the

credit institutions which do not meet the requirements laid

down in Article 109 of the Directive and in article 17B of this

Act, or in respect of which a negative determination has been

made on the issue described in article 17D (3) of this Act, if

the sole application of other measures is unlikely to improve

the arrangements, processes, mechanisms and strategies

sufficiently within an appropriate timeframe.”<

(d) in sub-article (3) thereof, as re-numbered, for the words

“established under sub-article (1), the competent authority shall”,

there shall be substituted the words “established under sub-article

(1) of this article, the competent authority shall”.

Article 17 of the principal Act shall be amended as follows>

(a)

in sub-article (1) thereof>

(i) in paragraph (a) thereof, for the words “maintain a

capital adequacy ratio to risk-weighted assets as defined”,

there shall be substituted the words “maintain capital

requirements to risk-weighted and notional risk-weighted

assets as defined”<

(ii) in paragraph (b) thereof, for the words “notify the

ratio to the competent authority”, there shall be substituted

the words “notify the capital requirements to the competent

authority”<

(iii) in paragraph (c) thereof, for the words “upon the

ratio falling below”, there shall be substituted the words “upon

the capital requirements falling below”, and for the words

“measures to restore the ratio to the required level”, there

shall be substituted the words “measures to restore the capital

requirements to the required level”<

(b) for sub-article (2) thereof, there shall be substituted the

following new sub-article>

“(2) Every credit institution, to the exclusion of an

electronic money institution, shall maintain adequate

provisions for bad and doubtful debts.”.

In the English text of article 17A of the principal Act, for

the words “The competent authority shall issue”, there shall be

substituted the words “The competent authority may issue”.

Immediately after article 17A of the principal Act, there Adds

17B, 17C and 17D

shall be inserted the following new articles>

to the principal

Act.

17B. (1) Every credit institution shall put in place

robust governance arrangements which include a clear

organisational structure with well defined, transparent and

consistent lines of responsibility, effective processes to

identify, manage, monitor and report the risks it is or might

be exposed to, and adequate internal control mechanisms

including sound and administrative and accounting

procedures.

(2) Such arrangements, processes and mechanisms

referred to in sub-article (1) of this article, shall be

comprehensive and proportionate to the nature, scale and

complexity of the credit institution’s activities. Credit

institutions shall take into account the technical criteria laid

down in a Banking Rule or Electronic Money Rule.

17C. All credit institutions, to the exclusion of

electronic money institutions, shall have in place sound,

effective and complete strategies and processes to assess and

maintain on an on-going basis, the amounts, types and

distribution of internal capital that they consider adequate to

cover the nature and level of risks to which they are or might

be exposed. These strategies and processes shall be subject

to regular internal review to ensure that they remain

comprehensive and proportionate to the nature, scale and

complexity of the activities of the credit institution concerned.

The competent authority shall issue a Banking Rule providing

for, inter alia the internal capital adequacy assessment process

that has to be maintained by credit institutions in relation to

their risk profile.

17D. (1) In carrying out its supervisory review and

evaluation process, the competent authority shall review the

arrangements, strategies, processes and mechanisms

implemented by the credit institutions to comply with this

Act, and any regulations or Banking Rules and Electronic

Money Rules made thereunder and the technical criteria set

out in Annex XI of the Directive, in order to evaluate the

risks to which the credit institutions are or might be exposed.

(2) The scope of such review and evaluation referred

to in sub-article (1) above shall be that of the requirements of

this Act and any regulations or Banking Rules and Electronic

Money Rules made thereunder.

(3) On the basis of such review and evaluation referred

to in sub-article (1) above, the competent authority shall

determine whether the arrangements, strategies, processes and

mechanisms implemented by the credit institutions and the

own funds held by these ensure a sound management and

coverage of their risks.

(4) The competent authority shall establish the

frequency and intensity of such review and evaluation referred

to in sub-article (1) above having regard to the size, systemic

importance, nature, scale and complexity of the activities of

the credit institution concerned and taking into account the

principle of proportionality. Such review and evaluation shall

be updated at least on an annual basis.

(5) Such review and evaluation performed by the

competent authority shall include the exposure of credit

institutions to the interest rate risk arising from non-trading

activities.”.

In article 18 of the principal Act, for the words “The

competent authority shall issue a banking directive”, there shall be

substituted the words “The competent authority may issue a Banking

Article 19 of the principal Act shall be amended as follows>

(a) in paragraph (c) of sub-article (1) thereof, for the words

“complying with the provisions of this Act<”, there shall be

substituted the words “complying with the provisions of this Act

and any regulations or Banking Rules and Electronic Money Rules

made thereunder<”<

(b) in sub-article (3) thereof, for the words “which is not

incorporated in Malta.”, there shall be substituted the words “which

is not licensed in Malta.”<

(c) in sub-article (4) thereof, for the words “under sub-article

(1) shall be submitted in such form and at such periods as shall be

prescribed by banking directive.”, there shall be substituted the

words “under sub-article (1) of this article shall be submitted in

such form and at such periods as may be prescribed by a Banking

Rule.”<

(d) in sub-article (5) thereof, for the words “under sub-

articles (1) and (2) shall be regarded”, there shall be substituted

the words “under sub-articles (1) and (2) of this article shall be

regarded”.

Immediately after article 19 of the principal Act there shall Adds

19A to the principal

be inserted the following new article>

Act.

19A. (1) No credit institution shall outsource its

“Outsourcing

service

material

services or activities unless the outsourcing service

providers.

provider is granted recognition by the competent authority

under this article.

(2) The competent authority may issue a

Banking and, or Electronic Money Rule as the case may

be, laying down the requirements for the recognition of

the outsourcing service provider and the provision of

such outsourced services.”.

Article 20 of the principal Act shall be amended as follows> Amendment of

article 20 of the

principal Act.

(a) in sub-article (1) thereof, for the words “its duties under

this Act, and the competent authority”, there shall be substituted

the words “its duties under this Act and any regulations or Banking

Rules made thereunder, and the competent authority”<

(b) in sub-article (2) thereof, for the words “shall be by

notice in writing”, there shall be substituted the words “shall be

made by notice in writing”<

(c)

in sub-article (3) thereof>

(i) in paragraph (a) thereof, for the words “under sub-

article (1)<”, there shall be substituted the words “under sub-

article (1) of this article<”<

(ii) in paragraph (c) thereof, for the words “its functions

under this Act.”, there shall be substituted the words “its

functions under this Act and any regulations or Banking Rules

and Electronic Money Rules made thereunder.”<

(d) in sub-article (4) thereof, for the words “required under

sub-article (3) (a) shall be a person”, there shall be substituted the

words “required under sub-article (3) (a) of this article shall be a

person”<

(e) in sub-article (5) thereof, for the words “by virtue of

sub-article (3), any person”, there shall be substituted the words

“by virtue of sub-article (3) of this article, any person”<

(f)

in sub-article (7) thereof>

(i) for the words “depositors of a credit institution to

do so, it may” there shall be substituted the words “depositors

of a credit institution to do so, or if otherwise required to

fulfil its supervisory responsibilities, it may”<

(ii) in paragraph (d) thereof, for the words “of that

credit institution.”, there shall be substituted the words “of

that credit institution< or”<

(iii) immediately after paragraph (d) thereof, there shall

be inserted the following new paragraph (e)>

“(e) an outsourcing service provider of that credit

institution.”<

(g) in sub-article (9) thereof, for the words “powers

conferred by sub-articles (1) and (3) in relation to”, there shall be

substituted the words “powers conferred by sub-articles (1) and

(3) of this article in relation to”< and

(h) in sub-article (11) thereof, for the words “reported on

under sub-article (3) the costs”, there shall be substituted the words

“reported under sub-article (3) of this article the costs”.

Article 22 of the principal Act shall be amended as follows>

(a) in sub-article (1) thereof, for the words “potential

depositors of a credit institution, it may appoint” there shall be

substituted the words “potential depositors of a credit institution,

or if otherwise required to fulfil its supervisory responsibilities, it

may appoint”<

(b) in sub-article (2) thereof>

(i) in paragraph (d) thereof, for the words “of that credit

institution.”, there shall be substituted the words “of that credit

institution< or”<

(ii) immediately after paragraph (d) thereof, there shall

be inserted the following new paragraph (e)>

“(e) an outsourcing service provider of that credit

institution.”<

(c) in sub-article (3) thereof, for the words “conferred by

sub-article (1) in relation to”, there shall be substituted the words

“conferred by sub-article (1) of this article in relation to”<

(d) in sub-article (4) thereof, for the words “appointed under

sub-article (1) decides to investigate the business of any person by

virtue of sub-article (2) or sub-article (3) he shall”, there shall be

substituted the words “appointed under sub-article (1) of this article

decides to investigate the business of any person by virtue of sub-

article (2) or sub-article (3) of this article he shall”<

(e)

in sub-article (5) thereof>

(i) for the words “under this Act, or any person

appointed to make a report in respect of that body under this

Act and anyone”, there shall be substituted the words “under

this Act and any regulations or Banking Rules and Electronic

Money Rules made thereunder, or any person appointed to

make a report in respect of that body under this Act and any

regulations or Banking Rules and Electronic Money Rules

made thereunder and anyone”<

(ii) in paragraph (a) thereof, for the words “appointed

under sub-article (1),”, there shall be substituted the words

“appointed under sub-article (1) of this article,”<

(f)

in sub-article (7) thereof>

(i) in paragraph (b) thereof, for the words “appointed

under sub-article (1)”, there shall be substituted the words

“appointed under sub-article (1) of this article”<

(ii) in paragraph (c) thereof, for the words “by virtue

of sub-article (2) or (3).”, there shall be substituted the words

“by virtue of sub-articles (2) or (3) of this article.”.

In sub-article (1) of article 23 of the principal Act, for the Amendment of

article 23 of the

words “under this Act,”, there shall be substituted the words “under principal Act.

this Act and any regulations or Banking Rules and Electronic Money

Rules made thereunder,”.

In paragraph (a) of article 24 of the principal Act, for the Amendment of

words “under article 20, article 22 or article 23< or”, there shall be article

principal Act.

substituted the words “under article 20, article 22 or article 23 of this

Act< or”.

Article 25 of the principal Act shall be amended as follows>

(a) sub-articles (3), (4) and (5) thereof shall be re-numbered

as sub-articles (4), (5) and (6)<

(b) immediately after sub-article (2) thereof, there shall be

inserted the following new sub-article (3)>

“(3) The competent authority may also conclude co-

operation agreements, providing for exchange of information,

with third countries or with authorities or bodies of third

countries as defined in Articles 47 and 48 (1) of the Directive,

if such information disclosed is subject to guarantees of

professional secrecy as provided for under this Act and any

regulations or Banking Rules made thereunder>

Provided that such exchange of information shall be for

the purpose of performing the supervisory tasks of the

authorities or bodies mentioned in this sub-article>

Provided further that where the information originates

in another Member State, it may not be disclosed without the

express agreement of the overseas regulatory authority which

has disclosed it, and where appropriate, solely for the purposes

for which such overseas regulatory authority gave its

agreement.”<

(c) in sub-article (4) thereof, as re-numbered, for the words

“provisions of sub-article (2) only to the extent that the foreign

authorities receiving the information”, there shall be substituted

the words “provisions of sub-article (2) of this article only to the

extent that the overseas regulatory authorities receiving the

information”<

(d) in sub-article (5) thereof, as re-numbered, for the words

“authorise other foreign competent authorities to carry out”, there

shall be substituted the words “authorise overseas regulatory

authorities to carry out”, and for the words “country of the

competent authority making the inspection.”, there shall be

substituted the words “country of the overseas regulatory authority

making the inspection.”<

(e) for sub-article (6) thereof, as re-numbered, there shall

be substituted the following new sub-article (6)>

“(6) The competent authority shall further, upon a

request in writing, disclose to the Central Bank, other bodies

with a similar function in their capacity as monetary authorities

and, where appropriate, to other authorities responsible for

overseeing payment systems, any information in the

possession of or accessible to the competent authority, which

is required for the discharge of the duties of the Central Bank

and the other authorities mentioned above, under the law>

Provided that in an emergency situation the competent

authority shall alert as soon as possible the Central Bank of

Malta with such information required for the discharge of the

duties of the Central Bank under the Central Bank of Malta

Act.”<

(f) sub-article (7) thereof, shall be re-numbered as sub-article

(8)< and

(g) immediately after sub-article (6) thereof, there shall be

inserted the following new sub-article (7)>

“(7) The competent authority may further

communicate information, received inter alia under the

provisions of this Act, to a clearing house or other similar

body recognised under national law for the provision of

clearing or settlement services of the relevant national market,

if it considers that it is necessary to communicate such

information in order to ensure the proper functioning of these

bodies in relation to defaults or potential defaults by market

participants>

Provided that the information received under this article

shall be subject to the conditions of professional secrecy>

Provided further that the information received under this

sub-article may not be disclosed by the competent authority

without the express consent of the overseas regulatory

authority which had disclosed it.”.

Immediately after article 25 of the principal Act there shall Adds new articles

25A and 25B to the

be inserted the following new articles>

principal Act.

“Co-operation

25A. (1) The competent authority shall cooperate

and sharing of

closely

with overseas regulatory authorities in all matters with

respect to supervision on a consolidated basis. In particular

to supervision

such co-operation shall include the provision to the overseas

consolidated

regulatory authority of any information which is essential or

relevant for the exercise of the overseas regulatory authorities’

functions under the Directive. In this regard the competent

authority shall communicate upon request all relevant

information and it shall communicate on its own initiative all

essential information.

(2) For the purposes of this article, information

shall be regarded as essential if it could materially influence

the assessment of the financial soundness of a credit institution

in another Member State or EEA State and shall include, in

particular, the following items>

(i) identification of the group structure of all

major credit institutions in a group<

(ii) identifying the supervisory authority or

the overseas regulatory authority of the credit

institutions in the group, as the case may be<

(iii) procedures for the collection of

information from the credit institutions in a group

and the verification of that information<

(iv) adverse developments in credit

institutions or in other entities of a group, which

could seriously affect the credit institutions< and

(v) major sanctions and exceptional

measures taken by the competent authority in

accordance with this Act and any regulations or

Banking Rules made thereunder including the

imposition of an additional capital charge in terms

of Article 136 (1) of the Directive and the

imposition of any limitation on the use of the

Advanced Measurement Approach for the

calculation of the credit institution’s own funds

requirements as provided for in a Banking Rule

issued by the competent authority.

(3) The competent authority may, on the basis of

written coordination and cooperation arrangements, entrust

additional functions to an overseas regulatory authority

responsible for supervision on a consolidated basis and may

specify procedures for the decision making process and for

its cooperation with overseas regulatory authorities.

(4) The competent authority shall consult overseas

regulatory authorities with regard to the following items, in

so far as the decisions referred to in the preceding sub-article

are of importance for such overseas regulatory authorities’

supervisory functions>

(a) changes in the shareholding, organisational or

management structure of the credit institutions in a group,

which require the approval or authorisation of the

overseas regulatory authorities< and

(b) major sanctions or exceptional measures taken

by the competent authority, including the imposition of

an additional capital charge in terms of Article 136 (1)

of the Directive and the imposition of any limitation on

the use of the Advanced Measurement Approach for the

calculation of the credit institution’s own funds

requirements for operational risk under a Banking Rule.

(5) The competent authority shall, in all cases, consult

with the overseas regulatory authorities responsible for

supervision on a consolidated basis with respect to the items

described in sub-article (4) (b) of this article, provided that

the competent authority may decide not to consult in cases of

urgency or where such consultation might jeopardise the

effectiveness of its decisions. In this case, the competent

authority shall, without delay, inform the overseas regulatory

authorities.

(6) The competent authority may, by bilateral

agreement, delegate its responsibility for supervision of the

subsidiary of a parent undertaking which is a credit institution,

to the overseas regulatory authority which authorised and

supervised the parent undertaking so that such overseas

regulatory authority assumes responsibility for supervising

the subsidiary in accordance with the Directive.

(7) In addition to the obligations imposed by the

provisions of this Act, where the competent authority is

responsible for the exercise of supervision on a consolidated

basis of parent credit institutions and credit institutions

controlled by parent financial holding companies, it shall carry

out the following functions>

(a) coordination of the gathering and

dissemination of relevant or essential information in

emergency situations as well as in going concern

situations< and

(b) planning and coordination of supervisory

activities in emergency situations as well as in going

concern situations, including in relation to the activities

in article 17D of this Act, in cooperation with the

overseas regulatory authorities involved.

(8) Where a parent undertaking is situated in Malta

and the competent authority does not itself exercise

supervision on a consolidated basis pursuant to Articles 125

and 126 of the Directive, the competent authority shall, upon

request by the overseas regulatory authority responsible for

exercising such supervision, require the parent undertaking

to provide any information relevant for the purposes of

supervision on a consolidated basis and the competent

authority shall transmit such information to the overseas

regulatory authority making the request.

(9) Where an emergency situation arises within a

banking group which potentially jeopardises the stability of

the financial system in any of the Member States or EEA

States where entities of a group have been licensed and where

the competent authority is responsible for the exercise of

supervision on a consolidated basis, it shall alert as soon as

possible, in addition to the provisions of article 25 of this

Act, the Central Bank of Malta, other overseas central banks

as well as the overseas regulatory authorities identified under

the relevant provisions of the Banking Rule relating to

supervision on a consolidated basis. Where possible, the

competent authority shall use existing defined channels of

communication.

(10) Where the competent authority is responsible for

supervision on a consolidated basis, it shall, when it needs

information which has already been given to an overseas

regulatory authority, contact such authority, whenever

possible, in order to avoid duplication of reporting to the

various overseas regulatory authorities involved in

supervision.

25B. (1) In specific cases the competent authority

may request an overseas regulatory authority to verify

information concerning a credit institution, a financial holding

company, a financial institution, an ancillary services

undertaking, a mixed-activity holding company or its

subsidiary situated in another Member State or EEA State

and, a subsidiary which is not included within the scope of

supervision on a consolidated basis exercised by the competent

authority.

(2) In the cases referred to in the preceding sub-

article the competent authority may>

(i) request the overseas regulatory authority to

enable the competent authority to carry out the

verification itself<

(ii) request the overseas regulatory authority to

carry out the verification on its behalf<

(iii) in cases where it does not carry out the

verification itself, request to participate in the carrying

out of such verification< or

(iv) request the overseas regulatory authority to

appoint an auditor or expert to carry out such verification.

(3) Where the competent authority receives a request

to verify information from an overseas regulatory authority>

(i) where an overseas regulatory authority

makes a request to the competent authority to carry

out the verification of the information, the

competent authority shall allow the overseas

regulatory authority making the request to carry out

such verification<

(ii) where the overseas regulatory authority

makes a request to the competent authority to carry

out the verification, the competent authority shall

carry out the verification itself on behalf of the

overseas regulatory authority<

(iii) where the overseas regulatory authority

requests the competent authority to participate in

the verification of the information in those cases

where the overseas regulatory authority does not

carry out the verification itself, the competent

authority shall allow the overseas regulatory

authority to participate in such verification< or

(iv) where the overseas regulatory authority

so requests, the competent authority shall appoint

an auditor or expert to carry out such verification.

(4) In this article, a financial holding company, a

financial institution, an ancillary services undertaking and a

mixed-activity holding company shall have the same meaning

as that assigned to them by Article 4 of the Directive.”.

Article 26 of the principal Act shall be amended as follows>

(a) in paragraph (b) of sub-article (1) thereof, for the words

“under article 20(3) (a) or article 22(1),”, there shall be substituted

the words “under article 20(3) (a) or article 22(1) of this Act,” and

thereafter, for the words “competent authority under this Act.”,

there shall be substituted the words “competent authority under

this Act and any regulations or Banking Rules and Electronic

Money Rules made thereunder.”<

(b) in sub-article (2) thereof, for the words “within article

31(9).”, there shall be substituted the words “within article 31(9)

of this Act.”<

(c)

in sub-article (3) thereof>

(i) for the words “under article 20(3) (a),”, there shall

be substituted the words “under article 20(3) (a) of this Act,”<

(ii) in the English text of paragraph (b) thereof, for the

words “by virtue of article 20(7),”, there shall be substituted

the words “by virtue of article 20(7) of this Act,”<

(d) in sub-article (4) thereof>

(i) for the words “report under article 22(1),”, there

shall be substituted the words “report under article 22(1) of

this Act,”<

(ii) in paragraph (b) thereof, for the words “by virtue

of article 22(2),”, there shall be substituted the words “by

virtue of article 22(2) of this Act,”<

(e) in sub-article (5) thereof, for the words “mentioned in

article 20(7) or mentioned in article 22(2).”, there shall be

substituted the words “mentioned in article 20(7) or in article 22(2)

of this Act.”<

(f)

sub-article (6) thereof shall be deleted.

In article 28 of the principal Act, for the words “provided Amendment

article 28 of the

for in this Act -”, there shall be substituted the words “provided for in principal Act.

this Act and any regulations or Banking Rules and Electronic Money

Rules made thereunder -”.

Article 28A of the principal Act shall be amended as follows> Amendment

article 28A of the

principal Act.

(a) for the words “arising under article 3, the Minister,”,

there shall be substituted the words “arising under article 3 of this

Act, the Minister,”<

(b) in the English text, for the words “schemes shall be

exempt form the payment”, there shall be substituted the words

“schemes shall be exempt from the payment”.

Article 29 of the principal Act shall be amended as follows> Amendment of

article 29 of the

principal Act.

(a) in sub-article (1) thereof, for the words “in article 9(2)

apply,”, there shall be substituted the words “in article 9(2) of this

Act apply,”, and for the words “provisions of article 9(2) -”, there

shall be substituted the words “ provisions of article 9(2) of this

Act -”<

(b) in sub-article (2) thereof>

(i) in paragraph (a) thereof, for the words “under sub-

article (1) (b),”, there shall be substituted the words “under

sub-article (1) (b) of this article,”<

(ii) in paragraph (b) thereof, for the words “under sub-

article (1) (c),”, there shall be substituted the words “under

sub-article (1) (c) of this article,”<

(iii) in paragraph (c) thereof, for the words “under sub-

article (1) (d),”, there shall be substituted the words “under

sub-article (1) (d) of this article,”<

(c) in sub-article (3) thereof, for the words “under sub-article

(1) (c) or (d) -”, there shall be substituted the words “under sub-

article (1) (c) and (d) of this article -”<

(d) in sub-article (4) thereof, for the words “under sub-article

(1) (f),”, there shall be substituted the words “under sub-article (1)

(f) of this article,”<

(e) in sub-article (7) thereof, for the words “under sub-article

(1)”, there shall be substituted the words “under sub-article (1) of

this article”<

(f) in sub-article (9) thereof, for the words “mentioned in

sub-article (1),”, there shall be substituted the words “mentioned

in sub-article (1) of this article,”.

For article 29A of the principal Act, there shall be substituted

the following new article 29A>

“29A. The Minister shall, after consulting the

competent authority, make regulations for the transposition

of Directive 2001#24#EC of the European Parliament and of

the Council of the European Union of 4 April 2001 on re-

organisation and winding–up of credit institutions with respect

to credit institutions established in Malta and of branches of

credit institutions established outside Malta, and different

provisions may be made for different cases or classes of cases,

and account shall be taken of Malta’s international

commitments in this regard. Such regulations may provide

for the implementation of detailed re-organisation measures

and procedures, including the following matters> the

publication and submission of information in such language

or languages and in such newspapers or other publications as

may be prescribed< the submission of information to creditors,

and the manner and procedure thereof< the notification to

creditors and the procedure for the submission of claims or

representations< measures for the protection of the rights of

creditors and other third parties, including netting

arrangements< consultation between the competent authority

and any other regulatory, administrative or judicial authorities

in Malta and outside Malta with competence over the winding-

up or re-organisation of credit institutions or of branches

thereof< the publication of decisions relating to such winding-

up or re-organisation procedures< the establishment of

Banking Rules governing the applicability of the proper or

applicable law and other issues of conflict of laws.”.

Repeals article 29B

Article 29B of the principal Act shall be repealed.

of the principal Act.

Article 29C of the principal Act shall be amended as follows> Amendment of

article 29C of the

principal Act

(a)

the whole article shall be renumbered as article 29B<

and

(b) for the words “regulations made under this Act”, there

shall be substituted the words “regulations and Banking Rules made

under this Act”.

In article 30 of the principal Act, for the words “as may be Amendment of

article 30 of the

exceptionally authorised by the competent authority -”, there shall be principal Act.

substituted the words “as may be exceptionally licensed by the competent

authority -”.

Article 31 of the principal Act shall be amended as follows> Amendment

article 31 of the

principal Act.

(a) in sub-article (2) thereof, for the words “auditor under

sub-article (1) or,”, there shall be substituted the words “auditor

under sub-article (1) of this article or,”<

(b) in sub-article (9) thereof, for the words “authority under

article 20 or article 22,”, there shall be substituted the words

“authority under article 20 or article 22 of this Act,”, and for the

words “which is not incorporated in Malta,”, there shall be

substituted the words “which is not licensed in Malta,”< and

(c) in sub-article (10) thereof, for the words “not

incorporated in Malta”, there shall be substituted the words “not

licensed in Malta”.

In article 32 of the principal Act, for the words “revoked Amendment of

article 32 of the

under article 9(2)<”, there shall be replaced the words “revoked under principal Act.

article 9 (2) of this Act<”.

Article 34 of the principal Act shall be amended as follows> Amendment of

article 34 of the

principal Act.

(a) for sub-article (1) thereof, there shall be substituted the

following new sub-article (1)>

“(1) Nothing in this Act shall authorise the Central

Bank or the competent authority to enquire or cause an enquiry

to be made in a credit institution into the affairs of any

individual customer of a credit institution except –

(a) for the purpose of ensuring compliance with

any of the provisions of this or any other Act, or

(b) to facilitate monitoring on a consolidated or

non-consolidated basis, of the conduct of business of

the credit institution, especially with regard to the

monitoring of liquidity, solvency, deposit guarantees,

large exposures, administrative and accounting

procedures and internal control mechanisms, or

(c) for the purpose of enabling the Central Bank

to satisfy its responsibilities under the Central Bank of

Malta Act, or

(d) for the purpose of enabling the Central Bank

or the competent authority, as the case may be, to satisfy

their respective obligations arising under Malta’s

international commitments.”<

(b) for sub-article (2) thereof, there shall be substituted the

following new sub-article (2)>

“(2) No person, including past and present officers or

agents of a bank, shall disclose any information relating to

the affairs of a bank or of a customer of a bank which he has

acquired in the performance of his duties or the exercise of

his functions under this Act and any regulations or Banking

Rules and Electronic Money Rules made thereunder except -

(a) when authorised to do so under any of the

provisions of this Act and any regulations or Banking

Rules and Electronic Money Rules made thereunder < or

(b) for the purpose of the performance of his

duties or the exercise of his functions<

(c) when lawfully required to do so by any court

or under a provision of any law<

(d) for the purpose of enabling the Central Bank

or the competent authority, as the case may be, to satisfy

their respective obligations arising under Malta’s

international commitments< or

(e) when the customer expressly consents, in

writing, to the disclosure of information relating to his

affairs, to the extent authorised by the customer.”<

(c) for sub-article (4) thereof, there shall be substituted the

following sub-article (4)>

“(4) Officers of the competent authority and of the

Central Bank, including past and present officers, as well as

auditors or experts acting on behalf of the competent authority

or the Central Bank, shall not disclose information obtained

from credit institutions in the course of carrying out

supervisory and other duties and which is governed by the

obligation of professional secrecy, unless such disclosure of

information be done in summary or collective form, so as not

to enable the identity of the credit institution, to whom such

information relates, to be ascertained>

Provided that the said officers, auditors or experts may

divulge such information for the purpose of the performance

of their duties or the exercise of their functions, or when

lawfully required to do so by any court or under a provision

of any law.”<

(d) for sub-article (5) thereof, there shall be substituted the

following new sub-article (5)>

“(5) Notwithstanding the provisions of any other law

and where necessary for the proper carrying out of its

activities, a credit institution may communicate any

information which is in its possession and which is related to

the affairs of a customer to other members of the group of

companies of which that institution forms part, which either

carry out the issuing of electronic money or any of the

activities referred to in the Schedule to the Financial

institutions Act, or banking or other equivalent activities which

they are duly licensed to carry out, or complementary and, or

supplementary functions thereto>

Provided that any such communication of information

shall be made subject to proper controls and safeguards, so

that it shall be the responsibility of the credit institution to

ensure that the said group company member is subject to

equivalent obligations of data protection, confidentiality and

care as required under Maltese law>

Provided further that for the purpose of this article,

advertising, marketing or promotion, shall not, under any

circumstances, be considered as necessary for the proper

carrying out of the activities of a credit institution.”< and

(e)

sub-article (6) shall be repealed.

Article 35 of the principal Act shall be amended as follows>

(a) in sub-article (2) thereof, for the words “Sub-article (1)

does not apply”, there shall be substituted the words “Sub-article

(1) of this article does not apply”<

(b) in sub-article (3) thereof>

(i) in paragraph (e) thereof, for the words “made under

this Act<”, there shall be substituted the words “made under

this Act and any regulations or Banking Rules and Electronic

Money Rules made thereunder<”<

(ii) in paragraph (f) thereof, for the words “under this

Act,”, there shall be substituted the words “under this Act

and any regulations or Banking Rules and Electronic Money

Rules made thereunder,”<

(c) in sub-article (4) thereof, for the words “offence under

sub-articles (1) and (3),”, there shall be substituted the words

“offence under sub-articles (1) and (3) of this article,”<

(d) in paragraph (b) of sub-article (5) thereof, for the words

“provisions of this Act<”, there shall be substituted the words

“provisions of this Act and any regulations made thereunder<”<

(e) in paragraph (b) of sub-article (6) thereof, for the words

“shall not provide for a fine of less than one hundred liri or greater

than five hundred thousand liri.”, there shall be substituted the

words “shall not provide for a fine of less than one hundred Malta

liri or its equivalent in Euro or greater than five hundred thousand

Malta liri or its equivalent in Euro.”<

(f) in the proviso of sub-article (7) thereof, for the words

“may not impose a financial penalty greater than fifty thousand

liri.”, there shall be substituted the words “may not impose a

financial penalty greater than fifty thousand Maltese liri or its

equivalent in Euro.”< and

(g) in sub-article (8) thereof, for the words “against this Act

or any regulations made thereunder,”, there shall be substituted

the words “under this Act and any regulations made thereunder,”.

Article 35A of the principal Act shall be amended as follows> Amendment

article 35A of the

principal Act.

(a) in sub-article (2) thereof, for the words “provisions of

sub-article (3) shall apply.”, there shall be substituted the words

“provisions of sub-article (3) of this article shall apply.”< and

(b) in sub-article (3) thereof, for the words “referred to in

sub-article (1),”, there shall be substituted the words “referred to

in sub-article (1) of this article,”.

Repeal of article 37

Article 37 shall be repealed.

of the principal Act.

PART V

(1) This Part amends and shall be read and construed as Amendment of the

Insurance Business

one with the Insurance Business Act, hereinafter in this Part referred to Act,

as “the principal Act”.

(2) The provisions of this Part shall come into force on the

date of publication of this Act.

Article 2 of the principal Act shall be amended as follows> Amendment of

article 2 of the

principal Act

(a) for the definition “insurance agent” there shall be

substituted the following>

“ “insurance agent” means a person enrolled as such

.Cap. 487.

under the Insurance Intermediaries Act<”<

(b) for the definition “insurance manager” there shall be

substituted the following>

“ “insurance manager” means a person enrolled as such

under the Insurance Intermediaries Act<”<

(c) in the definition “Lloyd’s”, for the words “in the First

Schedule” there shall be substituted the words “in article 48A”<

(d) for the definition “margin of solvency” and “Malta

margin of solvency” there shall be substituted the following>

“ “ margin of solvency”, “Malta margin of solvency”

and “EEA margin of solvency” shall be construed in

accordance with article 14 of this Act<”.

Article 11 of the principal Act shall be amended as follows>

(a)

in sub-article (1) thereof>

(i) in sub-paragraph (iii) of paragraph (d) therein, for

the words “an authorised insurance agent”, there shall be

substituted the words “an insurance agent”<

(ii) in sub-paragraph (iv) of paragraph (d) therein, for

the words “an authorised insurance agent”, there shall be

substituted the words “an insurance agent”<

(b) in paragraph (a) of sub-article (2) thereof, for the words

“an authorised insurance manager”, there shall be substituted the

words “an insurance manager”.

Article 14 of the principal Act shall be amended as follows>

(a)

in sub-article (2) thereof>

(i) in paragraph (b) therein, for the words “a Malta

margin of solvency,” there shall be substituted the words “a

Malta margin of solvency, or”<

(ii) immediately after paragraph (b) therein , there shall

be added the following new paragraph (c)>

“(c) an EEA margin of solvency,”<

(b) in sub-article (4) thereof>

(i) in paragraph (b) therein, for the words “carried on

by that company in Malta.” there shall be substituted the words

“carried on by that company in Malta<”<

(ii) immediately after paragraph (b) therein, there shall

be added the following new paragraph (c)>

“(c) the EEA margin of solvency is the margin of

solvency of an authorised company computed by

reference to the assets and liabilities of the business

carried on by that company in all Member States and

EEA States.”.

Paragraph (b) of sub-article (1) of article 20 of the principal Amendment of

article 20 of the

Act shall be amended as follows>

principal Act.

(a) for the words “in the English language<” there shall be

substituted the words “in the English language.”<

(b) immediately after the words “in the English language.”,

there shall be added the words “This requirement shall not apply

in the case of a company which carries on business restricted to

risks situated outside Malta or commitments where Malta is not

the country of commitment<”.

Article 33 of the principal Act shall be amended as follows> Amendment of

article 33 of the

principal Act.

(a) for sub-article (4) thereof, there shall be substituted the

following>

“(4) The competent authority shall not approve a

transfer on an application made under sub-article (1)

unless it is satisfied that -

(a) (i) the transferee is, or immediately after the approval

will be, authorised under article 7 to carry on general business of

the class or classes or part classes to be transferred under the

scheme<

(ii) the transferee is, or immediately after the approval

will be, authorised under article 6 or article 23 of First Council

Directive of 24 July 1973 on the co-ordination of laws,

Regulations, and administrative provisions relating to the

taking up and pursuit of direct insurance other than life

assurance (73#239#EEC) to carry on general business of the

class or classes or part classes to be transferred under the

scheme in a Member State or EEA State< or

(iii) if the transferee does not fall within sub-paragraphs

(i) and (ii) of this paragraph, the transferee has the

authorisation required to enable the business, or part which is

to be transferred, to be carried on in the place to which it is to

be transferred, or will have it before the scheme takes effect<

and

(b) (i) the transferee possesses, after taking the proposed

transfer into account, the margin or margins of solvency required

to be maintained under this Act<

(ii) the transferee possesses, after taking the proposed

transfer into account, the margin or margins of solvency

required to be maintained under Articles 16a, 25 or 26 of the

First Council Directive of 24 July 1973 on the co-ordination

of laws, Regulations, and administrative provisions relating

to the taking up and pursuit of direct insurance other than life

assurance (73#239#EEC)< or

(iii) if the transferee does not fall within sub-paragraphs

(i) and (ii) of this paragraph, the transferee possesses, or will

possess before the scheme takes effect, the margin or margins

of solvency required under the law applicable in the place to

which the business is being transferred< and

(c) (i) if the transferee is a company authorised under this

Act, the transferee’s financial resources are, consequential to the

transfer, adequate to fulfil the other obligations required of it by,

or under, this Act< or

(ii) if the transferee is a company whose head office is

in a country outside Malta, the transferee’s financial resources

are, consequential to the transfer, adequate to fulfil the other

obligations required of it by, or under, the law applicable in

the place to which the business is being transferred< and

(d) if the transferor is a company whose head office is in

Malta, and the establishment from which the policies are to be

transferred is situated in a Member State or EEA State –

(i) the overseas regulatory authority in that Member

State or EEA State has been consulted about the proposed

transfer< and

(ii) the overseas regulatory authority has either

responded or the period of three months beginning with the

consultation has elapsed<

(e) if the transferor is a company which carries on business

from Malta or in or from a country outside Malta and, as regards

any policy included in the proposed transfer which evidences a

contract of insurance, the risk is a risk situated outside Malta -

(i) the overseas regulatory authority in the country

where the risk is situated has been notified of the proposed

transfer< and

(ii) either the overseas regulatory authority has

consented to the transfer or the overseas regulatory authority

has not refused its consent to the transfer within the period of

three months beginning with the date of the notification.”<

and

(b) sub-article (6) thereof shall be deleted.

For sub-article (5) of article 35 of the principal Act, there Amendment of

article 35 of the

shall be substituted the following>

principal Act.

“(5) Subject to sub-article (6), the Tribunal shall not

approve a transfer on an application filed before it under sub-

article (1) unless it is satisfied that -

(a) (i) the transferee company is, or immediately

after the approval will be, authorised under article 7 to

carry on long term business of the class or classes to be

transferred under the scheme<

(ii) the transferee company is, or

immediately after the approval will be, authorised

under article 4 or article 51 of Directive 2002#83#EC

of the European Parliament and of the Council of 5

November 2002 concerning life assurance, to carry

on long term business of the class or classes to be

transferred under the scheme in a Member State or

an EEA State< or

(iii) if the transferee does not fall within

indents (i) and (ii) of this paragraph, the transferee

has the authorisation required to enable the business,

or part which is to be transferred, to be carried on

in the place to which it is to be transferred or will

have it before the scheme takes effect< and

(b)

the transferee company produces evidence

that -

(i) (aa) after taking the transfer into

account, it possesses the margin or margins of

solvency required to be maintained under this Act<

(bb) after taking the transfer into

account, it possesses the margin or margins of

solvency required to be maintained under

article 28, 55 or 56 of Directive 2002#83#EC

of the European Parliament and of the Council

of 5 November 2002 concerning life

assurance< or

(cc) if the transferee does not fall within

sub-indents (aa) and (bb) of this paragraph,

the transferee possesses, or will possess before

the scheme takes effect, the margin or margins

of solvency required under the law applicable

in the place to which the business is being

transferred<

(ii) (aa) if the transferee company is

authorised under this Act, its financial resources

are, consequential to the transfer, adequate to fulfil

the other obligations required of it by, or under,

this Act< or

(bb) if the transferee is a company

whose head office is in a country outside

Malta, the transferee’s financial resources are,

consequential to the transfer, adequate to fulfil

the other obligations required of it by, or under,

the law applicable in the place to which the

business is being transferred<

(c) if the transferor is a company whose head office is in

Malta, and the establishment from which the policies are to be

transferred is situated in a Member State or EEA State –

(i) the overseas regulatory authority in that Member

State or EEA State has been consulted about the proposed

transfer< and

(ii) the overseas regulatory authority has either

responded or the period of three months beginning with the

consultation has elapsed.”.

Immediately after article 36 of the principal Act there shall

be added the following new article>

37. (1) Subject to sub-article (2), this Part of the Act

shall not apply to business of reinsurance.

(2) Where a company authorised under this Act

carrying on business restricted to reinsurance (“the transferor”)

proposes to transfer all or part of its business, the competent

authority shall not approve a transfer unless it is satisfied that>

(a) (i) the transferee is, or immediately after the

approval will be, authorised under article 7 to carry on

business of reinsurance<

(ii) the transferee is, or immediately after the

approval will be, authorised under article 4 of

Directive 2005#68#EC of the European Parliament

and of the Council of 16 November 2005 on

reinsurance and amending Council Directives

73#239#EEC, 92#49#EEC and Directives 98#78#EEC

and 2002#83#EC, to carry on in a Member State or

an EEA State, business of reinsurance to be

transferred under the scheme< or

(iii) if the transferee does not fall within sub-

paragraphs (i) and (ii) of this paragraph, the

transferee has the authorisation required (if any) to

enable the business, or part which is to be

transferred, to be carried on in the place to which it

is to be transferred or will have it before the scheme

takes effect< and

(b) (i) the transferee possesses, after taking the

proposed transfer into account, the margin or margins

of solvency required to be maintained under this Act<

(ii) the transferee possesses, after taking the

proposed transfer into account, the margin or

margins of solvency required to be maintained

under articles 37 to 39 of Directive 2005#68#EC of

the European Parliament and of the Council of 16

November 2005 on reinsurance and amending

Council Directives 73#239#EEC, 92#49#EEC and

Directives 98#78#EC and 2002#83#EC< or

(iii) if the transferee does not fall within sub-

paragraphs (i) and (ii) of this paragraph, the

transferee satisfies the solvency requirements

required of it by, or under, the law applicable in the

place to which the business is being transferred.

(c) (i) if the transferee is a company authorised

under this Act, the transferee’s financial resources are,

consequential to the transfer, adequate to fulfil the other

obligations required of it by or under this Act<

(ii) if the transferee is a company whose head

office is in a country outside Malta, the transferee’s

financial resources are, consequential to the transfer,

adequate to fulfil (if any) the other obligations

required of it by, or under, the law applicable in the

place to which the business is being transferred.”.

Sub-article (12) of article 38 of the principal Act shall be

deleted.

Article 41 of the principal Act shall be amended as follows>

(a) in sub-article (3) thereof, for the words “attributable to

its business of insurance in Malta” there shall be substituted the

words “attributable to its business of insurance”<

(b) in the proviso to sub-article (3) thereof, for the words

“attributable to its business of insurance in Malta” there shall be

substituted the words “attributable to its business of insurance”.

In sub-article (2) of article 59 of the principal Act, for the

words “employees or agents” there shall be substituted the words

“employees or agents, as well as by inspectors, auditors and experts

engaged by the competent authority”.

In sub-article (2) of article 60 of the principal Act, the word

“authorised” shall be deleted.

In article 61 of the principal Act, for the words “shall include

an authorised insurance agent, an authorised insurance manager”, there

shall be substituted the words “shall include an insurance agent, an

insurance manager”.

In paragraph (i) of sub-article (1) of article 64 of the principal

Act, for the words “being penalties not exceeding five thousand liri”

there shall be substituted the words “being penalties not exceeding forty

thousand liri”.

Article 65 of the principal Act shall be amended as follows>

(a) for the marginal note and chapter references thereto, there

shall be substituted the words “Exemption under Duty on

Documents and Transfers Act. Cap. 364.”<

(b) sub-article (1) thereof shall be deleted< and

(c)

sub-article (2) thereof shall be renumbered as the whole

article.

Article 67 of the principal Act shall be amended as follows> Amendment of

article 67 of the

principal Act.

(a) in sub-article (3) thereof, for the words “shall include

an authorised insurance agent, an authorised insurance manager”,

there shall be substituted the words “shall include an insurance

agent, an insurance manager”.

(b) sub-article (6) thereof shall be amended as follows>

(i) in the proviso to sub-article (6) thereof, for the words

“during which the infringement continues<” there shall be

substituted the words “during which the infringement

continues>”<

(ii) immediately after the proviso to sub-article (6)

thereof, there shall be added the following new proviso>

“Provided further that a penalty imposed under this

article, whether in the form of a fixed amount, a daily penalty,

or both, may, in no case, exceed forty thousand liri.”.

PART VI

(1) This Part amends and shall be read and construed as Amendment of the

Insurance

one with the Insurance Intermediaries Act, hereinafter in this Part Intermediaries Act,

referred to as “the principal Act”.

(2) The provisions of this Part shall come into force on the

date of publication of this Act.

Paragraph (h) of sub-article (2) of article 3 of the principal Amendment of

article 3 of the

Act shall be amended as follows>

principal Act

(a) in the proviso to paragraph (h) thereof, for the words

“during which the infringement continues<” there shall be

substituted the words “during which the infringement continues>”<

(b) immediately after the proviso to paragraph (h) thereof,

there shall be added the following new proviso>

“Provided further that a penalty imposed under this article,

whether in the form of a fixed amount, a daily penalty, or both,

may, in no case, exceed forty thousand liri<”.

In indent (iii) of paragraph (a) of sub-article (1) of article

10, for the words “all qualifying shareholders, controllers and all persons

who will effectively manage the affairs”, there shall be substituted the

words “all qualifying shareholders, controllers, directors and all persons

who will effectively manage the affairs”.

In sub-article (4) of article 11 of the principal Act, for the

words “may carry out insurance intermediaries activities or set up or

acquire a subsidiary” there shall be substituted the words “may carry

out insurance intermediaries activities, open a branch, office or other

place of business, or set up or acquire a subsidiary”.

In the proviso to paragraph (b) of sub-article (1) of article

12 of the principal Act, for the words “restricted to contracts of insurance

relating to risks situated outside of Malta” there shall be substituted the

words “restricted to contracts of insurance relating to risks situated

outside of Malta or commitments where Malta is not the country of

commitment”.

For paragraph (a) of sub-article (1) of article 15 of the

principal Act, there shall be substituted the following>

“(a) the intermediary does not commence to carry on

the insurance intermediaries activities pursuant to the

enrolment within twelve months of it being granted, or within

such other period as may be specified in the enrolment< or”.

For paragraph (h) of article 16 of the principal Act there

shall be substituted the following>

“(h) the registered person does not hold a directorship

in, or is no longer employed with, the enrolled company< or”.

Article 26 of the principal Act shall be amended as follows>

(a) the present provision shall be renumbered as sub-article

(1) thereof< and

(b) immediately after sub-article (1) thereof, as renumbered,

there shall be added the following new sub-article (2)>

“(2) The application for ceasing shall be submitted to

the competent authority not later than three months before

the date on which the enrolled person intends to cease to carry

on such activities.”.

In article 30 of the principal Act, for the words “restricted Amendment of

to contracts of insurance relating to risks situated outside of Malta” article

principal Act.

there shall be substituted the words “restricted to contracts of insurance

relating to risks situated outside of Malta or commitments where Malta

is not the country of commitment”.

In the English text of sub-article (6) of article 37 of the Amendment of

principal Act, for the words “in the Tied Insurance Company Register” article

principal Act.

there shall be substituted the words “in the Tied Insurance Intermediaries

Company Register”.

For paragraph (b) of sub-article (2) of article 45 of the Amendment of

article 45 of the

principal Act there shall be substituted the following>

principal Act.

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

international commitments or the obligations arising out of

Directive 2002#92#EC of the European Parliament and of the

Council of 9 December 2002 on insurance mediation, as amended

from time to time, and includes any implementing measures that

have been or may be used thereunder< or”.

For sub-articles (2) and (3) of article 46 of the principal Act Amendment of

article 46 of the

there shall be substituted the following>

principal Act.

“(2) Information obtained by the competent authority or by

its officers, employees or agents, as well as by inspectors, auditors

and experts engaged by the competent authority for the purposes

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

regulations made thereunder, or of any insurance intermediaries

rule, or in the discharge of any functions under any of the said

provisions, shall be treated as confidential and protected by the

duty of professional secrecy, and shall not be disclosed to any other

person, except in the following cases –

(a) where the information is disclosed with a view to

the institution of, or otherwise for the purposes of, criminal

proceedings or of any proceedings by the competent authority

before any court under this Act<

(b) where the information is disclosed with a view to

enabling or assisting the competent authority in the

performance or discharge of any of its functions under this

Act<

(c) where the information has been made available to

the public by virtue of being disclosed in any circumstances

in which, or for any purpose for which, disclosure is not

precluded by this article<

(d) where a summary or collection of information is

prepared or supplied in such a way as not to enable the identity

of any person to whom the information relates to be

ascertained<

(e) where the information is disclosed to an auditor

where such disclosure would assist the auditor in the exercise

of his functions under article 28<

(f) where the information is provided to the Central

Bank of Malta or to the Listing Authority under the Financial

Markets Act in exercise of their respective functions in terms

of law<

(g) where the information is provided to such other

local or overseas regulatory, judicial or enforcement

authorities where such disclosure is required or requested for

the pursuance of serious regulatory concerns or the detection,

prevention or prosecution of criminal offences<

(h) where the information is disclosed in civil or

commercial proceedings in relation to the bankruptcy or

compulsory winding up of an insurance intermediary provided

such information does not concern third parties involved in

attempts to rescue such insurance intermediary, and to such

overseas bodies responsible for the liquidation and bankruptcy

of a person holding an authorisation or an equivalent licence

from an overseas regulatory authority.

(3) Subject to the provisions of article 45, information

obtained from an overseas regulatory authority may only be disclosed

to another person, to another overseas regulatory authority or to any

other third party with the prior approval of the authority which had

provided the information.”.

In paragraph (c) of sub-article (1) of article 48 of the

principal Act, for the words “under article 36” there shall be substituted

the words “under article 37”.

The Third Column in the Schedule to the principal Act, Amendment

Schedule to the

shall be amended as follows>

principal Act.

(a) in paragraph 2, in the definition “Insurance Agent”, for

the words “appointed by an authorised company”, there shall be

substituted the words, “appointed by a company authorised under

the Insurance Business Act and, or by a European insurance

undertaking”<

(b) in sub-paragraph (b) of paragraph 3, in the definition

“Insurance Manager”, for the words “restricted to contracts of

insurance relating to risks situated outside of Malta” there shall be

substituted the words “restricted to contracts of insurance relating

to risks situated outside of Malta or commitments where Malta is

not the country of commitment”.

PART VII

MISCELLANEOUS PROVISIONS

(1) With effect from such date as the Minister may by Transitory

provisions.

order establish, hereinafter “the operative date”, the Malta Stock

Exchange plc shall continue in the personality of the Malta Stock

Exchange established under Part IV of the Financial Markets Act prior

to the repeal of such Part by this Act< and subject to the exclusion of the

property described in sub-article (3) hereof, the Malta Stock Exchange

plc shall accordingly succeed to all its assets, rights, liabilities and

obligations, including the recognition order issued to the Malta Stock

Exchange in terms of Part II of the Financial Markets Act, which, unless

specifically cancelled or repealed, shall remain in force until the

operative date.

(2) With effect from the operative date>

(a) the competent authority shall issue in favour of the Malta

Stock Exchange plc an authorisation in terms of Part II of the

Financial Markets Act. Upon the issue of such authorisation, the

recognition order referred to in sub-article (1) shall automatically

lapse<

(b) the Malta Stock Exchange plc shall be deemed to have

satisfied the requirements of Part IV of the Financial Markets Act

and the competent authority shall issue an authorisation in its favour

with effect from such date.

(3) All authorisations, decisions, licenses, warrants,

approvals, notices and other acts or commitments made or taken by the

Malta Stock Exchange, including any membership or admission to the

official list and any other recognised list and any Council Notice or

bye-laws, as well as agreements, contracts of employment and relative

staff appointments and conditions, shall as from the operative date be

deemed to have been made or taken and assumed by the Malta Stock

Exchange plc, and shall, unless specifically cancelled or repealed, remain

in force accordingly, with such modifications and adaptations as are

strictly necessary to implement fully and correctly the succession and

devolution of the business and the rights and obligations as aforesaid of

the Malta Stock Exchange to and in favour of the Malta Stock Exchange

plc in terms of this Part.

(4) The immovable property and rights relating thereto as

described in the Schedule to this Part shall devolve to the Land

Department or another entity whose shares are wholly owned by

Government which shall within one month from the operative date

cause a declaratory public deed to be published containing a detailed

description of the allocation and the devolution in its favour of and of

its succession to the immovable property and rights relating thereto

which prior to the operative date were vested in the Malta Stock

Exchange, subject to the provisions of this Part, and a note thereon

shall be duly enrolled at the Public Registry and the Land Registry, as

the case may be.

(5) The succession, as from the operative date, of the assets,

rights, liabilities and obligations in favour of Malta Stock Exchange

plc and the Land Department or another entity whose shares are wholly

owned by Government, as the case may be, described in this Part, shall

be valid and effective even as regards third parties by operation of law

without the need for any other formality, other than the public deed and

notes required under this article, and shall be exempt from the payment

of income tax, duty on documents and other fiscal charges,

notwithstanding any other provision of law.

(6) Unless the context otherwise requires, any reference in

any law to the Malta Stock Exchange shall after the operative date be

deemed to be a reference to the Malta Stock Exchange plc< and any

reference to the Council, a member of the Council or any officer or

employee of the Malta Stock Exchange shall after the operative date be

deemed to be a reference to the Board of Directors, a director of the

company and to officers or employees of the company, respectively.

A