ACT No. XXII of 2014 AN ACT to amend the Investment Services Act, Cap. 370.

I assent.

M ARIE L OUISE

(L.S.)

C OLEIRO P RECA

President

24th June, 2014

ACT No. XXII of 2014

AN ACT to amend the Investment Services Act, Cap. 370.

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 Investment Services Short title.

(Amendment) Act, 2014, and this Act shall be read and construed as

one with the Investment Services Act, hereinafter referred to as "the Cap. 370.

principal Act".

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)

the definition "the Community" shall be

deleted;

(ii) in the definition "European regulatory

authority", for the words "MIFID Directive and Article 97

of the UCITS Directive", there shall be substituted the

words "MIFID Directive, Article 97 of the UCITS

Directive and Article 4 of the CRD";

(iii) immediately after the definition "Malta’s

international commitments", there shall be added the

following new definition

" "Management body" means the body or

bodies of a licence holder which are appointed in

accordance with national law and are empowered to

set the strategy, objectives and overall direction of

the licence holder, and oversee and monitor

management decision making, and includes the

persons who effectively direct the business of the

licence holder;"; and

(b) in sub-article (3) thereof, for the words, "The

objective of this Act is, in part, to transpose and implement the

provisions of the AIFM Directive, the MIFID Directive and the

UCITS Directive,", there shall be substituted the words "The

objective of this Act is, in part, to transpose and implement the

provisions of the AIFM Directive, the CRD, the MIFID

Directive and the UCITS Directive,".

For sub-article (2) of article 2A of the principal Act, there

shall be substituted the following

"(2) The competent authority shall also carry out the

functions and duties as competent authority for all purposes of

the AIFM Directive, the CRD, the CRR, the MIFID Directive

and the UCITS Directive and the Commission of the European

Union, ESMA, the EBA and European regulatory authorities

shall be informed accordingly.".

For paragraph (vi) of paragraph (b) of sub-article (6) of

article 10A of the principal Act, there shall be substituted the

following

"(vi) the CRD.".

Sub-article (1) of article 10B of the principal Act shall be

amended as follows

(a) for the words "The competent authority shall work

in full consultation with European regulatory authority or

overseas regulatory authorities", there shall be substituted the

words "The competent authority shall work in full consultation

with the European regulatory authorities or overseas regulatory

authorities";

(b) in paragraph (a) thereof, for the words "a credit

institution, an assurance undertaking, insurance undertaking,

reinsurance undertaking," there shall be substituted the words "a

credit institution, insurance undertaking, reinsurance

undertaking,";

(c)

in paragraph (b) thereof, for the words "the parent

undertaking of a credit institution, assurance undertaking,

insurance undertaking, reinsurance undertaking," there shall be

substituted the words "the parent undertaking of a credit

institution, insurance undertaking, reinsurance undertaking,";

(d) in paragraph (c) thereof, for the words "a person

controlling a credit institution, assurance undertaking, insurance

undertaking, reinsurance undertaking,", there shall be

substituted the words "a person controlling a credit institution,

insurance undertaking, reinsurance undertaking,".

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

article 12 of the

principal Act.

(a)

in sub-article (1) thereof

(i)

paragraph (j) thereof shall be deleted;

(ii) in paragraph (k) thereof for the words "the

AIFM Directive, the MIFID Directive, and the

UCITS Directive;" there shall be substituted the

words "the AIFM Directive, the CRD, the MIFID

Directive and the UCITS Directive;"; and

(iii) in paragraph (m) thereof for the words "the

MIFID Directive and UCITS Directive thereon"

there shall be substituted the words "the MIFID

Directive thereon";

(b)

sub-article (5) thereof shall be substituted as

"(5) Regulations made under this article may

impose

(a) administrative penalties which may not

exceed one hundred and fifty thousand euro

(€150,000) for each infringement or failure to

comply, as the case may be;

(b) punishments or other penalties in respect of

any contravention or failure of compliance not

exceeding a fine (multa) of one hundred and fifty

thousand euro (€150,000) or imprisonment for a term

not exceeding one year, or both such fine and

imprisonment; and

(c) administrative penalties and fines higher

than one hundred and fifty thousand euro

(€150,000), where deemed necessary or appropriate

for any contravention of or failure of compliance

with any EU Directive or EU Regulation or of any

regulations made under this article to transpose or to

give effect to any EU Directive or EU Regulation.";

(c)

sub-article (6) thereof shall be renumbered as sub-

article (7); and

(d) immediately after sub-article (5) thereof, there shall

be inserted the following new sub-article (6)

"(6) Regulations made under this Act and any

amendment or revocation of such regulations, may be

published in the English language only.".

In paragraph (g) of sub-article (2) of article 15 of the

principal Act, for the words "the AIFM Directive, the MIFID

Directive and the UCITS Directive;", there shall be substituted the

words "the AIFM Directive, the CRD, the MIFID Directive and the

UCITS Directive;".

In article 16B of the principal Act, for the words "any

provisions which transpose the AIFM Directive, the MIFID Directive

and the UCITS Directive," there shall be substituted the words "any

provisions which transpose the AIFM Directive, the CRD, the MIFID

Directive and the UCITS Directive,".

Article 17 of the principal Act shall be amended as

(a)

in sub-article (2) thereof, for the words "AIFM

Directive, the MIFID Directive and the UCITS Directive",

wherever they appear in the said sub-article, there shall be

substituted the words "AIFM Directive, the CRD, the MIFID

Directive and the UCITS Directive";

(b) sub-articles (9) to (13) thereof shall be re-numbered

as sub-articles (10) to (14);

(c)

immediately after sub-article (8) thereof there shall

be added the following new sub-article (9)

"(9) Sub-article (7) of this article and article 26

shall not preclude the competent authority from

exchanging information with European regulatory

authorities, or other overseas regulatory authorities or

other bodies and entities in pursuance of the requirements

and terms of the CRD and the CRR, as may be

prescribed."";

(d) in sub-article (10) thereof, as renumbered, for the

words "acts contrary to the provisions of the AIFM Directive,

the MIFID Directive or the UCITS Directive", there shall be

substituted the words "acts contrary to the provisions of the

AIFM Directive, the CRD, the CRR, the MIFID Directive or the

UCITS Directive"; and

(e)

in sub-article (12) thereof, as renumbered, for the

words "which are contrary to the provisions of the AIFM

Directive, the MIFID Directive or the UCITS Directive", there

shall be substituted the words "which are contrary to the

provisions of the AIFM Directive, the CRD, the CRR, the

MIFID Directive or the UCITS Directive".

Article 17A of the principal Act shall be amended as Amendment of

article 17A of

follows

the principal

Act.

(a) in sub-article (2) thereof, for the words "If, upon the

request for the cooperation by the competent authority in terms

of Article 54(2) of the AIFM Directive and Article 101(5) of the

UCITS Directive,", there shall be substituted the words "If,

upon the request for the cooperation by the competent authority

in terms of Article 54(2) of the AIFM Directive, Articles 52 and

118 of the CRD and Article 101(5) of the UCITS Directive,";

and

(b) for paragraph (a) of sub-article (3) thereof, there

shall be substituted the following

"(a) carry out the verifications or the investigation

itself, and in respect of requests pursuant to Article 118 of

the CRD with the participation of the requesting authority;

or".

Immediately after sub-article (4) of article 18 of the Amendment of

article 18 of the

principal Act, there shall be added the following new sub-article

principal Act.

"(5) An auditor of a licence holder shall, in the absence

of compelling reasons not to do so, simultaneously report the

information specified in sub-articles (1) and (2), in accordance

with the provisions of sub-articles (3) and (4), to the

management body of the licence holder.".

Sub-article (1) of article 26 of the principal Act shall be

amended as follows

(a)

in paragraph (f) thereof, for the words "in terms of

law; and", there shall be substituted the words "in terms of

law;";

(b)

in paragraph (g) thereof

(i) for the words "local or overseas regulatory",

there shall be substituted the words "local or European or

overseas regulatory"; and

(ii) for the words "or criminal nature:", there shall

be substituted the words "or criminal nature; and";

(c)

immediately after paragraph (g) thereof, there shall

be added the following new paragraph

"(h) where the competent authority publishes the

outcome of stress tests in accordance with Article 100 of

the CRD or Article 32 of Regulation (EU) No 1093/2010

and, or transmits the results to the EBA:"; and

(d) in the first proviso thereto, for the words "in

accordance with the MIFID Directive, the UCITS Directive and

with other Directives of the European Community", there shall

be substituted the words "in accordance with the AIFM

Directive, the CRD, the CRR, the MIFID Directive, the UCITS

Directive and with other Directives of the European Union".

Paragraph (h) of sub-article (1) of article 12 of the Income

Tax Act shall be amended as follows

(a)

for the words "provide pension payments);" there

shall be substituted the words "provide pension payments):";

and

(b) immediately after the words "provide pension

payments):" there shall be added the following new proviso

"Provided that in the case of commutation of

pensions in relation to retirement schemes, licensed,

registered or otherwise authorised under the Special Funds

(Regulation) Act or any Act replacing the same, the

maximum capital sum that may benefit from this

exemption shall be as provided under that Act, including

any regulations or directives issued thereunder;".

I n sub-article (8) of article 16 of the Malta Financial Amendment of

Services Authority Act, for the words "shall be subject to publication article

Malta Financial

in such medium" there shall be substituted the words "shall be Services

Authority Act.

published in such medium".

In sub-article (1) of article 2 of the Companies Act, Amendment of

immediately after the definition " "small and medium-sized article

Companies Act.

enterprises" or "SMEs" ", there shall be inserted the following new Cap. 386.

definition

" "system of interconnection of registers" means the system of

interconnection of central, commercial and companies registers

composed of the registers of Member States and EEA States, the

European central platform, and the European e-Justice portal serving

as the European electronic access point, in terms of Directive 2009/

101/EC, as amended by Directive 2012/17/EU;".

Article 3A of the Companies Act shall be amended as Amendment of

article 3A of the

Companies Act.

(a)

paragraphs (n), (o) and (p) of article 3A of the

Companies Act shall be renumbered as paragraphs (o), (p) and

(q) respectively; and

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

be inserted the following new paragraph

"(n) Directive 2012/17/EU of the European

Parliament and of the Council of 13 June 2012 amending

Council Directive 89/666/EEC and Directives 2005/56/EC

and 2009/101/EC of the European Parliament and of the

Council as regards the interconnection of central,

commercial and companies registers;".

(a)

This article shall come into force on such date as the Amendment of

Minister responsible for finance may by notice in the Gazette article

Companies Act.

establish.

(b) The second proviso of article 7 of the principal Act

shall be substituted as follows

"Provided further that where, and for as long

as, none of the partners is either an individual or a body

corporate which has its obligations guaranteed by the

unlimited and joint and several liability of one or more of

its members, the provisions of article 7A shall also apply

to that partnership.".

(a)

This article shall come into force on such date as the

Minister responsible for finance may by notice in the Gazette

(b) Immediately after article 7 of the Companies Act, there

shall be added the following new article

7A. (1) The provisions of this article shall

apply to a partnership where, and for as long as, none

of the partners is either an individual or a body

corporate which has its obligations guaranteed by the

unlimited and joint and several liability of one or more

of its members.

(2) A partnership which, either on formation or

at any time thereafter, becomes subject to the

provisions of this article shall, within fourteen days,

deliver to the Registrar for registration a notice

specifying that it is subject to this article and that it

shall comply with the provisions laid down in this

article.

(3) When a partnership ceases to be subject to

the provisions of this article, the partnership shall,

within fourteen days of such cessation, deliver to the

Registrar for registration a notice specifying that it is

no longer subject to this article and that the provisions

of this article shall not apply to such partnership as

from the date that it has ceased to be so subject.

(4) Notwithstanding any other penalties

imposed by this Act, any partner who fails to comply

with the provisions of sub-articles (2) and (3) shall be

liable to a penalty, and, for every day during which the

default continued, to a further penalty.

(5) The provisions of Chapters IX and X of Part

V of this Act, other than the provisions of article 184,

shall mutatis mutandis apply to a partnership subject to

this article for as long as such partnership continues to

be so subject.

(6) Where a partnership subject to the

provisions of this article is dissolved, a liquidator shall

be appointed and the provisions of articles 305 and

306 shall mutatis mutandis apply. The provisions of

article 37(1) and article 48 shall not apply.

(7) (a)

As soon as the affairs of the

partnership are fully wound up, the liquidator shall

make an account of the winding up, showing how the

winding up has been conducted and how the property

of the partnership has been disposed of, and shall draw

up a scheme of distribution and he shall cause the

account to be audited by one or more auditors

appointed by a decision of the partners. The liquidator

shall serve on each of the partners a copy of the

accounts and of the scheme of distribution, if any,

together with the auditors’ report and any explanation

thereof.

(b) The accounts and the scheme of distribution

shall be deemed to have been approved by all the

partners if no objection thereto is lodged by

application by any of the partners within three months

of the service referred to in paragraph (a).

(c) The provisions of article 153 shall apply to

an auditor appointed in terms of paragraph (a). Such

auditor shall not be a person who has held the office of

auditor of the partnership at any time during the last

three years immediately preceding the date of

dissolution.

(8) The Minister may make regulations for the

better carrying out of any of the provisions of this

article; and without prejudice to the generality of the

foregoing may, by such regulations, in particular

exempt or provide for the exemption of such

partnership from any of the provisions of this Act or of

any other law in force, subject to such modifications,

variations and conditions that may be specified

thereunder.".

(a)

This article shall come into force on such date as the Amendment of

Minister responsible for finance may by notice in the Gazette article

Companies Act.

(b) The proviso of article 51 of the Companies Act shall

be substituted as follows

"Provided that where, and for as long as, none

of the general partners is either an individual or a body

corporate which has its obligations guaranteed by the

unlimited and joint and several liability of one or more of

its members, the provisions of article 51A shall also apply

to that partnership en commandite or limited partnership.".

(a)

This article shall come into force on such date as the

Minister responsible for finance may by notice in the Gazette

(b) Immediately after article 51 of the Companies Act,

there shall be inserted the following new article

51A. (1) The provisions of this article shall

apply to a partnership en commandite or limited

partnership where, and for as long as, none of the

general partners is either an individual or a body

corporate which has its obligations guaranteed by the

unlimited and joint and several liability of one or more

of its members.

(2) A partnership en commandite or limited

partnership which, either on formation or at any time

thereafter, becomes subject to the provisions of this

article shall, within fourteen days, deliver to the

Registrar for registration a notice specifying that it is

subject to this article and that it shall comply with the

provisions laid down in this article.

(3) When a partnership en commandite or

limited partnership ceases to be subject to the

provisions of this article, the partnership shall, within

fourteen days of such cessation, deliver to the

Registrar for registration a notice specifying that it is

no longer subject to this article and that the provisions

of this article shall not apply to such partnership as

from the date that it has ceased to be so subject.

(4) Notwithstanding any other penalties

imposed by this Act, any partner of the partnership

en commandite or limited partnership who fails to

comply with the provisions of sub-articles (2) and (3)

shall be liable to a penalty, and, for every day during

which the default continued, to a further penalty.

(5) The provisions of Chapters IX and X of Part

V of this Act, other than the provisions of article 184,

shall mutatis mutandis apply to a partnership en

commandite or limited partnership subject to this

article for as long as such partnership continues to be

so subject.

(6) Where a partnership en commandite or

limited partnership subject to the provisions of this

article is dissolved, a liquidator shall be appointed and

the provisions of articles 305 and 306 shall mutatis

mutandis apply. The provisions of article 37(1) and

article 48 shall not apply.

(7) (a)

As soon as the affairs of the

partnership en commandite or limited partnership are

fully wound up, the liquidator shall make an account

of the winding up, showing how the winding up has

been conducted and how the property of such

partnership has been disposed of, and shall draw up a

scheme of distribution and he shall cause the account

to be audited by one or more auditors appointed by a

decision of the general partners. The liquidator shall

serve on each of the partners a copy of the accounts

and of the scheme of distribution, if any, together with

the auditors’ report and any explanation thereof.

(b) The accounts and the scheme of distribution

shall be deemed to have been approved by all the

partners if no objection thereto is lodged by

application by any of the partners within three months

of the service referred to in paragraph (a).

(c) The provisions of article 153 shall apply to

an auditor appointed in terms of paragraph (a). Such

auditor shall not be a person who has held the office of

auditor of the partnership en commandite or limited

partnership at any time during the last three years

immediately preceding the date of dissolution.

(8) The Minister may make regulations for the

better carrying out of any of the provisions of this

article; and without prejudice to the generality of the

foregoing may, by such regulations, in particular

exempt or provide for the exemption of such

partnership en commandite or limited partnership from

any of the provisions of this Act or of any other law in

force, subject to such modifications, variations and

conditions that may be specified thereunder.".

Article 401 of the Companies Act shall be amended as Amendment of

article 401 of

the Companies

Act.

(a)

in paragraph (e) of sub-article (1) thereof

(i) for the words "to cause without delay a

statement to be published in the Gazette or on a website"

there shall be substituted the words "to cause without

delay, normally within twenty one days from receipt of the

complete documentation including any legality checks as

may be required for entry in the register, a statement to be

published in the Gazette or on a website";

(ii) immediately after the words "the commercial

partnership to which the statement related:" there shall be

added the following new proviso

"Provided that the twenty one day period

referred to in this sub-paragraph shall not apply to annual

accounts delivered to the Registrar for registration in

accordance with this Act:";

(iii) for the words "Provided that the Registrar

shall additionally be required" there shall be substituted

the words "Provided further that the Registrar shall

additionally be required";

(b) in paragraph (g) thereof, for the words "as the

Director may consider appropriate." there shall be substituted

the words "as the Director may consider appropriate;";

(c)

immediately after paragraph (g) thereof there shall

be added the following new paragraph

"(h) when processing personal data to do so in

accordance with Directive 95/46/EC of the European

Parliament and of the Council of 24th October 1995 on the

protection of individuals with regard to the processing of

personal data and on the free movement of such data."; and

(d) in sub-article (2) thereof, immediately after the

second proviso thereof, there shall be inserted the following

new paragraph

"The Registrar shall make available on a website

maintained by him up to date information explaining the

provisions of this article according to which third parties

can rely on documents and particulars which are registered

in terms of any of the provisions of this Act, or any other

Act requiring such registration. Such information shall also

be made available by the Registrar on the European e-

Justice portal in accordance with the portal’s rules and

technical requirements as stipulated in Article 3a(2) of

Directive 2009/101/EC.".

Sub-article (1) of article 425 of the Companies Act shall be Amendment of

article 425 of

amended as follows

the Companies

Act.

(a)

paragraphs (m) and (n) thereof shall be renumbered

as paragraphs (n) and (o) respectively; and

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

be inserted the following new paragraph (m)

"(m) prescribe requirements in relation to the

system of interconnection of registers and the

interoperability of registers within the system of

interconnection of registers through the European e-Justice

portal, and such requirements may stipulate any further

conditions necessary to implement Directive 2012/17/EU

of the European Parliament and of the Council of 13 June

2012 amending Council Directive 89/666/EEC and

Directives 2005/56/EC and 2009/101/EC of the European

Parliament and of the Council as regards the

interconnection of central, commercial and companies

registers;".

(a)

This article shall come into force on such date as the Amendment of

Minister responsible for finance may by notice in the Gazette the

Schedule of the

establish.

Companies Act.

(b) In the Eleventh Schedule of the Companies Act

(i) immediately after article 6(9) thereof, there shall be added

the following new article

Failure of partner of partnership en nom €465.87 €23.29"

"7A(4)

collectif to comply with article 7A(2) and (3)

and;

immediately after article 50(5) thereof, there shall be

added the following new article

"51A(4)

Failure of partner of partnership en nom

commandite or limited partnership to comply

with article 51A(2) and (3)

€465.87 €23.29".

Passed by the House of Representatives at Sitting No. 163 of the

16th June, 2014.

A NĠLU F ARRUGIA

Speaker

R AYMOND S CICLUNA

Clerk to the House of Representatives