MT
ACT No. X of 2015 AN ACT to amend the Banking Act, Cap. 371, and to provide for matters ancillary or incidental thereto.
Table of Provisions (53)
Statutory Text (53 Articles)
I assent.
M ARIE L OUISE
(L.S.)
C OLEIRO P RECA
President
10th April, 2015
ACT No. X of 2015
AN ACT to amend the Banking Act, Cap. 371, and to provide
for matters ancillary or incidental thereto.
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 Banking (Amendment) Short title.
Act, 2015, and this Act shall be read and construed as one with the
Banking Act, hereinafter referred to as "the principal Act".
Article 2 of the principal Act shall be amended as follows
Amendment of
article 2 of the
principal Act.
(a)
the definition "Advanced Measurement Approach"
shall be deleted;
(b) for the definition " "bank" or "credit institution" ",
there shall be substituted the following
" "bank" or "credit institution" " shall have
the same meaning as that assigned to it in point (1)
of Article 4(1) of the CRR;";
(c)
for the definition "branch", there shall be substituted
the following
" "branch" shall have the same meaning as
that assigned to it in point (17) of Article 4(1) of
the CRR;";
(d) in the definition "business of banking", for the
words "set out in sub-article (2)", there shall be substituted the
words "set out in article 2A";
(e)
the definition "Capital Adequacy Directive" shall be
(f)
the definition "Capital Requirements Directive"
shall be deleted;
(g) for the definition "close links", there shall be
substituted the following
" "close links" shall have the same meaning
as that assigned to it in point (38) of Article 4(1) of
the CRR;";
(h)
the definition "connected persons" shall be deleted;
(i)
the definition "consolidating supervisor" shall be
(j)
immediately after the definition "court", there shall
be added the following new definition
" "the CRD" means Directive 2013/36/EU of
the European Parliament and of the Council of 26
June 2013 on the access to the activity of credit
institutions and the prudential supervision of credit
institutions and investment firms, amending
Directive 2002/87/EC and repealing Directives
2006/48/EC and 2006/49/EC, as amended from
time to time, and includes any implementing
measures that have been or may be issued
thereunder;";
(k) immediately after the definition "credit facility",
there shall be added the following new definition
" "the CRR" means Regulation (EU) No.
575/2013 of the European Parliament and of the
Council of 26 June 2013 on prudential
requirements for credit institutions and investment
firms and amending Regulation (EU) No. 648/
2012, as amended from time to time, and includes
any implementing measures that have been or may
be issued thereunder;";
(l)
immediately after the definition "deposit", there
shall be added the following new definitions
" "Directive 2004/39/EC" 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;
"Directive 2004/109/EC" 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;";
(m) for the definition "EBA", there shall be substituted
the following
" "EBA" means the European Banking
Authority established by Regulation (EU) No.
1093/2010;";
(n)
the definition "EU parent credit institution" shall be
(o) the definition "EU
parent
financial
holding
company" shall be deleted;
(p) the definition "EU parent mixed financial holding
company" shall be deleted;
(q) immediately after the definition "EEA State", there
shall be added the following new definitions
" "ESCB central banks" shall have the same
meaning as that assigned to it in point (45) of
Article 4(1) of the CRR;
"ESFS" means European System of Financial
Supervision;
"ESRB" means the European Systemic Risk
Board established by Regulation (EU) No. 1092/
2010;
"financial holding company" shall have the
same meaning as that assigned to it in point (20) of
Article 4(1) of the CRR;
"financial instrument" shall have the same
meaning as that assigned to it in point (50) of
Article 4(1) of the CRR;
"financial sector entity" shall have the same
meaning as that assigned to it in point (27) of
Article 4(1) of the CRR;";
(r)
for the definition "home Member State", there shall
be substituted the following
" "home Member State" shall have the same
meaning as that assigned to it in point (43) of
Article 4(1) of the CRR;";
(s)
for the definition "host Member State", there shall
be substituted the following
" "host Member State" shall have the same
meaning as that assigned to it in point (44) of
Article 4(1) of the CRR;";
(t)
for the definition "initial capital", there shall be
substituted the following
" "initial capital" shall have the same
meaning as that assigned to it in point (51) of
Article 4(1) of the CRR;";
(u) immediately after the definition "initial capital",
there shall be added the following new definitions
" "institution" shall have the same meaning
as that assigned to it in point (3) of Article 4(1) of
the CRR;
"insurance undertaking" shall have the same
meaning as that assigned to it in point (5) of Article
4(1) of the CRR;
"investment firm" shall have the same
meaning as that assigned to it in point (2) of Article
4(1) of the CRR;";
(v)
the definition "Large Exposures Rule" shall be
deleted;
(w) in
the
definition
"Malta’s
international
commitments", for the words "means commitments,
responsibilities and obligations arising out of European
Community law,", there shall be substituted the words "means
commitments, responsibilities and obligations arising out of
European Union law,";
(x) for the definition "mixed financial
holding
company", there shall be substituted the following
" "mixed financial holding company" shall
have the same meaning as that assigned to it in
point (21) of Article 4(1) of the CRR;";
(y) in the definition "outsourcing service provider", for
the words "which may or may not be an licensed entity,", there
shall be substituted the words "which may or may not be a
licensed entity,";
(z)
immediately after the definition "overseas
regulatory authority", there shall be added the following new
definitions
" "own funds" shall have the same meaning
as that assigned to it in point (118) of Article 4(1)
of the CRR;
"parent undertaking" shall have the same
meaning as that assigned to it in point (15) of
Article 4(1) of the CRR;";
(aa) for the definition "qualifying shareholding", there
shall be substituted the following
" "qualifying
holding"
or
"qualifying
shareholding" shall have the same meaning as that
assigned to it in point (36) of Article 4(1) of the
CRR;";
(bb) immediately after the definition "reconstruction",
there shall be added the following new definitions
" "Regulation (EU) No. 1092/2010" means
Regulation (EU) No. 1092/2010 of the European
Parliament and of the Council of 24 November
2010 on European Union macro-prudential
oversight of the financial system and establishing a
European Systemic Risk Board, as amended from
time to time, and includes any implementing
measures that have been or may be issued
thereunder;
"Regulation (EU) No. 1093/2010" means
Regulation (EU) No. 1093/2010 of the European
Parliament and of the Council of 24 November
2010 establishing a European Supervisory
Authority
(European
Banking
Authority),
amending Decision No. 716/2009/EC and
repealing Commission Decision 2009/78/EC, as
amended from time to time, and includes any
implementing measures that have been or may be
issued thereunder;
"Regulation (EU) No. 1094/2010" means
Regulation (EU) No. 1094/2010 of the European
Parliament and of the Council of 24 November
2010 establishing a European Supervisory
Authority (European Insurance and Occupational
Pensions Authority), amending Decision No. 716/
2009/EC and repealing Commission Decision
2009/79/EC, as amended from time to time, and
includes any implementing measures that have
been or may be issued thereunder;
"Regulation (EU) No. 1095/2010" means
Regulation (EU) No. 1095/2010 of the European
Parliament and of the Council of 24 November
2010 establishing a European Supervisory
Authority (European Securities and Markets
Authority), amending Decision No. 716/2009/EC
and repealing Commission Decision 2009/77/EC,
as amended from time to time, and includes any
implementing measures that have been or may be
issued thereunder;
"reinsurance undertaking" shall have the
same meaning as that assigned to it in point (6) of
Article 4(1) of the CRR;";
(cc) in the definition "representative office", for the words
"under the laws of a foreign country,", there shall be substituted
the words "under the laws of a country outside Malta,";
(dd) immediately after the definition "representative
office", as amended, there shall be added the following new
" "senior management" means those natural
persons who exercise executive function within a
credit institution and who are responsible, and
accountable to the board of directors, for the day-
to-day management of the credit institution;";
(ee) for the definition "subsidiary", there shall be
substituted the following
" "subsidiary" shall have the same meaning
as that assigned to it in point (16) of Article 4(1) of
the CRR;";
(ff) immediately after the definition "third country",
there shall be added the following new definition
" "UCITS" means undertakings for collective
investment in transferable securities in terms of
Directive 2009/65/EC of the European Parliament
and of the Council of 13 July 2009 on the
coordination
of
laws,
regulations
and
administrative provisions relating to undertakings
for collective investment in transferable securities
(UCITS) (recast), as amended from time to time,
including any implementing measures that have
been or may be issued thereunder;";
(gg) sub-article (2) thereof shall be deleted;
(hh) sub-articles (3), (4) and (5) thereof shall be
renumbered as sub-articles (2), (3) and (4) respectively; and
(ii)
in sub-article (3) thereof, as renumbered, for the
words "The objective of this Act is, in part, to implement the
provisions of the Directive and the Capital Adequacy
Directive,", there shall be substituted the words "The objective
of this Act is, in part, to transpose and implement the relevant
provisions of the CRD and CRR,".
Immediately after article 2 of the principal Act, there shall
be added the following new article 2A
" Prohibition
2A. A person that is not a credit
from
institution shall be prohibited from carrying
undertaking the
on the business of taking deposits or other
business of
banking.
repayable funds from the public. A person
shall be deemed to be accepting deposits of
money as a regular feature of his business, if,
whether as principal or as agent, he advertises
or solicits for such deposits, without regard to
the terms and conditions under which such
deposits are solicited or received and without
regard to whether certificates or other
instruments are issued in respect of any such
deposits
Provided that this article shall not
apply to the taking of deposits or other funds
repayable by a Member State or by a Member
State’s regional or local authorities or by
public international bodies of which one or
more Member States are members or to cases
expressly covered by national or European
Union law, provided that those activities are
subject to regulations and controls intended to
protect depositors and investors
Provided
further
that
the
acceptance of money against any issue of
debentures or debenture stock or other
instruments creating or acknowledging
indebtedness offered to the public in
accordance with any law in force in Malta
shall not of itself be deemed to constitute
acceptance of deposits of money for the
purposes of this Act and any regulations made
or Banking Rules issued thereunder.".
Article 3 of the principal Act shall be amended as follows
(a) for sub-article (1)(a) thereof, there shall be substituted the
following
"(1) The Minister, acting on the advice of
the competent authority, may make, amend or
revoke regulations to give effect to the provisions
of this Act and, without prejudice to the generality
of the foregoing may, by such regulations, in
particular, do any of the following
(a) transpose, implement and, or give effect
to the requirements of the CRD and the CRR;";
(b) paragraphs (b) and (c) of sub-article (1) thereof shall
be renumbered as paragraphs (c) and (e) respectively;
(c)
immediately after paragraph (a) of sub-article (1)
thereof, there shall be added the following new paragraph (b)
"(b) transpose 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;";
(d) in paragraph (c) of sub-article (1) thereof, as
renumbered, for the words "The Minister, acting on the advice
of the competent authority, may make regulations to transpose,
implement and give effect", there shall be substituted the words
"transpose, implement and, or give effect";
(e)
immediately after paragraph (c) of sub-article (1)
thereof, as renumbered, there shall be added the following new
paragraph (d)
"(d) adopt,
where
necessary,
any
Communications issued by the European
Commission;"; and
(f)
for paragraph (e) of sub-article (1) thereof, as
renumbered, there shall be substituted the following
"(e) prescribe that a breach of any
regulations made under this Act may amount to a
criminal offence as may be specified, and such
regulations may impose punishments in respect of
any breach, not exceeding a fine (multa) of two
million euro (€2,000,000) or imprisonment for a
term not exceeding three years, or both such fine
and imprisonment, and a higher fine (multa) may
be imposed where deemed necessary or appropriate
for any breach or failure of compliance with any
EU Directive or EU Regulation or with any
regulations made under this article to transpose or
to give effect to any EU Directive or EU
Regulation.".
Article 4 of the principal Act shall be amended as follows
(a) in sub-article (1) thereof, for the words "It shall be
the duty of the competent authority to carry out the functions
prescribed by this Act and any regulations or Banking Rules
made thereunder and to ensure that credit institutions carrying
on business in Malta comply with this Act and any regulations,
directives and Banking Rules made thereunder and with the
conditions of their licences.", there shall be substituted the
words "It shall be the duty of the competent authority to carry
out the functions and duties prescribed by this Act, any
regulations made or Banking Rules issued thereunder and the
CRR and to ensure that credit institutions carrying out their
activities in Malta comply with this Act, any regulations,
directives and Banking Rules made or issued thereunder, the
CRR and with the conditions of their licences.";
(b) sub-articles (2), (3), (4) and (5) thereof shall be
renumbered as sub-articles (6), (9), (10) and (11) respectively;
(c)
immediately after sub-article (1) thereof, there shall
be added the following new sub-articles (2), (3), (4) and (5)
respectively
"(2) The competent authority shall be
the authority appointed for the purposes of
Article 131(1) of the CRD and shall act
jointly with the designated authority as
appointed in terms of the Central Bank of
Malta Act (Appointment of Designate
Authority to implement Macro-Prudential
Instruments) Regulations.
(3) The competent authority shall
notify the European Commission and the
EBA of its functions and duties.
(4) The competent authority shall, in
the exercise of its general duties, duly
consider the potential impact of its decisions
on the stability of the financial system in the
other Member States concerned and, in
particular, in emergency situations, based on
the information available at the relevant time.
(5) The competent authority shall
monitor the activities of credit institutions,
and where applicable, of financial holding
companies and mixed financial holding
companies, so as to assess compliance with
the requirements of the CRR and this Act and
any regulations made or Banking Rules issued
thereunder.".
(d) in sub-article (6) thereof, as renumbered, for the
words "of this Act and any regulations or Banking Rules made
thereunder.", there shall be substituted the words "of this Act
and any regulations made thereunder.";
(e)
immediately after sub-article (6) thereof, as
renumbered, there shall be added the following new sub-articles
(7) and (8)
"(7) The competent authority may make,
amend or revoke Banking Rules as may be required
for the purpose of implementing any guidelines,
recommendations and individual decisions issued
by the EBA under Articles 16, 17(3) and 18(3) of
Regulation (EU) No. 1093/2010.
(8) The competent authority may make,
amend or revoke Banking Rules as may be required
for the purpose of implementing any opinions and
recommendations issued by the ECB under
Articles 127(4) and 132(1) of the Treaty on the
Functioning of the European Union."; and
(f)
sub-article (11) thereof, as renumbered, shall be
Article 4A of the principal Act shall be substituted by the
" Supervisory
4A. (1) In the exercise of its duties,
practices.
the competent authority shall take into
account the convergence in respect of
supervisory tools and supervisory practices in
the application of this Act and any regulations
made and Banking Rules issued thereunder
transposing the CRD, and the CRR. For that
purpose, the competent authority shall -
(a)
as party to the ESFS,
cooperate with trust and full mutual
respect, in particular when ensuring the
flow of appropriate and reliable
information between the competent
authority and other parties to the ESFS
in accordance with the principle of
sincere cooperation set out in Article
4(3) of the Treaty on European Union;
(b) participate in the activities
of the EBA and, as appropriate, in the
colleges of supervisors;
(c)
make every effort to comply
with
those
guidelines
and
recommendations issued by the EBA in
accordance with Article 16 of
Regulation (EU) No. 1093/2010 and to
respond
to
the
warnings
and
recommendations issued by the ESRB
pursuant to Article 16 of Regulation
(EU) No. 1092/2010;
(d) cooperate closely with the
ESRB.
(2) The competent authority shall not
be inhibited by other national legislative
provisions in the performance of its duties as
member of the EBA and the ESRB, or its
duties under the CRD and the CRR.".
Immediately after article 4A of the principal Act, there Addition of new
article 4B to the
shall be added the following new article 4B
principal Act.
" Power to
4B. (1) Without prejudice to any of
issue
the powers conferred in this Act, the
directives.
competent authority may, whenever it deems
necessary, give, by notice in writing, such
directives as it may deem appropriate in the
circumstances in order to carry out the
functions and duties prescribed by the Malta
Financial Services Authority Act and by this
Act and any regulations made or Banking
Rules issued thereunder, and by the CRR.
(2) Any person to whom a notice is
given in accordance with sub-article (1) shall
obey, comply with and otherwise give effect
to any such directive within the time and in
the manner stated in the directive.
(3) The power to give directives under
this article shall include the power to vary,
alter, add to or withdraw any directive, as well
as the power to issue new or further
directives.
(4) Where the competent authority is
satisfied that the circumstances so warrant, it
may at any time make public any directive it
has given under any of the provisions of this
article.".
Sub-article (2) of article 5 of the principal Act shall be
amended as follows
(a)
for the words "agency or office", there shall be
substituted the words "agency or representative office"; and
(b) in the proviso thereof, for the words "to exercise its
rights under European Community Law.", there shall be
substituted the words "to exercise its rights under European
Union Law.".
Article 6 of the principal Act shall be amended as follows
(a)
for sub-article (2) thereof, there shall be substituted
the following
"(2) All applications for a licence shall be in
such form and accompanied by such information,
including a programme of operations setting out
the types of business envisaged and the structural
organisation of the credit institution, and shall
conform with such requirements as may be
prescribed from time to time by a Banking Rule.
Such requirements shall be notified to the EBA
Provided that before authorisation is granted
or refused, an application may only be withdrawn
by written notice to the competent authority.";
(b) in sub-article (3) thereof, for the words "whether to
restrict or revoke a licence.", there shall be substituted the
words "whether to restrict or withdraw a licence."; and
(c)
immediately after sub-article (3) thereof, there shall
be added the following new sub-article (4)
"(4) The competent authority shall not
consider the economic needs of the market as a
criterion when examining an application for a
licence.".
Article 7 of the principal Act shall be amended as follows
(a)
for sub-article (1) thereof, there shall be substituted
the following
"(1) No. company shall be granted a licence
unless -
(a) its initial capital amounts to not less than
five million euro (€5,000,000) or an equivalent
amount in another currency as may be specified in
a Banking Rule
Provided that the competent authority
may, by a provision contained in a Banking Rule or
as required through a condition in a credit
institution’s licence, increase the amount laid down
in this paragraph
Provided further that the initial capital
shall comprise only one or more of the items
referred to in Article 26(1)(a) to (e) of the CRR;
(b) there are at least two individuals who
effectively direct the business of the company;
(c) the competent authority is notified of the
identities of the shareholders or members whether
direct or indirect, that have qualifying holdings and
of the amounts of those holdings or, where there
are no qualifying holdings, of the twenty largest
shareholders or members
Provided that in determining whether the
criteria for a qualifying holding are fulfilled, the
voting rights referred to in Articles 9 and 10 of
Directive 2004/109/EC and the conditions
regarding aggregation thereof set out in Article
12(4) and (5) of that Directive, shall be taken into
account
Provided further that voting rights or
shares which institutions hold as a result of
providing the underwriting of financial instruments
or placing of financial instruments on a firm
commitment basis included under point (6) of
Section A of Annex I to Directive 2004/39/EC
shall not be taken into account, provided that those
rights are not exercised or otherwise used to
intervene in the management of the issuer and are
disposed of within one year of acquisition;
(d) the competent authority is satisfied that
the shareholders or members mentioned in
paragraph (c), controllers and all individuals who
will effectively direct the business of the credit
institution are suitable persons to ensure its sound
and prudent management. The competent authority
shall be satisfied with the suitability of the
individuals who will effectively direct the business
if the requirements referred to in article 14(2) are
met. The competent authority shall be satisfied of
the suitability of the shareholders or members
mentioned in paragraph (c), in particular, where the
criteria set out in article 13A(9) are met. Article
13A(8) and (10) and article 13B shall apply;
(e) the competent authority is satisfied that,
where there are close links between the company
and another person or persons, such links do not
through any law, regulation, administrative
provision or in any other manner prevent it from
exercising effective supervision of the company,
once in possession of a licence, under the
provisions of this Act and any regulations made or
Banking Rules issued thereunder
Provided that the competent authority
shall not grant authorisation where the laws,
regulations or administrative provisions of a third
country governing one or more persons with which
the credit institution has close links, or difficulties
involved in the enforcement of those laws,
regulations and administrative provisions, prevent
the effective exercise of its supervisory functions
Provided further that in respect of this
paragraph (e), the credit institution shall inform the
competent authority forthwith of any change in
circumstances concerning the application of this
said paragraph (e) and shall further provide the
competent authority with the information necessary
to monitor compliance with the conditions referred
to in this paragraph (e) on a continuous basis.";
(b) in sub-article (5) thereof, for the words "such fact
shall be deemed to constitute a refusal to grant a licence.", there
shall be substituted the words "such fact shall be deemed to
constitute a refusal to grant a licence and shall be subject to a
right of appeal in accordance with article 10."; and
(c)
for sub-article (7) thereof, there shall be substituted
the following
"(7) A credit institution licensed in terms of
the Act shall have its head office and its registered
office in Malta.".
Immediately after article 7A of the principal Act, there Addition of new
article 7B to the
shall be added the following new article 7B
principal Act.
" Prior
7B. (1) The competent authority
consultation
shall, before issuing a licence to a credit
with overseas
institution, consult the overseas regulatory
regulatory
authorities.
authorities of another Member State where the
credit institution is -
(a)
a subsidiary of a credit
institution authorised in that other
Member State;
(b) a subsidiary of the parent
undertaking of a credit institution
authorised in that other Member State;
(c)
controlled by the same
persons as those who control a credit
institution authorised in that other
Member State.
(2) The competent authority shall,
before issuing a licence to a credit institution,
consult the overseas regulatory authority that
is responsible for the supervision of insurance
undertakings or investment firms in the
Member State concerned where the credit
institution is -
(a)
a subsidiary of an insurance
undertaking
or
investment
firm
authorised in the European Union;
(b) a subsidiary of the parent
undertaking of an insurance undertaking
or investment firm authorised in the
European Union;
(c)
controlled by the same
persons as those who control an
insurance undertaking or investment
firm authorised in the European Union.
(3) The competent authority shall
consult with the relevant overseas regulatory
authorities referred to in sub-articles (1) and
(2) when assessing the suitability of the
shareholders and the reputation and
experience of the directors in terms of article
7(1)(d) involved in the management of
another entity of the same group.
(4) The competent authority shall
exchange any information regarding the
suitability of shareholders and the reputation
and experience of directors which is of
relevance for the issuing of a licence and for
the ongoing assessment of compliance with
the relevant overseas regulatory authorities
referred to in sub-articles (1) and (2).".
Article 9 of the principal Act shall be amended as follows
(a) for the marginal note thereof, there shall be
substituted the following
"Withdrawal and restriction of a licence.";
(b)
in sub-article (1) thereof
(i) paragraph (b) thereof shall be deleted and
paragraphs (c), (d) and (e) shall be renumbered
paragraphs (b), (c) and (d) respectively; and
(ii) for paragraph (d) thereof, as renumbered,
there shall be substituted the following
"(d) in the case of a credit institution
licensed or holding an equivalent authorisation in a
third country and which has been granted a licence
under this Act to open a branch in Malta, has had
its authorisation withdrawn by the overseas
regulatory authority in the third country within
which the credit institution has been authorised.";
(c) for sub-article (2) thereof, there shall be substituted
the following
"(2) The competent authority may only
restrict or withdraw the licence issued to a credit
institution in any of the following cases where such
a credit institution -
(a) does not make use of the licence within
twelve months, expressly renounces the licence or
has ceased to engage in business for more than six
months, if no provision was made for the licence to
lapse in such cases;
(b) has obtained the licence through false
statements or any other irregular means;
(c) no longer fulfils the conditions under
which the licence was issued;
(d) no longer meets the prudential
requirements set out in Parts Three, Four or Six of
the CRR or imposed under regulations 9(1)(a) and
10(1) and (2) of the Banking Act (Supervisory
Review) Regulations or can no longer be relied on
to fulfil its obligations towards its creditors, and, in
particular, no longer provides security for the
assets entrusted to it by its depositors;
(e) commits one of the breaches referred to
in regulation 7(1) of the Administrative Penalties,
Measures and Investigatory Powers Regulations;
(f) conceals from, or fails to notify to the
competent authority of any document or
information or change therein which it was its duty
to reveal or notify under this Act or any regulations
or Banking Rules issued thereunder;
(g) fails to comply with any of the provisions
of this Act or any regulations made or Banking
Rules issued thereunder or with the conditions
under which the licence is issued;
(h) has insufficient assets to cover its
liabilities;
(i) has suspended payment or is about to
suspend payment.";
(d) in sub-article (5) thereof, for the words "intends to
restrict or revoke a licence", there shall be substituted the words
"intends to restrict or withdraw a licence", and for the words
"shall not impose or vary any restriction or revoke a licence",
there shall be substituted the words "shall not impose or vary
any restriction or withdraw a licence";
(e) for sub-article (6) thereof there shall be substituted
the following
"(6) A licence granted for the establishment
in Malta of a branch of a credit institution licensed
or holding an equivalent authorisation in a third
country may only be withdrawn after consultation
with the overseas regulatory authorities of the
country within which it has been authorised, unless
the competent authority decides that the matter is
urgent or that there are circumstances which make
such prior consultation inappropriate."; and
(f)
for sub-article (7) thereof there shall be substituted
the following
"(7) Upon the restriction or withdrawal of a
licence of a credit institution licensed in Malta, the
competent authority shall inform the overseas
regulatory authorities of the countries in which the
credit institution or its subsidiaries are carrying on
the business of banking. The competent authority
shall notify the EBA of every withdrawal of a
licence together with the reasons for such a
withdrawal.".
Article 10 of the principal Act shall be substituted by the
"10. Any person who is aggrieved by a decision and, or
measure taken pursuant to the Act, and any regulations made or
Banking Rules issued thereunder, or the CRR by the competent
authority, may appeal against the decision and, or measure to
the Financial Services Tribunal within such period and under
such conditions as established under the Malta Financial
Services Authority Act.".
Article 11 of the principal Act shall be amended as
(a)
in sub-article (2) thereof, for the words "agency or
office or set up or acquire any subsidiary in any place outside
Malta.", there shall be substituted the words "agency or
representative office or set up or acquire any subsidiary in any
place outside Malta:";
(b) immediately after sub-article (2) thereof, there shall
be added the following new proviso
"Provided that a credit institution licensed in
Malta which intends to exercise its rights under the
European Passport Rights for Credit Institutions
Regulations shall only be required to notify the
competent authority in terms of the said
Regulations.";
(c)
in sub-article (3) thereof, for the words "A credit
institution licensed in Malta shall be prohibited from opening a
branch,", there shall be substituted the words "A credit
institution licensed in Malta shall not establish a branch,"; and
(d) for sub-article (4) thereof, there shall be substituted
the following
"(4) Where Malta is the host Member State,
the competent authority shall not require
authorisation or endowment capital for branches of
credit institutions authorised in other Member
States. The establishment and supervision of such
branches shall be effected in accordance with
article 17B, the European Passport Rights for
Credit Institutions Regulations and regulation 13 of
the
Banking
Act
(Supervisory
Review)
Regulations.".
Article 11A of the principal Act shall be substituted by the Amendment of
article 11A of
following
the principal
Act.
"11A. (1) The competent authority shall not apply
provisions which result in more favourable treatment to a
branch of a credit institution having its head office in a third
country, than that accorded to branches of credit institutions
having their head office in the European Union, when
commencing or continuing to carry out their business.
(2) The competent authority shall notify the European
Commission, the EBA and the European Banking Committee of
all authorisations for branches granted to credit institutions
having their head office in a third country.".
Article 13 of the principal Act shall be amended as Amendment of
article 13 of the
follows
principal Act.
(a)
for sub-article (5) thereof, there shall be substituted
the following
"(5) Credit Institutions shall, on becoming
aware of any acquisitions or disposals of holdings
in their capital that cause holdings to exceed or fall
below one of the thresholds referred to in this
article, inform the competent authority of those
acquisitions or disposals
Provided that credit institutions admitted
to trading on a regulated market shall, at least
annually, notify the competent authority of the
names of the shareholders and members possessing
qualifying holdings and the sizes of such holdings
as shown by the information received at the annual
general meetings of shareholders and members or
as a result of compliance with the regulations
relating to companies admitted to trading on a
regulated market or as requested by the competent
authority."; and
(b) in sub-article (7) thereof, for the words "a qualifying
shareholding is, or is likely to, operate against the sound and
prudent management of the credit institution,", there shall be
substituted the words "a qualifying shareholding is, or is likely,
to operate to the detriment of the sound and prudent
management of the credit institution,".
Article 13A of the principal Act shall be amended as
(a)
for sub-article (6) thereof, there shall be substituted
the following
"(6) The competent authority may extend the
interruption period referred to in sub-article (5) up
to thirty working days if the proposed acquirer is -
(a) situated or regulated in a third country; or
(b) is a person not subject to supervision
under -
(i) the CRD;
(ii) Directive 2009/65/EC of the
European Parliament and of the Council of 13
July 2009 on the coordination of laws,
regulations and administrative provisions
relating to undertakings for collective
investment in transferable securities (UCITS)
(recast), as amended from time to time;
(iii) Directive 2009/138/EC of the
European Parliament and of the Council of 25
November 2009 on the taking-up and pursuit
of the business of Insurance and Reinsurance
(Solvency II) (recast), as amended from time
to time; or
(iv) Directive 2004/39/EC.";
(b) sub-articles (9), (10), (11), (12), (13) and (14)
thereof shall be renumbered as sub-articles (10), (11), (12), (13),
(14) and (15) respectively;
(c)
immediately after sub-article (8) thereof, there shall
be added the following new sub-article (9)
"(9) In assessing the notification provided
for in article 13(1) and the information referred to
in sub-articles (4) and (5) of this article, the
competent authority shall, in order to ensure the
sound and prudent management of the credit
institution in which an acquisition is proposed, and
having regard to the likely influence of the
proposed acquirer on the credit institution, assess
the suitability of the proposed acquirer and the
financial soundness of the proposed acquisition in
accordance with the following criteria -
(a) the reputation of the proposed acquirer;
(b) the reputation, knowledge, skills and
experience, as set out in article 14(2), of any
member of the board of directors and any member
of senior management who will direct the business
of the credit institution as a result of the proposed
acquisition;
(c) the financial soundness of the proposed
acquirer, in particular in relation to the type of
business pursued and envisaged in the credit
institution in which the acquisition is proposed;
(d) whether the credit institution will be able
to comply and continue to comply with the
prudential requirements based on this Act and any
regulations and Banking Rules issued thereunder,
and the CRR, and where applicable, other
European Union laws, in particular Directive 2002/
87/EC of the European Parliament and of the
Council of 16 December 2002 on the
supplementary supervision of credit institutions,
insurance undertakings and investment firms in a
financial conglomerate and Directive 2009/110/EC
of the European Parliament and of the Council of
16 September 2009 on the taking up, pursuit and
prudential supervision of the business of electronic
money institutions, as amended from time to time,
including whether the group of which it will
become a part has a structure that makes it possible
to exercise effective supervision, effectively
exchange information among the competent
authority and the overseas regulatory authorities
and determine the allocation of responsibilities
among the competent authority and the overseas
regulatory authorities;
(e) whether there are reasonable grounds to
suspect that, in connection with the proposed
acquisition, money laundering or terrorist
financing within the meaning of Article 1 of
Directive 2005/60/EC of the European Parliament
and of the Council of 26 October 2005 on the
prevention of the use of the financial system for the
purpose of money laundering and terrorist
financing is being or has been committed or
attempted, or that the proposed acquisition could
increase the risk thereof.";
(d) for sub-article (10) thereof, as renumbered, there
shall be substituted the following
"(10) The competent authority may oppose
the proposed acquisition only if there are
reasonable grounds for doing so on the basis of the
criteria set out in sub-article (9) or if the
information provided by the proposed acquirer is
incomplete.";
(e)
in sub-article (11) thereof, as renumbered, for the
words "If the competent authority decides to refuse the
proposed acquisition,", there shall be substituted the words "If
the competent authority, upon completion of the assessment,
decides to oppose the proposed acquisition,";
(f)
in sub-article (12) thereof, as renumbered, for the
words "If the competent authority does not refuse the proposed
acquisition in writing", there shall be substituted the words "If
the competent authority does not oppose the proposed
acquisition in writing".
Sub-article (1) of article 13C of the principal Act shall be Amendment of
article 13C of
amended as follows
the principal
Act.
(a)
in paragraph (d) thereof, for the words "effect any
material change in the voting rights.", there shall be substituted
the words "effect any material change in the voting rights:"; and
(b) immediately after paragraph (d) thereof, there shall
be added the following new proviso
"Provided that this will be without prejudice
to the provisions of the CRR on the conditions for
reducing own funds.".
Immediately after article 13C of the principal Act, there Addition of new
article 13D of
shall be added the following new article 13D
the principal
Act.
" Criteria for
13D. In determining whether the criteria
qualifying
for a qualifying shareholding are fulfilled, the
holdings.
voting rights referred to in Articles 9, 10 and
11 of Directive 2004/109/EC and the
conditions regarding aggregation thereof set
out in Article 12(4) and (5) of that same
Directive, shall be taken into account
Provided that in determining
whether the criteria for a qualifying
shareholding are fulfilled, the competent
authority shall not take into account voting
rights or shares which credit institutions may
hold as a result of providing the underwriting
of financial instruments on a firm
commitments basis in terms of point 6 of
Section A of Annex 1 to Directive 2004/39/
EC, provided that those rights are not
exercised or otherwise used to intervene in the
management of the issuer and are disposed of
within one year of acquisition.".
Article 14 of the principal Act shall be amended as
(a)
sub-articles (2), (3), (4) and (5) thereof shall be
renumbered as sub-articles (8), (9), (10) and (11) respectively;
(b) immediately after sub-article (1) thereof, there shall
be added the following new sub-articles
"(2) Directors shall at all times be of
sufficiently good repute and possess sufficient
knowledge, skills and experience to perform their
duties. The overall composition of the board of
directors shall reflect an adequately broad range of
experiences
Provided that directors shall,
in
particular, fulfil the following requirements
(a) All directors shall commit sufficient time
to perform their functions in the credit institution;
(b) The number of directorships which may
be held by a director at the same time shall take
into account individual circumstances and the
nature, scale and complexity of the credit
institution's activities. A director of a credit
institution that is significant in terms of its size,
internal organisation and the nature, the scope and
the complexity of its activities shall, from 1 July
2014, not hold more than one of the following
combinations of directorships at the same time -
(i) one
directorship
having
an
executive role with two directorships having a
non-executive role;
(ii) four directorships having a non-
executive role;
(c) For the purposes of paragraph (b), the
following shall count as a single directorship -
(i)
directorships having an executive
or non-executive role held within the same
group;
(ii) directorships having an executive
or non-executive role held within -
(aa) credit institutions which are
members of the same institutional
protection scheme provided that the
conditions set out in Article 113(7) of
the CRR are fulfilled; or
(bb) undertakings (including non-
financial entities) in which the credit
institution holds a qualifying holding.
(3) The following directorships shall not be
taken into consideration for the purposes of sub-
article (2)(b)
(a) directors who are directly or indirectly
appointed to represent the interests of the
Government of Malta; and
(b) directors appointed in organisations
which do not pursue predominantly commercial
objectives, including directorships in non-profit-
making or charitable organisations.
(4) The competent authority may authorise
directors to hold one additional directorship having
a non-executive role. The competent authority shall
notify the EBA of such authorisations on a regular
basis.
(5) The board of directors shall possess
adequate collective knowledge, skills and
experience to be able to understand the credit
institution's activities, including the main risks.
(6) Each director shall act with honesty,
integrity and independence of mind to effectively
assess and challenge the decisions of the senior
management where necessary and to effectively
oversee and monitor management decision-
making.
(7) The directors of a financial holding
company or mixed financial holding company,
being a parent to a credit institution, shall be of
sufficiently good repute and possess sufficient
knowledge skills and experience as referred to in
sub-article (2) to perform those duties, taking into
account the specific role of a financial holding
company or mixed financial holding company.".
Sub-article (1) of article 15 of the principal Act shall be
amended as follows
(a)
paragraph (d) thereof shall be deleted; and
(b) paragraphs (e) and (f) thereof shall be renumbered
paragraphs (d) and (e) respectively.
Article 15A of the principal Act shall be deleted.
Article 16 of the principal Act shall be deleted.
Article 16A of the principal Act shall be deleted.
Immediately after article 16A of the principal Act, there
shall be added the following new article 16B
" Capital
16B. The competent authority shall issue
buffers.
a Banking Rule as it shall consider
appropriate for the regulation of capital
buffers.".
Article 17 of the principal Act shall be deleted.
Article 17A of the principal Act shall be substituted by the
following
" Measures
17A. The competent authority may issue
aimed at
a Banking Rule as it considers appropriate for
addressing
the implementation of measures aimed at
credit risks.
addressing credit risks arising from the
assessment of the quality of a credit
institution’s asset portfolio.".
Article 17B of the principal Act shall be amended as Amendment of
article 17B of
the principal
Act.
(a)
for the marginal note thereof, there shall be
substituted the following
"Internal governance and recovery plans.";
and
(b) immediately after sub-article (2) thereof, there shall
be added the following new sub-articles (3) and (4)
"(3) Every credit institution shall also
ensure that its internal control mechanisms and
administrative and accounting procedures permit
the checking of compliance with the rules adopted
in accordance with the provisions of this Act and
any regulations made or Banking Rules issued
thereunder, and the CRR at all times.
(4) Every credit institution shall have in
place a recovery plan for the restoration of its
financial situation following a significant
deterioration in accordance with any regulations
made under this Act.".
Article 17D of the principal Act shall be deleted.
Deletion of
article 17D of
the principal
Act.
Immediately after article 17D of the principal Act, there Addition of new
article 17E to
shall be added the following new article 17E
the principal
Act.
" Supervisory
17E. (1) The competent authority
measures.
shall require a credit institution to take the
necessary measures at an early stage to
address relevant problems in circumstances
where -
(a)
the credit institution does
not meet the requirements of the Act,
regulations made or Banking Rules
issued thereunder, or of the CRR;
(b) the competent authority has
evidence that the credit institution is
likely to breach the Act, regulations
made or Banking Rules issued
thereunder, or the provisions of the
CRR, within the following twelve
months.
(2) For the purposes of sub-article (1),
the powers of the competent authority shall
include the supervisory powers referred to in
regulation 9 of the Banking Act (Supervisory
Review) Regulations.
(3) The competent authority shall
apply supervisory measures in accordance
with the level of application of the
requirements of Part One, Title II of the
CRR.".
Article 19 of the principal Act shall be amended as
(a)
for paragraph (c) of sub-article (1) thereof, there
shall be substituted the following
"(c) all the information necessary for the
assessment of its compliance with the rules adopted
in accordance with the CRR, this Act and any
regulations or Banking Rules issued thereunder;";
(b) sub-articles (3), (4) and (5) thereof shall be
renumbered as sub-articles (4), (5) and (6) respectively;
(c)
immediately after sub-article (2) thereof, there shall
be added the following new sub-article (3)
"(3) A credit institution shall register all its
transactions and document systems and processes,
which are subject to the CRR and this Act and any
regulations or Banking Rules issued thereunder, in
such a manner that the competent authority would
be able to verify compliance with the requirements
of the CRR and this Act and any regulations or
Banking Rules issued thereunder at all times."; and
(d) in sub-article (4) thereof, as renumbered, for the
words "to all branches, agencies or offices in Malta", there shall
be substituted the words "to all branches, agencies or
representative offices in Malta".
For sub-article (1) of article 20 of the principal Act there Amendment of
article 20 of the
shall be substituted the following
principal Act.
"(1) Every credit institution licensed in terms of the Act,
and where applicable, a financial holding company or a mixed
financial holding company, shall submit to the competent
authority any information which it may reasonably require in
the exercise of its duties under this Act and any regulations
made or Banking Rules issued thereunder and the CRR, and the
competent authority may enquire into and ask for clarification
of any information so submitted.".
In sub-article (1) of article 21 of the principal Act, for the Amendment of
words "Any officer, employee or agent of the competent authority", article
principal Act.
there shall be substituted the words "Any officer, employee, agent or
inspector of the competent authority".
In sub-article (1) of article 22 of the principal Act, for the Amendment of
words "one or more competent persons to investigate and report on", article
principal Act.
there shall be substituted the words "one or more competent persons,
as inspectors, to investigate and report on".
For sub-article (1) of article 23 of the principal Act, there Amendment of
article 23 of the
shall be substituted the following
principal Act.
"(1) Where the competent authority has reasonable
grounds for suspecting that a person has contravened or has
failed to comply with any provision of this Act and any
regulations or Banking Rules issued thereunder, it may by
notice in writing require that person or any other person -
(a) to provide at such place as may be
specified in the notice and either forthwith or at
such time as may be so specified, such information
as it may reasonably require for the purpose of
investigating the suspected contravention or failure
to comply;
(b) to produce, at such place as may be
specified in the notice and either forthwith or at
such time as may be so specified, such documents,
or documents of such description as may be
specified which it may reasonably require for that
purpose;
(c) to attend at such place and time as may
be specified in the notice, and answer questions
relevant for determining whether such a
contravention or failure to comply has occurred.".
Article 25 of the principal Act shall be amended as
(a)
for sub-article (1) thereof, there shall be substituted
the following
"(1) On the basis of Malta’s international
commitments, the competent authority may share
its supervisory duties with overseas regulatory
authorities in the case of a credit institution
licensed in terms of this Act and operating in the
country of such overseas regulatory authority or a
branch established in Malta and having its head
office in another Member State.";
(b) for sub-article (2) thereof, there shall be substituted
the following
"(2) The competent authority may further,
on the basis of Malta’s international commitments,
exchange information with overseas regulatory
authorities or transmit information to the ESRB,
the EBA or the European Securities and Markets
Authority established by Regulation (EU) No.
1095/2010, in accordance with the Act and any
regulations made and Banking Rules issued
thereunder transposing the CRD, and the CRR and
with other Directives applicable to credit
institutions, with Article 15 of Regulation (EU)
No. 1092/2010, with Articles 31, 35 and 36 of
Regulation (EU) No. 1093/2010 and with Articles
31 and 36 of Regulation (EU) No. 1095/2010. Such
information shall be subject to professional secrecy
provided for under this Act and any regulations
issued thereunder.";
(c)
for sub-article (3) thereof, there shall be substituted
the following
"(3) The competent authority may also
conclude cooperation agreements, providing for
exchanges of information, with third country
overseas regulatory authorities or with authorities
or bodies of third countries in accordance with sub-
articles (7) and (8), only if the information
disclosed is subject to a guarantee that professional
secrecy requirements at least equivalent to those
referred to in article 34(4) and (5) are complied
with
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
shall only be disclosed with the express agreement
of the overseas regulatory authority which has
disclosed it, and where appropriate, solely for the
purposes for which the overseas regulatory
authority gave its agreement.";
(d) in sub-article (5) thereof, for the words "credit
institutions having their head office in the country of the
overseas regulatory authority making the inspection.", there
shall be substituted the words "credit institutions having their
head office in the country of the overseas regulatory authority
making the inspection:";
(e)
immediately after sub-article (5) thereof, there shall
be added the following new proviso
"Provided that on-the-spot checking and
inspection of branches established in Malta of
credit institutions authorised in another Member
State, shall be carried out in accordance with the
European Passport Rights for Credit Institutions
Regulations.";
(f)
for sub-article (6) thereof, there shall be substituted
the following
"(6) Nothing in this Act shall prevent the
competent authority from transmitting information
to the following for the purposes of their tasks -
(a) the Central Bank, ESCB central banks
and other bodies with a similar function in their
capacity as monetary authorities when the
information is relevant for the exercise of their
respective statutory tasks, including the conduct of
monetary policy and related liquidity provision,
oversight of payments, clearing and settlement
systems and the safeguarding of stability of the
financial system;
(b) contractual or institutional protection
schemes as referred to in Article 113(7) of the
CRR;
(c) where
appropriate,
other
public
authorities responsible for overseeing payment
systems;
(d) the ESRB, the European Insurance and
Occupational Pensions Authority established by
Regulation (EU) No. 1094/2010 and the European
Securities and Markets Authority established by
Regulation (EU) No. 1095/2010, where that
information is relevant for the exercise of their
tasks under Regulations (EU) No. 1092/2010, (EU)
No. 1094/2010 or (EU) No. 1095/2010
Provided that the competent authority
shall take the appropriate measures to remove
obstacles preventing it from transmitting
information in accordance with this sub-article
Provided further that information
received in accordance with this sub-article shall
be subject to professional secrecy requirements at
least equivalent to those referred to in article 34(4)
and (5)
Provided further that in an emergency
situation, including a situation as described in
Article 18 of Regulation (EU) No. 1093/2010 or a
situation of adverse developments in markets
arises, which potentially jeopardises the market
liquidity and the stability of the financial system,
the competent authority shall communicate without
delay information to the ESCB central banks where
that information is relevant for the exercise of their
statutory tasks, including the conduct of monetary
policy and related liquidity provision, the oversight
of payments, clearing and settlement systems, and
to the ESRB where such information is relevant for
the exercise of its statutory tasks.";
(g) sub-articles (7) and (8) thereof shall be renumbered
as sub-articles (12) and (13) respectively;
(h) immediately after sub-article (6) thereof, there shall
be added the following new sub-articles (7), (8), (9), (10) and
"(7) The provisions of article 34(4), (5) and
(7) shall not preclude the exchange of information
between the competent authority and other
authorities in Malta; between the competent
authority and overseas regulatory authorities in
other Member States; or between the competent
authority and the following, in the discharge of
their supervisory functions -
(a) authorities entrusted with the public duty
of supervising other financial sector entities and
the authorities responsible for the supervision of
financial markets;
(b) authorities or bodies charged with
responsibility for maintaining the stability of the
financial system in Member States through the use
of macro-prudential rules;
(c) reorganisation bodies or authorities
aiming at protecting the stability of the financial
system;
(d) contractual or institutional protection
schemes as referred to in Article 113(7) of the
CRR;
(e) bodies involved in the liquidation and
bankruptcy of credit institutions and in other
similar procedures;
(f) persons responsible for carrying out
statutory audits of the accounts of institutions,
insurance undertakings and financial institutions
Provided that the provisions of article
34(4), (5) and (7) shall not preclude the disclosure
to bodies which administer deposit-guarantee
schemes and investor compensation schemes of
information necessary for the exercise of their
functions
Provided further that the information
received shall in any event be subject to
professional secrecy requirements at least
equivalent to those referred to in article 34(4) and
(5).
(8) Notwithstanding the provisions of sub-
article (3) of this article and article 34(4), (5) and
(7), the competent authority may exchange
information with the authorities responsible for
overseeing -
(a) the bodies involved in the liquidation and
bankruptcy of institutions and in other similar
procedures;
(b) contractual or institutional protection
schemes as referred to in Article 113(7) of the
CRR;
(c) persons charged with carrying out
statutory audits of the accounts of institutions,
insurance undertakings and financial institutions
Provided that in the cases referred to in
this sub-article, the competent authority shall
require fulfilment of at least the following
conditions
(i) that the informatio"n is exchanged for the
purpose of performing the tasks referred to in this
sub-article;
(ii) that the information received is subject to
professional secrecy requirements at least
equivalent to those referred to in article 34(4) and
(5);
(iii) where the information originates in
another Member State, that it is not disclosed
without the express agreement of the overseas
regulatory authorities which have disclosed it and,
where appropriate, solely for the purposes for
which those authorities gave their agreement
Provided further that where the authorities or
bodies referred to in this sub-article perform their
task of detection or investigation through the
assistance of persons appointed for that purpose in
view of their specific competence and not
employed in the public sector, the competent
authority may exchange information with the
authorities or bodies responsible under the law for
the detection and investigation of breaches of
company law, to such persons, and shall require the
fulfilment of at least the following conditions
(i) that the information is exchanged for the
purpose of detecting and investigating breaches of
company law;
(ii) that the information received is subject to
professional secrecy requirements at least
equivalent to those referred to in article 34(4) and
(5);
(iii) where the information originates in
another Member State, that it is not disclosed
without the express agreement of the overseas
regulatory authorities which have disclosed it and,
where appropriate, solely for the purposes for
which those authorities gave their agreement.
(9) Notwithstanding the provisions of article
34(4), (5) and (7), the competent authority may
authorise the disclosure of certain information to
other government departments of other Member
States’ central government administrations
responsible for legislation on the supervision of
institutions, financial institutions and insurance
undertakings and to inspectors acting on behalf of
those departments
Provided that such disclosures may be
made only where necessary for reasons of
prudential supervision and prevention and
resolution of failing credit institutions. Without
prejudice to sub-article (10), persons having access
to the information shall be subject to professional
secrecy requirements at least equivalent to those
referred to in article 34(4) and (5)
Provided further that in an emergency
situation, including a situation as described in
Article 18 of Regulation (EU) No. 1093/2010 or a
situation of adverse developments in markets
arises, which potentially jeopardises the market
liquidity and the stability of the financial system,
the competent authority may disclose information
which is relevant to the departments referred to in
this sub-article in all Member States concerned.
(10) The competent authority may disclose
certain information relating to the prudential
supervision of credit institutions to parliamentary
enquiry committees, courts of auditors and other
entities in charge of enquiries in Malta, under the
following conditions -
(a) that the entities have a precise mandate
under Maltese law to investigate or scrutinise the
actions of the competent authority or for laws on
the supervision of credit institutions;
(b) that the information is strictly necessary
for fulfilling the mandate referred to in paragraph
(a);
(c) the persons with access to the
information are subject to professional secrecy
requirements at least equivalent to those referred to
in article 34(4) and (5);
(d) where the information originates in
another Member State, such information shall not
be disclosed without the express agreement of the
overseas regulatory authorities which have
disclosed it and, solely for the purposes for which
those overseas regulatory authorities gave their
agreement
Provided that where the disclosure of
information relating to prudential supervision
involves the processing of personal data, any
processing by the entities referred to in this sub-
article shall comply with the Data Protection Act
and any regulations made thereunder.
(11) The competent authority shall not
disclose in terms of sub-articles (9) and (10), any
information received under Article 52, Article
53(2) and Article 56 of the CRD, except with the
express consent of the overseas regulatory
authority of the Member State in which such an on-
the-spot check or inspection was carried out or of
the overseas regulatory authority of the Member
State which disclosed such information.";
(i)
in the first proviso to sub-article (12) thereof, as
renumbered, for the words "subject to the conditions of
professional secrecy:", there shall be substituted the words
"subject to the conditions of professional secrecy at least
equivalent to those referred to in article 34(4) and (5):"; and
(j)
immediately after sub-article (13) thereof, as
renumbered, there shall be added the following new sub-article
(14)
"(14) For the purposes of this article,
"financial institution" shall have the same meaning
as that assigned to it in point (26) of Article 4(1) of
the CRR.".
Article 25A of the principal Act shall be substituted by the Substitution of
article 25A of
following
the principal
Act.
"25A. The competent authority shall cooperate closely
with overseas regulatory authorities in all matters with respect
to supervision on a consolidated basis. Such cooperation shall
be regulated through the Supervisory Consolidation
Regulations.".
Article 25B of the principal Act shall be deleted.
Deletion of
article 25B of
the principal
Act.
Article 25C of the principal Act shall be deleted.
Deletion of
article 25C of
the principal
Act.
Article 26 of the principal Act shall be amended as Amendment of
article 26 of the
follows
principal Act.
(a)
for sub-article (1) thereof, there shall be substituted
the following
"(1) The disclosure in good faith to the
competent authority by -
(a) an auditor of a credit institution; or
(b) a person appointed to make a report
under article 20(3)(a) or article 22(1),
of any fact or decision referred to in article 31(9) shall not
constitute a breach of any restriction on disclosure of
information imposed by contract or by any legislative,
regulatory or administrative provision and shall not involve
such persons in any liability. Such disclosure shall be made
simultaneously to the board of directors of the credit
institution unless there are compelling reasons not to do
so.";
(b)
sub-article (2) thereof shall be deleted;
(c)
sub-articles (3), (4) and (5) thereof shall be
renumbered sub-articles (2), (3) and (4) respectively; and
(d) immediately after sub-article (4) thereof, as
renumbered, there shall be added the following new sub-article
(5)
"(5) In relation to an auditor of a credit
institution, this article shall apply to any matter
falling within article 31(9).".
In paragraph (a) of article 28 of the principal Act, for the
words "where a credit institution considers that it is likely", there
shall be substituted the words "where a credit institution establishes
that it is likely".
Article 29A of the principal Act shall be deleted.
Article 30 of the principal Act shall be amended as
(a)
for the words "Every credit institution shall, not later
than", there shall be substituted the words "Every credit
institution and, where applicable, financial holding companies
and mixed financial holding companies, shall, not later than";
and
(b) for the words "audited financial statements drawn
up", there shall be substituted the words "audited financial
statements or consolidated financial statements, as may be
applicable, drawn up".
Immediately after article 30 of the principal Act, there Addition of new
article 30A to
shall be added the following new article 30A
the principal
Act.
" Specific
30A. (1) The competent authority
publication
may require credit institutions -
requirements.
(a)
to
publish
information
referred to in Part Eight of the CRR
more than once per year and to set
deadlines for publication;
(b) to use specific media and
locations for publications other than the
financial statements.
(2) The competent authority may
require parent undertakings to publish
annually, either in full or by way of references
to equivalent information, a description of
their legal structure and governance and
organisational structure of the group of
institutions in accordance with Article 14(3),
Article 74(1) and Article 109(2) of the CRD.".
For sub-article (9) of article 31 of the principal Act, there Amendment of
article 31 of the
shall be substituted the following
principal Act.
"(9) In his capacity as an auditor of a credit institution or
due to a direct request by the competent authority under article
20 or under article 22, an auditor shall promptly notify the
competent authority of any fact or decision concerning that
credit institution of which he has become aware while carrying
out his tasks, which is liable to -
(a) constitute a material breach of this Act
and any regulations made or Banking Rules issued
thereunder which lay down the licensing conditions
or which specifically govern the activities of credit
institutions;
(b) affect the ongoing functioning of the
credit institution;
(c) affect the depositors of the credit
institution, of the branches in Malta of a credit
institution authorised by an overseas regulatory
authority or of any connected person which is a
credit institution;
(d) lead to refusal to certify the accounts or
to the expression of reservations
Provided that an auditor shall also have the duty to
report any fact or decision of which he becomes aware in the
course of carrying out his tasks in an undertaking having close
links resulting from a control relationship with the credit
institution within which he is carrying out that task.".
In paragraph (a) of sub-article (1) of article 32 of the
principal Act, for the words "which has had its licence revoked under
article 9(2),", there shall be substituted the words "which has had its
licence withdrawn under article 9(2);".
For paragraph (b) of article 33 of the principal Act, there
shall be substituted the following
"(b) to ensure that no incorrect information is provided to
the competent authority either wilfully or as the result of gross
negligence.".
Article 34 of the principal Act shall be amended as
(a)
sub-article (1) thereof shall be amended as follows
(i) paragraph (b) thereof shall be deleted;
(ii) paragraphs (c) and (d) thereof shall be
renumbered as paragraphs (b) and (c) respectively;
(b) for sub-article (4) thereof, there shall be substituted
the following
"(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 be governed by the obligation of
professional secrecy and shall not disclose
information obtained from credit institutions in the
course of carrying out supervisory and other duties
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, without
prejudice to the provisions of the Criminal Code
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
Provided further that where a credit
institution has been declared bankrupt or is being
compulsorily wound up, confidential information
which does not concern third parties involved in
attempts to rescue that credit institution may be
disclosed in civil or commercial proceedings.";
(c) sub-article (5) thereof shall be renumbered as sub-
(d) immediately after sub-article (4) thereof, there shall
be added the following new sub-article (5)
"(5) The provisions of sub-article (4) shall
not prevent the competent authority from
exchanging information with overseas regulatory
authorities or transmitting information to the
ESRB, the EBA or the European Securities and
Markets Authority established by Regulation (EU)
No. 1095/2010, in accordance with the Act and any
regulations made and Banking Rules issued
thereunder transposing the CRD, and the CRR and
with other Directives applicable to credit
institutions, with Article 15 of Regulation (EU)
No. 1092/2010, with Articles 31, 35 and 36 of
Regulation (EU) No. 1093/2010 and with Articles
31 and 36 of Regulation (EU) No. 1095/2010. That
information shall be subject to the provisions of
sub-article (4)
Provided that the provisions of sub-
article (4) shall not prevent the competent authority
from publishing the outcome of stress tests carried
out in accordance with the Banking Act
(Supervisory Review) Regulations or Article 32 of
Regulation (EU) No. 1093/2010 or from
transmitting the outcome of the stress tests to the
EBA for the purpose of the publication by the EBA
of the results of Union-wide stress tests.";
(e) immediately after sub-article (6) thereof, as
renumbered, there shall be added the following new sub-articles
(7), (8) and (9)
"(7) Where the competent authority receives
confidential information under this article, it shall
use such information only in the course of its duties
and only for any of the following purposes -
(a) to check that the conditions governing
access to the activity of credit institutions are met
and to facilitate monitoring, on a non-consolidated
or consolidated basis, of the conduct of such
activity, especially with regard to the monitoring of
liquidity, solvency, large exposures and
administrative and accounting procedures and
internal control mechanisms;
(b) to impose penalties;
(c) in an appeal against a decision of the
competent authority including court proceedings
pursuant to article 10;
(d) in court proceedings initiated pursuant to
special provisions provided for in European Union
law adopted in the field of credit institutions.
(8) The
competent
authority,
when
processing personal data for the purposes of the
Act and any regulations and Banking Rules issued
thereunder shall do so in accordance with the Data
Protection Act and any regulations made
thereunder and, where relevant, with Regulation
(EC) No. 45/2001 of the European Parliament and
of the Council of 18 December 2000 on the
protection of individuals with regard to the
processing of personal data by the Community
institutions and bodies and on the free movement
of such data.
(9) The provisions of article 25(2) and sub-
articles (4), (5) and (7) of this article shall be
without prejudice to the powers of investigation
conferred on the European Parliament pursuant to
Article 226 of the Treaty on the Functioning of the
European Union.".
Article 35 of the principal Act shall be substituted by the Substitution of
article 35 of the
following
principal Act.
" Offences.
35. (1) Any person who -
(a)
fails to comply with any
directive issued by the competent
authority under this Act;
(b) without reasonable excuse
alters, suppresses, conceals, destroys or
refuses to produce any document which
he is lawfully required to produce by
any person under this Act and any
regulations made or Banking Rules
issued thereunder;
(c)
makes a statement, promise
or forecast which he knows to be
misleading, false or deceptive, or
dishonestly conceals any material facts;
(d) recklessly
makes
(dishonestly or otherwise) a statement,
promise or forecast which is misleading,
false or deceptive; or
(e)
contravenes or fails to
comply with any of the provisions of
articles 2A, 5(1) and (2), 6(1), 12, 13,
21(2), 22(7), 23(4), 24, 28(a), 29(7), 32,
33(b), and 34(2) and (4),
shall be guilty of an offence
Provided that, with respect to
paragraphs (c) and (d), a person shall be
guilty of an offence if he makes the statement,
promise or forecast or conceals the facts for
the purpose of inducing, or is reckless as to
whether it may induce, another person
(whether or not to the person to whom the
statement, promise or forecast is made or
from whom the facts are concealed) -
(i)
to make, or refrain from
making, a deposit with him or any other
person; or
(ii) to enter, or refrain from
entering, into an agreement for the
purpose of making such a deposit
Provided further that, with respect
to paragraphs (c) and (d), a person shall not be
guilty of an offence unless -
(i)
the statement, promise or
forecast is made in or from Malta, or the
facts are concealed in or from Malta, or
arrangements are made in or from Malta
for the statement, promise or forecast to
be made or the facts to be concealed;
(ii) the person on whom the
inducement is intended to or may have
effect on is in Malta; or
(iii) the deposit is or would be
made, or the agreement is or would be
entered into, in Malta.
(2) Any person who is knowingly a
party to, or procures or aids and abets the
commission of any offence under sub-article
(1), shall be guilty of an offence and shall be
liable to the same penalties as the principal
offender.
(3) Any person found guilty of an
offence shall, on conviction, be liable to a fine
(multa) not exceeding two million euro
(€2,000,000) or to a term of imprisonment not
exceeding three years or to both such fine and
imprisonment.
(4) No. proceedings for an offence
under this Act shall be commenced without
the sanction of the Attorney General.".
Article 35A of the principal Act shall be substituted by the
Substitution of
article 35A of
following
the principal
Act.
" Administrative
35A. (1) Without prejudice to the
penalties and other
provisions of articles 35 and 35B and to any
administrative
regulations made under article 3(1)(e), where
measures imposed
by the competent
any person fails to comply with any of the
authority.
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, or any
regulations made or Banking Rules issued
thereunder, or the CRR, or such person has
failed to comply with a directive issued by the
competent authority under this Act, or any
regulation made or Banking Rules issued
thereunder, or the CRR, the competent
authority may, by notice in writing and
without recourse to a court hearing, impose on
such person an administrative penalty of -
(a)
up to twice the amount of the
benefit derived from the breach where
that benefit can be determined;
(b) in the case of a natural
person, up to five million euro
(€5,000,000); or
(c) in the case of a legal person,
up to 10% of the total annual net
turnover of the undertaking in the
preceding business year including the
gross income consisting of interest
receivable and similar income, income
from shares and other variable or fixed-
yield securities, and commissions or
fees receivable in accordance with
Article 316 of the CRR
Provided that, in the case of a
subsidiary of a parent undertaking, the
relevant gross income shall be the gross
income resulting from the consolidated
account of the ultimate parent undertaking in
the preceding business year.
(2) The Minister may, acting on the
advice of the competent authority, make
regulations as shall be deemed appropriate to
provide for the establishment and imposition
of administrative penalties and other
administrative measures on licence holders or
others as may be specified therein.
(3) Where the competent authority
decides to impose an administrative penalty, it
shall notify the person on whom the penalty is
being imposed by means of a notice in
writing.
(4) Where the person upon whom the
notice referred to in sub-article (3) is served -
(a)
fails to pay to the competent
authority the amount of the penalty
within a period of thirty days of the
service of the notice, and fails to appeal
from the decision of the competent
authority to the Financial Services
Tribunal; or
(b) appeals to the Financial
Service Tribunal and fails within a
period of fifteen days from the decision
of the Tribunal to pay the administrative
penalty as confirmed or as reduced by
that Tribunal,
then, in every case, the amount of the
administrative penalty, as originally imposed
or as reduced, as the case may be, shall be due
to the competent authority as a civil debt, and
the provisions of sub-article (5) shall apply.
(5) A notice as is referred to in sub-
article (3), or the decision of the Financial
Services Tribunal, as the case may be, shall
upon the service by judicial act of a copy
thereof on the person indicated in the notice,
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.
(6) The imposition by the competent
authority of an administrative penalty in terms
of this article shall be without prejudice to
any other consequences of the act or omission
of the offender under civil or criminal law
Provided that in all cases where the
competent
authority
imposes
an
administrative 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.".
Immediately after article 35A of the principal Act, there Addition of new
article 35B to
shall be added the following new article 35B
the principal
Act.
" Publication of
35B. (1) The competent authority
administrative
shall publish, on its official website and in
penalties.
any other media as it considers appropriate,
any administrative penalty or penalties
imposed under the provisions of this Act and
of any regulations made or Banking Rules
issued thereunder, and the CRR. Such
publications shall include information on the
type and nature of the breach and the identity
of the person on whom the penalty is
imposed, without undue delay after that
person is informed of those penalties
Provided that in cases where an
appeal has been filed by the person on whom
such administrative penalty or penalties have
been imposed, the competent authority shall,
without undue delay, also publish on its
official website and in any other media as it
considers appropriate, information on the
status of the appeal and the outcome thereof.
(2) The competent authority shall
publish the penalties imposed under the
provisions of this Act and of any regulations
made or Banking Rules issued thereunder, and
of the CRR, on an anonymous basis, in any of
the following circumstances
(a)
where the penalty is imposed
on a natural person and, following an
obligatory prior assessment, publication
of personal data is found to be
disproportionate;
(b) where publication would
jeopardise the stability of financial
markets or an on-going criminal
investigation;
(c)
where publication would
cause, insofar as it can be determined,
disproportionate damage to the credit
institutions or natural persons involved
Provided that, with respect to
paragraphs (a), (b) and (c), publication on an
anonymous basis in any such circumstances
shall be an exceptional measure which needs
to be justified by a detailed report compiled
by the competent authority
Provided further that, where the
circumstances referred to in this sub-article
are likely to cease within a reasonable period
of time, publication under this article may be
postponed for such a period of time.
(3) Information published in terms of
this article shall remain on the official website
of the competent authority for a period of not
less than five years. Personal data shall be
retained on the official website of the
competent authority and in any other media it
considers appropriate only for the period
necessary, in accordance with the provisions
of Maltese legislation on data protection.".
In the Schedule to the principal Act, for the words
"(Article 2(3))", there shall be substituted the words "(Article 2(2))".
Passed by the House of Representatives at Sitting No. 256 of the
1st April, 2015.
Ċ ENSU G ALEA
Deputy Speaker
R AYMOND S CICLUNA
Clerk of the House of Representatives
€4.86