ACT No. XXI of 2015 AN ACT to amend various financial services laws, to establish the Resolution Authority and the Resolution Committee and to provide for matters ancillary or incidental thereto.

I assent.

M ARIE L OUISE

(L.S.)

C OLEIRO P RECA

President

17th July, 2015

ACT No. XXI of 2015

AN ACT to amend various financial services laws, to establish

the Resolution Authority and the Resolution Committee 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 Various Financial Services Short title.

Laws (Amendment) Act, 2015.

PART I

AMENDMENTS TO THE MALTA FINANCIAL SERVICES

AUTHORITY ACT

This Part amends and shall be read and construed as one Amendments to

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

Financial

Part referred to as "the principal Act".

Services

Authority Act.

Article 2 of the principal Act shall be amended as follows

Amendment of

article 2 of the

principal Act.

(a)

immediately after the definition "Board of

Management and Resources", there shall be added the following

new definition

" "the BRRD" means Directive 2014/59/EU

of the European Parliament and of the Council of

15 May 2014 establishing a framework for the

recovery and resolution of credit institutions and

investment firms and amending Council Directive

82/891/EEC, and Directives 2001/24/EC, 2002/47/

EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/

35/EU, 2012/30/EU and 2013/36/EU, and

Regulations (EU) No. 1093/2010 and (EU) No.

648/2012, of the European Parliament and of the

Council, as amended from time to time, and

includes

any

implementing

measures,

implementing technical standards, regulatory

technical standards, guidelines and similar

measures that have been or may be issued

thereunder;"; and

(b) immediately after the definition "financial services",

there shall be added the following new definition

" "institution" means a credit institution or an

investment firm;".

In sub-article (2) of article 4 of the principal Act, for the

words "the European Systemic Risk Board (ESRB) and other

entities", there shall be substituted the words "the European Systemic

Risk Board (ESRB), the European Central Bank (ECB), the Single

Resolution Board (SRB) and other entities".

Immediately after article 7A of the principal Act, there

shall be added the following new articles

" The Resolution

(1) The Board of Governors shall

Authority and

also act as the Resolution Authority, which

the Resolution

shall be the authority appointed for the

purposes of Article 3 of the BRRD.

(2) The Resolution Authority shall

appoint a Resolution Committee which shall

have all the powers assigned to the Resolution

Authority under the BRRD. The composition,

powers and functions of the Resolution

Committee shall be governed by the provisions

set out in the First Schedule and in terms of

any regulations made hereunder. The

Resolution Authority and the Resolution

Committee shall be operationally independent

and shall act independently of each other and

of the Supervisory Council.

For the better carrying out and

Recovery and

Resolution

implementation of the provisions of the First

Rules.

Schedule and the BRRD, the Authority,

through the Resolution Committee, may, from

time to time, issue and publish Recovery and

Resolution Rules which shall be binding on

institutions and others as may be specified

therein. Such Rules may lay down additional

requirements and conditions in relation to the

recovery and resolution of institutions, the

conduct of their business, their responsibilities,

and any other matters as the Resolution

Committee may consider appropriate.".

6. Article 20D of the principal Act shall be renumbered as Renumbering of

article 20D of

article 20E.

the principal

Act.

7. Immediately after article 20C of the principal Act, there Addition of new

article to the

shall be added the following new article

principal Act.

" Power to make

(1) The Minister, acting on the

regulations in

advice of the Resolution Authority, may make

relation to the

regulations for the following purposes

Resolution

Authority and

(a) to transpose, implement, and,

the Resolution

Committee.

or give effect to the requirements of the

BRRD;

(b) to better implement the

provisions of the First Schedule;

(c)

to provide for powers and

functions of the Resolution Committee;

(d) to establish and impose

administrative penalties and other

administrative measures on institutions or

others as may be specified therein;

(e)

to prescribe that a breach of

any regulations made under this Act may

amount to a criminal offence as may be

specified, and for this purpose 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.

(2) Where regulations have been made

in terms of this article, the Authority, through

the Resolution Committee, may issue

Recovery and Resolution Rules within the

meaning of article 7C of this Act for the better

carrying out of, and to better implement, the

provisions of the regulations.".

8. In article 29 of the principal Act, for the words "of the Co-

Ordination Committee, of the Supervisory Council,", there shall be

substituted the words "of the Co-Ordination Committee, of the

Resolution Committee, of the Supervisory Council,".

9. Immediately after article 30 of the principal Act there shall

be added the following new Schedule

"FIRST SCHEDULE

RECOVERY AND RESOLUTION

Article 7B.

Interpretation.

1. (1)

In this Schedule, unless the context otherwise

requires

"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;

"European resolution authority" means an authority which is

situated in a country or territory outside Malta that is in a Member

State or an EEA State, and which exercises any function

corresponding to the functions of the Resolution Committee under

this Act and the Recovery and Resolution Regulations;

"investment firm" means an investment firm as defined in point

(2) of Article 4(1) of the CRR, that is subject to the initial capital

requirement laid down in Article 28(2) of Directive 2013/36/EU of

the European Parliament and of the Council on access to the activity

of credit institutions and the prudential supervision of credit

institutions and investment firms;

"resolution" means the structuring of a credit institution or

investment firm through the application of a resolution measure or

measures in order to achieve one or more of the objectives referred to

in paragraph 3(2);

"resolution measures" means one or more of the following

(a)

sale of business;

(b)

bridge institutions;

(c)

asset separation; and

(d)

bail in.

"resolution powers" means the powers conferred on the

Resolution Committee in terms of the Recovery and Resolution

Regulations;

"third-country resolution authority" means an authority in a

country or territory that is not a Member State or EEA State which is

responsible for carrying out functions comparable or equivalent to

those of the Resolution Committee pursuant to this Act.

(2) Words and expressions used in this Schedule, but which

are not defined herein, shall be interpreted within the meaning of the

BRRD.

The Resolution Committee.

2. (1) The Resolution Committee shall ensure full and

complete adherence to the requirements and obligations prescribed by

regulations made under this Act, either directly or in collaboration

with European and third-country resolution authorities, and may, for

such purposes, exercise any of its powers under this Act and any

regulations made thereunder.

(2) The Resolution Committee shall be composed of three

persons, who shall be a person appointed by the Central Bank of

Malta, a person appointed by the Authority, and a person appointed

by the Ministry responsible for Finance, who have distinguished

themselves in banking and financial related matters or have the

relevant experience in financial supervision, regulation, resolution

and insolvency of institutions.

(3) The appointment of such persons shall be for such term,

being a period of not more than three years, as may be specified in the

letter of appointment, and shall be eligible for reappointment for a

maximum period of two terms or otherwise for a maximum period of

six years, whichever is the higher. Such persons shall receive such

remuneration as the Authority may from time to time determine.

(4) The provisions of article 6(3) to (6) of the Act shall, as far

as applicable, mutatis mutandis apply to the eligibility, term of office,

termination and resignation of the Resolution Committee.

The objectives of the Resolution Committee.

3. (1) In discharging its general functions, the Resolution

Committee shall, as far as is reasonably possible, act in a way which

(a)

is compatible with the resolution objectives; and

(b) minimises the cost of resolution and avoids the

destruction of value of the institution.

(2) The resolution objectives of the Resolution Committee are

(a)

safeguarding the continuity of critical functions;

(b)

minimising risks to financial stability;

(c)

protecting public funds by reducing reliance on

extraordinary public financial support;

(d)

protecting depositors, client funds and client assets.

(3) (a)

The Resolution Committee shall have the power to

require the full assistance and collaboration of any institution, as may

be necessary to enable it to fulfil its functions under this Schedule.

(b) Any institution as may be required by the Resolution

Committee to provide its assistance and collaboration in terms of sub-

paragraph (3)(a) shall comply with such request fully, without delay

and in such detail as may be required.

Functions and powers of the Resolution Committee.

4. (1) Without prejudice to any other function or power

conferred to it by this Act or any other law or regulations, it shall be

the function of the Resolution Committee to

(a) review and decide upon the recommendations made

to it by the Resolution Unit established in terms of this

Schedule, in relation to resolution decisions;

(b) liaise and consult, on matters relating to budgets and

resources, with the Authority;

(c)

exchange information, where necessary, with the

Authority;

(d) carry out such other functions which are assigned to

it by this Act or any regulations made thereunder;

(e)

apply resolution measures when an institution is

failing or is likely to fail;

(f)

cooperate closely with the Authority in the

preparation, planning and application of resolution decisions;

(g) cooperate with authorities, both local or overseas, in

order to coordinate resolution measures to protect financial

stability in all affected Member States and EEA States, and

achieve the most effective outcome for the group as a whole,

when a cross-border group is failing or likely to fail;

(h) cooperate with European resolution authorities and

third country resolution authorities on matters relating to

resolution;

(i)

set up a resolution financing arrangement through

mandatory contributions from institutions;

(j)

communicate to the Resolution Authority its

resolution decisions which necessitate implementation;

(k)

implement the resolution decisions mentioned under

point (j);

(l)

assist the Resolution Authority on any matter falling

under this Part, on which the Resolution Authority seeks

assistance.

(2) In carrying out its general functions, the Resolution

Committee shall

(a) ensure that no conflict of interest may arise with the

supervisory functions of the Authority;

(b) seek the approval in writing of the Minister, after

informing the Resolution Authority and the Central Bank of

Malta, prior to taking any decisions that may have a direct fiscal

impact or which have systemic implications;

(c)

notify the Minister, after having informed the

Resolution Authority, of any decisions taken by it pursuant to

this Act.

(3) The Resolution Committee shall have all the powers that

are necessary to enable it to perform its functions under this paragraph

and to ensure the effective implementation of the provisions of the

(4) The Resolution Committee shall also have the power to

(a)

collect the contributions from institutions towards

the resolution financing arrangements;

(b) determine the administrative penalties payable by

institutions for failure to comply with the decisions addressed to

(c)

impose administrative penalties on any person

whose conduct, in the opinion of the Resolution Committee,

amounts to a breach of any of the provisions of this Act or any

regulations or Rules issued thereunder transposing the BRRD;

(d) impose an administrative penalty on any person who

has failed to comply with a directive issued by the Resolution

Committee under this Act or any regulations or Rules issued

thereunder transposing the BRRD; and

(e)

publish, collect and recover any administrative

penalties imposed by it in terms of this paragraph.

In exercising its power under sub-paragraphs (4) (c)

and (d), the Resolution Committee may, by notice in writing and

without recourse to a court hearing, impose on such person an

administrative penalty of

(i) up to twice the amount of the benefit

derived from the breach, where that benefit can be

determined;

(ii) in the case of a natural person, up to five

million euro (€5,000,000); or

(iii) 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. In the case of a subsidiary of a parent

undertaking, the relevant turnover shall be turnover

resulting from the consolidated accounts of the

ultimate parent undertaking in the preceding

business year.

(b) Where the Resolution Committee 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.

(c)

Where the person upon whom the notice referred to

in point (b) is served

(i) fails to pay to the Resolution Committee

the amount of the administrative penalty within a

period of thirty days from the service of the notice,

and fails to appeal from the decision of the

Resolution Committee to the Court of Civil

Jurisdiction; or

(ii) appeals to the Court of Civil Jurisdiction

and fails within a period of fifteen days from the

decision of the said Court to pay the administrative

penalty as confirmed or as varied by that Court;

then, in every case, the amount of the administrative penalty, as

originally imposed or as reduced or increased, as the case may be,

shall be due to the Resolution Committee as a civil debt, and the

provisions of point (d) shall apply.

(d) A notice as is referred to in point (b), or the decision

of the Court of Civil Jurisdiction, 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 Resolution Committee 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 Resolution Committee

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.

(7) The Resolution Committee shall designate an official

forming part of the Resolution Unit to act as a secretary for such

period of time and under such terms as the Resolution Committee

shall deem appropriate.

(8) The Resolution Committee may invite any person and may

require any officer of the Resolution Unit or of the Authority to attend

a meeting of the Resolution Committee and to take part in the

discussion.

Publication of administrative penalties.

5. (1) The Authority shall publish, on its official website

and in any other media as it considers appropriate, any administrative

penalty or penalties for any breaches of the provisions of the BRRD

imposed by the Resolution Committee under the provisions of this

Act and of any regulations made or Rules issued thereunder. Such

publications shall include information on the type and nature of the

breach and the identity of the person on whom the administrative

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 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 Authority shall publish the administrative penalties for

any breaches of the provisions of the BRRD, imposed by the

Resolution Committee under the provisions of this Act and of any

regulations made or Rules issued thereunder, on an anonymous basis,

in any of the following circumstances

(a)

where the administrative 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 can be

determined, disproportionate damage to the institutions, to the

entities referred to in point (b), (c) or (d) of Article 1(1) of the

BRRD or to the natural persons involved

Provided that 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 Resolution

Committee

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 Authority for a period of not less than

five years. Personal data shall be retained on the official website of

the 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.

Power to recover debt.

6. The Resolution Committee may bring proceedings before

the Court of Civil Jurisdiction to recover as a debt an amount of

administrative penalty due to it under this Part.

Power to issue directives.

7. (1) Without prejudice to any of the powers conferred in

this Act, the Resolution Committee 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 this Act, and any regulations made or Rules

issued thereunder transposing the BRRD.

(2) 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.

(3) Any person to whom a notice is given in accordance with

sub-paragraph (1) shall obey, comply with and otherwise give effect

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

directive.

(4) Where the Resolution Committee is satisfied that the

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

directive which it has issued in terms of this paragraph.

The Resolution Unit

8. (1) There shall be a Resolution Unit which shall carry

out the functions assigned to it under this Act, and as may be assigned

to it by the Resolution Committee.

(2) The Resolution Unit shall periodically report to the

Resolution Committee on the activities and developments within its

area of competence.

(3) The Resolution Unit shall be composed of the Director of

the Office, and any number of employees as may be required in order

to carry out its functions properly.

(4) It shall be the function of the Resolution Unit to

(a)

assess whether an institution is failing or is likely to

fail, after consulting the Authority;

(b) draw up resolution plans, after consulting the

Authority, on how to deal with financial stress or failure of

institutions, including at group level;

(c)

carry out resolvability assessment of institutions;

(d) cooperate, liaise and exchange information, as

necessary, with the Units respectively responsible for

supervision of credit institutions and investment firms within

the Authority.

Appeal.

9. (1) A decision taken by the Resolution Committee in

relation to a crisis prevention measure, a crisis management measure or

in exercise of any of its powers under this Act or any other law or

regulation, shall be subject to an appeal by any person aggrieved by the

decision.

(2) An appeal from a decision under sub-paragraph (1) shall

lie with the Court of Appeal (Inferior Jurisdiction) constituted in

terms of article 41(6) of the Code of Organization and Civil

Procedure.

(3) An appeal to the Court of Appeal (Inferior Jurisdiction) in

terms of article 41(6) of the Code of Organization and Civil

Procedure shall be submitted within twenty days from when the

decision of the Resolution Committee is notified to the institution

concerned.

(4) (a)

The determination by the Court of Appeal (Inferior

Jurisdiction) in relation to a decision taken by the Resolution

Committee shall be made as expeditiously as possible.

(b)

The economic assessments made by the Resolution

Committee shall be used as a basis by the Court when reviewing the

crisis management measures concerned

Provided that the complex nature of those assessments

shall not prevent the Court from examining whether the evidence

relied on by the Resolution Committee is factually accurate, reliable

and consistent, and whether that evidence contains all relevant

information which should be taken into account in order to assess a

complex situation and whether it is capable of substantiating the

conclusions drawn therefrom.

(5) The filing of an appeal from a crisis management measure

shall not automatically suspend the effects of the challenged decision

and the decision of the Resolution Committee shall be immediately

enforceable and shall give rise to a rebuttable presumption that a

request for the suspension of its enforcement is not in the public

interest.

(6) Where it is necessary to protect the interests of third parties

acting in good faith who have acquired shares, other instruments of

ownership, assets, rights or liabilities of an institution under

resolution by virtue of the use of resolution tools or exercise of

resolution powers by the Resolution Committee, the annulment of a

decision of the Resolution Committee shall not affect any subsequent

administrative acts or transactions concluded by the Resolution

Committee which were based on the annulled decision. In that case,

remedies for a wrongful decision or action by the Resolution

Committee shall be limited to compensation for the loss suffered by

the applicant as a result of the decision or act.

Issuing of precautionary warrant.

10. Notwithstanding any other law, no precautionary warrant

or other order under any other law shall be issued by any Court or

Tribunal restraining the Resolution Committee from taking any

action, including a crisis prevention measure or a crisis management

measure, under this Act, or under any regulations issued thereunder

or any other law.

Functions and powers of the Authority.

11. (1) In addition to the powers assigned to the Authority

under this Act, the Banking Act, and the Investment Services Act, the

Authority shall have the power to

(a)

determine the administrative penalties payable by

institutions for failure to comply with any decisions issued by

the Authority and addressed to them;

(b) impose administrative penalties on any person

whose conduct, in the opinion of the Authority, amounts to a

breach of any of those provisions of this Act or any regulations

or Rules issued thereunder transposing the BRRD in which an

institution has an obligation towards the Authority;

(c)

impose an administrative penalty on any person who

has failed to comply with a directive issued by the Authority

under this Act or any regulations or Rules issued thereunder

transposing the BRRD;

(d) publish, collect and recover any administrative

penalties imposed by it in terms of this paragraph

Provided that in exercising the powers listed in sub-

paragraphs (a) to (d), the provisions of paragraphs 4(5), 4(6) and

5 of this Schedule shall apply mutatis mutandis, and provided

further that any reference to ''the Resolution Committee'' shall

be deemed to be a reference to ''the Authority'', and any

reference to ''the Court of Civil Jurisdiction'' or ''the Court'' shall

be deemed to be references to ''the Tribunal'';

(e)

issue, by notice in writing, such directives on any

person as it may deem appropriate in the circumstances in order

to carry out the functions and duties prescribed by this Act and

any regulations or Rules issued thereunder transposing the

BRRD, and in exercising such power, the provisions of

paragraph 7 of this Schedule shall apply mutatis mutandis, and

any reference to ''the Resolution Committee'' shall be deemed to

be a reference to ''the Authority''; and

(f)

bring proceedings before the Court of Civil

Jurisdiction to recover as a debt an amount of administrative

penalty due to it under this Schedule.

(2) The Authority shall have all the powers that are necessary

to enable it to perform its functions under this paragraph to ensure the

effective implementation of the provisions of the BRRD imposing

rights and obligations on competent authorities, and, accordingly the

powers of the Authority in terms of this paragraph shall be interpreted

and applied in accordance with the provisions of the BRRD.

Appeal from a decision taken by the Authority.

12. (1)

A decision taken by the Authority in relation to a

crisis prevention measure or in exercise of any of its powers under

this Act or any other law or regulation transposing the BRRD, shall

be subject to an appeal by any person aggrieved by the decision.

(2) An appeal from a decision under sub-paragraph (1) shall

lie with the Tribunal constituted in terms of article 21, and

accordingly the provisions of such article shall mutatis mutandis

(3) The determination by the Tribunal in relation to a decision

shall be made as expeditiously as possible.

PART II

AMENDMENTS TO THE INVESTMENT SERVICES ACT

10. This Part amends and shall be read and construed as one Amendments to

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

Services Act.

as "the principal Act".

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

Amendment of

article 2 of the

principal Act.

(a) in sub-article (1) thereof, immediately after the

definition "AIFM Directive", there shall be added the following

new definition

" "the BRRD" means Directive 2014/59/EU

of the European Parliament and of the Council of

15 May 2014 establishing a framework for the

recovery and resolution of credit institutions and

investment firms and amending Council Directive

82/891/EEC, and Directives 2001/24/EC, 2002/47/

EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/

35/EU, 2012/30/EU and 2013/36/EU, and

Regulations (EU) No. 1093/2010 and (EU) No.

648/2012, of the European Parliament and of the

Council, as amended from time to time, and

includes

any

implementing

measures,

implementing technical standards, regulatory

technical standards, guidelines and similar

measures that have been or may be issued

thereunder;"; and

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

Directive, the CRD,", there shall be substituted the words "the

AIFM Directive, the BRRD, the CRD,".

12. Immediately after sub-article (3) of article 2A of the Amendment of

principal Act, there shall be added the following new sub-article (4): article

principal Act.

''(4) Without prejudice to the functions, powers and duties

assigned to the competent authority by means of this Act, the

competent authority shall also have the functions, powers and

duties assigned to it under the Malta Financial Services Authority

Act and under any regulations made thereunder for the purposes

of transposing the provisions of the BRRD.''.

13. Article 12 of the principal Act shall be amended as

follows

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

words "the AIFM Directive, the CRD,", there shall be

substituted the words "the AIFM Directive, the BRRD, the

CRD,"; and

(b) immediately after sub-article (2)(B) thereof, there

shall be added the following new sub-article

"(2)(C) Regulations made under this article

may also make provision for the re-organisation

and winding-up of those investment firms to which

such re-organisation and winding-up is, or may be

rendered, applicable in terms of the BRRD.".

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

principal Act, for the words "implementation of the AIFM Directive,

the CRD,", there shall be substituted the words "implementation of

the AIFM Directive, the BRRD, the CRD,".

15. In article 16B of the principal Act, for the words "which

transpose the AIFM Directive, the CRD,", there shall be substituted

the words "which transpose the AIFM Directive, the BRRD, the

CRD,".

16. Article 17 of the principal Act shall be amended as

follows

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

Directive, the CRD,", wherever they appear, there shall be

substituted the words "the AIFM Directive, the BRRD, the

CRD,"; and

(b) in sub-article (9) thereof, for the words "terms of the

CRD and the CRR, as may be prescribed.", there shall be

substituted the words "terms of the BRRD, the CRD and the

CRR, as may be prescribed.".

17. In the first proviso to sub-article (1) of article 26 of the Amendment of

principal Act, for the words "the AIFM Directive, the CRD,", there article

principal Act.

shall be substituted the words "the AIFM Directive, the BRRD, the

PART III

AMENDMENTS TO THE BANKING ACT

18. This Part amends and shall be read and construed as one Amendments to

with the Banking Act, hereinafter in this Part referred to as "the the

Act.

19. Sub-article (1) of article 2 of the principal Act shall be Amendment of

article 2 of the

amended as follows

principal Act.

(a) immediately after the definition "branch", there shall

be added the following new definition

" "the BRRD" means Directive 2014/59/EU

of the European Parliament and of the Council of

15 May 2014 establishing a framework for the

recovery and resolution of credit institutions and

investment firms and amending Council Directive

82/891/EEC, and Directives 2001/24/EC, 2002/47/

EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/

35/EU, 2012/30/EU and 2013/36/EU, and

Regulations (EU) No. 1093/2010 and (EU) No.

648/2012, of the European Parliament and of the

Council, as amended from time to time, and

includes

any

implementing

measures,

implementing technical standards, regulatory

technical standards, guidelines and similar

measures that have been or may be issued

thereunder;";

(b) immediately after the definition "ESRB", there shall

be added the following new definition

" "European Resolution Authority" means an

authority which is situated in a country or territory

outside Malta that is in a Member State or an EEA

State and which exercises any function

corresponding to the functions of the Resolution

Committee under the Malta Financial Services

Authority Act and the Recovery and Resolution

Regulations issued thereunder;"; and

(c)

immediately after the definition "third country"

there shall be added the following new definition

" "Third Country Resolution Authority"

means an authority which is in a country or

territory that is not a Member State and is

responsible for carrying out functions comparable

or equivalent to those of the Resolution Committee

under the Malta Financial Services Authority Act

and the Recovery and Resolution Regulations

issued thereunder.".

20. Paragraph (a) of sub-article (1) of article 3 of the principal

Act shall be substituted by the following

"(a) transpose, implement and, or give effect to the

requirements of the BRRD, the CRD and the CRR;".

Immediately after article 4B of the principal Act, there

shall be added the following new article 4C

4C. Without prejudice to the functions, powers

and duties assigned to the competent authority by this

Act, the competent authority shall also have the

functions, powers and duties assigned to it under the

Malta Financial Services Authority Act and under any

regulations made thereunder for the purposes of

transposing the provisions of the BRRD.''.

Article 17B of the principal Act shall be amended as

(a)

for the marginal note thereof, there shall be

substituted the following

"Internal governance and recovery and

resolution plans."; and

(b) immediately after sub-article (4) thereof, there shall

be added the following new sub-article

"(5) A credit institution shall cooperate

closely with the Resolution Committee established

under the Malta Financial Services Authority Act,

and with any relevant European resolution

authorities or third-country resolution authorities

and shall provide them with all information

necessary for the preparation and drafting of a

viable resolution plan setting out options for the

orderly resolution of the credit institution in the

case of failure, in accordance with the principle of

proportionality.".

In paragraph (e) of subarticle (1) of article 35 of the Amendment of

principal Act, for the words ''12, 13, 21(2)'', there shall be substituted article

principal Act.

the words ''12, 13, 17B, 21(2)''.

PART IV

AMENDMENTS TO THE LOCAL LOANS (REGISTERED

STOCK AND SECURITIES) ORDINANCE (AMENDMENT)

ACT, 2014

This Part of this Act amends the Local Loans (Registered Amendments to

Stock and Securities) Ordinance (Amendment) Act, 2014 and it shall the

(Registered

be read and construed as one with the Local Loans (Registered Stock Stock

Securities)

and Securities) Ordinance (Amendment) Act, 2014, hereinafter in this Ordinance

(Amendment)

Part referred to as "the principal Act''.

Act, 2014.

Act XLII of

2014.

The definition "Resolution Authority" in paragraph (b) of Amendment of

article 2 of the principal Act shall be substituted by the following new article

principal Act.

definition

" "Resolution Committee" means the Committee

established within the Malta Financial Services Authority

through the Malta Financial Services Authority Act and which

is responsible for the resolution of credit institutions and

investment firms;".

Sub-article (1) of the new article 4A, as added by article 4 Amendment of

article 4 of the

of the principal Act shall be amended as follows

principal Act.

(a)

for the words ''made under the Banking Act and the

Investment Services Act'' there shall be susbtituted the words

''made under the Malta Financial Services Authority Act'' and,

in the marginal note thereof, for the words ''Cap. 371. Cap. 370.''

there shall be substituted the words ''Cap. 330.'';

(b) in paragraph (a) thereof, for the words ''with the

Resolution Authority'' there shall be substituted the words ''with

the Resolution Committee'';

(c)

in paragraph (b) thereof, for the words ''by the

Resolution Authority'' there shall be substituted the words ''by

the Resolution Committee''; and

(d) in paragraph (c) thereof, for the words ''with the

Resolution Authority'' there shall be substituted the words ''with

the Resolution Committee''.

PART V

AMENDMENTS TO THE INCOME TAX ACT

This Part of this Act amends the Income Tax Act and it

shall be read and construed as one with the Income Tax Act,

hereinafter in this Part referred to as "the principal Act''.

Paragraph (c) of sub-article (5) of article 5 of the principal

Act shall be amended as follows

(a)

for the words ''including land which the individual

has for his or her own occupation and enjoyment with that

residence as its garden or grounds up to an area (exclusive of the

site of the dwelling house) not exceeding two times the area of

the house and transferred through the same deed with the

principal residence'' there shall be substituted the words

''including land, transferred through the same deed with the

principal residence, which the owner has for his own occupation

and enjoyment with that residence as its garden or grounds

consisting of an area which, regard being had to the size and

character of the dwelling house, is required for the reasonable

enjoyment of it as a residence'';

(b) for the words ''Any part of the house which is used

exclusively for commercial purposes for any time within two

years of the transfer shall not be considered as "own residence"

and this part shall be apportioned on the basis of the area

occupied for this purpose as a proportion of the whole area of

the relative dwelling house:'' there shall be substituted the words

''Any part of the house, garden or grounds which is used

exclusively for commercial purposes for any time within two

years of the transfer, or which is not required for the reasonable

enjoyment of it as a residence shall not be considered as "own

residence" and this part shall be apportioned on the basis of the

area occupied for this purpose as a proportion of the whole area

of the relative dwelling house, garden or grounds.''; and

(c)

the proviso to the said paragraph (c) shall be deleted.

Article 31D of the principal Act shall be amended as

follows

(a)

in sub-article (1) thereof, for the words ''leased as a

residence or garage, to an individual or individuals'' there shall

be substituted the words ''that is used as a residence or a garage

by an individual or individuals''; and

(b) in paragraph (a) of sub-article (8) thereof, for the

words ''or a garage, excluding a tenement which, for the purpose

of the said letting, is required to be licensed by virtue of the Malta

Travel and Tourism Services Act, or any Act which may be

substituted therefor; and'' there shall be substituted the words ''or

a garage; and''.

Passed by the House of Representatives at Sitting No. 290 of the

15th July, 2015.

A NĠLU F ARRUGIA

Speaker

R AYMOND S CICLUNA

Clerk of the House of Representatives

€2.16