ACT No. XIX of 2016 AN ACT to amend various financial services laws and to provide for matters ancillary or incidental thereto.

I assent.

M ARIE- L OUISE

(L.S.)

C OLEIRO P RECA

President

22nd April, 2016

ACT No. XIX of 2016

AN ACT to amend various financial services laws 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, 2016.

PART I

AMENDMENTS TO THE FINANCIAL MARKETS ACT

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

with the Financial Markets Act, hereinafter in this Part referred to as the

Markets Act.

"the principal 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 "central securities

depository" there shall be added the following new definition

" "commodity derivatives" means those

financial instruments defined in point (44)(c) of

Article 4(1) of MiFID; which relate to a

commodity or an underlying referred to in Section

C(10) of Annex I to MiFID; or in point (5), (6), (7)

and (10) of Section C of Annex I thereto;";

(b)

the definition "the Community" shall be deleted;

(c)

immediately after the definition "competent

authority", there shall be added the following new definition

" "CRAR" means Regulation (EC) No. 1060/

2009 of the European Parliament and of the

Council of the 16 September 2009 on credit rating

agencies, as amended from time to time, and words

and expressions used in this Act shall have the

same meaning as is given to them in the said EU

Regulation unless otherwise defined herein;";

(d) immediately after the definition "CRAR" there shall

be added the following new definition

"derivatives"

means

those

financial

instruments as defined in point (44)(c) of Article

4(1) of MiFID; and referred to in Annex I, Section

C (4) to (10) thereto;";

(e)

the definition "the Directive" shall be deleted;

(f)

immediately after the definition "EEA State" there

shall be added the following new definition

" "EMIR" means Regulation (EU) No. 648/

2012 of the European Parliament and of the

Council of the 4th July, 2012 on OTC derivatives,

central counterparties and trade repositories as

amended from time to time;";

(g) for the definition "financial instruments" there shall

be substituted the following

" "financial instruments" means those

instruments specified in Section C of Annex I of

MiFID;";

(h) immediately after the definition "inspector" there

shall be added the following new definition

" "legal entity" shall include registered

business associations without legal personality and

trusts within the meaning of the Transparency

Directive;";

(i)

for the definition "listed company" there shall be

substituted the following

" "listed company" means a company whose

financial instruments have been admitted to listing

on a trading venue in accordance with the

provisions of this Act;";

(j)

immediately after the definition "market abuse"

there shall be added the following new definition

" "market maker" means a person who holds

himself out on the financial markets on a

continuous basis as being willing to deal on own

account by buying and selling financial instruments

against that person’s proprietary capital at prices

defined by that person;";

(k) for the definition "market operator" there shall be

substituted the following

" "market operator" means a person or

persons who manages and, or operates the business

of a regulated market and may be the regulated

market itself;";

(l)

immediately after the definition "Member State"

there shall be added the following new definition

" "MiFID" means Directive 2014/65/EU of

the European Parliament and of the Council of 15

May 2014 on markets in financial instruments and

amending Directive 2002/92/EC and Directive

2011/61/EU, as amended from time to time, and

includes any implementing measures that have

been or may be issued thereunder;";

(m) immediately after the new definition "MiFID" there

shall be added the following new definition

"MiFIR" means Regulation (EU) No. 600/

2014 of the European Parliament and of the

Council of 15 May 2014 on markets in financial

instruments 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;";

(n) for the definition "multilateral system" there shall be

substituted the following

" "multilateral system" includes all those

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

a trading platform as well as those that only

function on the basis of a set of bye-laws but

excludes bilateral systems where a person enters

into every trade on own account and not as a

riskless counterparty interposed between buyer and

seller;";

(o) immediately after the definition "multilateral

system", as substituted, there shall be added the following new

" "multilateral trading facility" or "MTF"

means a multilateral system, operated by an

investment firm or a market operator, which brings

together multiple third-party buying and selling

interests in financial instruments - in the system

and in accordance with non-discretionary rules - in

a way that results in a contract in accordance with

Title II of MiFID;";

(p) immediately after the new definition "multilateral

trading facility" or "MTF" there shall be added the following

new definition

" "organised trading facility" or "OTF"

means a multilateral system which is not a

regulated market or an MTF and in which multiple

third-party buying and selling interests in bonds,

structured finance products, emission allowances

or derivatives are able to interact in the system in a

way that results in a contract in accordance with

Title II of MiFID;";

(q) for the definition "quoted company" there shall be

substituted the following

" "quoted company" means a company

whose financial instruments have been admitted to

listing and trading on a trading venue in

accordance with the provisions of this Act;";

(r)

for the definition "regulated market" there shall be

substituted the following

" "regulated market" means a multilateral

system operated and, or managed by a market

operator, which brings together or facilitates the

bringing together of multiple third-party buying

and selling interests in financial instruments - in

the system and in accordance with its non-

discretionary rules - in a way that results in a

contract, in respect of the financial instruments

admitted to trading under its rules and, or systems,

and which is authorised and functions regularly and

in accordance with Title III of MiFID. For the

purposes of this definition, "buying and selling

interests" includes orders, quotes and indications of

interest;";

(s)

immediately after the definition "related company"

there shall be added the following new definition

" "SSR" means Regulation (EU) No. 236/

2012 of the European Parliament and of the

Council of 14 March 2012 on short selling and

certain aspects of credit default swaps, as amended

from time to time;";

(t)

immediately after the definition "trading" there shall

be added the following new definition

" "trading venue" means a regulated market,

an MTF or an OTF;"; and

(u) for the definition "transferable securities" there shall

be substituted the following

" "transferable securities" means those

classes of securities which are negotiable on the

capital market, with the exception of instruments of

payment, such as

(a) shares in companies and other securities

equivalent to shares in companies, partnerships or

other entities, and depositary receipts in respect of

shares;

(b) bonds or other forms of securitised debt,

including depositary receipts in respect of such

securities;

(c)

any other securities giving the right to

acquire or sell any such transferable securities or

giving rise to a cash settlement determined by

reference to transferable securities, currencies,

interest rates or yields, commodities or other

indices or measures;".

Immediately after article 2 of the principal Act, there shall

be added the following new article

" Competent

2A. (1) The competent authority shall

authority shall

carry out its functions under this Act and, in

particular, shall ensure compliance with the

functions under

provisions of this Act.

(2) The competent authority shall also

carry out the functions and duties as competent

authority for all purposes of the CRAR, CSDR,

EMIR, MiFID, MiFIR and the SSR, and the

Commission of the European Union, ESMA,

and European regulatory authorities shall be

informed accordingly.

(3) The Malta Financial Services

Authority established by the Malta Financial

Services Authority Act shall be the designated

competent authority in Malta for the purposes

of implementing the relevant provisions of the

CRAR, CSDR, EMIR, MiFID, MiFIR and the

SSR, and any reference in this Act to the

competent authority shall be read and

construed accordingly.".

For the words "REGULATED MARKETS" in the title to

Part II of the principal Act there shall be substituted the words

"TRADING VENUES".

For sub-article (4) of article 4C of the principal Act there

shall be substituted the following

"(4) In complying with the provisions of this article

regulated markets shall also comply with the applicable

provisions of MiFIR.".

Immediately after sub-article (2) of article 7 of the

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

"(3) The operator of a multilateral trading facility shall

comply immediately with any instruction from the Listing

Authority to suspend or remove an instrument from trading.".

Article 11A of the principal Act shall be deleted.

Deletion of

article 11A of

the principal

Act.

In sub-article (1) of article 19 of the principal Act, for the Amendment of

words "as the case may be." there shall be substituted the words "as article

principal Act.

the case may be:", and immediately thereafter there shall be added the

following proviso

"Provided that if the Listing Authority considers that -

(a) an issuer of listed financial instruments

has failed to make public any regulated information

as defined in the Listing Rules; or

(b) any other person subject to the Listing

Rules has failed to notify, within the required time

limit, the acquisition or disposal of a major holding

in accordance with the Listing Rules,

it may, without recourse to a court hearing, impose on such

issuer or any other person subject to the Listing Rules as the

case may be, an administrative penalty in terms of article 19A.".

Immediately after article 19 of the principal Act, there Addition of new

articles to the

shall be added the following new articles

principal Act.

" Administrative

In the case of breaches in terms of

penalties.

the proviso of article 19(1), the Listing

Authority may, without recourse to a court

hearing, impose the following administrative

penalties

(a)

in the case of a natural

person

(i) a penalty not exceeding

two million euro (€2,000,000), or

(ii) up to twice the amount

of the profits gained or losses

avoided because of the breach,

where those can be determined,

whichever is higher;

(b) in the case of an issuer or any

other legal entity

(i) a penalty up to ten

million euro (€10,000,000) or up to

5% of the total annual turnover

according to the last available

annual accounts approved by the

management body; where the legal

entity is a parent undertaking or a

subsidiary of a parent undertaking

which has to prepare consolidated

financial accounts pursuant to

Directive 2013/34/EU, the relevant

total turnover shall be the

total annual turnover

or the

corresponding type of income

according to the last available

consolidated

annual

accounts

approved by the management body

of the ultimate parent undertaking,

or

(ii) up to twice the amount

of the profits gained or losses

avoided because of the breach,

where these can be determined,

whichever is higher.

Where obligations imposed in terms

Sanctions on

members of

of the Act or any regulations or Listing Rules

administrative,

management or

issued thereunder apply to the issuer or to any

supervisory

other legal entity, in the event of a breach,

bodies of the

legal entity.

sanctions can also be applied, subject to the

conditions laid down in national law, to the

members of administrative, management or

supervisory bodies of the legal entity

concerned, and to other individuals who are

responsible for the breach under national law.

Without prejudice to the powers of

Suspension of

exercise of

the Listing Authority in terms of this Act, the

voting rights.

Listing Authority may suspend the exercise of

voting rights attached to shares in the event

where a person subject to the Listing Rules

fails to notify, within the required time limit,

the acquisition or disposal of a major holding

in accordance with the Listing Rules.

In the case of administrative

Relevant

circumstances.

penalties or measures imposed by the Listing

Authority, the Listing Authority shall take into

account all relevant circumstances, including

where appropriate

(a)

the gravity and the duration

of the breach;

(b) the degree of responsibility of

the natural person or legal entity

responsible;

(c)

the financial strength of the

natural person or legal entity responsible,

for example as indicated by the total

turnover of the legal entity responsible or

the annual income of the natural person

responsible;

(d) the importance of profits

gained or losses avoided by the natural

person or legal entity responsible, in so

far as they can be determined;

(e)

the losses sustained by third

parties as a result of the breach, in so far

as they can be determined;

(f)

the level of cooperation of the

natural person or legal entity responsible

with the competent authority;

(g) previous breaches by the

natural

person

or

legal

entity

responsible.".

11. In sub-article (1) of article 20 of the principal Act, for the Amendment of

words "under article 19 it shall give" there shall be substituted the article

principal Act.

words "under article 19 and article 19A it shall give".

12. In article 41A of the principal Act, for the words "publish a Amendment of

statement to that effect.", there shall be substituted the words "publish article

the principal

a statement to that effect indicating the natural person or the legal Act.

entity responsible and the nature of the breach, and, or impose an

order requiring the natural person or legal entity responsible to cease

the conduct constituting the breach and to desist from any repetition

of that conduct:", and immediately thereafter there shall be added the

following new provisos

"Provided that in the case of Listing Rules transposing the

Transparency Directive, the Listing Authority shall, by means

of a public statement and without undue delay, publish every

decision on sanctions and measures imposed for a breach of the

Listing Rules transposing the Transparency Directive, including

at least information on the type and nature of the breach and the

identity of natural persons or legal entities responsible for it

Provided further that in this latter case only the Listing

Authority may delay such public disclosure in the following

three circumstances

(a) where, in the event that the sanction is

imposed on a natural person, publication of

personal data is found to be disproportionate by an

obligatory prior assessment of the proportionality

of such publication, or

(b) where it deems that such publication

would seriously jeopardise the stability of the

financial system or an ongoing official

investigation; or

(c) where publication would, in so far as

can be determined, cause disproportionate and

serious damage to the institutions or natural

persons involved.".

13. Immediately after article 41A of the principal Act there

shall be added the following new article

" Appeal against

If an appeal is submitted against the

decision of the

decision of the Listing Authority in terms of

Listing

article 19A, the Listing Authority shall include

Authority.

information to that effect in the public

statement referred to in the proviso of article

41A at the time of the publication or to amend

the public statement if the appeal is submitted

after the initial publication.".

14. In sub-article (1) of article 45 of the principal Act, for the

words "the regulated market on which they are listed.", there shall be

substituted the words "the regulated market on which they are listed,

or admitted to a multilateral trading facility or admitted to an

Organised Trading Facility:", and immediately thereafter there shall

be added the following new proviso

"Provided that, for the purposes of this sub-article, the

term "admitted" shall mean admitted to listing following an

admission process approved by the Multilateral Trading Facility

or Organised Trading Facility, or admitted to listing and trading

following an admission process approved by the Multilateral

Trading Facility or Organised Trading Facility.".

PART II

AMENDMENTS TO THE COMPANIES ACT

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

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

Act.

principal Act".

16. For sub-paragraph (iii) of the definition "home Member Amendment of

State" in sub-article (1) of article 2 of the principal Act, there shall be article

principal Act.

substituted the following

"(iii) for all issuers of securities incorporated in a third

country, which are not mentioned in paragraph (ii) hereof, the

Member State where

(a) the securities are intended to be offered

to the public for the first time after the date of entry

into force of this provision; or

(b) where the first application for

admission to trading on a regulated market is made,

at the choice of the issuer, the offerer or the person

asking for admission, as the case may be, subject to

a subsequent election by issuers incorporated in a

third country in the following circumstances

i.

where the home Member State

was not determined by their choice; or

ii.

in accordance with point

(1)(i)(iii) of Article 2 of 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.".

17. Article 3A of the principal Act shall be amended as Amendment of

article 3A of the

follows

principal Act.

(a)

paragraphs (d), (e), (f), (g), (h), (i), (j), (k), (l), (m),

(n), (o) and (p) thereof shall be re-numbered as paragraphs (f),

(g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (r) and (s) respectively;

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

be added the following new paragraphs

"(d) Directive 2003/71/EC of the European

Parliament and of the Council of 4 November 2003

on the prospectus to be published when securities

are offered to the public or admitted to trading and

amending Directive 2001/34/EC;

(e) 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;"; and

(c) immediately after paragraph (p) thereof, as re-

numbered, there shall be added the following new paragraph

"(q) Directive 2013/50/EU of the European

Parliament and of the Council of 22 October 2013

amending Directive 2004/109/EC of the European

Parliament and of the Council on the harmonisation

of transparency requirements in relation to

information about issuers whose securities are

admitted to trading on a regulated market,

Directive 2003/71/EC of the European Parliament

and of the Council on the prospectus to be

published when securities are offered to the public

or admitted to trading and Commission Directive

2007/14/EC laying down detailed rules for the

implementation of certain provisions of Directive

2004/109/EC;".

PART III

AMENDMENTS TO THE PREVENTION OF

FINANCIAL MARKETS ABUSE ACT

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

with the Prevention of Financial Markets Abuse Act, hereinafter in

this Part referred to as "the principal Act".

19. Immediately after sub-article (7) of article 20 of the

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

"(8) (a)

Notwithstanding any of the

provisions of this Act, and without prejudice to

any power under this or any other law, nothing

shall prevent or obstruct the competent

authority from assisting any authority, body or

other entity as mentioned in article 17(2) of the

Malta Financial Services Authority Act for the

purpose of carrying out its functions or duties

in matters related to market abuse

(i)

where so required within the

terms

of

Malta’s

international

commitments; or

(ii) where so required within the

terms of undertakings assumed in

bilateral or multilateral agreements for

the exchange of information and other

forms of collaboration with overseas

regulatory authorities including a request

arising under a memorandum of

understanding concluded with the

competent authority.

(b) Upon receipt of a request

from any such authority, body or other entity

for the purpose of carrying out its functions or

duties in matters related to market abuse, the

competent authority shall immediately take the

necessary measures in order to gather the

information required by such authority, body or

other entity and may for such purpose exercise

any of the powers under this Act. If the

competent authority is not able to supply the

required information immediately, it shall

notify the requesting authority, body or other

entity of the reasons.

(c)

Sub-articles (4) and (6) shall

apply mutatis mutandis to this sub-article.".

PART IV

AMENDMENTS TO THE INVESTMENT SERVICES ACT

20. 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

Investment

Services Act.

as ''the principal Act''.

21. Immediately after sub-article (14) of article 17 of the

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

''(15) The competent authority may also cooperate with

European regulatory authorities with respect to facilitating the

recovery of administrative penalties.''.

22. Article 17B of the principal Act shall be amended as

follows

(a)

paragraphs (b) and (c) thereof shall be renumbered

as paragraphs (c) and (d) respectively; and

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

be added the following new paragraph

''(b) compliance with the request is likely to

affect adversely its own investigation, enforcement

activities or, where applicable, any criminal

investigation;''.

Passed by the House of Representatives at Sitting No. 378 of the

19th April, 2016.

A NĠLU F ARRUGIA

Speaker

R AYMOND S CICLUNA

Clerk of the House of Representatives

€1.44