ACT No. X of 2017 An Act to amend the Banking Act, Cap. 371, and to provide for matters ancillary or incidental thereto.

I assent.

M ARIE- L OUISE

(L.S.)

C OLEIRO P RECA

President

17 th March, 2017

ACT No. X of 2017

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, 2017, 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)

before the definition "bank", there shall be added the

following new definition

" "Additional Tier 1 instruments" means capital

instruments that meet the conditions laid down in Article

52(1) of the CRR;";

(b) immediately after the definition "Banking Rule",

there shall be added the following new definition

" "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, 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;";

(c)

immediately after the definition "close links", there

shall be added the following new definition

" "Common Equity Tier 1 instruments" means capital

instruments that meet the conditions laid down in Article

28(1) to (4), Article 29(1) to (5) or Article 31(1) of the

CRR;";

(d) immediately after the definition "court", there shall

be added the following new definition

" "covered deposits" means covered

deposits as defined in regulation 2 of the

Depositor Compensation Scheme Regulations;";

(e)

immediately after the definition "director", there

shall be added the following new definition

" "eligible deposits" means deposits that

are not excluded from protection pursuant to

regulation 9 of the Depositor Compensation

Scheme Regulations, and includes deposits held

in an account entitled to compensate pursuant to

regulation 12(5) Depositor Compensation

Scheme Regulations;";

(f)

immediately after the definition "representative

office", there shall be added the following new definition

" "Scheme" means the Depositor

Compensation Scheme established under

regulation 4 of the Depositor Compensation

Scheme Regulations;"; and

(g) immediately after the definition "third country",

there shall be added the following new definition

" "Tier 2 instruments" means capital instruments or

subordinated loans that meet the conditions laid down in

Article 63 of the CRR;".

Immediately after article 29 of the principal Act, there Addition of new

article to the

shall be added the following new article

principal Act.

" Ranking of

(1)

When a credit institution is

creditors in

insolvent and is being wound up, creditors having

case of

their rights secured by pledges, privileges

insolvency or

winding up of

whether resulting from registration or granted by

a credit

institution.

law, or hypothecs shall rank in accordance with

the applicable laws in force in Malta at the time.

(2) Without prejudice to the provisions of

sub-article (1), the following shall rank before the

creditors listed under sub-article (3)

(a)

covered deposits;

(b) the Scheme

(i) subrogating to the rights

and

obligations

of

covered

depositors in insolvency;

(ii) in relation to contribution/s

that are due to it by the credit

institution under the Depositor

Compensation Scheme Regulations

Provided that notwithstanding any provision

to the contrary in the applicable Maltese Law,

covered deposits mentioned in paragraph (a), the

subrogation into the rights and obligations of

covered depositors mentioned in paragraph (b)(i)

and the contribution/s due to the Scheme

mentioned in paragraph (b)(ii) shall rank pari

passu.

(3) Without prejudice to the provisions of

sub-articles (1) and (2), the following shall rank

equally between themselves but before the

ranking provided for the claims of ordinary

unsecured, non-preferred creditors

(a)

that part of eligible deposits

from natural persons and micro, small and

medium-sized enterprises which exceeds the

coverage level provided for in regulation 10

of the Depositor Compensation Scheme

Regulations;

(b) deposits that would be eligible

deposits from natural persons, micro, small

and medium-sized enterprises were they not

made through branches located outside the

European Union of institutions established

within the European Union.

(4) The following shall rank below all

other ordinary unsecured, non-preferred creditors

and shall have the following order of priority

(a)

the amount of subordinated debt

that is not Additional Tier 1 or Tier 2

capital;

(b) Tier 2 instruments;

(c)

Additional Tier 1 instruments;

(d) Common

Equity

Tier

instruments.".

Passed by the House of Representatives at Sitting No. 493 of the

13 th March, 2017.

ĊENSU GALEA

Deputy Speaker

R AYMOND S CICLUNA

Clerk of the House of Representatives

€0.54