ACT No. XXXI of 2017 AN ACT to amend various financial services laws 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:-

I assent.

(L.S.)

MARIE-LOUISE

COLEIRO PRECA

President

22nd December, 2017

ACT No. XXXI of 2017

AN ACT to amend various financial services laws

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:-

(1) The short title of this Act is the Various Financial

Services Laws (Amendment) Act, 2017.

(2) Paragraphs (a), (b), (d), (e), (g), (h), (i), (k), (l), (m), (o),

(p), (q), (s), (t), (u), (w), (z) and (aa) of article 16, articles 19, 21, 22,

23, 24, 25, 35, 36, 38, 39 of Part II; and all of Part III, with the

exception of the definition "Conduct of Business Rules" in article

44(a)(vii) and the definition "Minister" in article 44(a)(xx), articles

47(a)(i), 47(b), 47(d), and articles 48, 51(c), 51(d), articles 53, 54,

55(b)(ii), 61, 62, 63(a)(i), 64 and 65 of this Act, shall come into force

on such date as the Minister for Finance may by notice in the Gazette

establish, and different dates may be so established for different

provisions and different purposes thereof.

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 before the definition "Authority" there

shall be added the following new definition

" "Audit Committee"

means

the

Committee

established by article 12A;";

(b) immediately after the definition "institution", there

shall be added the following new definition

" "internal audit" means an independent, objective

assurance and consulting activity designed to add value

and improve the operations of the Authority;";

(c) immediately after the new definition "internal audit"

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;"; and

(d)

the definition "Minister" shall be substituted as

follows

" "Minister" means the Minister responsible for the

regulation of Financial Services;".

Immediately after article 12 of the principal Act, there shall Addition of new

article to the

be added the following new article

principal Act.

'' Audit Committee.

(1)

It shall be the function of the Audit

Committee to

(a)

determine whether the governance,

controls and risk management processes of the

Authority in implementing agreed policies and

strategies across the activities of the Authority

are adequate, effective and functioning;

(b) determine the Internal Audit Unit’s

remit and role;

(c)

evaluate the performance of the

Internal Audit Unit set out under article 12B;

(d) carry out such other functions as may

be assigned to it by the Board of Governors.

(2)

In carrying out its functions the Audit

Committee shall have all powers necessary to enable it

to perform its functions properly, and the provisions of

sub-articles (4) and (5) of article 12B shall, mutatis

mutandis, apply to the Audit Committee.

(3) In carrying out its functions under sub-

article (1)(b), the Audit Committee shall consult the

Director General and the Chief Operations Officer

regarding new tasks and the processes applied

throughout the activities of the Authority to ensure full

coverage of the activities of the Authority by the

Internal Audit Unit. In so far as its functions under

sub-article (1)(c) are concerned, the Audit Committee

shall take into consideration the internal audit plan and

any audit quality assurance assessment reports.

(4) The Audit Committee shall be composed of

a Chairman and two other members appointed by the

Board of Governors, 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; and shall receive such remuneration as

the Authority may from time to time, determine.

(5) The Authority shall consult the Audit

Committee before appointing one or more suitable

officers to perform the functions of Director and

Deputy Director within the Internal Audit Unit.

(6) The Audit Committee shall report to the

Board of Governors on the progress made in its area of

competence and on the progress made by the Internal

Audit Unit.

(7) The Audit Committee shall be independent

of the Board of Governors, and shall act independently

of it.

(8) The Audit Committee shall designate one

of the officers of the Authority as its Secretary for such

period and under such terms as the Board of

Governors shall deem appropriate.

(9) The provisions of article 7 shall, as far as

applicable, mutatis mutandis apply to the meetings of

the Audit Committee, and the provisions of paragraphs

(a), (b), (d) and (e) of article 6(6) shall, as far as

applicable, mutatis mutandis apply to the office of the

Chairman and the members of such Committee.''.

5. Immediately after article 12A of the principal Act, there Addition of new

article to the

shall be added the following new article

principal Act.

(1) It shall be the function of the Internal

Audit Unit to examine, evaluate and report upon the

adequacy and effectiveness of the governance, internal

control and risk management processes of the

Authority. To this effect, in addition to any other

objectives that may be assigned to it by the Board of

Governors or the Audit Committee within the purposes

of this article, the Internal Audit Unit shall determine

that

(a)

adequate internal controls are in

place and operating effectively and efficiently;

(b) risks are appropriately identified and

managed;

(c)

interaction with the various units of

the Authority occurs as needed;

(d) financial, managerial and operating

information is accurate, reliable, integral and

timely;

(e) the actions of officers and employees

of the Authority are in compliance with the

policies and procedures of the Authority, and

applicable laws and regulations;

(f)

resources are acquired economically,

used efficiently, and adequately protected;

(g) plans and objectives of the Authority

are achieved or are being implemented as

planned;

(h) quality and continuous improvement

are fostered in the control processes of the

Authority;

(i)

significant

regulatory

issues

impacting on the Authority are recognised and

addressed appropriately.

(2) The Internal Audit Unit shall be composed

of the Director of the Unit, and any number of

employees as may be required in order to carry out its

functions properly.

(3) In carrying out its functions, the Internal

Audit Unit shall, as appropriate, apply international

best practice guidance and standards and shall adhere

to internationally accepted principles of ethics for

internal auditors.

(4) For the better performance of its functions,

the Internal Audit Unit may audit all parts of the

Authority, and shall have full, complete unrestricted

access to any records, files, physical properties,

electronic data, and personnel of the Authority

relevant to the performance of an audit.

(5) Officers or employees of the Authority shall

fully cooperate with the Internal Audit Unit in the

exercise of its functions.

(6) The Internal Audit Unit shall report to the

Audit Committee on the progress made in its area of

competence.''.

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

(a) in sub-article (2) thereof, for the words ''The

Authority may:'' there shall be substituted the words ''The

Authority may, for the better carrying out of the provisions of

this Act or any other Act administered by it, from time to

time:''; and

(b) paragraph (a) of sub-article (2) thereof shall be

substituted by the following

''(a) issue and publish Rules regulating the

procedures and duties of persons licensed or authorised

by it, or falling under its regulatory or supervisory

functions. Such Rules may

(i) lay down additional requirements and

conditions in relation to activities of such persons,

the conduct of their business, their relations with

customers, the public and other parties, their

responsibilities to the Authority, reporting

requirements, financial resources, capital adequacy

and related requirements, and any other matters as

the Authority may consider appropriate;

(ii) provide for the returns, statements and

notices to be made or given for any purposes in

regard to which the Authority exercises supervisory

or regulatory functions under this Act or any other

Act, and the form and contents thereof; and

(iii) prescribe the information that such persons

are to submit to the Authority

Provided that such Rules shall be binding on

all licence holders and others as may be specified

therein;''.

7. Immediately after article 16 of the principal Act, there Addition of new

article to the

shall be added the following new article

principal Act.

(1) The Authority shall, on an annual

basis, contact the office of the Attorney General and

the Commissioner of Police and seek information

about any criminal sanctions imposed for any breaches

of any provisions of any Act or regulations transposing

MiFID. The office of the Attorney General and the

Commissioner of Police shall co-operate with the

Authority and shall, where relevant, send the

Authority a copy of the final judgement in relation to

any criminal sanctions imposed. The Authority shall

submit such copy of the final judgement to the

European Securities and Markets Authority (ESMA).

(2) The Authority shall, on an annual basis,

contact the office of the Attorney General and the

Commissioner of Police and ask for anonymised and

aggregated data regarding all criminal investigations

undertaken and all criminal sanctions imposed for any

breaches of any provisions of any Act or regulations

transposing MiFID. The Authority shall forward such

information to the European Securities and Markets

Authority (ESMA).''.

8. Article 20E of the principal Act shall be renumbered as Amendment of

article 20E of

the principal

Act.

9. Immediately after article 20D of the principal Act there

shall be added the following new article 20E

The Minister may, acting on the advice of

"Transparency of

securities financing

the Authority, make regulations for the following

transactions and of

re-use, and

purposes

benchmarks".

(a)

to implement and, or give effect to

(i) the requirements of Regulation

(EU) 2016/1011 of the European

Parliament and of the Council of 8 June

2016 on indices used as benchmarks in

financial instruments and financial

contracts or to measure the performance

of investment funds and amending

Directives 2008/48/EC and 2014/17/EU

and Regulation (EU) No. 596/2014, and

to otherwise regulate the supervision of

supervised entities within the meaning of

Regulation (EU) 2016/1011; and

(ii) the requirements of Regulation

(EU) 2015/2365 of the European

Parliament and of the Council of 25

November 2015 on transparency of

securities financing transactions and of

re-use and amending Regulation (EU)

No. 648/2012, and to otherwise regulate

the

supervision

of

financial

counterparties

and

non-financial

counterparties within the meaning of

Regulation (EU) 2015/2365;

(b) where regulations have been made in

terms of this article, the Authority may issue

Rules for the better carrying out of, and to better

implement, the provisions of the regulations;

(c) to

establish

and

impose

administrative penalties and other administrative

measures as may be specified therein for the

purposes of implementing Regulation (EU)

2016/1011 and Regulation (EU) No 2015/2365

and to provide for appeals therefrom to the

Financial Services Tribunal.".

PART II

AMENDMENTS TO THE TRUSTS AND TRUSTEES ACT

10. This Part amends the Trusts and Trustees Act, and it shall be Amendments to

read and construed as one with the Trusts and Trustees Act, hereinafter the

Trustees Act.

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

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

article 2 of the

amended as follows

principal Act.

(a)

the definition "Minister" shall be substituted as

follows

" "Minister" means the Minister responsible for the

regulation of Financial Services;"; and

(b)

the first definition of ''resident in Malta'' shall be

deleted.

12. Article 43 of the principal Act shall be amended as Amendment of

article 43 of the

follows

principal Act.

(a)

in sub-article (1) thereof, for the words ''any person,

resident or operating in or from Malta,'' there shall be

substituted the words ''any person operating in or from Malta,'';

(b)

in sub-article (4) thereof

(i) in sub-paragraph (a) of paragraph (i) thereof,

for the words "its objects include", there shall be

substituted the words "its objects are limited to:";

(ii) in sub-paragraph (i) of paragraph (i) thereof, for

the words "an approved jurisdiction;", there shall be

substituted the words "an approved jurisdiction:";

(iii)

immediately after sub-paragraph (i) of

paragraph (i) thereof, as amended, there shall be added

the following new proviso

"Provided that, notwithstanding the

provisions of paragraphs (a) and (b), persons

authorised in terms of sub-article (1) may act

as company service providers as defined in

the Company Service Providers Act, subject

to any rules or regulations which may be

applicable under this Act;"; and

(iv) in sub-paragraph (a) of paragraph (ii) thereof,

the words "is resident or" shall be deleted;

(c) in sub-article (12) thereof, the words "resident or"

shall be deleted;

(d)

in sub-article (13) thereof

(i) in sub-paragraph (a) of paragraph (i) thereof,

for the words "its objects include", there shall be

substituted the words "its objects are limited to";

(ii) in sub-paragraph (i) of paragraph (i) thereof, for

the words "an approved jurisidiction;", there shall be

substituted the words "an approved jurisdiction:";

(iii) immediately after sub-paragraph (i) of

paragraph (i) thereof, as amended, there shall be added

the following new proviso

"Provided that notwithstanding the

provisions of paragraphs (a) and (b),

persons authorised in terms of sub-article

(1) may act as company service providers as

defined in the Company Service Providers

Act, subject to any rules or regulations

which may be applicable under this Act;";

and

(iv) in sub-paragraph (a) of paragraph (ii) thereof,

for the words "is resident or operating" there shall be

substituted the word "operates";

(e)

in sub-article (15) thereof

(i) in sub-paragraph (a) thereof of paragraph (i)

thereof, for the words "its objects include", there shall be

substituted the words "its objects are limited to";

(ii) in sub-paragraph (g) of paragraph (i) thereof,

for the words "an approved jurisdiction", there shall be

substituted the words "an approved jurisdiction:";

(iii) immediately after sub-paragraph (g) of

paragraph (i) thereof, there shall be added the following

new proviso

"Provided that notwithstanding the provisions

of paragraphs (a) and (b), persons authorised in

terms of sub-article (1) may act as company service

providers as defined in the Company Service

Providers Act, subject to any rules or regulations

which may be applicable under this Act."; and

(iv) in sub-paragraph (a) of paragraph (ii) thereof,

for the words "is resident or operating" there shall be

substituted the word "operates".

13. Article 51 of the principal Act shall be amended as Amendment of

article 51 of the

principal Act.

(a) the marginal note thereof shall be substituted by the

following

''Offences and administrative sanctions.''; and

(b) sub-article (7) thereof shall be substituted by the

following new sub-article

"(7) (a)

Without prejudice to any other powers

assigned to the Authority in terms of this Act, where a

trustee, or a director of a trustee company or any other

person entrusted with the management and

administration thereof, or any other person having

obligations with respect to the trustee, contravenes or

fails to comply with any of the conditions imposed in an

authorisation issued under article 43, or the conditions

imposed in article 43A, or the conditions imposed by the

Authority upon registration in accordance with article

43B, and, or where the Authority is satisfied that the

trustee’s or the person’s conduct amounts to a breach of

any provisions of the Act, regulations or rules issued

thereunder, or of any directive, obligations or other

requirement made or given by the Authority, including

failure to cooperate in an investigation, the Authority

may by notice in writing and without recourse to a court

hearing, impose an administrative penalty which may

not exceed one hundred and fifty thousand euro

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

the case may be.

(b) Administrative penalties or other measures

that may be imposed by the Authority on a trustee or

any of the persons referred to in paragraph (a) as may

be specified, may be imposed in the form of a fixed

penalty, a daily penalty, or both.

(c) The imposition by the Authority of an

administrative penalty in terms of this sub-article

shall be without prejudice to any other consequence

of the act or omission of the offender under civil or

criminal law

Provided that in all cases where the

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.

(d) The provisions of article 16(8) of the Malta

Financial Services Authority Act shall apply mutatis

mutandis to any administrative or disciplinary

sanction or measure, of whatever type, including

administrative penalties, reprimands or warnings,

imposed or decided by the Authority under this Act,

and any regulations or rules made thereunder.".

14. Sub-article (2) of article 55 of the principal Act shall be

amended as follows

(a)

in paragraph (e) thereof, for the words "to make any

order under this Act," there shall be substituted the words "to

issue a directive under this Act;"; and

(b)

immediately after paragraph (e) thereof, as

amended, there shall be added the following new paragraph

''(f) to impose an administrative penalty in terms of

article 51(7),".

PART III

AMENDMENTS TO THE FINANCIAL MARKETS ACT

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

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

"the principal Act".

16. 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 before the definition "bye-laws", there

shall be added the following new definition

'' "APA" or "approved publication arrangement"

means a person authorised under MiFID to provide the

service of publishing trade reports on behalf of

investment firms pursuant to Articles 20 and 21 of

MiFIR;";

(b) immediately after the new definition " "APA" or

"approved publication arrangement" " there shall be added the

following new definition

" "ARM" or "approved reporting mechanism" means

a person authorised under MiFID to provide the service

of reporting details of transactions to the competent

authority or to European regulatory authorities, as the

case may be, or to ESMA on behalf of investment

firms;";

(c) for the definition "central securities depository"

there shall be substituted the following

" "central securities depository" or "CSD" shall mean

a legal person that operates a securities settlement

system as referred to in point (3) of Section A of the

Annex to the CSDR and provides at least one of the

following core services listed in Section A of the said

Annex

(i) initial recording of securities in a book-entry

system (‘notary service’);

(ii) providing and maintaining securities

accounts at the top tier level (‘central maintenance

service’);";

(d)

immediately after the new definition " "central

securities depository" or "CSD"" there shall be added the

following new definition

" "certificates" means those securities which are

negotiable on the capital market and which in case of a

repayment of investment by the issuer are ranked above

shares but below unsecured bond instruments and other

similar instruments;";

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

be added the following new definition

" "CRD" means Directive 2013/36/EU of the

European Parliament and of the Council of 26 June 2013

on 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;";

(f)

immediately after the new definition "CRD" there

shall be added the following new definition

" "CSDR" means Regulation (EU) No. 909/2014 of

the European Parliament and of the Council of the 23

July 2014 on improving securities settlement in the

European Union and on central securities depositories

and amending Directives 98/26/EC and MiFID and

Regulation (EU) No. 236/2012, as may be amended

from time to time, and includes any implementing

measures that have been or may be issued thereunder;";

(g)

immediately after the new definition "CSDR" there

shall be added the following new definition

" "CTP" or "consolidated tape provider" means a

person authorised under MiFID to provide the service of

collecting trade reports for financial instruments listed in

Articles 6, 7, 10, 12, 13, 20 and 21 of MiFIR from

regulated markets, MTFs, OTFs and APAs and

consolidating them into a continuous electronic live data

stream providing price and volume data per financial

instrument;";

(h) immediately after the new definition " "CTP" or

"consolidated tape provider" " there shall be added the

following new definition

" "data reporting services provider" means an APA, a

CTP or an ARM;";

(i)

immediately after the new definition "data reporting

services provider" there shall be added the following new

definition

" "dealing on own account" means trading against

proprietary capital resulting in the conclusion of

transactions in one or more financial instruments;";

(j)

immediately after the new definition "dealing on

own account" there shall be added the following new definition

" "dematerialised form" means the fact that financial

instruments exist only as book entry records;";

(k) immediately after the definition "derivatives" there

shall be added the following new definition

" "Directive 95/46/EC" means Directive 95/46/EC of

the European Parliament and of the Council of 24

October 1995 on the protection of individuals with

regard to the processing of personal data and on the free

movement of such data, as amended from time to time,

and includes any implementing measures that have been

or may be issued thereunder;";

(l)

immediately after the new definition "Directive 95/

46/EC" there shall be added the following new definition

" "Directive 2003/87/EC" means Directive 2003/87/

EC of the European Parliament and of the Council of 13

October 2003 establishing a scheme for greenhouse gas

emission allowance trading within the Community and

amending Council Directive 96/61/EC, 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 "Directive

2003/87/EC", there shall be added the following new definition

" "Directive 2013/34/EU" means Directive 2013/34/

EU of the European Parliament and of the Council of 26

June 2013 on the annual financial statements,

consolidated financial statements and related reports of

certain types of undertakings, amending Directive 2006/

43/EC of the European Parliament and of the Council

and repealing Council Directives 78/660/EEC and 83/

349/EEC as may be amended from time to time, and

includes any implementing measures that have been or

may be issued thereunder;";

(n) the definition "designated financial instruments"

shall be deleted;

(o)

immediately after the definition "European

regulatory authority" there shall be added the following new

definition

" "exchange-traded fund" means a fund of which at

least one unit or share class is traded throughout the day

on at least one trading venue and with at least one

market maker which takes action to ensure that the price

of its units or shares on the trading venue does not vary

significantly from its net asset value and, where

applicable, from its indicative net asset value;";

(p) immediately after the definition "Financial Market

Rules", there shall be added the following new definition

" "home Member State" means, in the case of a

regulated market, the Member State or EEA State in

which the regulated market is registered or, if under the

law of that Member State or EEA State it has no

registered office, the Member State or EEA State in

which the head office of the regulated market is

situated;";

(q) immediately after the new definition "home Member

State", there shall be added the following new definition

" "host Member State" means the Member State or

EEA State in which a regulated market provides

appropriate arrangements so as to facilitate access to

trading on its system by remote members or participants

established in that same Member State or EEA State;";

(r)

immediately after the new definition "host Member

State", there shall be added the following new definition

" "immobilisation" means the act of concentrating

location of physical securities in a CSD in a way that

enables subsequent transfers to be made by book-

entry;";

(s)

immediately after the definition " "listed financial

instruments" or "quoted financial instruments" " there shall be

added the following new definition

" "MAD" means Directive 2014/57/EU of the

European Parliament and of the Council of 16 April

2014 on criminal sanctions for market abuse (market

abuse directive), as amended from time to time, and

includes any implementing measures that have been or

may be issued thereunder;";

(t)

immediately after the new definition "MAD" there

shall be added the following new definition

" "management body" means the body or bodies of a

market operator which are appointed in accordance with

Maltese law, which are empowered to set the entity’s

strategy, objectives and overall direction, and which

oversee and monitor management decision-making and

include persons who effectively direct the business of

the entity;";

(u) immediately after the new definition "management

body" there shall be added the following new definition

" "MAR" means Regulation (EU) No. 596/2014 of

the European Parliament and of the Council of 16 April

2014 on market abuse (market abuse regulation) and

repealing Directive 2003/6/EC of the European

Parliament and of the Council and Commission

Directives 2003/124/EC, 2003/125/EC and 2004/72/EC,

as amended from time to time, and includes any

implementing measures that have been or may be issued

thereunder;";

(v) for the definition "Minister" there shall be

substituted the following

" "Minister" means the Minister responsible for the

regulation of Financial Services;";

(w)

for the definition "multilateral system" there shall

be substituted the following

" "multilateral system" means any system or facility

in which multiple third-party buying and selling trading

interests in financial instruments are able to interact in

the system;";

(x) the definition

"overseas

central

securities

depository" shall be deleted;

(y)

the definition "recognised jurisdiction" shall be

deleted;

(z) immediately after the definition "regulated market"

there shall be added the following new definition

" "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 hereunder;";

(aa) immediately after the new definition "Regulation

(EU) No. 1095/2010" there shall be added the following new

definition

" "Regulation (EU) No. 1308/2013" means

Regulation (EU) No. 1308/2013 of the European

Parliament and of the Council of 17 December 2013

establishing a common organisation of the markets in

agricultural products and repealing Council Regulations

(EEC) No. 922/72, (EEC) No. 234/79, (EC) No. 1037/

2001 and (EC) No. 1234/2007, as amended from time to

time, and includes any implementing measures that have

been or may be issued thereunder;"; and

(bb) immediately after the definition "Takeover Bids

Directive", there shall be added the following new definition

" "third-country CSD" means any legal entity

established in a third country that provides a similar

service to the core service referred to in point (3) of

Section A of the Annex to the CSDR and performs at

least one other core service listed in Section A of the

Annex;".

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

(a) the current article shall be re-numbered as sub-article (1)

thereof;

(b) immediately after sub-article (1) thereof,

as

renumbered, there shall be inserted the following

"(2) Regulations made under this article may

impose

(a) administrative penalties which may not

exceed one hundred and fifty thousand euro

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

comply, as the case may be;

(b) punishments or other penalties in respect of

any contravention or failure to comply not exceeding

a fine (multa) of four hundred and sixty six thousand

euro (€466,000) or to a term of imprisonment not

exceeding four years, or to both such fine and

imprisonment;

(c) administrative penalties higher than one

hundred and fifty thousand euro (€150,000) and fines

higher than four hundred and sixty six thousand euro

(€466,000), where deemed necessary or appropriate

for any contravention of or failure of compliance

with any EU Directive or EU Regulation or of any

regulations made under this article to transpose or to

give effect to any EU Directive or EU Regulation.

(3) Regulations made under this article may also

prescribe penalties and fines as provided for in sub-

article (2)(c), for any breach of any provision of the Act

or for any breach of any Financial Market Rules,

transposing and, or implementing any EU Directive or

EU Regulation.".

18. In paragraph (d) of sub-article (1) of article 4 of the Amendment of

principal Act, for the words "the Directive" there shall be substituted article

principal Act.

the word "MiFID".

19. For article 4A of the principal Act there shall be Amendment of

article 4A of the

substituted the following

principal Act.

4A. Without prejudice to any relevant

provisions of MAR or of MAD, the public law

governing the trading conducted under the systems of

the regulated market shall be that of Malta when

Malta is the home Member State of the regulated

market.".

20. Sub-article (1) of article 4C of the principal Act shall be Amendment of

article 4C of the

amended as follows

principal Act.

(a)

in paragraph (ii) thereof, for the words "European

Community Law" there shall be substituted the words "Union

Law"; and

(b) in paragraph (iii) thereof, for the words "European

Community Law" there shall be substituted the words "Union

Immediately after article 4C of the principal Act there shall

be inserted the following new articles

4D. A market operator shall be entitled to

exercise the rights that correspond to the regulated

market that it manages by virtue of MiFID.

4E. Market operators shall not execute client

orders against proprietary capital, or engage in

matched principal trading on any of the regulated

markets they operate.

4F. (1) A regulated market shall have in place

effective systems, procedures and arrangements to

ensure its trading systems are resilient, have sufficient

capacity to deal with peak order and message volumes,

are able to ensure orderly trading under conditions of

severe market stress, are fully tested to ensure such

conditions are met and are subject to effective business

continuity arrangements to ensure continuity of its

services if there is any failure of its trading systems.

(2) A regulated market shall have in place

(a)

written

agreements

with

all

investment firms pursuing a market making

strategy on the regulated market;

(b) schemes to ensure that a sufficient

number of investment firms participate in such

agreements which require them to post firm

quotes at competitive prices with the result of

providing liquidity to the market on a regular and

predictable basis, where such a requirement is

appropriate to the nature and scale of the trading

on that regulated market.

(3) The written agreement referred to in sub-

article (2) shall at least specify

(a)

the obligations of the investment firm

in relation to the provision of liquidity and where

applicable any other obligation arising from

participation in the scheme referred to in sub-

article (2)(b);

(b) any incentives in terms of rebates or

otherwise offered by the regulated market to an

investment firm so as to provide liquidity to the

market on a regular and predictable basis and,

where applicable, any other rights accruing to the

investment firm as a result of participation in the

scheme referred to in sub-article (2)(b).

(4) A regulated market shall monitor and

enforce compliance by investment firms with the

requirements of such binding written agreements. The

regulated market shall inform the competent authority

about the content of the binding written agreement and

shall, upon request, provide all further information to

the competent authority necessary to enable the

competent authority to satisfy itself of compliance by

the regulated market with sub-article (3) and this sub-

article.

(5) A regulated market shall have in place

effective systems, procedures and arrangements to

reject orders that exceed pre-determined volume and

(6) A regulated market shall be able to

temporarily halt or constrain trading if there is a

significant price movement in a financial instrument

on that market or a related market during a short

period and, in exceptional cases, to be able to cancel,

vary or correct any transaction. A regulated market

shall ensure that the parameters for halting trading are

appropriately calibrated in a way which takes into

account the liquidity of different asset classes and sub-

classes, the nature of the market model and types of

users and is sufficient to avoid significant disruptions

to the orderliness of trading.

(7) A regulated market shall report the

parameters for halting trading and any material

changes to those parameters to the competent authority

in a consistent and comparable manner. The competent

authority shall in turn report them to ESMA.

(8) Where a regulated market which is material

in terms of liquidity in that financial instrument halts

trading, in any Member State or EEA State including

Malta, that trading venue shall have the necessary

systems and procedures in place to ensure that it will

notify the competent authority or European regulatory

authorities, as the case may be, in order for them to

coordinate a market-wide response and determine

whether it is appropriate to halt trading on other

venues on which the financial instrument is traded

until trading resumes on the original market.

(9) A regulated market shall have in place

effective systems, procedures and arrangements,

including requiring members or participants to carry

out appropriate testing of algorithms and providing

environments to facilitate such testing, to ensure that

algorithmic trading systems cannot create or

contribute to disorderly trading conditions on the

market and to manage any disorderly trading

conditions which do arise from such algorithmic

trading systems, including systems to limit the ratio of

unexecuted orders to transactions that may be entered

into the system by a member or participant, to be able

to slow down the flow of orders if there is a risk of its

system capacity being reached and to limit and enforce

the minimum tick size that may be executed on the

market.

(10) A regulated market that permits direct

electronic access shall have in place effective systems

procedures and arrangements to ensure that members

or participants are only permitted to provide such

services if they are investment firms authorised under

MiFID or credit institutions authorised under the CRD,

that appropriate criteria are set and applied regarding

the suitability of persons to whom such access may be

provided and that the member or participant retains

responsibility for orders and trades executed using that

service in relation to the requirements of MiFID.

(11) A regulated market shall also set

appropriate standards regarding risk controls and

thresholds on trading through such access and be able

to distinguish and, if necessary, stop orders or trading

by a person using direct electronic access separately

from other orders or trading by the member or

participant.

(12)

A regulated market shall have

arrangements in place to suspend or terminate the

provision of direct electronic access by a member or

participant to a client in the case of non-compliance

with sub-articles (10) and (11).

(13) A regulated market shall ensure that its

rules on co-location services are transparent, fair and

non-discriminatory.

(14) A regulated market shall ensure that its fee

structures including execution fees, ancillary fees and

any rebates are transparent, fair and non-

discriminatory and that they do not create incentives to

place, modify or cancel orders or to execute

transactions in a way which contributes to disorderly

trading conditions or market abuse. In particular, a

regulated market shall impose market making

obligations in individual shares or a suitable basket of

shares in exchange for any rebates that are granted.

(15) A regulated market shall be allowed to

adjust its fees for cancelled orders according to the

length of time for which the order was maintained and

to calibrate the fees to each financial instrument to

which they apply.

(16) A regulated market may be allowed to

impose a higher fee for placing an order that is

subsequently cancelled than an order which is

executed and to impose a higher fee on participants

placing a high ratio of cancelled orders to executed

orders and on those operating a high-frequency

algorithmic trading technique in order to reflect the

additional burden on system capacity.

(17) A regulated market shall be able to

identify, by means of flagging from members or

participants, orders generated by algorithmic trading,

the different algorithms used for the creation of orders

and the relevant persons initiating those orders. That

information shall be available to the competent

authority and European regulatory authorities upon

request.

(18) Upon request by the competent authority, a

regulated market shall make available thereto, data

relating to the order book or give the competent

authority access to the order book so that it is able to

monitor trading.

4G. (1) Regulated markets shall adopt tick

size regimes in shares, depositary receipts, exchange-

traded funds, certificates and other similar financial

instruments and in any other financial instrument for

which regulatory technical standards are developed by

ESMA.

(2) The tick size regimes referred to in sub-

article (1) shall

(a)

be calibrated to reflect the liquidity

profile of the financial instrument in different

markets and the average bid-ask spread, taking

into account the desirability of enabling

reasonably stable prices without unduly

constraining further narrowing of spreads;

(b) adapt the tick size for each financial

instrument appropriately.

4H. All trading venues and their members or

participants shall synchronise the business clocks they

use to record the date and time of any reportable

event.".

Article 8 of the principal Act shall be amended as follows

(a)

in paragraph (e) of sub-article (2) thereof, for the

words "authorisation was granted," there shall be substituted the

words "authorisation was granted, or";

(b) immediately after paragraph (e) of sub-article (2)

thereof, as amended, there shall be inserted the following

"(f) has seriously and systematically infringed the

provisions adopted pursuant to MiFID or MiFIR,".

Sub-article (2) of article 10A of the principal Act shall be

deleted and the remaining provisions shall be renumbered as article

10A.

For article 10B of the principal Act there shall be

substituted the following

10B. (1) The competent authority shall

"Competent

authority to

draw up a list of the regulated markets registered

draw up list

in Malta and shall forward that list to the other

home Member

Member States, EEA States and ESMA. A

similar communication shall be effected in

respect of each change to that list.

(2) Market operators shall communicate,

on a regular basis, the list of the members or

participants of the regulated market to the

competent authority of the regulated market.".

Sub-article (1) of article 17 of the principal Act shall be Amendment of

article 17 of the

amended as follows

principal Act.

(a)

paragraph (b) thereof shall be amended as follows

(i) for the words "the market operator of the

regulated market may suspend" there shall be substituted

the words "the market operator operating a regulated

market, an MTF or an OTF may suspend";

(ii) for the words "with the bye-laws of the

regulated market unless" there shall be substituted the

words "with the bye-laws of the regulated market, MTF

or OTF unless"; and

(iii) for the words "market operator of a regulated

market that suspends or removes" there shall be

substituted the words "market operator operating a

regulated market, MTF or OTF that suspends or

removes"; and

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

be inserted the following new paragraphs

"(d) A market operator operating an MTF or an OTF

that suspends or removes from trading a financial

instrument shall also suspend or remove the derivatives

as referred to in points (4) to (10) of Section C of Annex

I to MiFID that relate or are referenced to that financial

instrument where necessary to support the objectives of

the suspension or removal of the underlying financial

instrument. The market operator operating an MTF or an

OTF shall make public its decision on the suspension or

removal of the financial instrument and of any related

derivatives and communicate the relevant decisions to

the competent authority.

(e) The competent authority shall require other

regulated markets, other MTFs, other OTFs and

systematic internalisers, which fall under its jurisdiction

and trade the same financial instrument or derivatives as

referred to in points (4) to (10) of Section C of Annex I

to MiFID that relate or are referenced to that financial

instrument, to also suspend or remove that financial

instrument or derivatives from trading, where the

suspension or removal is due to suspected market abuse,

a take-over bid or the non-disclosure of inside

information about the issuer or financial instrument

infringing Articles 7 and 17 of Regulation (EU) No. 596/

2014 except where such suspension or removal could

cause significant damage to the investors’ interests or

the orderly functioning of the market.

(f) The competent authority shall immediately

make public and communicate to ESMA and the

European regulatory authorities of the other Member

States or EEA States such a decision.

(g) Where the competent authority receives a

notification from a European regulatory authority of

another Member State or EEA State, it shall require that

regulated markets, other MTFs, other OTFs and

systematic internalisers, which fall under its jurisdiction

and trade the same financial instrument or derivatives

referred to in points (4) to (10) of Section C of Annex I

to MiFID that relate or are referenced to that financial

instrument, also suspend or remove that financial

instrument or derivatives from trading, where the

suspension or removal is due to suspected market abuse,

a take-over bid or the non-disclosure of inside

information about the issuer or financial instrument

infringing Articles 7 and 17 of Regulation (EU) No. 596/

2014 except where such suspension or removal could

cause significant damage to the investors’ interests or

the orderly functioning of the market.

(h) The competent authority shall communicate its

decision to ESMA and other European regulatory

authorities, including an explanation if the decision was

not to suspend or remove from trading the financial

instrument or derivatives as referred to in points (4) to

(10) of Section C of Annex I to MiFID that relate or are

referenced to that financial instrument.

(i) Paragraphs (d) to (j) shall also apply when the

suspension from trading of financial instrument or

derivatives as referred to in points (4) to (10) of Section

C of Annex I to MiFID that relate or are referenced to

that financial instrument is lifted.

(j) The notification procedure referred to in

paragraphs (d) to (i) shall also apply in the case where

the decision to suspend or remove from trading a

financial instrument or derivatives as referred to in

points (4) to (10) of Section C of Annex I to MiFID that

relate or are referenced to that financial instrument is

taken by the competent authority.".

Article 24 of the principal Act shall be amended as Amendment of

article 24 of the

principal Act.

(a)

in sub-article (1) thereof

(i) for the words "No person shall operate a central

securities depository or" there shall be substituted the

words "No person shall establish and operate a central

securities depository in Malta or"; and

(ii) for the words "under this Part." there shall be

substituted the words "under this Part, in terms of the

CSDR:" and immediately thereafter there shall be added

the following new provisos

"Provided that a CSD authorised in Malta and

wishing to provide the services referred to in points 1

and 2 of Section A of the Annex to the CSDR, within

the territory of a Member State or an EEA State, may do

so in accordance with Article 23 of the CSDR

Provided further that a CSD, authorised in a

Member State or an EEA State and wishing to provide

the services referred to in points 1 and 2 of Section A of

the Annex to the CSDR, within the territory of Malta,

may do so in accordance with Article 23 of the CSDR

Provided further that a third-country CSD may

provide services referred to in the Annex to the CSDR

within the territory of Malta, in accordance with Article

25 of the CSDR.";

(b) in sub-article (2) thereof, for the words "Any body

corporate or unincorporate may apply in writing to the

competent authority for an authorisation under this Part,

authorizing it to act" there shall be substituted the words "Any

legal person may apply in writing to the competent authority for

an authorisation under this Part in terms of the CSDR,

authorizing it to act"; and

(c) in sub-article (3) thereof, immediately after the

words "will be in a position to comply" there shall be added the

words "with the applicable requirements laid down under the

CSDR and".

Immediately after article 24 of the principal Act, there

shall be added the following new article 24A

24A. The Malta Financial Services Authority

"Designation

of the

established by the Malta Financial Services

competent

authority.

Authority Act shall be the designated competent

authority in Malta for the purposes of

implementing the relevant provisions of the CSDR,

and any reference to the competent authority shall

be read and construed accordingly.".

Article 25 of the principal Act shall be amended as

follows

(a)

sub-article (2) thereof shall be amended as follows

(i) for the words "in accordance with this Part"

there shall be substituted the words "in accordance with

this Part, in terms of the CSDR,"; and

(ii) for the words "the provisions of the Act," there

shall be substituted the words "the provisions of the

CSDR as well as the provisions of the Act,"; and

(b)

sub-article (5) thereof shall be deleted.

For article 26 of the principal Act there shall be substituted

the following

26. Without prejudice to any other power or

"Functions of a

central

function conferred on it by law or regulation, the

securities

depository.

functions of a central securities depository shall

include the services listed in the Annex to the

CSDR.".

Article 27 of the principal Act shall be amended as

follows

(a)

sub-article (2) thereof shall be amended as follows

(i) in paragraph (a) thereof, immediately after the

words "to satisfy the requirements for authorisation"

there shall be added the words "under the CSDR or";

(ii)

in paragraph (b) thereof

a. immediately after the words "any other

obligation imposed on it by or under" there shall be

added the words "the CSDR or"; and

b. immediately after the words "or Financial

Market Rules made hereunder", there shall be added

the words "or has seriously or systematically

infringed the requirements laid down in the CSDR or,

where applicable, in MiFID or MiFIR";

(iii) in paragraph (c) thereof

a. for the words "authorisation within twelve

months", there shall be substituted the words

"authorisation during twelve months"; and

b. for the words "or has not operated for the

preceding six months;", there shall be substituted the

words "or has provided no services or performed no

activity during the preceding six months;";

(iv) in paragraph (d) thereof, for the words "other

irregular means;" there shall be substituted the words

"other unlawful means;";

(v) in paragraph (e) thereof, for the words

"authorisation was granted." there shall be substituted

the words "authorisation was granted and has not taken

remedial actions requested by the competent authority

within a set time frame."; and

(b)

sub-article (5) thereof shall be deleted.

Immediately after article 27 of the principal Act, there Addition of new

article 27A to

shall be added the following new article 27A

the principal

Act.

27A. A right of appeal before the Financial

"Right of

Services Tribunal in accordance with Part VI of

this Act shall lie

(a) where no decision is taken, within six

months of its submission, in respect of an

application for authorisation to act as a central

securities depository which contains all the

information required under the provisions in

force;

(b) where the competent authority refuses

an application for authorisation to act as a

central securities depository;

(c) where authorisation to act as a central

securities depository is revoked by the

competent authority in terms of article 27 of this

Act.".

Article 28 of the principal Act shall be deleted.

Article 30 of the principal Act shall be amended as

(a)

in sub-article (1) thereof

(i) in paragraph (e) thereof, for the words

"dematerialised or uncertificated form" there shall be

substituted the words "dematerialised form or

represented in book-entry form as immobilisation"; and

(ii) paragraph (i) thereof shall be deleted;

(b) in sub-article (2) thereof, for the words "or classes of

financial instruments, overseas central securities depositories

and", there shall be substituted the words "or classes of financial

instruments and";

(c) immediately after sub-article (2) thereof, there shall

be inserted the following

"(3) Regulations made under this article may impose

administrative penalties and fines higher than one

hundred and fifty thousand euro (€150,000), where

deemed necessary or appropriate for any contravention

of or failure of compliance with any EU Directive or EU

Regulation or of any regulations made under this article

to transpose or to give effect to any EU Directive or EU

Regulation.".

Immediately after article 31 of the principal Act, there

shall be added the following new article 31A

31A. This Part shall be read and construed

"CSDR to

prevail in case

in accordance with the CSDR and, insofar as the

of any

inconsistency.

provisions of this Part of this Act and any rules

made thereunder are inconsistent with the

provisions of the CSDR, the provisions of the

CSDR shall prevail and the provisions of this

Part of this Act and any rules made thereunder

shall not apply to the extent of the

inconsistency.".

For paragraph (v) of sub-article (1) of article 32 of the Amendment of

article 32 of the

principal Act there shall be substituted the following

principal Act.

"(v) any auditor of a trading venue or data reporting services

provider who appears to be in possession of relevant information;".

Article 37 of the principal Act shall be amended as Amendment of

article 37 of the

principal Act.

(a) in sub-article (1) thereof, for the words "sub-article

(1) of Article 56 of the Directive.", there shall be substituted the

words "sub-article (1) of Article 79 of MiFID.";

(b) for sub-article (2) thereof, there shall be substituted

the following

"(2) The competent authority shall cooperate with

other European regulatory authorities whenever

necessary for the purpose of carrying out its duties under

MiFID and, or MiFIR. It shall render the necessary

assistance to other European regulatory authorities, in

particular by exchanging information and cooperating in

any investigatory or supervisory function. In terms of

MiFID and, or MiFIR, the competent authority may use

its powers for the purposes of cooperation even in cases

where the conduct under investigation does not

constitute an infringement of any provisions of this Act,

regulations or Financial Market Rules issued thereunder

Provided that the competent authority may, at

its own discretion, also cooperate with other European

regulatory authorities with respect to facilitating the

recovery of fines.";

(c)

sub-article (3) thereof shall be amended as follows

(i) for the words "Article 56 of the Directive",

there shall be substituted the words "Article 79 of

MiFID"; and

(ii) for the words "pursuant to the Directive.", there

shall be substituted the words "pursuant to MiFIR or

MiFID.";

(d) in paragraph (a) of sub-article (7) thereof, for the

words "within the meaning of the Directive;", there shall be

substituted the words "within the meaning of MiFID;";

(e)

sub-article (8) thereof shall be amended as follows

(i) for the words "the provisions of the Directive",

there shall be substituted the words "the provisions of

MiFID or MiFIR"; and

(ii) for the words "it shall notify this in as specific a

manner as possible to the contact point in the other

Member State or EEA State.", there shall be substituted

the words "it shall notify the European regulatory

authority of the other Member State or EEA State and

ESMA in as specific a manner as possible.";

(f)

Sub-article (10) thereof shall be amended as

follows

(i) for the words "the provisions of the Directive",

there shall be substituted the words "the provisions of

MiFID or MiFIR"; and

(ii)

for the words "notifying European

regulatory authority", there shall be substituted the

words "notifying European regulatory authority and

ESMA";

(g) immediately after sub-article (11) thereof, there

shall be added the following new sub-articles

"(12) In relation to emission allowances, the

competent authority shall cooperate with public bodies

competent for the oversight of spot and auction markets

and the European regulatory authorities, registry

administrators and other public bodies charged with the

supervision of compliance under Directive 2003/87/EC

in order to ensure that they can acquire a consolidated

overview of emission allowances markets.

(13)

In relation to agricultural commodity

derivatives, the competent authority shall report to and

cooperate with public bodies competent for the

oversight, administration and regulation of physical

agricultural markets under Regulation (EU) No. 1308/

2013. (14) The competent authority shall consult with the

European regulatory authority of the Member State or

EEA State responsible for the supervision of credit

institutions or insurance undertakings prior to granting

an authorisation to a market operator which is

(a) a subsidiary of a credit institution or

insurance undertaking authorised in the Union; or

(b) a subsidiary of the parent undertaking of a

credit institution or insurance undertaking authorised

in the Union; or

(c) controlled by the same person, whether

natural or legal, who controls a credit institution or

insurance undertaking authorised in the Union.

(15) The competent authority and the European

regulatory authorities referred to in sub-article (14) shall

in particular consult each other when assessing the

suitability of the shareholders or members and the

reputation and experience of persons who effectively

direct the business involved in the management of

another entity of the same group. They shall exchange

all information regarding the suitability of shareholders

or members and the reputation and experience of persons

who effectively direct the business that is of relevance to

the other European regulatory authorities involved, for

the granting of an authorisation as well as for the

ongoing assessment of compliance with operating

conditions.

(16) Where Malta is the host Member State of a

regulated market and the competent authority has clear

and demonstrable grounds for believing that such

regulated market infringes the obligations arising from

the provisions adopted pursuant to MiFID, it shall refer

those findings to the European regulatory authority of

the home Member State of the regulated market.

(17) Where, despite the measures taken by the

European regulatory authority of the home Member

State or because such measures prove inadequate, that

regulated market persists in acting in a manner that is

clearly prejudicial to the interests of Maltese investors or

the orderly functioning of markets, the competent

authority shall, after informing the European regulatory

authority of the home Member State, take all the

appropriate measures needed in order to protect

investors and the proper functioning of the markets,

which shall include the possibility of preventing that

regulated market from making their arrangements

available to remote members or participants established

in Malta. The competent authority may refer the matter

to ESMA which may act in accordance with the powers

conferred on it under Article 19 of Regulation (EU) No.

1095/2010.

(18) Any measure adopted pursuant to sub-article

(16) involving sanctions or restrictions on the activities

of a regulated market shall be properly justified and

communicated to the regulated market concerned.".

In article 37B of the principal Act, for the words "article

56(1) of the Directive" there shall be substituted the words "Article

79(1) of MiFID".

Immediately after sub-article (4) of article 37C of the

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

"(5) The competent authority may also conclude

cooperation agreements providing for the exchange of

information with overseas regulatory authorities, bodies

and natural or legal persons responsible for one or more

of the following

(a) the supervision of credit institutions, other

financial institutions, insurance undertakings and the

supervision of financial markets;

(b) the liquidation and bankruptcy of investment

firms and other similar procedures;

(c) the carrying out of statutory audits of the

accounts of investment firms and other financial

institutions, credit institutions and insurance

undertakings, in the performance of their supervisory

functions, or which administer compensation

schemes, in the performance of their functions;

(d) oversight of the bodies involved in the

liquidation and bankruptcy of investment firms and

other similar procedures;

(e) oversight of persons charged with carrying

out statutory audits of the accounts of insurance

undertakings, credit institutions, investment firms

and other financial institutions;

(f) oversight of persons active on emission

allowance markets for the purpose of ensuring a

consolidated overview of financial and spot markets;

(g) oversight of persons active on agricultural

commodity derivatives markets for the purpose of

ensuring a consolidated overview of financial and

spot markets.".

Immediately after article 37C of the principal Act, there Addition of

article 37D to

shall be inserted the following new article

the principal

Act.

37D. The competent authority may refer

"Binding

mediation.

to ESMA situations where a request relating to

one of the following has been rejected or has not

been acted upon within a reasonable time

(a) to exchange information as provided

for in article 37; or

(b) to carry out a supervisory activity, an

on-the-spot verification, or an investigation, as

provided for in article 37A.".

Sub-article (1) of article 39A of the principal Act shall be Amendment of

article 39A of

amended as follows

the principal

Act.

(a) for the words "other than Part III thereof,", there

shall be substituted the words "other than Part III or Part IV

thereof,";

(b) the words "adopted in the implementation of the

Directive" shall be deleted.

For sub-article (1) of article 42 of the principal Act, there Amendment of

article 42 of the

shall be substituted the following

principal Act.

The Tribunal shall have the exclusive competence

to determine all appeals as may be referred to it under articles

4(11), 16(9), 17(3), 18(6), 20(4), 27A, 33(6) and 39A or under

any regulations made by the Minister under articles 3 and 49.".

Article 49 of the principal Act shall be amended as

(a)

for paragraph (e) of sub-article (1) thereof, there

shall be substituted the following

"(e) to transpose, implement and give effect to the

provisions and requirements of Directives, Regulations

and any other legislative measures of the European

Union requiring transposition and, or implementation, as

they may be amended from time to time, including any

implementing measures that have been or may be issued

thereunder and including those relating to licence

holders, credit rating agencies, regulated markets,

commodities markets, central counterparties, central

securities depositaries, market making, short selling,

transactions in OTC derivatives, trade repositories and,

or the admissibility to listing of financial instruments

thereon and others as may be specified therein or to any

other matter falling within the terms of this Act;

regulations made under this paragraph, and strictly

related to transposition or implementation as aforesaid,

may provide that any provision of this Act or of any

other law shall not apply to matters falling under the

regulations, and that in so far as any of the provisions of

the regulations are inconsistent with the provisions of

this Act or of any other law, such provisions in any such

regulations shall prevail;".

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

be added the following new sub-articles

"(2A) Regulations made under this article may

impose

(a) administrative penalties which may not

exceed one hundred and fifty thousand euro

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

comply, as the case may be;

(b) punishments or other penalties in respect of

any contravention or failure to comply not

exceeding a fine (multa) of four hundred and sixty-

six thousand euro (€466,000) or to a term of

imprisonment not exceeding four years, or to both

such fine and imprisonment;

(c) administrative penalties and fines higher

than one hundred and fifty thousand euro (€150,000),

and fines higher than four hundred and sixty-six

thousand euro (€466,000), where deemed necessary

or appropriate for any contravention of or failure of

compliance with any EU Directive or EU Regulation

or of any regulations made under this article to

transpose or to give effect to any EU Directive or EU

Regulation.

(2B) Regulations made under this article may

prescribe penalties and fines as provided for in sub-

article (2A)(c), for any breach of any provision of the

Act or for any breach of any Financial Market Rules,

transposing and, or implementing any EU Directive or

EU Regulation.".

PART IV

AMENDMENTS TO THE INVESTMENT SERVICES ACT

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".

Article 2 of the principal Act shall be amended as Amendment of

article 2 of the

principal Act.

(a)

sub-article (1) thereof shall be amended as follows

(i) immediately before the definition "AIFM

Directive" there shall be added the following new

definition

" "agricultural commodity derivatives" means

derivative contracts relating to products listed in

Article 1 of, and Annex I, Parts I to XX and XXIV/1

to, Regulation (EU) No. 1308/2013;";

(ii) immediately after the definition "AIFM

Directive" there shall be added the following new

definition

" "ancillary services" means any of the services

listed within the Third Schedule;";

(iii) immediately after the definition "the BRRD"

there shall be added the following new definition

" "certificates" means those securities which are

negotiable on the capital market and which in case of

a repayment of investment by the issuer are ranked

above shares but below unsecured bond instruments

and other similar instruments;";

(iv) immediately after the new definition

"certificates" there shall be added the following new

definition

" "client" means any natural or legal person to

whom an investment services licence holder provides

investment or ancillary services;";

(v) immediately after the new definition "client"

there shall be added the following new definition

" "close links" means a situation in which two or

more natural or legal persons are linked by

(i) participation in the form of

ownership, direct or by way of control, of

20% or more of the voting rights or capital of

an undertaking;

(ii)

"control" which means the

relationship between a parent undertaking

and a subsidiary, in all the cases referred to in

Article 22(1) and (2) of Directive 2013/34/

EU, or a similar relationship between any

natural or legal person and an undertaking,

any subsidiary undertaking of a subsidiary

undertaking also being considered to be a

subsidiary of the parent undertaking which

is at the head of those undertakings;

(iii) a permanent link of both or all of

them to the same person by a control

relationship;";

(vi) immediately after the definition "collective

investment scheme licence", there shall be added the

following new definition

" "commodity derivatives" shall have the same

meaning as that given to the term by Article 2 of the

MiFIR;";

(vii) immediately after the definition "competent

authority", there shall be added the following new

definition

" "Conduct of Business Rules" refers to Rules

issued by the competent authority under various

articles of this Act;";

(viii) immediately after the definition "the CRD"

there shall be added the following new definition

" "credit institution" means a credit institution as

defined in point (1) of Article 4(1) of the CRR;";

(ix) immediately after the definition "the CRR"

there shall be added the following new definition

" "derivatives" means those securities giving the

right to acquire or sell any transferable security or

giving rise to a cash settlement determined by

reference to transferable securities, currencies,

interest rates or yields, commodities or other indices

or measures; and referred to in paragraphs 4 to 10 of

the Second Schedule;";

(x) immediately after the new definition

"derivatives" there shall be added the following new

definition

" "Directive 2013/34/EU" means Directive 2013/

34/EU of the European Parliament and of the

Council of 26 June 2013 on the annual financial

statements, consolidated financial statements and

related reports of certain types of undertakings, as

may be amended from time to time;";

(xi) in the definition "European investment firm"

for the words "MiFID Directive" there shall be

substituted the word "MiFID";

(xii) in the definition "European regulatory

authority" for the words "Article 48 of the MiFID

Directive" there shall be substituted the words "Article

67 of the MiFID";

(xiii) immediately after the definition "exempted

person" there shall be added the following new

definition

" "home Member State or EEA State" means

(a) where the European investment firm

is a natural person, the Member State or EEA

State in which the head office of that person

is situated; or

(b) where the European investment

firm is a legal person, the Member State or

EEA State in which its registered office is

situated; or

(c) where the European investment firm

has, under its national law no registered

office, the Member State or EEA State in

which its head office is situated;";

(xiv) immediately after the new definition "home

Member State or EEA State", there shall be added the

following new definition

" "host Member State or EEA State" means the

Member State or EEA State, other than the home

Member State or EEA State, in which an investment

services licence holder has a branch or provides

investment services and, or activities;";

(xv) the definition "investment advertisement" shall

be substituted as follows

" "investment advertisement" means any form or

medium of marketing activity or communication

disseminated to the public by means of all types of

media, other than a prospectus, which promotes the

purchase or procurement of an investment service or

instrument;";

(xvi) in the definition "investment service", for the

words "any services falling within the First Schedule",

there shall be substituted the words "any service and

activity falling within the First Schedule";

(xvii) immediately after the definition "management

body" there shall be added the following new

definition

" "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;";

(xviii) for the definition "MiFID Directive" there

shall be substituted the following

" "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;";

(xix) immediately after the definition "MiFID", as

substituted, 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

may be 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;

(xx) the definition "Minister" shall be substituted by

the following

" "Minister" means the Minister responsible for

the regulation of Financial Services;";

(xxi) immediately after the definition "Minister"

there shall be added the following new definition

" "multilateral system" means any system or

facility in which multiple third-party buying and

selling trading interests in financial instruments are

able to interact in the system;";

(xxii) immediately after the new definition

"multilateral system", there shall be added the following

new definition

" "multilateral trading facility" or "MTF" means

a multilateral system, operated by an investment

services licence holder or a market operator, which

brings together multiple third-party buying and

selling interests in 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;";

(xxiii) 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;";

(xxiv) immediately after the definition "overseas

regulatory authority" there shall be added the

following new definition

" "parent undertaking" means a parent

undertaking within the meaning of Article 2(9) and

22 of Directive 2013/34/EU;"

(xxv) in the proviso to the definition "qualifying

shareholding", for the words "MiFID Directive", there

shall be substituted the word "MiFID";

(xxvi) immediately after the definition "Regulation

(EU) No. 1095/2010" there shall be added the following

new definition

" "Regulation (EU) No. 1227/2011" means

Regulation (EU) No. 1227/2011 of the European

Parliament and of the Council of 25 October 2011 on

wholesale

energy

market

integrity

and

transparency;";

(xxvii) immediately after the new definition

"Regulation (EU) No. 1227/2011" there shall be added

the following new definition

" "Regulation (EU) No. 648/2012" means

Regulation (EU) No. 648/2012 of the European

Parliament and of the Council of 4 July 2012 on OTC

derivatives, central counterparties and trade

repositories, as may be 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;";

(xxviii) immediately after the new definition

"Regulation (EU) No. 648/2012" there shall be added the

following new definition

" "Regulation (EU) No. 1308/2013" means

Regulation (EU) No. 1308/2013 of the European

Parliament and of the Council of 17 December 2013

establishing a common organisation of the markets in

agricultural products and repealing Council

Regulations (EEC) No. 922/72, (EEC) No. 234/79,

(EC) No. 1037/2001 and (EC) No. 1234/2007;";

(xxix) immediately after the new definition

"Regulation (EU) No. 1308/2013", there shall be added

the following new definition

" "Solvency II Directive" means 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,

as amended from time to time, and includes any

implementing measures that have been or may be

issued thereunder;";

(xxx) immediately after the new definition "Solvency

II Directive" there shall be added the following new

definition

" "structured finance products" means those

securities created to securitise and transfer credit risk

associated with a pool of financial assets entitling the

security holder to receive regular payments that

depend on the cash flow from the underlying

assets;";

(xxxi) immediately after the definition "subsidiary"

there shall be added the following new definition

" "third country" means a country which is not

a Member State or an EEA State;";

(xxxii) immediately after the new definition "third

country" there shall be added the following new

definition

" "trading venue" means a regulated market, an

MTF or an OTF;";

(xxxiii) immediately after the definition "UCITS

Directive" there shall be added the following new

definition

" "UCITS management company" means a

management company as defined in point (b) of

Article 2(1) of the UCITS Directive;"; and

(xxxiv) immediately after the definition "Unit" there

shall be added the following new definition

" "wholesale energy product" means wholesale

energy products as defined in point (4) of Article 2

of Regulation (EU) No. 1227/2011;"; and

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

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

MiFIR".".

Article 2A of the principal Act shall be amended as

(a)

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

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

MiFIR"; and

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

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

Sub-article (3) of article 3 of the principal Act shall be

amended as follows

(a) in paragraph (a) thereof, for the words "an

instrument; or" there shall be substituted the words "an

instrument;";

(b) in paragraph (b) thereof, for the words "in Malta;"

there shall be substituted the words "in Malta; or"; and

(c)

immediately after paragraph (b) thereof, there shall

be inserted the following new paragraph

"(c) a service falls within the Third Schedule;".

Article 6 of the principal Act shall be amended as follows

Amendment of

article 6 of the

principal Act.

(a)

in sub-article (1) thereof –

(i) in sub-paragraph (i) of paragraph (a) of the

proviso thereto, for the words "observe any Investment

Services Rules and regulations made under this Act and

applicable to him;" there shall be substituted the words

"observe regulations made under this Act as well as any

Investment Services Rules and any Conduct of Business

Rules issued by the competent authority made under this

Act and which are applicable to him;";

(ii) immediately after item (c) of sub-paragraph (ii)

of paragraph (a) of the proviso thereto, there shall be

added the following new sub-paragraph (iii)

"(iii) grant an investment services licence solely

for the provision of an ancillary service;";

(iii) in paragraph (c) thereof, for the words "in

article 17C." there shall be substituted the words "in

article 17C;"; and

(iv) immediately after paragraph (c) thereof, as

amended, there shall be added the following new

paragraphs

"(d) grant a licence to an applicant if there are

objective and demonstrable grounds for believing

that the management body of the applicant may pose

a threat to its effective, sound and prudent

management and to the adequate consideration of the

interest of its clients and the integrity of the market;

(e) grant a licence to an applicant unless it is

satisfied that the members of the management body

of the applicant are of sufficiently good repute,

possess sufficient knowledge, skills and experience

and commit sufficient time to perform their functions

with the applicant;";

(b) in paragraph (b) of sub-article (2) thereof, for the

words "For the better carrying out of the provisions of this Act,

the competent authority may, from time to time, issue and

publish Investment Service Rules which shall be binding on

licence holders and others as may be specified therein. Such

Investment Service Rules may lay down additional

requirements" there shall be substituted the words "For the

better carrying out of the provisions of this Act, and to

transpose, implement and give effect to the provisions and

requirements of Directives, Regulations and other legislative

matters of the European Union requiring transposition or

implementation, the competent authority may, from time to

time, issue and publish Investment Services Rules and Conduct

of Business Rules which shall be binding on licence holders and

others as may be specified therein. Such Investment Service

Rules and Conduct of Business Rules may lay down additional

requirements";

(c) for sub-article (4) thereof, there shall be substituted

the following

"(4)(a) Every investment services licence shall

specify the investment service which the holder

thereof has been authorised to provide, and shall,

where applicable, cover one or more of the ancillary

services set out in the Third Schedule;

(b) Every collective investment scheme licence

shall specify the class of collective investment

scheme to which the licence relates."; and

(d) for sub-article (6) thereof, there shall be substituted

the following

"(6) Within six months from the date of the

submission of a properly completed application form

together with the requisite documentation, the competent

authority shall inform an applicant in writing of its

decision whether or not to grant a licence

Provided that, the competent authority shall

inform a UCITS management company which has

submitted an application for authorisation of a UCITS or

where applicable a self-managed UCITS, in writing,

within two months of the submission of a complete

application whether or not the collective investment

scheme has been authorised. Where an investment

company has not designated a management company,

this proviso shall not apply and the first paragraph of this

sub-article shall apply

Provided further that the competent authority

shall inform an AIFM in writing within three months of

the submission of a complete application whether or not

authorisation has been granted. The competent authority

may prolong this period for up to three additional

months where it considers it necessary due to the

specific circumstances of the case and after having

notified the AIFM accordingly.".

In paragraph (b) of sub-article (2) of article 7 of the Amendment of

principal Act, for the words "or of any Investment Services Rules or article

principal Act.

regulations made thereunder," there shall be substituted the words "or

regulations made thereunder or of any applicable Investment Services

Rules or Conduct of Business Rules issued by the competent

For sub-article (6) of article 10A of the principal Act there Amendment of

article 10A of

shall be substituted the following

the principal

Act.

"(6) The competent authority may extend the interruption

referred to in sub-article (5) up to thirty working days if the

proposed acquirer is

(a) a natural or legal person situated or regulated in

countries that are not Member States or EEA States; or

(b) a natural or legal person not subject to

supervision under the MiFID, the UCITS Directive, the

CRD or the Solvency Directive.".

In sub-article (2) of article 11 of the principal Act, for the Amendment of

words "issue such Investment Service Rules" there shall be article

principal Act.

substituted the words "issue such Conduct of Business Rules", and for

the words "Such Investment Service Rules" there shall be substituted

the words "Such Conduct of Business Rules".

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

article 12 of the

principal Act.

(a)

sub-article (1) thereof shall be amended as follows

(i) paragraph (a) thereof shall be substituted by the

following

"(a) amend the definitions of "ancillary services",

"collective investment scheme" and "investment

service" in article 2, as well as the provisions of the

First, Second and Third Schedules;";

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

MiFID Directive" there shall be substituted the words

"the MiFID, the MiFIR";

(iii) in paragraph (l) thereof, for the words "by the

Authority on investment firms," there shall be

substituted the words "by the competent authority on

investment services licence holders,";

(iv) in paragraph (m) thereof, for the words "the

MiFID Directive" there shall be substituted the words

"the MiFID and the MiFIR"; and

(b)

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

"investment firms" there shall be substituted the words

"investment services licence holders";

(c) in sub-article (4) thereof, for the words "may issue

Investment Services Rules within the meaning of article 6 of

this Act" there shall be substituted the words "may issue

Investment Services Rules and, or Conduct of Business Rules

within the meaning of article 6 of this Act";

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

be added the following new sub-article

"(5A) Regulations made under this article may

prescribe administrative penalties and fines as provided

for in sub-article (5)(c), for any breach of any provision

of this Act or for any breach of any Investment Services

Rules or Conduct of Business Rules, transposing and, or

implementing any EU Directive or EU Regulation.".

Sub-article (2) of article 15 of the principal Act shall be

amended as follows

(a)

in paragraph (g) thereof, for the words "the MiFID

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

MiFIR";

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

Financial Markets Act:" there shall be substituted the words

"the Financial Markets Act;";

(c)

immediately after paragraph (h) thereof, there shall

be inserted the following new paragraphs

"(i) require the suspension of trading in a financial

instrument;

(j) request any person to take steps to reduce the

size of the position or exposure;

(k) limit the ability of any person from entering into

a commodity derivative, including by introducing limits

on the size of a position any person can hold at all times

in accordance with Article 57 of MiFID:".

Article 16A of the principal Act shall be amended as Amendment of

article 16A of

follows

the principal

Act.

(a) in sub-article (1) thereof, for the words "regulations

or Investment Services Rules issued thereunder," there shall be

substituted the words "regulations, Investment Services Rules

or Conduct of Business Rules issued thereunder,"; and

(b) in sub-article (4) thereof, for the words "regulations

or Investment Services Rules issued thereunder," there shall be

substituted the words "regulations, Investment Services Rules

or Conduct of Business Rules issued thereunder,".

In article 16B of the principal Act, for the words Amendment of

"Investment Services Rules, or administrative provisions" there shall article

the principal

be substituted the words "Investment Services Rules, Conduct of Act.

Business Rules, or administrative provisions".

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

article 17 of the

follows

principal Act.

(a)

in sub-article (1) thereof, for the words "Article

56(1) of the MiFID Directive" there shall be substituted the

words "Article 79(1) of the MiFID";

(b)

in sub-article (2) thereof

(i) for the words "the CRD, the MiFID Directive"

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

the MiFID, the MiFIR";

(ii) for the words "regulations or Investment

Services Rules issued thereunder:" there shall be

substituted the words "regulations, Investment Services

Rules or Conduct of Business Rules issued thereunder:";

and

(iii) for the words "systemically relevant investment

firms" in the proviso thereto, there shall be substituted

the words "systemically relevant investment services

licence holders".

(c)

in sub-article (3) thereof

(i) for the words "Article 56(1) of the MiFID

Directive" there shall be substituted the words "Article

79(1) of the MiFID"; and

(ii) for the words "pursuant to the MiFID

Directive." there shall be substituted the words "pursuant

to the MiFID and the MiFIR.";

(d)

sub-article (7) thereof shall be amended as follows

(i)

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

MiFID Directive;" there shall be substituted the words

"the MiFID and the MiFIR;"; and

(ii) in paragraph (f) thereof, for the words "and the

MiFID Directive." there shall be substituted the words

"the MiFID and the MiFIR.";

(e) in paragraph (c) of sub-article (8) thereof, for the

words "investment firms" there shall be substituted the words

"investment services licence holders";

(f)

in sub-article (10) thereof, for the words "the MiFID

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

MiFIR"; and

(g) in sub-article (12) thereof, for the words "the MiFID

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

MiFIR".

In the proviso to sub-article (1) of article 17A of the

principal Act, for the words "the MiFID Directive" there shall be

substituted the words "the MiFID".

In article 17B of the principal Act, for the words "Article Amendment of

56(1) of the MiFID Directive" there shall be substituted the words article

the principal

"Article 79(1) of the MiFID".

Act.

In paragraph (a) of sub-article (1) of article 17C of the Amendment of

principal Act, for the words "investment services licence or an article

the principal

equivalent authorisation" there shall be substituted the words Act.

"investment services licence or equivalent authorisation or of a

market operator".

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

article 17E of

follows

the principal

Act.

(a) in sub-article (1) thereof, for the words "the MiFID

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

MiFIR"; and

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

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

MiFIR".

Sub-article (2) of article 17F of the principal Act shall be Amendment of

article 17F of

amended as follows

the principal

Act.

(a) in paragraph (v) thereof, for the words "and other

financial institutions." there shall be substituted the words "and

other financial institutions;"; and

(b)

immediately after paragraph (v) thereof, there shall

be inserted the following new paragraphs

"(vi) overseeing persons active on emission

allowance markets for the purpose of ensuring a

consolidated overview of financial and spot markets;

(vii) overseeing persons active on agricultural

commodity derivatives markets for the purpose of

ensuring a consolidated overview of financial and spot

markets.".

Sub-article (1) of article 21 of the principal Act shall be Amendment of

article 21 of the

amended as follows

principal Act.

(a) in paragraph (a) thereof, for the words "any

Investment Services Rules and regulations made under it," there

shall be substituted the words "any regulations, Investment

Services Rules and Conduct of Business Rules issued under it",

and for the words "Investment Services Rules, directive" there

shall be substituted the words "Investment Services Rules,

Conduct of Business Rules, directive"; and

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

Services Rules, directive," there shall be substituted the words

"Investment Services Rules, Conduct of Business Rules,

directive,".

In sub-article (1) of article 25 of the principal Act, for the

words "Investment Services Rules, directive" there shall be

substituted the words "Investment Services Rules, Conduct of

Business Rules, directive".

Article 26 of the principal Act shall be amended as follows

(a)

in sub-article (1) thereof

(i) for the words "Investment Services Rules or

regulations made thereunder," there shall be substituted

the words "regulations, Investment Services Rules or

Conduct of Business Rules made thereunder,"; and

(ii) in the first proviso thereof, for the words "the

MiFID Directive," there shall be substituted the words

"the MiFID, the MiFIR,";

(b) in sub-article (2) thereof, for the words "Article 58

of the MiFID Directive" there shall be substituted the words

"Article 81 of the MiFID"; and

(c) in sub-article (3) thereof, for the words "under the

MiFID Directive:" there shall be substituted the words "under

the MiFID and the MiFIR:".

In article 27 of the principal Act, for the words "any

Investment Services Rules or regulations made thereunder," there

shall be substituted the words "any regulations, Investment Services

Rules or Conduct of Business Rules made thereunder,", and for the

words "any functions under this Act, or any Investment Services

Rules or regulations aforesaid" there shall be substituted the words

"any functions under this Act, regulations, Investment Services Rules

or Conduct of Business Rules aforesaid".

In article 28 of the principal Act, for the words

"Investment Services Rules or regulations made thereunder," there

shall be substituted the words "regulations, Investment Services Rules

or Conduct of Business Rules made thereunder,".

The First Schedule to the principal Act shall be amended Amendment of

the First

Schedule to the

principal Act.

(a) in the title thereof, for the word "Services" there shall be

substituted the word "Investment Services and Activities";

(b) for paragraph 2 thereof, there shall be substituted the

"2.

Execution of orders on behalf of clients

Acting to conclude agreements to buy or sell

one or more instruments on behalf of clients and

includes the conclusion of agreements to sell

instruments issued by an investment services licence

holder or a credit institution at the moment of their

issuance."; and

(c) immediately after paragraph 10 thereof, there shall

be added the following new paragraph

"11.

Operation of an Organised Trading Facility

The operation of an OTF whereby 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.".

The Second Schedule to the principal Act shall be amended Amendment of

the Second

Schedule to the

principal Act.

(a) in paragraph 4 thereof, for the words "yields, or

other derivative instruments," there shall be substituted the

words "yields, emission allowances or other derivative

instruments,";

(b)

in paragraph 5 thereof

(i) for the words "forward rate agreements" there

shall be substituted the words "forwards"; and

(ii) for the words "(otherwise than by reason of a

default or other termination event)" there shall be

substituted the words "other than by reason of default or

other termination event;";

(c)

in paragraph (6) thereof, for the words "and, or a

Multilateral Trading Facility within the meaning of the First

Schedule;" there shall be substituted the words "a Multilateral

Trading Facility, or an Organised Trading Facility, except for

wholesale energy products traded on an Organised Trading

Facility that must be physically settled;";

(d) in paragraph 7 thereof, for the words "other

derivative instruments, having regard to whether, inter alia,

they are cleared and settled throughout recognised clearing

houses or are subject to regular margin calls." there shall be

substituted the words "other derivative instruments.";

(e) for paragraph 10 thereof, there shall be substituted

the following

"10.

Options, futures, swaps, forward rate

agreements and any other derivative contracts relating to

climatic variables, freight rates or inflation rates or other

official economic statistics that must be settled in cash or

may be settled in cash at the option of one of the parties

other than by reason of default or other termination

event, as well as any other derivative contracts relating

to assets, rights, obligations, indices and measures not

otherwise mentioned in this Schedule, which have the

characteristics of other derivative financial instruments,

having regard to whether, inter alia, they are traded on a

regulated market, OTF, or an MTF;"; and

(f)

immediately after paragraph 12 thereof, there shall

be inserted the following new paragraph 13

"13. Emission allowances consisting of any units

recognised for compliance with the requirements of

Directive 2003/87/EC (Emissions Trading Scheme).".

Immediately after the Second Schedule to the principal Act

there shall be inserted the following new Third Schedule

"Third Schedule

(Article 2)

Ancillary Services

1. Safekeeping and administration of financial instruments

for the account of clients, including custodianship and related

services such as cash, collateral management and excluding

maintaining securities accounts at the top tier level;

2. Granting credits or loans to an investor to allow him to

carry out a transaction in one or more financial instruments, where the

firm granting the credit or loan is involved in the transaction;

3. Advice to undertakings on capital structure, industrial

strategy and related matters and advice and services relating to

mergers and the purchase of undertakings;

4. Foreign exchange services where these are connected to

the provision of investment services;

5. Investment research and financial analysis or other forms

of general recommendation relating to transactions in financial

instruments;

6. Services related to underwriting;

7. Investment services and activities as well as ancillary

services of the type included under Section A or B of Annex 1 related

to the underlying of the derivatives included under points (5), (6), (7)

and (10) of Section C of MiFID where these are connected to the

provision of investment or ancillary services.".

PART V

AMENDMENTS TO THE BANKING ACT

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.

principal Act".

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 "competent

authority", there shall be added the following new definition

" "Conduct of Business Rules" means Rules, other

than Banking Rules, which are issued by the competent

authority in terms of article 4;";

(b) immediately after the new definition "Conduct of

Business Rules", there shall be added the following new

definition

" "connected person" means a person whose

information is provided to the bank by, or on behalf of, a

customer of the bank or by, or on behalf of, a person who

seeks to become a customer of the bank, in connection

with services from the bank requested by such customer,

or by such person seeking to become a customer of the

bank, provided that the information is required by the

bank for the purposes of fulfilling a statutory

obligation;"; and

(c)

the definition "Minister" shall be substituted as

" "Minister" means the Minister responsible for the

regulation of Financial Services;";

(d) immediately after the definition " "qualifying

holding" or "qualifying shareholding" ", there shall be added the

following new definition

" "recognised jurisdiction" means

(a) a Member State and Switzerland;

(b) any country that is a member of the

Organisation for Economic Co-operation and

Development (OECD);

(c) a country that is a signatory of the

International

Organisation

of

Securities

Commissions (IOSCO) Multilateral Memorandum of

Understanding;

(d) a country that is a signatory of the

International Association of Insurance Supervisors

(IAIS) Multilateral Memorandum of Understanding;

(e) any jurisdiction which is a member of the

Basel Committee on Banking Supervision;

(f) any jurisdiction falling within the

Recommendations

on

the

equivalence

of

confidentiality regimes issued by the EBA from time

to time; or

(g) any other jurisdiction with whom the

competent authority has signed a Memorandum of

Understanding;".

Article 4 of the principal Act shall be amended as follows

(a) for sub-article (6) thereof there shall be substituted

the following

"(6) The competent authority may make, amend or

revoke Banking Rules and Conduct of Business Rules as

may be required for carrying into effect any of the

provisions of this Act and any regulations made

thereunder, and to transpose, implement and give effect

to the provisions and requirements of Directives,

Regulations and any other legislative matters of the

European

Union

requiring

transposition

or

implementation.";

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

Rules shall be binding" there shall be substituted the words

"Banking Rules and Conduct of Business Rules shall be

binding"; and

(c) in sub-article (10) thereof, for the words "Banking

Rules" there shall be substituted the words "Banking Rules and

Conduct of Business Rules".

Sub-article (6) of article 34 of the principal Act shall be Amendment of

article 34 of the

substituted by the following new sub-article

principal Act.

''(6) Notwithstanding the provisions of the Professional Cap. 377.

Secrecy Act and of article 257 of the Criminal Code, a credit Cap. 9.

institution may, where necessary for the proper carrying out of

its activities or for the fulfilment of its obligations,

communicate any information which is in its possession and

which is related to the affairs of a customer or of a connected

person to

(a) other members of the group of companies of

which that institution forms part, which carry out any

activities licensed or authorised by the competent

authority under this Act, the Trusts and Trustees Act, the Cap. 331.

Investment Services Act, the Financial Institutions Act Cap.

370. or the Insurance Business Act, or which otherwise carry Cap. 403.

out activities equivalent to those activities mentioned in

this paragraph, and which are authorised by an overseas

regulatory authority in a recognised jurisdiction; or

(b) any auditor or expert engaged by the credit

institution to carry out a compliance assessment,

monitoring, auditing or a similar review in relation to

any of the activities or risk management processes of the

credit institution or of the group of companies of which

it forms part in order to assess the credit institution’s

compliance with any statutory obligations relating to the

prevention of money laundering and the funding of

terrorism;

(c) an outsourcing service provider in whose favour

a credit institution has outsourced any of its activities.

This shall be without prejudice to article 19A

Provided that, for the purposes of this sub-

article, any such communication of information shall be

made subject to all proper controls and safeguards, so

that it shall be the responsibility of the credit institution

to ensure that the group company member, the auditor or

expert, or the outsourcing service provider, as the case

may be, is subject to equivalent obligations of data

protection, confidentiality and care as required under

Maltese law and any European Union law, including

Regulation (EU) 2016/679 of the European Parliament

and of the Council of 27 April 2016 on the protection of

natural persons with regard to the processing of personal

data and on the free movement of such data, and

repealing Directive 95/46/EC (General Data Protection

Regulation)

Provided further that for the purpose of this

article, advertising, marketing or promotion, shall not,

under any circumstances, be considered as necessary for

the proper carrying out of the activities of a credit

institution or for the fulfilment of its obligations

Provided further that communication of

information made in terms of paragraphs (a) to (c) shall

be without prejudice to any provision of the Prevention

of Money Laundering and Funding of Terrorism

Regulations.''.

PART VI

AMENDMENTS TO THE COMPANIES ACT

This Part amends and shall be read and construed as one

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

principal Act".

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

amended as follows

(a)

immediately after the definition "body corporate"

there shall be added the following new definition

" "central securities depository" means a legal

person, that operates a securities settlement system and

is authorised to provide at least one other of the

following services

(i) initial recording of securities in a book-entry

system;

(ii) providing and maintaining

securities

accounts at the top tier level;";

(b) the definition "company secretary" shall be substituted

by the following

" "company secretary" means a person who holds the

office of a company secretary in terms of article 138;";

(c)

immediately after the definition "debenture", there

shall be added the following new definition

" "dematerialised form" in relation to securities

issued by a company means the form where such

securities exist only as book-entry records;";

(d) immediately after the definition "host Member

State" there shall be added the following new definition

" "immobilisation" means the act of concentrating

location of physical certificates relating to securities

issued by a company in a central securities depository in

a way which enables subsequent transfers to be made by

book-entry;";

(e)

immediately after the definition "public-interest

entities" there shall be added the following new definition

" "recognised jurisdiction" means

(a) a Member State;

(b) an EEA State;

(c) any country that is a member of the

Organisation for Economic Co-operation and

Development (OECD) established in 1961;

(d) any country that is a signatory of the IOSCO

Multilateral Memorandum of Understanding; or

(e) any other jurisdiction where the competent

authority, as referred to in the Financial Markets Act,

has a memorandum of understanding covering

securities;".

In paragraph (h) of sub-article (1) of article 69 of the

principal Act, for the words "or secretaries;" there shall be substituted

the words "or secretaries, or where a company secretary is a body

corporate, the name, registration number and registered office of the

body corporate;".

For sub-article (3) of article 118 of the principal Act, there

shall be substituted the following

"(3) This article shall not apply to shares or debentures of a

company held or evidenced in a dematerialised form or

represented in book-entry form as immobilisation.".

Article 123 of the principal Act shall be amended as

(a)

paragraph (c) of sub-article (1) thereof shall be

substituted by the following

"(c) the date at which any person ceased to be a

member.";

(b) the provisos to sub-article (1) thereof shall be

deleted; and

(c) immediately after sub-article (3) thereof, there shall

be added the following new sub-article

"(3A) Notwithstanding the provisions of this article,

a company may make arrangements for the register of its

members to be kept in a dematerialised form or

represented in book-entry form as immobilisation with a

central securities depository established in a recognised

jurisdiction

Provided that the company shall remain

responsible for the proper keeping of the register and

shall keep a copy of all entries relating to registered

shareholders held by the central securities depository.".

Immediately after sub-article (3) of article 124 of the Amendment of

article 124 of

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

the principal

Act.

"(3A) Notwithstanding the provisions of this article, a

company may make arrangements for the register of debentures

to be kept in a dematerialised form or represented in book-entry

form as immobilisation with a central securities depository

established in a recognised jurisdiction

Provided that the company shall remain responsible

for the proper keeping of the register and shall keep a copy of all

entries relating to registered debenture holders held by the

central securities depository.".

Article 138 of the principal Act shall be amended as Amendment of

article 138 of

follows

the principal

Act.

(a)

sub-article (2) thereof shall be amended as follows

(i) in paragraph (b) thereof, for the words

"company secretary to the company." there shall be

substituted the words "company secretary to the

company;"; and

(ii) immediately after paragraph (b) thereof, as

amended, there shall be added the following new

paragraph

"(c) have as company secretary a

body corporate, unless such body

corporate is duly registered as a company

service provider in terms of the Company

Service Providers Act

Provided that, for the purposes

of this paragraph, a body corporate which

does not require registration in terms of

article 3(1)(a) and (b) of the Company

Service Providers Act may also act as a

company secretary in terms of this

article.";

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

functions of company secretary." there shall be substituted the

words "the functions of company secretary, or is a body

corporate as referred to in sub-article (2)(c).";

(c) in sub-article (4) thereof, for the words "appoint

another individual to fill the post" there shall be substituted the

words "appoint another individual, or a body corporate as

referred to in sub-article (2)(c), to fill the post"; and

(d) in sub-article (5) thereof, for the words "they shall

appoint another individual in his stead within fourteen days

from the date of his removal." there shall be substituted the

words "they shall appoint another company secretary within

fourteen days from the date of such removal.".

In sub-article (1) of article 146 of the principal Act, for the

words ''together with the name and residence of any new director'' there

shall be substituted the words ''together with the name and residence or

name, registered office and registration number, as the case may be, of

any new director".

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

amended as follows

(a)

in paragraph (o) thereof, for the words "such

Directives; and" there shall be substituted the words "such

Directives;";

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

be added the following new paragraph

"(oa) provide for the exemption of certain small

undertakings from the provisions of Chapter IX of Title

I of Part V of this Act and from the requirements

imposed by article 179, subject to such conditions and

requirements as may be prescribed; and".

PART VII

AMENDMENTS TO THE COMPANY SERVICE PROVIDERS

ACT

This Part amends the Company Service Providers Act, and

it shall be read and construed as one with the Company Service

Providers Act, hereinafter in this Part referred to as "the principal

Act''.

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

definition "Minister" shall be substituted as follows

" "Minister" means the Minister responsible for the

regulation of Financial Services;".

In sub-article (1) of article 3 of the principal Act, the words Amendment of

article 3 of the

"resident or" shall be deleted.

principal Act.

In paragraph (b) of sub-article (1) of article 5 of the principal Amendment of

Act, for the words "such person is resident or operating in Malta;" there article

5 of the

principal Act.

shall be substituted the words "such person is operating in or from

Malta;".

Passed by the House of Representatives at Sitting No. 65 of the

18th December, 2017.

ANĠLU FARRUGIA

Speaker

RAYMOND SCICLUNA

Clerk of the House of Representatives

€5.94