ACT No. XXXI of 2018 AN ACT to provide for the establishment of an Authority to be known as the Malta Digital Innovation Authority, to support the development and implementation of the guiding principles described in this Act and to promote consistent principles for the development of

I assent.

(L.S.)

MARIE-LOUISE

COLEIRO PRECA

President

20th July, 2018

ACT No. XXXI of 2018

AN ACT to provide for the establishment of an Authority to be

known as the Malta Digital Innovation Authority, to support the

development and implementation of the guiding principles described

in this Act and to promote consistent principles for the development of

visions, skills, and other qualities relating to technology innovation,

including distributed or decentralised technology, and to exercise

regulatory functions regarding innovative technology, arrangements

and related services and to make provision with respect to matters

ancillary thereto or connected therewith.

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 Malta Digital

Innovation Authority Act, 2018.

(2) This Act shall come into force on such date as the Minister

for Digital Economy may by notice in the Gazette establish, and

different dates may be so established for different provisions and

different purposes of the Act.

(1)

In this Act, unless the context otherwise requires -

[Article 55 and 57]

National Competent Authorities and the Joint Regulatory Efficiency

Board

The Joint Regulatory Efficiency Board shall be composed of not

less than five and not more than eleven persons, having

expertise in the authorisation processes of the particular

nominating authority or having general expertise based on past

experiences or academic focus, and having senior or executive

authority with decision-taking powers in the relevant competent

authorities, who shall be nominated by the following persons

(i)

the Minister responsible for technology, the Minister

for Justice and the Minister for Finance;

(ii)

the Chair of the Authority;

(iii)

the Chair of the MFSA;

(iv)

the Chair of the MGA;

(v)

the Chair of MCA;

(vi)

the Chair of MITA.

Each person appointed shall designate a substitute with similar

experiences or qualifications to attend meetings when he or she

is not able to attend.

The persons are appointed for three years and may be re-

appointed.

The competent authorities not mentioned in the above list shall be

invited to send a representative to participate in meetings which

are of specific interest to them.

PART I

National Competent Authorities to issue Joint Guidelines

The following are intended to be high level principles.

National competent authorities shall issue joint guidelines

regarding the combined supervision of sectors by the relevant

national competent authority and the Authority in so far as relates to

innovative technology arrangements and related matters. These

guidelines shall ensure that the right priorities are applied in the

particular case so as to achieve the best outcome.

An authority will have a principal responsibility (in which case

it will take the regulatory lead) or a secondary responsibility (in

which case it will carry out a supporting function) depending on the

subject matter.

PART II

Guiding Principles relating to the establishment of co-ordinating units

in National Competent Authorities relating to Innovative Technology

Arrangements.

1. To avoid duplication it is necessary that national

competent authorities are not required to act on areas beyond their

natural competence. Given the fact that innovative technology

arrangements will, in the near future, underpin many sectors of

society, including many regulated areas, even to the extent of

supporting the very regulatory functions through regulatory

algorithms, it is important that the focus on the quality of regulation

of the innovative technology arrangement itself be specialised and

effective. Regulatory authorities, which have a different focus, should

not all seek to build up regulatory capacity to deal with innovative

technology arrangements when they arise in the areas of their specific

competence as in such cases the innovative technology arrangement

will be an ancillary factor.

This approach will ensure that there will be focus and

concentration of knowledge at a deeper level in the Authority which

is the appropriate authority created to regulate innovative technology

arrangements and related innovative technology services, the

competition for the very limited pool of persons with innovative

technology arrangements competence among Malta’s national

competent authorities will be avoided, as will be the risk of not

enough resources being available for the Authority and other

authorities to meet their goals and carry out their functions to a level

of excellence required.

It is for this reason that national competent authorities are to co-

ordinate their teams having innovative technology arrangements and

innovative technology services as their focus so that they will have

specialised units having knowledge and sensitivity but not necessarily

integrate the innovative technology arrangements team into their

main regulatory functions. Any support that the specialised units

require will be supplied by the Authority through its combined and

integrated resources.

2. The Authority, being aware of the array of other national

competent authorities who have established a specialised unit in their

organisation, will seek to create subject matter teams within the

Authority to ensure awareness of the context in which the specialised

units are actually working, so that over time, shared information will

establish a common understanding on the part of both authorities to

achieve the best results for both authorities for the persons applying

for innovative technology authorisations in all sectors as well as users

or consumers in each sector.

When the Authority is aware that an application for the

authorisation of an innovative technology arrangement is being made

in the context of a project, and it is probable that the two applications

will be progressing at the same time, it will be aware of the role of the

other national competent authority, its duties and authorisation

processes and its requirements for the particular type of authorisation

being requested, so that when the innovative technology arrangement

application is being considered, the right priorities are applied to the

context. The two authorities will be able to work together for the best

outcomes.

The opportunity for the national regulatory system, through the

above, is that through combined analysis, experience and supervision

of each sector where two regulators (one regulating the subject matter

and the other regulating the innovative technology arrangements) are

involved, it will be possible to develop regulatory smart contracts and

innovative technology arrangements which carry out regulatory

functions for the benefit of every non-innovative technology

regulator in its own area of specialisation where operators are using

innovative technology arrangements.

"this Act" means the Malta Digital Innovation Authority Act,

2018, and includes any regulations made, and rules and guidelines

issued thereunder unless the context otherwise requires;

"Authority" means the Malta Digital Innovation Authority

established by article 5 and any references in this Act or any other law

to the Authority shall, unless the context otherwise requires, be

construed as including a reference to any person authorised by the

Authority to act for or on its behalf;

"authorisation" shall include all forms of recognition as defined

in this article;

"Board" means the Board of Governors of the Authority

composed of the Chairman and members appointed in accordance

with article 5;

"Chairman" means the Chairman of the Authority and includes,

in the circumstances mentioned in article 5(3), the Deputy Chairman

or any other person appointed to act as Chairman;

"decision" includes any directive, determination, direction,

condition, measure, requirement or specification, howsoever

described, made by the Authority;

"directive" means a directive issued by the Authority in terms of

article 6;

"DLT", "distributed ledger technology", "decentralised ledger

technology" means a database system in which information is

recorded, consensually shared, and synchronised across a network of

multiple nodes, or any variations thereof, as further described in the

First Schedule of the Innovative Technology Arrangements and

Services Act, 2018, and the term "node" means a device and data

point on a computer network;

"innovative technology arrangements" means the intrinsic

elements including software, codes, computer protocols and other

architectures which are used in the context of DLT, smart contracts

and related applications as well as other arrangements as may be

further defined in the Innovative Technology Arrangements and Act No. XXXIII

Services Act, 2018;

of 2018.

"innovative technology authorisation'' includes any form of

recognition issued under this Act, or any special law which the

Authority is entitled to administer or enforce, whether with reference to

innovative technology arrangements or with reference to innovative

technology services;

''innovative technology services'' are those services in relation to

innovative technology arrangements as are designated in the

Innovative Technology Arrangements and Services Act, 2018;

Act No. XXXIII

of 2018.

"Member State" means a Member State of the European Union;

"Minister" means the Minister responsible for digital economy;

"national competent authorities" means the authorities and other

bodies referred to in the First Schedule;

"recognised jurisdiction" means a member of the European

Union or the EEA or the Organisation for Economic Co-operation

and Development as well as any other jurisdiction approved by notice

of the Minister from time to time for the purpose of this definition;

"recognition" refers to the formal recognition by the Authority

which is sought with reference to an innovative technology services

provider or an innovative technology arrangement and which the

Authority is entitled to grant through or by the provision, issuance,

validation, confirmation, certification or otherwise in writing to an

applicant and includes any licence, permission, authorisation,

approval, confirmation, certification by or registration with the

Authority in terms of any special law which the Authority is entitled

to administer or enforce and the terms ''authorisation'' or

''authorisation holder'' in the provisions of this Act shall be construed

as a reference to the relevant form of recognition, or the holder

thereof, as the case may be;

''smart contract'' means a form of innovative technology

arrangement consisting of

(a)

a computer protocol; and, or

(b) an agreement concluded wholly or partly in an

electronic form, which is automatable and enforceable by

execution of computer code, although some parts may require

human input and control and which may be also enforceable by

ordinary legal methods or by a mixture of both;

''special law'' means an Act of Parliament and any regulations

made thereunder;

"Tribunal" means the Administrative Review

Tribunal

established by article 5 of the Administrative Justice Act;

"user" means any person who uses or otherwise participates in

or engages with an innovative technology arrangement of any type

whether he is a holder of any direct or indirect ownership or control

rights or otherwise and includes but is not restricted to miners,

consumers, oracles, persons with governance, compliance, regulatory

or other functions and may form part of a class of users with the same

rights and powers or otherwise.

(2) The Minister, acting on the advice of the Authority, may by

regulations, and the Authority, with the consent of the Minister, may

by guidelines clarify any definition in sub-article (1) or provide

additional definitions in support of the definitions in sub-article (1).

(3) Where reference is made in this Act, or in any special law

which the Authority is entitled to administer or enforce, to the

protection of the public interest and consumers, it is intended to refer

to whenever members of the public and consumers in any country

may use the innovative technology arrangements or smart contracts,

and shall not be construed solely as a reference to members of the

public or consumers in Malta.

PART II

Guiding Principles

[Article 5(4)(d)]

Regulatory laws

The laws in relation to which the National Competent

Authorities have a regulatory function are

(a)

Malta Financial Services Authority Act;

(b)

Gaming Act; and

(c)

Malta Communications Authority Act.

Passed by the House of Representatives at Sitting No. 137 of the 4th

July, 2018.

ANĠLU FARRUGIA

Speaker

JOSANNE PARIS

Acting Clerk of the

House of Representatives

€5.76

The Government shall, through the establishment of the

Authority in Malta, seek the development of the innovative technology

sector in Malta through proper recognition and regulation of relevant

innovative technology arrangements and related services.

This shall be done

(a) in full respect of the importance of not hindering

innovation and the efforts and potential of the start-up sector in

this area of activity;

(b) considering that the approach to recognition and

regulation will be moderated by the pace of change and

development taking place in this sector; and

(c)

in a manner ensuring that there are standards in

place for the protection of consumers and investors, the

integrity of the market and the public interest in general to be

protected against abuse and non-compliance with mandatory

laws intended for such purposes.

(1) The Government shall determine Malta’s policies Main policies

and objectives with regard to innovative technology arrangements and objectives.

and services to support the development of Malta as a centre of

excellence for innovative technology arrangements and shall

appropriate such funds and provide such resources, as it considers

necessary to achieve such aims.

(2) The Authority shall endeavour to achieve the following

main objectives and policies

(a) to promote governmental policies that favour the

deployment, within the public administration, of innovative

technology arrangements, by the Government where necessary

or appropriate;

(b) to foster, promote and facilitate the advancement

and utilisation of innovative technology arrangements and their

design and uses;

(c)

to promote education on ethical standards and

legitimate exploitation of innovative technology arrangements;

(d) to safeguard, maintain and protect the reputation of

Malta in the use of innovative technology arrangements;

(e)

to protect users of innovative technology

arrangements, including consumers and the public in general

and to ensure standards to meet their legitimate expectations

and protect against misuse;

(f)

to provide a sound financial basis for the Authority

to be able to achieve its purposes;

(g) to harmonise practices, and, where applicable, to

facilitate the adoption of standards, on innovative technology

arrangements in Malta in line with international norms,

standards, rules and, or laws and with those of the European

Union in particular;

(h) to assist the competent data protection authorities in

safeguarding the data protection rights of data subjects and

assist other competent authorities in the protection of vulnerable

persons and the promotion of fair competition and consumer

choice;

(i)

to promote, and if required enforce, ethical and

legitimate criteria in the design and use of innovative

technology arrangements and any application, software or

derivative product from it or intrinsically part of or connected to

it as well as to ensure quality of services and security therein;

(j)

through collaboration with other regulatory bodies

and competent authorities with responsibility for the prevention

of money laundering and the financing of terrorism and crime in

general, to support the prevention of money laundering, terrorist

financing and the commission of any other crime in or through

the use of innovative technology arrangements;

(k) to promote transparency and auditability in the use

of innovative technology arrangements, and any application,

software, or derivative product from it or intrinsically part of or

connected to it;

(l)

to promote ease of accessibility to the facilities

provided by publicly available innovative technology

arrangements and the recognition and implementation of the

right of exit, withdrawal or termination of participation from

any arrangement in the use of innovative technology

arrangements; and

(m) to promote legal certainty in the application of laws,

in a national and cross-border context, and the development of

appropriate legal principles for the effective application of law

to innovative technology arrangements.

(3) The Authority shall encourage the development of

innovative technology in as wide a manner and for as many uses as

possible so as to achieve its benefits in as many economic and social

sectors as possible, including, but not limited to, in financial services,

health and education, voluntary organisations, public administration

and transport.

(4) The Authority shall also encourage the development of

regulatory processes in relation to innovative technology

arrangements to support all national competent authorities regulating

different sectors to better administer the laws entrusted to their

administration for the public benefit.

PART III

Establishment, Functions and Conduct of Affairs of the Authority

(1) There shall be a body, to be known as the Malta Establishment

Digital Innovation Authority, the affairs and business of which shall and

of the Malta

be carried out by a Board composed of a Chairman and not less than Digital

Innovation

four and not more than eight other members, who, in the opinion of Authority.

the Minister, shall be persons with the relative qualifications and

experience inter alia in matters relating to innovative technology

arrangements and innovative technology services, financial services,

audit and accounting, law, regulation and other subjects which may be

relevant to the supervisory and regulatory competence of the

Authority under this Act or under any special law which the Authority

is entitled to administer or enforce.

(2) The members of the Board shall be appointed by the

Minister for a term of one year or for such longer period as may be

specified in the instrument of appointment subject to a maximum of

three years and the members so appointed may be re-appointed on the

expiration of their term of office.

(3) The Minister may designate one of the members of the

Board other than the Chairman as Deputy Chairman and the member

so designated shall have all the powers and perform all the functions

of the Chairman during the Chairman’s absence or inability to act as

Chairman or during any vacancy in the office of Chairman.

(4) A person shall not be qualified to hold office as a member

of the Board if he -

(a) is a Minister, Parliamentary Secretary or a member

of the House of Representatives; or

(b)

is a judge or magistrate of the courts of justice; or

(c)

has a financial or other interest in any enterprise or

activity which is likely to affect, in a general manner, the

discharge of his functions as a member of the Board as a result

of a conflict of interest

Provided that should any nominee to such a position

declare a conflict of interest or potential conflict of interest

based on a specific context only and provides full information,

this may be reviewed by the Minister and the Board, and if the

conflict of interest is not considered one which would disqualify

the nominee, this disqualification shall not apply but it shall be

the subject of a written guidance on the part of the Minister,

and, or the Board which shall apply to the member for as long as

such specific context subsists, and this without prejudice to sub-

article (9); or

(d) has been convicted of a criminal offence affecting

public trust, or of theft or fraud, or of knowingly receiving

property obtained by theft or fraud or of bribery or of money

laundering, or of a criminal offence under a regulatory law

referred to in the Second Schedule, or is being investigated for

such criminal offence.

(5) Subject to the provisions of this article, the office of a

member of the Board shall become vacant -

(a)

at the expiration of his term of office; or

(b) if any circumstances arise that, if he were not a

member of the Board, would cause him to be disqualified for

appointment as such.

(6) A member of the Board may only be removed from office

by the Minister for any one or more of the following reasons

(a) if the member due to infirmity of mind or of body or

for any other cause is effectively unable to continue to discharge

his duties as a member;

(b) if the behaviour or performance of the member

brings into question his suitability or ability to continue as a

member, in particular for behaviour that affects or may affect

his reputation, independence or autonomy, or the reputation,

independence or autonomy of the Authority;

(c)

if the member fails to perform his duties for a

prolonged period without any valid justification and it shall be a

cause for the removal of a member if that member for any

reason fails to perform his duties, including attending Board

meetings, for a continuous period exceeding six months.

(7) If the Minister removes a member of the Board from

office, such removal shall be made public by no later than the

effective date of removal from office. At the same time, the Minister

shall provide the member concerned with a statement of reasons for

his removal, and the member shall have the right to request that the

statement of reasons for his removal be made public, in which case

the Minister shall publish such statement.

(8) If a member resigns or if the office of a member of the

Board is otherwise vacant or if a member is for any reason unable to

perform the functions of his office, the Minister may appoint a person

who is qualified to be appointed to be a member to be a temporary

member of the Board; and any person so appointed shall cease to be

such a member when a person has been appointed to fill the vacancy

or, as the case may be, when the member who was unable to perform

the functions of his office resumes those functions.

(9) Any member of the Authority who has any direct or

indirect interest in any decision or contract made or proposed to be

made by the Board, not being an interest which disqualifies such

member from remaining a member, shall disclose the nature of his

interest at the first meeting of the Board after the relevant facts have

come to his knowledge; such disclosure shall then be recorded in the

minutes of the Board, and the member having an interest as aforesaid

shall withdraw from any meetings at which such decision or contract

is discussed. Any such disclosure shall be communicated to the

Minister without delay. Where the interest of the member is such as to

disqualify him from remaining a member, he shall report the fact

immediately to the Minister and tender his resignation.

(10) With reference to conflicts of interest, the Board shall, with

the consent of the Minister, issue guidelines which shall determine

which conflicts of interest require the member concerned to resign.

(1) It shall be the purpose of the Authority to address Purpose,

the development in Malta of all innovative technology arrangements functions

powers of the

and innovative technology services in order to achieve the principles Authority.

and objectives outlined in Part II.

(2) It shall be the duty of the Authority to exercise such

supervisory and regulatory functions in the field of innovative

technology arrangements and innovative technology services as may

from time to time be assigned to the Authority by any special law.

(3) The Authority shall, without prejudice to any other power

or function conferred to it by this Act or any other law, and in

accordance with any laws which may be applicable to it

(a) regulate, monitor and supervise the provision of such

innovative technology arrangements and innovative technology

services in or from Malta;

(b) keep under review all practices, operations and

activities relating to any matter regulated by or under this Act or

any other special law which the Authority is entitled to

administer or enforce;

(c)

promote the general interest and legitimate

expectations of users of innovative technology arrangements

and innovative technology services and promote fair

competition, practices and consumer choice in the sector;

(d) provide facilities for the recognition, certification,

registration, or otherwise grant or issue of any authorisation for

the carrying out of any lawful operation or activity relating to

any matter regulated by any special law which the Authority is

entitled to administer or enforce;

(e)

regulate the innovative technology products,

operations or activities relating to any matter regulated by any

special law which the Authority is entitled to administer or

enforce, and ensure high standards of conduct and governance

throughout the innovative technology arrangements industry;

(f)

establish minimum quality, compliance and security

standards for any innovative technology arrangements and

innovative technology services and regulate such sectors as may

be necessary to protect the general public;

(g) monitor the working and enforcement of laws that

directly or indirectly affect the use and operation of innovative

technology arrangements and innovative technology services

and undertake or commission such study, research or

investigation which it may deem necessary in this regard;

(h) provide information and issue guidelines relating to

any matter regulated by or under this Act, or any other special

law which the Authority is entitled to administer or enforce;

(i)

establish the minimum qualifications, if any, to be

possessed by any person who is engaged or employed in any

activity regulated by this Act or by any special law which the

Authority is entitled to administer or enforce;

(j)

ensure that international obligations entered into by

Malta relative to matters regulated by or under this Act, or any

other special law which the Authority is entitled to administer or

enforce, are complied with;

(k) advise the Minister on the formulation of policy in

relation to matters regulated by or under this Act, or any other

special law which the Authority is entitled to administer or

enforce, and in particular in relation to Malta’s international

obligations;

(l)

advise the Minister on any matter connected with its

functions under this or any other law;

(m) formulate and implement the policies and strategies

with short-term and long-term objectives in relation to the

matters connected with its functions under this or any other law;

(n) advise the Minister on the planning and

development of the innovative technology arrangements

industry;

(o) support innovation in the development and use of

innovative technology arrangements and innovative technology

services;

(p) support and liaise with non-profit organisations and

educational institutions in Malta which are established for the

promotion of the use and development of innovative technology

arrangements and innovative technology services;

(q) keep under review developments on relevant

subjects relating to innovative technology arrangements and

innovative technology services including, but not limited to,

digital assets and their issuance, cryptography in the context of

innovative technology arrangements as well as the uses thereof,

the development of standards within the industry and all related

matters, so as to ensure that activity in Malta is generally

consistent with internationally recognised standards and norms

of good practice;

(r)

investigate allegations of practices and activities

detrimental to consumers of innovative technology

arrangements and innovative technology services, and generally

keep under review trading practices relating to the provision of

innovative technology services and identify, and take measures

to suppress and prevent, any practices which may be unfair,

harmful or otherwise detrimental to consumers and users of

innovative technology arrangements and innovative technology

services; and

(s)

perform such other functions, including functions

aimed at promoting innovative technology arrangements and

innovative technology services, as may from time to time be

assigned to it by the Minister.

(4) (a)

The Board of the Authority may, in consultation

with the Minister, establish committees of the Board, composed of

members of the Board and other persons who may be invited to

participate in the committee, to address particular issues as may be

assigned to it by the Board.

(b) The Board may also establish a National Technology

Ethics Committee for the purpose of ensuring that the proper

standards of ethics are reflected in the area of innovative technology

arrangement uses which are recognised by the Authority and to guide

other authorities in Malta when such matters are referred to it by such

other authorities which note that innovative technology arrangements

are being used in areas of their competence. The National Technology

Ethics Committee shall have the functions and shall be composed of

the persons as may be determined by the Board in consultation with

the Minister, other national competent authorities, voluntary

organisations with purposes related to the sector and persons

operating within the sector.

(5) In carrying out its functions under this Act and any special

law the Authority is entitled to administer or enforce, the Authority

shall pay regard to the nature, features and facilities of the innovative

technologies which fall within its competence and shall seek to reflect

such elements in its policies and administration.

In particular the Authority shall have the power, strictly for

the purposes of its functions

(a) in relation to any innovative technology

arrangement which it recognises under this Act or any special

law it is entitled to administer or enforce, and in a manner

satisfactory to the Authority and without in any way implying

liability on the Authority’s part, to receive and access

information on the innovative technology arrangement and its

activities strictly in pursuance of its regulatory mandate and to

enforce compliance when the arrangement has adopted,

subscribed or undertaken to apply regulatory rules or guidelines

or licence conditions, including mandatory legal obligations, in

its operations

Provided that under no condition shall this

paragraph imply a right of the Authority to obtain information

on source codes of the software used in the innovative

technology arrangement which is confidential and commercially

sensitive and when the Authority requires such information for

regulatory purposes it shall seek such information under

conditions acceptable to the holder of the innovative technology

authorisation intended to protect his commercial interest or

otherwise under the conditions established by the First Hall,

Civil Court;

(b) to be a user and hold any wallet, account or other

facility in relation to any form of digital assets in order to be

able to carry out regulatory compliance functions, including,

inter alia, to access information within the particular

arrangement which is recognised under this Act or any other

special law which the Authority is entitled to administer or

enforce; and

(c)

to engage with such facilities or persons

administering or representing the same and to carry out

transactions which it may consider necessary for the carrying

out of its functions.

(7) It shall be the duty of the Authority to carry out its

functions as established by or under this Act or any other law in an

impartial, transparent and timely manner and to ensure compliance

therewith, and without prejudice to the generality of the foregoing, to

ensure that, to the extent they are so bound, persons providing any

services, products, operations and activities in or from Malta relating

to any matter regulated by the Authority, comply with this Act and

with any other special law which the Authority is entitled to

administer or enforce, and with any decisions issued by or under this

Act or any such other special law.

(8) The Authority shall also have such other functions,

responsibilities and powers as are set out by or under this Act or as

may be assigned to it by or under any other law including all such

powers as are necessary for or incidental to the performance of its

functions by or under this Act or any other law.

(9) The Authority shall in the carrying out of its functions seek

to ensure that the measures taken are proportionate having regard also

to the objectives of the Authority.

(1) The affairs and business of the Authority shall be the Conduct of the

responsibility of the Board which responsibility shall be exercised affairs

Authority.

through the Chairman

Provided that the Board may delegate or devolve all or part

of the executive conduct of the Authority, its administration and

organisation and the administrative control of its officers and

employees, to a Chief Executive Officer or any other officer or

officers of the Authority, who shall also have such other powers as

may from time to time be delegated or devolved to him or to them by

the Board. The first Chief Executive Officer shall be appointed by the

Minister.

(2) The Authority shall exercise its functions through such

officer or officers as the Board may from time to time designate in

accordance with the provisions of sub-article (1).

(3) The Authority may exercise any one or more of its

functions either directly or through any of its officers or employees or

through an agency authorised for that purpose, or through a contractor

or other person with whom an agreement for the performance of any

one or more of such functions has been entered into

Provided that nothing in this sub-article shall authorise the

Authority to contract out or delegate any of

(a)

its regulatory functions; or

(b) its recognition or authorisation functions, unless

such functions are expressly delegated to another public

authority established by law, in particular another national

competent authority as defined in this Act.

(1) Except as expressly provided for in other provisions

of this Act, the Authority shall act independently and shall not seek or

take instructions from any other body or person.

(2) (a)

The Minister may, in relation to matters that appear

to him to affect the public interest, from time to time give to the

Authority policy directions in writing of a general character, not

inconsistent with the provisions of this Act, on the policies to be

followed in the carrying out of the functions vested in the Authority

by or under this Act.

(b) In determining policies which are the subject of a

Ministerial direction, the Board shall respect the principles reflected

by the policy direction given to it by the Minister.

(3) The Authority shall afford to the Minister facilities for

obtaining information with respect to its property and activities, other

than matters which are confidential to any applicant or regulated

person, and furnish the Minister with returns, accounts and other

statistical information with respect thereto, and afford to him

facilities for the verification of information furnished, in such manner

and at such times as he may reasonably require.

(4) The provisions of article 72 of the Financial Cap. 174.

Administration and Audit Act shall not apply to the Authority.

(1) The Authority shall be a body corporate having a Legal

distinct legal personality and shall be capable, subject to the personality

representation

provisions of this Act, of entering into contracts, of acquiring, of the Authority.

holding and disposing of any kind of property for the purposes of its

functions, of suing and being sued, and of doing all such things and

entering into all such transactions as are incidental or conducive to

the exercise or performance of its functions under this Act, including

the lending or borrowing of money.

(2) The legal and judicial representation of the Authority shall

vest in the Chairman

Provided that the Authority may appoint one or more

members of the Board, the Chief Executive Officer, if any, or one or

more officers of the Authority to appear in the name or on behalf of

the Authority in any judicial proceedings and in any act, contract,

instrument or other document whatsoever.

(3) Any document purporting to be an instrument made or

issued by the Authority and signed by the Chairman, or such other

member of the Board, the Chief Executive Officer, if any, or officer of

the Authority as may, in accordance with sub-article (2), be vested by

the Board with the legal and judicial representation of the Authority,

shall be received in evidence and shall, until the contrary is proved,

be deemed to be an instrument made or issued by the Authority.

(1) The meetings of the Board shall be called by the Meetings.

Chairman as often as may be necessary but at least once a month

either on his own initiative or at the request of any two of the other

members of the Board.

(2) Half the number of members for the time being

constituting the Board shall form a quorum. Decisions shall be

adopted by a simple majority of the votes of the members present and

voting. The Chairman, or in his absence the Deputy Chairman or

other person appointed to act as chairman, shall have an initial vote

and, in the event of an equality of votes, a casting vote. Without

prejudice to the other requirements of this Act, no decision shall be

valid which is not supported by at least two members of the Board.

(3) Subject to the provisions of this Act the Board may

regulate its own procedure.

(4) Subject to the foregoing provisions of this article, no act or

proceeding of the Authority shall be invalidated merely by reason of

the existence of any vacancy among the members of the Board.

(5) All acts done by any person acting in good faith as a

member of the Board shall be valid as if he were a member

notwithstanding that some defect in his appointment or qualification

be afterwards discovered. No act or proceeding of the Authority shall

be questioned on the ground of the contravention, by a member, of the

provisions of article 5(9).

PART IV

Officers and Employees of the Authority

Without prejudice to the other provisions of this Act, the

Authority shall appoint and employ, at such remuneration and upon

such terms and conditions as it may establish with the concurrence of

the Minister, such officers and employees of the Authority as may

from time to time be necessary for the due and efficient discharge of

the functions of the Authority.

All officers and employees of the Authority shall be deemed

to be public employees within the meaning of the Public

Administration Act and shall be considered to be public officers as

defined in article 124 of the Constitution for the purposes of the

Criminal Code or any other law.

PART V

Financial Provisions

(1) Without prejudice to the following provisions of this

article, the Authority shall so conduct its affairs so that the

expenditure required for the proper performance of its functions shall,

as far as practicable, be met out of its revenue.

(2) In furtherance of the provisions of sub-article (1), the

Authority shall levy all fees, rates and other payments prescribed

under this Act or any other law related to the powers and functions of

the Authority.

(3) The Authority shall be paid by Government out of the

Consolidated Fund such sums as Parliament may from time to time

authorise to be appropriated to meet the costs of specified works to be

continued or otherwise carried out by the Authority

Provided that any subvention received from Government

shall be exempted from any liability for the payment of income tax

and duty on documents under any law for the time being in force.

(4) Any excess of revenue over expenditure shall, subject to

such directives as the Minister, after consultation with the Minister

responsible for finance may from time to time give, be applied by the

Authority to the formation of reserve funds to be used for the

purposes of the Authority; and without prejudice to the generality of

the powers given to the Minister by this sub-article, any direction

given by the Minister as aforesaid may order the transfer to the

Government, or the application in such manner as may be specified in

the direction, of any part of the fees, rates and other payments levied

in accordance with sub-article (2) or any such excess as aforesaid.

(5) Any funds of the Authority not immediately required to

meet expenditure may be invested in such manner as may from time

to time be approved by the Minister.

(1) For the purpose of carrying out any of its functions Power to

under this Act or any other special law which the Authority is entitled borrow

capital.

to administer or enforce, the Authority may, with the approval in

writing of the Minister given after consultation with the Minister

responsible for finance, borrow or raise money in such manner, from

such person, body or authority, and under such terms and conditions

as the Minister, after consultation as aforesaid, may in writing

approve.

(2) The Authority may also, from time to time, borrow, by way

of overdraft or otherwise, such sums as it may require for carrying out

its functions under this Act or any other special law which the

Authority is entitled to administer or enforce

Provided that for any amount in excess of one hundred and

forty-four thousand euro (€144,000), there shall be required the

approval of the Minister in writing.

The Minister responsible for finance may, after Advances from

consultation with the Minister, make advances to the Authority of Government.

such sums as he may agree to be required by the Authority for

carrying out any of its functions under this Act or any other special

law which the Authority is entitled to administer or enforce, and may

make such advances on such terms and conditions as he may, after

consultation as aforesaid, deem appropriate. Any such advance may

be made by the Minister responsible for finance out of the

Consolidated Fund, and without further appropriation other than this

Act, by warrant under his hand authorising the Accountant General to

make such advance.

(1) The Minister, after consultation with the Minister Borrowing from

responsible for finance, may, for any requirements of the Authority of Government.

a capital nature, contract or raise loans, or incur liabilities, for such

periods and on such terms and conditions as he may deem

appropriate; and any sums due in respect of or in connection with any

such loan or liability shall be a charge on the Consolidated Fund.

(2) Notice of any loans, liabilities or advances made or

incurred under the foregoing provisions of this article shall be given

to the House of Representatives as soon as practicable.

(1) The Authority shall cause to be prepared in every

financial year, and shall not later than three months after the end of

each such year, adopt estimates of the income and expenditure of the

Authority for the next following financial year

Provided that the estimates for the first financial year of

the Authority shall be prepared and adopted within such time as the

Minister may by notice in writing to the Authority specify.

(2) In the preparation of such estimates the Authority shall

take account of any funds and other monies that may be due to be

paid to it out of the Consolidated Fund during the relevant financial

year, whether by virtue of this Act or an appropriation Act or of any

other law; and the Authority shall prepare the said estimates so as to

ensure that the total revenues of the Authority are at least sufficient to

meet all sums properly chargeable to its revenue account including,

but without prejudice to the generality of that expression,

depreciation.

(3) The estimates shall be made out in such form and shall

contain such information and such comparison with previous years as

the Minister responsible for finance may direct.

(4) A copy of the estimates shall, upon their adoption by the

Authority, be sent forthwith by the Authority to the Minister.

(5) The Minister shall, at the earliest opportunity and not later

than three months after he has received a copy of the estimates from

the Authority, approve the same with or without amendment.

(1) No expenditure shall be made or incurred by the

Authority unless it has been approved by the Minister as provided in

article 17.

(2) Notwithstanding the provisions of sub-article (1) -

(a) until the expiration of six months from the

beginning of a financial year, or until the approval of the

estimates for that year by the Minister, whichever is the earlier

date, the Authority may make or incur expenditure for carrying

out its functions under this Act or any other special law which

the Authority is entitled to administer or enforce not exceeding

in the aggregate one-half of the amount approved by the

Minister for the preceding financial year;

(b) expenditure approved in respect of a head or sub-

head of the estimates may, with the approval of the Minister,

given after consultation with the Minister responsible for

finance, be made or incurred in respect of another head or sub-

head of the estimates;

(c)

in respect of the first financial year, the Authority

may make or incur expenditure not exceeding in the aggregate

such amounts as the Minister responsible for finance may, after

consultation with the Minister, allow;

(d) if in respect of any financial year it is found that the

amount approved by the Minister is not sufficient or a need has

arisen for expenditure for a purpose not provided for in the

estimates, the Authority may adopt supplementary estimates for

approval by the Minister and in any such case the provisions of

this Act applicable to the estimates shall as near as practicable

apply to the supplementary estimates.

The Minister shall, at the earliest opportunity and not later Publication of

than three months after he has received a copy of the estimates and approved

estimates.

supplementary estimates of the Authority, or if at any time during that

period the House of Representatives is not in session, within three

months from the beginning of the next following session, cause such

estimates to be laid on the Table of the House of Representatives.

(1) The Authority shall cause to be kept proper accounts Accounts and

and other records in respect of its operations, and shall cause to be audit.

prepared a statement of accounts in respect of each financial year.

(2) The accounts of the Authority shall be audited by an

auditor or auditors to be appointed by the Authority and approved by

the Minister

Provided that the Minister may, prior to approving the

accounts, require the books and accounts of the Authority to be

audited or examined by the Auditor General who shall for the purpose

have the power to carry out such physical checking and other

certifications as he may deem necessary.

(3) The Authority shall, not later than three months after the

end of each financial year, cause a copy of the statement of accounts

duly audited to be transmitted to the Minister together with a copy of

any report made by the auditors on that statement or on the accounts

of the Authority.

(4) The Minister shall, at the earliest opportunity and not later

than three months after he has received a copy of every such

statement and report, or if at any time during that period the House of

Representatives is not in session, within three months from the

beginning of the next following session, cause every such statement

and report to be laid on the Table of the House of Representatives.

(1) All monies accruing to the Authority shall be paid

into a bank or banks appointed as bankers of the Authority by a

resolution of the Authority. Such monies shall, as far as practicable,

be paid into any such banks from day to day, except such sum as the

Authority may authorise to be retained to meet petty disbursements

and immediate cash payments.

(2) All payments out of the funds of the Authority, other than

petty disbursements not exceeding a sum fixed by the Authority, shall

be made by such officer or officers of the Authority as the Authority

shall appoint or designate for that purpose.

(3) Cheques against and withdrawals from any bank account

of the Authority shall be signed by such officer of the Authority as

may be appointed or designated by the Authority for that purpose and

shall be countersigned by the Chairman, or such other member of the

Board or officer of the Authority as may be authorised by the

Authority for that purpose.

(4) The Authority shall also make provision with respect to -

(a)

the manner in which and the officer or officers by

whom payments are to be authorised or approved;

(b) the title of any account held with the bank or banks

into which the monies of the Authority are to be paid, and the

transfer of funds from one account to the other;

(c)

the method to be adopted in making payments out of

funds of the Authority,

and generally with respect to any matter which is relevant to the

proper keeping and control of the accounts and books, and the control

of the finance, of the Authority.

Without prejudice to any directions communicated by the Contracts of

Minister under article 8(2), the Authority shall not, except with the supply or works.

approval of the Minister granted for special reasons and after

consultation with the Minister responsible for finance, award or enter

into any contract for the supply of goods or materials or for the

execution of works, or for the rendering of services, to or for the

benefit of the Authority, which is estimated by the Authority to

exceed one hundred and forty-four thousand euro (€144,000) in

value, or such other amount as the Minister responsible for finance

may by regulations prescribe, except after notice of the intention of

the Authority to enter into the contract has been published and in

conformity with the provisions of the Financial Administration and Cap. 174.

Audit Act and regulations made thereunder.

The Authority shall, not later than three months after the Annual Report.

end of each financial year, make and transmit to the Minister and to

the Minister responsible for finance a report dealing generally with

the activities of the Authority during that financial year and

containing such information relating to the proceedings and policy of

the Authority as either of the said Ministers may from time to time

require. The Minister shall, at the earliest opportunity and not later

than three months after he has received a copy of every such report, or

if at any time during that period the House of Representatives is not in

session, within three months from the beginning of the next following

session, cause a copy of every such report to be laid on the Table of

the House of Representatives.

(1) An authorisation holder or persons acting on his Money

behalf or under an arrangement with him shall fulfil any prevention of laundering.

money laundering and the combating of funding of terrorism

obligations as may be imposed on them by means of regulations made

under article 12 of the Prevention of Money Laundering Act.

(2) Where the Authority discovers facts or obtains information

that is related to transactions which are known or suspected to be

related to proceeds of criminal activity or the funding of terrorism, or

to a person who may have been, is or may be connected with money

laundering or the funding of terrorism, the Authority shall disclose

those facts or that information, supported by the relevant

documentation that may be available, to the Financial Intelligence

Analysis Unit in a timely manner.

(3) Where through its monitoring, or through any other means,

the Authority notices that there are areas of innovative technology

arrangements and innovative technology services which are

vulnerable to money laundering or the funding of terrorism, the

Authority shall inform the National Coordinating Committee on

Combating Money Laundering and the Funding of Terrorism

established under article 12A of the Prevention of Money Laundering

Act of its concerns and provide it with any analysis, statistics, studies,

or any other information relative thereto.

The Authority and any Board member, officer or employee

of the Authority, and any other person appointed to perform a

function under this Act or any other special law which the Authority

is entitled to administer or enforce, or under any rules or regulations

made thereunder, shall not be liable in damages for anything done or

omitted to be done in the discharge or purported discharge of any

functions under this Act, or any other special law which the Authority

is entitled to administer or enforce, or rules or regulations aforesaid,

unless the act or omission is shown to have been done or omitted to

be done in bad faith.

PART VI

Principles relating to Recognition, Powers of the Authority

(1) The Authority may require from any applicant for

any innovative technology authorisation any information,

documentation and assurances as may be necessary or relevant for the

Authority to carry out its functions and to grant recognition or

otherwise authorise any innovative technology arrangement or any

innovative technology service provider under this Act or under any

other special law which the Authority is entitled to administer or

enforce, and thereafter to consider the continuing suitability of the

innovative technology arrangement or the innovative technology

service provider to continue to hold any authorisation

Provided that the Authority shall from time to time state by

notice what information, documentation and assurances will

generally be required from any applicant so that applicants will be

able to establish such requirements in advance of any application they

may wish to submit.

(2) Rules shall be prescribed by the Authority in relation to all

forms of recognition it may be empowered to grant or issue under any

other special law which the Authority is entitled to administer or

enforce.

(3) The rules may also determine the qualifications and

requirements for the issue of any innovative technology

authorisations, the conditions under which innovative technology

authorisations are issued, the types of innovative technology

authorisations relative to innovative technology arrangements or

innovative technology services and all related matters.

(4) The Authority may also determine when innovative

technology arrangements and innovative technology services which

may be the subject of requirements under any other special law which

the Authority is entitled to administer or enforce are exempt from

such requirements.

(1) The Authority may grant or refuse to grant an Power of

innovative technology authorisation applied for under this Act or Authority

grant or refuse

under any special law which the Authority is entitled to administer innovative

technology

and enforce, as follows

authorisation.

(a) it may grant an innovative technology services

authorisation when it is satisfied that the applicant is a fit and

proper person to provide the innovative technology services

concerned and that the applicant will comply with and observe

any innovative technology authorisation rules and regulations

made under this Act or any other special law which the

Authority is entitled to administer or enforce and applicable to

him, or the provisions of any other law which has mandatory

application to the applicant or his activities in the specific

context, as well as any conditions established by the Authority

in the particular case; or

(b) it may grant an innovative technology arrangements

authorisation when it is satisfied that the innovative technology

arrangement is fit and proper and will comply with and observe

any innovative technology authorisation rules and regulations

made under this Act or any other special law which the

Authority is entitled to administer or enforce and applicable to

it, as well as any conditions established by the Authority in the

particular case,

and reference hereafter to the term "innovative technology

authorisation" shall encompass all types of recognition and

authorisations, whether for services or for arrangements, and

reference hereafter to the term "innovative technology authorisation

rules" shall encompass all sets of rules and each shall be interpreted

as the context shall require.

Such recognition and authorisations may be issued on the

voluntary application of innovative technology service providers or

the technical administrators or other persons involved in any

innovative technology arrangements.

(2) (a)

In granting an innovative technology authorisation

the Authority may subject it to such conditions as it may deem

appropriate having regard to general market impacts, and having

granted an innovative technology authorisation it may, from time to

time, vary or revoke any condition so imposed or impose new

conditions.

(b) For the better carrying out of the provisions of this

Act, the Authority may, from time to time, issue and publish

innovative technology authorisation rules which shall be binding on

innovative technology authorisation holders and others as may be

specified therein.

(c)

In the interest of transparency and market

awareness, such innovative technology authorisation rules may lay

down additional requirements and conditions in relation to activities

of innovative technology authorisation holders, the conduct of their

business, their relations with customers, the public and other parties,

their responsibilities to the Authority, reporting requirements,

financial resources and related requirements, if any, and any other

matters as the Authority may consider appropriate.

(3) When considering whether to grant or refuse to grant an

innovative technology authorisation the Authority shall, in particular,

have regard to -

(a) the

protection

of

the

general

public

and

organisations;

(b) the protection of the reputation of Malta taking into

account Malta’s international commitments;

(c)

the promotion of innovation, competition and

choice; and

(d)

the reputation and suitability of the applicant and all

other parties connected with innovative technology

arrangements.

(4) Every innovative technology service authorisation shall

specify the innovative technology service which the holder thereof

has been recognised as being able to provide and any innovative

technology arrangement authorisation shall specify the innovative

technology arrangement which has been recognised or authorised.

(5) The Authority shall establish a register containing a list of

all holders of innovative technology authorisations. This register,

which shall be publicly available, shall also indicate -

(a)

the services in relation to which each innovative

technology services authorisation and each innovative

technology arrangement in relation to which an innovative

technology authorisation was issued; and

(b) information on all matters which are required to be

entered into the register for public information under the other

provisions of this Act, the Innovative Technology Arrangements Act

of 2018.

and Services Act, 2018, or the Virtual Financial Assets Act, Act No. XXX of

2018. 2018, or any other applicable law,

and shall be updated on a regular basis.

(1) The Authority, acting in line with the governing Refusal to grant

principles and in furtherance of the regulatory objectives established an

technology

by this Act, or any other special law which the Authority is entitled to authorisation.

administer or enforce, shall refuse to grant an innovative technology

authorisation in any of the following instances

(a) if the application is not submitted in accordance

with the established form or in accordance with applicable

procedure; or

(b)

if the applicable fees have not been paid; or

(c)

if the Authority, in its reasonable discretion, is not

satisfied that the applicant and all relevant persons, including

any innovative technology service providers who are rendering

services, are fit and proper; or

(d) if, where applicable and in the reasonable opinion of

the Authority, it appears on the basis of the assessment carried

out, as may be prescribed by the Authority, the innovative

technology services or innovative technology arrangements that

the applicant intends to offer do not satisfy the minimum

requirements of quality or security for their respective types; or

(e)

if it transpires that any information or submission

made to the Authority is false, misleading, inaccurate or

incomplete in a material respect; or

(f)

if the Authority, in its reasonable discretion, is not

satisfied, as the circumstances of the context require, that

(i) the applicant is capable of sustainably financing

the service or technology; or

(ii) the applicant has the necessary competence,

technical know-how and resources to carry out the

service; or

(iii) the applicant has a business model to carry the

service in a viable way and in a way that is compliant

with the applicable regulatory instruments in force; or

(iv) the applicant will comply with all regulatory

requirements applicable to authorised persons of the

relevant category and with any additional requirements

that the Authority considers, on the basis of a risk-based

approach, necessary to impose on the applicant, which

requirements may include but are not limited to financial

safeguards, protection of users and, or the

implementation of any policies and procedures.

(2) For the avoidance of doubt, reference in this article to

carrying out functions to the satisfaction of the Authority shall refer

to both services rendered personally by the applicant as well as

services rendered through engagement of delegates and through

automated technology systems approved by the Authority.

(3) When the Authority refuses to grant recognition under this

Act or any other special law which the Authority is entitled to

administer or enforce, it shall state on its website the fact that it has

refused the application and the principal reasons for so doing and

shall maintain such information on its website for three months from

the notification to the applicant of its determination.

The Authority, acting in line with the governing principles

and in furtherance of the regulatory objectives established by this Act,

or any other special law which the Authority is entitled to administer

or enforce, may additionally refuse to grant an authorisation in any of

the following instances

(a) if the Authority believes that the innovative

technology service or innovative technology arrangement being

proposed is not compliant with the regulatory instruments in

force; or

(b) if the Authority believes that granting an

authorisation to the applicant may pose a risk to the reputation

of Malta or be otherwise not in the public interest or contrary to

regulatory objectives established by the Act.

(1) The Authority may, in furtherance of the regulatory Further powers

objectives under this Act or any other special law which the Authority of the Authority.

is entitled to administer or enforce and in applying a risk-based

approach in line with the governing principles

(a) establish, where appropriate or necessary, by means

of binding instruments, more extensive, reduced or amended

requirements for an applicant to qualify for recognition or an

authorisation in certain pre-defined circumstances; and, or

(b) impose on an applicant, where appropriate or

necessary, specific additional requirements by means of a

binding instrument.

(2) Where the Authority has imposed specific requirements on

an authorised person or several authorised persons, or where the

Authority deems necessary or appropriate to impose new specific

requirements on an authorised person or several authorised persons,

by whichever binding instrument such imposition is made, the

Authority shall have the power to make or vary such requirement

during the term of the authorisation

Provided that where a variation or a new requirement

consists of making requirements more onerous on an authorised

person, unless such variation or requirement has been requested by the

authorised person himself, the Authority shall by notice in writing

inform the authorised person of the Authority’s intention to vary the

said requirements or to impose new requirements, calling upon the

said authorised person to show cause, within such period being not

less than twenty days after the issue of the notice as may be specified

in the same notice, why such requirement should not be imposed, and

the Authority shall consider any representations made by the

authorised person within the period specified in the notice, before

imposing a new requirement

Provided further that in case where, in the Authority’s

reasonable opinion, there is serious prejudice or an imminent threat of

serious prejudice to users’ financial security, Malta’s reputation, or

other overriding reasons of public interest, the Authority shall be

authorised to impose immediate compliance with a new requirement.

The burden of proving the applicant’s qualification to Burden of proof.

receive recognition or to continue being so recognised shall be solely

on the applicant or the authorised person, as the case may be.

The general purposes of an innovative technology Variations of

arrangement recognised by the Authority and the specific matters on purposes

other features.

which it has received assurances through the systems audit or specific

undertakings by any person in connection with any recognition under

this Act, or any special law which the Authority is entitled to

administer or enforce, shall not be amended or substituted unless the

authorised person has obtained a prior written approval by the

Authority of any such amendment or substitution

Provided that any substitutions or amendments which refer

to upgrades, maintenance, innovative evolution or mere replacement

of any supporting software which does not materially change the

functionality shall not require prior approval by the Authority;

however if, in the opinion of the recognised innovative technology

services provider, they may have material impact on the users of the

innovative technology arrangement or in any manner are not in

accordance with the regulatory principles of this Act, they shall be

notified to the Authority

Provided further that the Authority, following a risk-based

evaluation, may prescribe mandatory notification in general or give

directions in particular cases.

(1) An authorisation granted by the Authority cannot be

assigned or transferred.

(2) The Authority is to be notified where any transactions

which have the effect of the assignment or transfer of ownership or in

relation to an innovative technology services provider which is a legal

organisation are taking place and unless otherwise stated in rules or

guidelines by the Authority, a transfer of ownership shall take place

when the transferor enjoys ownership rights of twenty-five per cent or

more of the organisation’s shares or otherwise controls the

organisation, directly or indirectly.

(3) The Authority shall designate from time to time the

holders of office or other functionaries within the applicant who shall

have the duties of notification to the Authority under this Act.

(4) The Authority may implement such procedures under this

Act to transferees as are applicable to transferors.

(5) Any requirement in this Act that a person be a fit and

proper person to carry out innovative technology services shall be

interpreted as a requirement not only that such person be a fit and

proper person to carry out such activities or functions, but also that

any qualifying shareholder or member, director or officer of such

person, when a legal organisation, be a fit and proper person to carry

out such activities or functions or the role such person has assumed

with regard to the legal organisation.

For the purposes of this Act ''qualifying shareholder''

means a person who holds more than 25% of the shares or ownership

interests in the legal organisation or who, through provisions of the

statute, has special voting or other rights permitting him to exercise

control over the activities of the organisation

Provided that any person being a lender, financier or other

funding supporter of an applicant who is not involved in the day to

day administration of the service or innovative technology

arrangement shall not be considered to be a "qualifying shareholder"

if the relationship is one of holding security or otherwise of a

temporary nature and this until such time as it becomes permanent or

he becomes involved in the day to day administration of the

operation, including through the appointment of directors with

executive functions on the board of directors.

(6) The transfer to a wholly owned subsidiary of an applicant

or to another legal organisation which is owned and controlled by the

same persons shall not be considered to be a transfer.

(7) The Authority shall issue guidelines on requirements

applicable to changes in control in relation to any innovative

technology arrangement.

PART VII

Regulatory Powers

(1) The Authority may at any time revoke, cancel or Power of

suspend an innovative technology arrangement authorisation or an competent

authority to

innovative technology services authorisation in accordance with the revoke,

or suspend

provisions of this Act or any other special law which the Authority is innovative

technology

entitled to administer or enforce.

arrangement

authorisations

(2) The Authority may revoke, cancel or suspend an and

technology

innovative technology services authorisation -

services

authorisations.

(a) if it considers that the holder thereof is not a fit and

proper person to provide the innovative technology service he is

authorised to provide; or

(b) if it considers that the holder thereof does not fulfil

the requirements of, or has contravened, any of the provisions of

this Act or any other special law which the Authority is entitled

to administer or enforce or of any innovative technology

services rules or regulations made thereunder, or has failed to

satisfy or comply with any obligation or condition to which he

or the innovative technology arrangement is subject by virtue of

or under this Act or any other special law which the Authority is

entitled to administer or enforce, or any conditions established

by the Authority in the particular case; or

(c)

if the Authority has been furnished by or on behalf

of the innovative technology services authorisation holder with

information which is false, inaccurate or misleading, or if the

innovative technology services authorisation holder has

obtained the innovative technology services authorisation by

making false statements or by any other irregular means; or

(d) if the innovative technology services authorisation

holder has not commenced to provide the service he has been

authorised to provide within the time provided for in the

innovative technology services authorisation, if any, or has

ceased to provide such service; or

(e)

if it considers it desirable to revoke, cancel or

suspend the innovative technology services authorisation for the

protection of the general public, and the reputation of Malta

taking into account Malta’s international commitments; or

(f)

at the request of the innovative technology services

authorisation holder; or

(g) in any of the circumstances under which the

Authority would have been precluded from issuing the

innovative technology services authorisation under this Act or

any other special law which the Authority is entitled to

administer or enforce or where under such Act or any other

special law which the Authority is entitled to administer or

enforce it would have been entitled to refuse the grant of such

innovative technology authorisation; or

(h) after proper communication and investigation, at the

written request of another national competent authority, as well

as the Financial Intelligence Analysis Unit acting under the

Prevention of Money Laundering Act, which is carrying out

regulatory functions in relation to the relevant innovative

technology services authorisation holder simultaneously with the

Authority.

(3) In the case of an innovative technology authorisation with

reference to an innovative technology arrangement, the Authority

may revoke, cancel or suspend an authorisation -

(a) if it considers that the persons who assume any

responsibility towards the Authority with reference to the

innovative technology arrangement are not fit and proper

persons to carry out the functions required of them in

connection with the arrangement or if there are no such persons

in office as stipulated or required by the innovative technology

authorisation; or

(b) if it considers that the requirements of any provision

of this Act, or any other special law which the Authority is

entitled to administer or enforce, are not being fulfilled, or there

has been a contravention of any such provision as aforesaid, or

an obligation or condition to which the authorisation is subject

by virtue of or under this Act, or any other special law which the

Authority is entitled to administer or enforce, has not been

satisfied or complied with; or

(c)

if information has been furnished to the Authority

by or on behalf of or in relation to the innovative technology

arrangement which is false, inaccurate or misleading; or

(d) if the innovative technology arrangement has not

commenced the activities within the time provided for in the

authorisation or has ceased to carry on such activities; or

(e)

if it considers it desirable to cancel or suspend the

innovative technology authorisation for the protection of the

general public and the reputation of Malta taking into account

Malta’s international commitments; or

(f)

at the request of the innovative technology

authorisation holder; or

(g) in any of the circumstances under which the

Authority would have been precluded from issuing the

innovative technology authorisation under this Act or any other

special law which the Authority is entitled to administer or

enforce or where under this Act or any other special law which

the Authority is entitled to administer or enforce it would have

been entitled to refuse the grant of such authorisation; or

(h) after proper communication and investigation, at the

written request of another national competent authority as well

as the Financial Intelligence Analysis Unit acting under the

Prevention of Money Laundering Act which is carrying out Cap. 373.

regulatory functions in relation to the relevant innovative

technology services authourisation holder simultaneously with

the Authority.

(4) Revocations, cancellations and suspensions shall be

reflected in the register of authorisations appearing on the website of

the Authority. The Authority shall have the power to publicise more

widely the revocation, cancellation or suspension of its authorisations

should it consider that this would be necessary for the protection of

the general public.

(5) No action shall lie against the Authority in terms of the

Press Act, or any other law relating to defamation or slander, for the

issuing of bona fide public statements in terms of this article.

(6) The Authority may issue guidelines on how this article will

apply with regard to innovative technology arrangements, the whole

or parts of which are automated or in relation to a decentralised

autonomous organisation or similar contexts.

(1) The Authority shall, before proceeding to take any

of the measures under article 34, write to the person concerned,

warning him of the measure that may be taken and the specific reason

why it may be taken, requiring him to cease or rectify his acts or

omissions and, or to make his submissions thereto within such period

not being less than twenty-five (25) days which period, without

prejudice to the provisions of sub-article (4), may be abridged if the

Authority considers that the continuance of the infringement impacts

negatively the effective exercise by the Authority of its regulatory

functions and, or warrants the immediate intervention of the

Authority

Provided that where the measure is an administrative fine

the person concerned shall also be informed of the amount of the fine

Provided further that when issuing a warning under this

sub-article, the Authority may impose such conditions as it may

consider reasonable in the circumstances.

(2) If the person concerned remedies the infringement within

the period established by the Authority in accordance with sub-article

(1), and agrees in writing to abide with any condition that the

Authority may impose, the Authority may at its discretion desist from

proceeding any further, this without prejudice to any regulatory

measures that may have already been imposed.

(3) If, after the lapse of the period mentioned in sub-article (1),

the Authority considers that the person concerned has not given any

valid reasons to demonstrate why no measure should be taken against

him, the Authority shall notify the person concerned in writing,

specifying the nature of the infringement, stating the measure being

taken, and if the measure is an administrative fine, stating the amount

of the fine being imposed.

(4) Notwithstanding the provisions of sub-article (1), where

the Authority has prima facie evidence that the infringement -

(a) represents an immediate and serious threat to the

public interest or to the application of mandatory rules of law;

or

(b) creates or may create serious economic or

operational problems for other providers or users of innovative

technology arrangements; or

(c)

would result in significant harm to competition,

including in the innovative technology arrangements sector,

the Authority may take urgent interim measures to remedy the

situation in advance of reaching a final decision, including ordering

the immediate cessation of the act or omission giving cause to the

infringement and the imposition of administrative fines

Provided that the person against whom such measures are

contemplated shall, thereafter, be given a reasonable opportunity to

state his view and propose any remedies

Provided further that the interim measures shall be valid

for a maximum of three (3) months, subject to extension for a further

period of three (3) months, in circumstances where enforcement

procedures have not been completed.

(5) The notification as referred to in sub-article (3) shall, upon

the expiry of the time limit for appeal therefrom, upon the service of a

copy thereof by means of a judicial act on the person indicated in the

notice, constitute an executive title for all effects and the purposes of

Title VII of Part I of Book Second of the Code of Organization and Cap. 12.

Civil Procedure

Provided that if the person against whom the notice has

been issued files an appeal before the Tribunal within the twenty-day

period referred to under article 30, and concurrently with or before

the filing of his appeal requests the Tribunal to suspend the effects of

the notice, then the Authority shall desist from issuing a judicial act

as referred to in this sub-article until such time as the request for

suspension has been determined, withdrawn or otherwise dealt with

Provided further that the Tribunal shall determine any

requests for suspension referred to in this sub-article expeditiously.

Before determining any such request the Tribunal shall give the

Authority a reasonable opportunity to reply and make its submissions.

(6) Interest at the rate of five percentage points or such other

rates as may be established by the Minister for Finance from time to

time shall run as from the date set by the Authority for the payment of

any administrative fine imposed by it in terms of this Act or any

special law which the Authority is entitled to enforce. In cases where

the Tribunal or the Court of Appeal, as the case may be, after having

upheld an application to suspend the fine pending proceedings, finally

decides that the fine is due, such fine shall be due together with any

interests accrued thereon as from the date originally set by the

Authority for payment including the period during which the payment

of the said fine was suspended.

(7) The Authority shall give its reasons for any decision taken

under this article.

(8) The provisions of this article shall continue to apply to the

person concerned with reference to their actions and those related

thereto, having been done prior to the issue of any warning hereunder,

notwithstanding the revocation or the unilateral surrender of the

relevant innovative technology authorisation where applicable.

(9) Notwithstanding the provisions of any law, no

precautionary warrant or order shall be issued by any court

restraining the Authority from taking any material prevention or

management measure under this Act, or under any regulations issued

hereunder or any other law. Without prejudice to the power of the

Authority to declare to the court that a measure is one contemplated

by this article, the Minister may from time to time make regulations

to better define what constitutes a material prevention or management

measure for the purpose of this Act.

(1) Where the Authority proposes to refuse an

application for an innovative technology authorisation or to cancel or

suspend an innovative technology authorisation, it shall give the

applicant or, as the case may be, the innovative technology

authorisation holder, notice in writing of its intention to do so, setting

out the reasons for the decision it proposes to take.

(2) Every notice given under sub-article (1) shall state that the

recipient of the notice may, within such reasonable period after the

service thereof as may be stated in the notice (being a period of not

less than forty-eight hours), make representations in writing to the

Authority giving reasons why the proposed decision should not be

taken, and the Authority shall consider any representation so made

before arriving at a final decision.

(3) The Authority shall as soon as practicable notify its final

decision in writing to any of the persons to whom notice is to be given

under sub-article (1).

(1) Without in any way disclosing information on Publication of

specific applicants or matters of commercial sensitivity, the Authority policy

guidelines.

shall seek to regularly publish information relating to its rulings,

determinations and policy positions when they affect applications,

interpretation of the provisions of this Act, or any special law which it

is entitled to administer or enforce, so as to ensure that applicants and

the public in general are aware of the position taken by the Authority

on matters of general interest relating to innovative technology

arrangements.

(2) The publication of such information shall not in any way

limit the freedom of the Authority to vary its policies or approach on

any issue based on further review and experience or development of

technology or law generally. When such variations take place the

Authority shall notify in later publications the connection and review

to previous publications.

(3) Such publications are intended for the benefit of the sector

and predictability of the recognition, review and enforcement

processes envisaged by this Act.

(1)

This article applies only

Exemptions.

(a) in circumstances where under provisions of any

special law applicable at any time, it is prohibited to carry on

any specified activities or it is so prohibited except when

authorised permitted to do so, not being a law of general

application to achieve public order the application of which

cannot be waived;

(b) with reference to innovative technology services or

innovative technology arrangements of a designated type and

not generally, and in particular where the innovative technology

arrangement has embedded within it certain software features

which may substitute for existing regulatory requirements,

which may, due to its area of operation or its effects, fall within

the prohibitions above referred to.

(2) The Minister shall, on the written recommendation of the

Authority and subject to the concurrence of the relevant Minister and,

or national competent authority based on which person has the power

to grant exemptions or waivers under the relevant special law which

may have application to any innovative technology arrangement or

innovative technology service, have the power to

(a) make regulations to exempt from the provisions of

any law requiring authorisation to carry on relevant activities

which may be applicable to it; or

(b) to introduce rules which postpone the application of

rules for a period of time or to introduce thresholds based on the

volume of activities based on transactions, values or otherwise;

or

(c)

to waive particular regulatory requirements.

PART VIII

Enforcement and Sanctions

(1) Without prejudice to the enforcement powers that it

has at law, the Authority may require any person to provide it with

any information, including information on codes, software protocols,

and financial information, that the Authority considers necessary for

the purpose of ensuring the quality and integrity standards required

by this Act for purposes of recognition or compliance with the

provisions of this Act or any other special law which the Authority is

entitled to administer or enforce, or decisions or directives made in

accordance with this Act or such other special law

Provided that nothing in this sub-article shall imply the

power of the Authority to request information relating to confidential

source codes for software which is commercially sensitive or to

cryptographic keys owned personally by such person, but this shall

not interfere with the powers of any other national competent

authority under applicable law in relation to the enforcement of such

applicable law.

(2) Any information required by the Authority under sub-

article (1) shall be proportionate to the performance of its functions

and obligations under this Act or any other special law which the

Authority is entitled to administer or enforce and, in requiring any

information as aforesaid, the Authority shall state why it requires the

information requested.

(3) Except in cases where the recipient of a request may refuse

to provide such information, which refusal shall be in writing and

shall state the basis for such refusal, a person who is notified with a

requirement under sub-article (2) shall comply promptly with the

requirement within the time-scales and according to any level of

detail as may be required by the Authority

Provided that any such person may, in complying with the

provisions of this sub-article, state clearly to the Authority if any

information provided by him is to be considered as confidential for

commercial reasons and the Authority shall respect the

confidentiality requested subject to the provisions of the Professional Cap. 377.

Secrecy Act.

(4) The same rules stated above shall apply to the innovative

technology authorisation holder who, in carrying out the authorised

services, may review or receive information as described in the

proviso to sub-article (1). Such innovative technology authorisation

holder shall not be required to provide information to the Authority if

such information was obtained under confidence or under non-

disclosure obligations whilst carrying out his functions for the benefit

of any applicant.

(1) For the purposes of the exercise by the Authority of Enforcement

any of its functions under this Act or under any other special law powers

Authority.

which the Authority is entitled to administer or enforce, the Authority

may, as may be applicable in the context and subject to the limitations

in the applicable laws on professional secrecy

(a)

enter, at any reasonable time, any premises other

than a place of residence, or any other place or any vehicle or

vessel where any activity regulated by or under this Act or any

other special law which the Authority is entitled to administer or

enforce, takes place, or in the opinion of the Authority takes

place, and search and inspect the premises, place, vehicle or

vessel and any books, documents or records found therein;

(b) require any person to produce for inspection and

take extracts or copies from any books, documents or records

relating to any activities regulated by or under this Act or any

other special law which the Authority is entitled to administer or

enforce, which are under the control of that person and, in the

case of information in a non-legible form to reproduce it in a

legible form, and to give to the Authority such information as

the Authority may reasonably require in relation to any entries

in such books, documents or records;

(c)

remove and retain such books, documents or records

for such period as may be reasonable for further examination;

(d) require any person to maintain such books,

documents or records for such period as may be reasonable as

the Authority directs;

(e)

require any person to give to the Authority any

information that may be required with regard to any innovative

technology arrangement regulated by or under this Act or any

other special law the Authority is entitled to administer or

enforce;

(f)

make such inspections, including site inspections, to

enable the Authority to carry out its functions at law and in

doing so the Authority may also undertake tests and

measurements of any machinery, apparatus, appliances and

other equipment at any place as the Authority may consider

necessary

Provided that where the person concerned fails to abide

with any requirements made by the Authority under this sub-article,

the Authority may then take any such measures as it may consider

appropriate in the circumstances including the switching off or

modification of the use of any such apparatus.

(2) Any officer of the Authority or any other person duly

authorised by the Authority to act on its behalf, when exercising a

power conferred by this Act or by any other special law which the

Authority is entitled to administer or enforce, shall, if requested by

any person thereby affected, produce to that person for inspection a

certificate issued by the Authority stating that he is duly authorised to

act for and on behalf of the Authority.

(3) In the course of the exercise of any of the powers conferred

by this Act or by any other special law which the Authority is entitled

to administer or enforce the Authority may request the assistance of

the Police.

(4) Any persons who are or have been in charge of the

innovative technology arrangement falling under the supervisory or

regulatory functions of the Authority shall assist and shall collaborate

with the Authority in order to enable it to discharge its functions, and

shall collate and transmit without any undue delay such information

and documentation as the Authority may reasonably request from

time to time.

(5) Any person who -

(a) obstructs, impedes or assaults an officer of the

Authority or any other person duly authorised by the Authority

to act on its behalf in the exercise of any of the powers

conferred by this Act or by any other special law which the

Authority is entitled to administer or enforce;

(b) fails or refuses to comply with a requirement under

this article;

(c)

alters, suppresses or destroys any books, documents

or records which the person concerned has been required to

produce, or may reasonably expect to be required to produce;

(d) falsely represents himself to be an officer of the

Authority or a person authorised by the Authority to act on its

behalf; or

(e)

furnishes any information to the Authority which it

may require in the exercise of its functions under any special

law it is entitled to administer or enforce, which he knows, or

has reasonable cause to believe to be false or misleading,

shall be guilty of an offence against this Act, and shall on conviction

be liable to a fine (multa) not exceeding twelve thousand euro

(€12,000) or to imprisonment for a period not exceeding three

months, or to both such fine and imprisonment.

(6) The Minister may make regulations on how this article will

apply with regard to innovative technology arrangements, their

protocols, nodes and users, including when the whole or parts of

which are automated or in relation to a decentralised autonomous

organisation or similar context, so as to ensure that users or

designated classes of users are not subjected to the exercise of such

powers when they are not personally involved in the activity being

investigated or upon which enforcement is being taken.

(1) Except where otherwise provided by law, a person Disclosure of

shall not knowingly disclose confidential information obtained by confidential

information.

him while performing the duties of a member of the Board, or of an

officer or employee of the Authority or of an adviser or consultant to

the Authority, unless he is duly authorised by the Authority to do so

Provided that any such person shall remain bound by the

requirements of this article even after his appointment or

employment, howsoever described, with the Authority has come to an

end.

(2) In this article "confidential information" means any

information, howsoever described, which is considered by the

Authority to be confidential, or has been notified of such status by the

person providing it, and in relation to which the Authority has

notified the persons concerned of their duty of non-disclosure.

(3) A person who contravenes the provisions of this article

shall be guilty of an offence against this Act and shall on conviction

be liable to a fine (multa) not exceeding ten thousand euro (€10,000).

(4) Nothing in this article shall prevent the disclosure of any

information to the Authority or, by or on behalf of the Authority to

the Minister or as may be required at law.

(1) An administrative fine imposed shall not, unless

provided otherwise by or under this Act or any special law which the

Authority is entitled to enforce, exceed three hundred and fifty

thousand euro (€350,000) for each infringement or failure to comply

and, or twelve thousand euro (€12,000) for each day of infringement

or non-compliance as the case may be

Provided that if the act or omission which constitutes an

infringement is committed by an undertaking and the Authority

considers that such act or omission has especially significant effects

on the market to the detriment of competitors and, or consumers, the

stated amount that may be imposed as an administrative fine may be

increased to an amount that is not more than five per cent (5%) of the

turnover of the undertaking in the calendar year immediately

preceding the year when the infringement was committed

Provided further that any daily fine imposed may be back-

dated to the date of the commission or commencement of the

infringement.

(2) In determining the amount of an administrative fine, regard

shall be had in particular to the nature and extent of the infringement,

its duration and its impact on the market and on consumers.

(3) The Minister may, by regulations made under this Act,

establish the administrative fines that may be imposed by the

Authority for breaches of the said regulations

Provided that the amount of the fines that may be so

prescribed shall not exceed the maximum amounts referred to under

sub-article (1).

Where an administrative infringement of any provision of

this Act or any other special law which the Authority is entitled to

administer or enforce is committed by a body corporate and is proved

to have been committed with the consent or involvement of or to be

attributable to the gross negligence on the part of a person being an

administrator of the body corporate or a person who was purporting to

act in any such capacity, that person, as well as the body corporate,

shall be liable to be proceeded against and punished as if he was

responsible for the said infringement.

The prosecution of a criminal offence or the initiation of Prescription for

proceedings to impose an administrative fine under this Act or under offences

administrative

any other special law which the Authority is entitled to administer or infringements.

enforce shall be prescribed by the lapse of two years from the date on

which the offence or administrative infringement is alleged to have

been committed.

PART IX

Administrative Review Tribunal

(1) The Administrative Review Tribunal shall be Administrative

competent to hear and determine appeals from decisions of the Review

Tribunal.

Authority as provided in this Act or in any law or regulations.

(2) The provisions of the Administrative Justice Act, in so far Cap. 490.

as they apply to the Administrative Review Tribunal, shall apply to

any proceedings before the said Tribunal and the words "public

administration" in the said enactment shall be construed as a

reference to the Authority.

(1) Unless otherwise provided by law, an appeal shall Appeals from

lie to the Tribunal from a decision of the Authority made under this decisions

Authority other

Act, any other decisions that the Authority may take under any other than

imposition of

special law which the Authority is entitled to administer or enforce, administrative

and any decision taken by or on behalf of Government or by any fines.

public authority in relation to or having a substantial bearing on

innovative technology services or innovative technology

arrangements.

(2) The right of appeal to the Tribunal shall be competent to

any person aggrieved by the decision

Provided that in any case, a person making an appeal to the

Tribunal shall also explain his juridical interest in impugning the

decision appealed from.

(3) An appeal from a decision of the Authority shall be made

by application and shall be filed with the Secretary of the Tribunal

within twenty (20) days from the date on which the said decision has

been notified.

(4) There shall be a right of appeal from decisions of the

Tribunal to the Court of Appeal in accordance with the provisions of

Part IV of the Administrative Justice Act.

(1) Without prejudice to the provisions of this Part, the

procedure to be followed in relation to appeals against administrative

fines imposed by the Authority shall be regulated by the provisions of

this article.

(2) A person who is notified with a notice in writing given

under article 35 may, within twenty (20) days from the date of such

notification, lodge an appeal before the Tribunal objecting to the

administrative fine so fixed.

(3) The Tribunal shall not annul an administrative fine as

aforesaid unless it results to it that such fine could not at law be

imposed in the circumstances of the case, or could not at law be fixed

in the amount established by the Authority due account being given to

the principle of proportionality.

(4) The Tribunal shall, without delay, set down the appeal for

hearing at an early date, which date shall in no case be later than forty

(40) days from the date of the service of the appeal on the Authority.

(5) The appeal, and the notification of the date fixed for

hearing, shall be notified to the Authority without delay, and the

Authority shall file its reply thereto within twenty (20) days from the

date of the notification of the appeal.

(6) The decision of the Tribunal upon an appeal referred to in

sub-article (2), confirming the imposition of a fine established by the

Authority or reducing any such fine, shall upon becoming res judicata

be deemed to be a decision of the Tribunal.

(7) There shall be a right of appeal on points of law to the

Court of Appeal to any of the parties to the proceedings before the

Tribunal.

In determining an appeal the Tribunal shall take into

account the merits of the appeal, and may, in whole or in part, confirm

or annul the decision appealed from, giving in writing the reasons for

its decision and shall cause such decision to be made public and

communicated to the parties to the appeal.

(1) The Tribunal shall endeavour to determine an appeal

within one hundred and twenty (120) days from the lapse of the

period by when the Authority may file its reply to the aforesaid

appeal and in any case shall deliver its final decision not later than

sixty (60) days from when the parties declare that they have

concluded with their evidence and made their final submissions.

(2) The Tribunal may, in order to assist it in the exercise of its

functions, appoint independent and impartial experts to advise it on

any issue that may be relevant to any appeal lodged before it. In such

cases the Tribunal shall be entitled to make both provisional and final

orders in respect of the payment of the costs and fees of such experts

by any of the parties to the appeal.

(3) The Minister may, subject to the provisions of this Act, by

regulations prescribe the procedure to be followed before the

Tribunal, and subject thereto and to any other provisions of this Act,

the Tribunal may regulate its own procedure.

(4) The Minister may by regulation amend any of the periods

stated in sub-article (1).

(1) The decision of the Authority, pending an appeal Status of

whether before the Tribunal or the Court of Appeal, shall stand and decision

directive

shall be adhered to by all the parties to whom the decision applies.

pending an

appeal before

the Tribunal or

(2) The Tribunal or the Court of Appeal, as the case may be, the

Appeal.

where it considers it to be appropriate, may, on the application of a

party to the appeal, suspend in whole or in part the decision which is

the subject of the appeal pending the final determination of the

appeal. The Tribunal or the Court of Appeal in deciding whether or

not to suspend the decision shall state its reasons and shall take into

account all the relevant circumstances, including -

(a)

the urgency of the matter;

(b) the effect on the party making the request if the

application for suspension is not upheld; and

(c)

the effect on competition and, or on users of the

innovative technology services or innovative technology

arrangements if the application is upheld

Provided that a party, in making an application under this

article, shall state the factual and legal grounds establishing a prima

facie case for the suspension of the decision. The Tribunal or the

Court of Appeal, as the case may be, shall on receipt of any such

application order the notification thereof to the other party or parties

to the appeal affording them reasonable opportunity to make their

response thereto

Provided further that the Tribunal, in determining any such

application, may include such conditions as it considers necessary in

the circumstances.

Where a notice, howsoever described, is required to be

given by the Authority to any person whether under this Act or under

any other law administered by the Authority, the notice shall be

addressed to that person and shall be given to the person in any of the

following ways

(a)

by delivering it to the person;

(b) by leaving it at the address at which the person

ordinarily resides or carries on business;

(c)

by sending it by registered post to the person at the

address at which the person ordinarily resides or carries on

business;

(d) if an address for the service of notices has been

provided by the person, by leaving it at such address, or sending

it by registered post addressed to the person to that address;

(e)

in any case where the Authority considers that the

immediate giving of the notice is required by sending it by

electronic mail to a device or facility for the reception of

electronic mail located at the address at which the person

ordinarily resides or carries on business or, if an address for the

service of notices has been furnished by the person, that

address, provided that the facility of the sender for the reception

of electronic mail generates a message confirming receipt of the

electronic mail

Provided that the provisions of this paragraph shall

not apply to the notification of documents filed before the

Tribunal or any Court.

(1) Where the Authority desires to sue for the recovery

of a debt due to the Authority under any other special law which it is

entitled to administer or enforce for any innovative technology

authorisation fee or other similar fee or charge howsoever described

that may be due, the Chairman or an officer of the Authority duly

authorised by the Authority to act on its behalf may make a

declaration on oath before the registrar of the Courts, a judge or a

magistrate wherein he states the nature of the debt and the name of

the debtor and confirm that it is due.

(2) The declaration referred to in sub-article (1) shall be

served upon the debtor by means of a judicial act and it shall have the

same effect as a final judgement of the competent court unless the

debtor shall, within a period of twenty (20) days from service upon

him of the said declaration, oppose the claim by filing an application

demanding that the court declare the claim unfounded.

(3) The application filed in terms of sub-article (2) shall be

served upon the Authority, which shall be entitled to file a reply

within a period of twenty (20) days. The court shall appoint the

application for hearing on a date after the lapse of that period.

(4) Any debts due to the Authority in accordance with this

article shall be prescribed by the lapse of the period of five (5) years

from the date on which the debt was due.

(1) No person shall make or cause to be made any Name of the

advertisement or other representation, in any visual or aural form, Authority

be used in any

whether the advertisement is made in Malta or otherwise, either advertisement

and prohibition

specifically or by implication, to the effect that

of

misrepresenta-

tion.

(a) any innovative technology services supplied by any

person or any innovative technology arrangements have the

recognition or approval of the Authority when it is not the case;

or

(b) any activity carried out by any person or provided by

or on an innovative technology arrangement has the recognition

or approval or is conducted with the co-operation or assistance of

the Authority when it is not the case; or

(c) any activity is being carried out in or from Malta in

accordance with the regulatory framework applicable to

innovative technology arrangements or services when the

relevant arrangement is not certified or the relevant service

provider is not registered under the Innovative Technology Act No. XXXIII

Arrangements and Services Act, 2018,

of 2018.

or similar statements based on the circumstances from time to time, and

in case of breach such person shall be guilty of an offence under this

article.

(2) In relation to persons recognised by the Authority, the

provisions of sub-article (1) shall not apply when an advertisement or

other representation is issued with the prior written consent or

instructions of the Authority, or is permitted in general guidelines

issued by the Authority on the subject matter, and shall constitute an

offence only if a misrepresentation is made regarding the Authority,

or any recognition granted by it, to an innovative technology

arrangement or service.

(3) If:-

(a)

an innovative technology arrangement is being

administered and operated in or from Malta or an innovative

technology service is being provided in or from Malta;

(b)

reference is made to such fact in an advertisement;

(c)

such arrangement or service falls within the

provisions of the Innovative Technology Arrangements and

Services Act, 2018; and

(d) it is not recognised by the Authority, in any form as

the case may be,

it shall be incumbent on the issuer of the advertisement to expressly

state in any advertisement that the arrangement or service does not

enjoy recognition by the Authority in Malta and not give the contrary

impression under any circumstances.

(4) Should the Authority become aware of a breach of sub-

article (3), the Authority shall have the power to issue a notice under

this article to the issuer of the advertisement or the persons involved

in relation to the relevant arrangement or service, demanding

compliance with the said sub-article and the relevant person shall be

obliged to correct the same within the time stipulated by the

Authority failing which he shall be guilty of an offence under this

article.

(5) Where the name, trade name, trademark or the designation

of any innovative technology arrangement or provider of a service

appears in relation to a representation referred to in sub-article (1) or

(2), that person shall be deemed for the purposes of this article to have

caused the representation to be made unless such person proves that

the representation was made without his knowledge or connivance.

(6) A person convicted under this article shall be liable to a

fine (multa) of

(a) not less than five thousand euro (€5,000) and not

more than ten thousand euro (€10,000) if the person enjoys

recognition by the Authority; and

(b) not less than fifty thousand euro (€50,000) and not

more than one hundred thousand euro (€100,000) if the person

does not enjoy recognition by the Authority.

The Authority shall be exempt from any liability for the

payment of income tax, duty on documents and transfers, and

customs and excise duty, under any law for the time being in force.

PART X

Co-ordination with other Competent Authorities; Simplification

(1) Upon the signing of a memorandum of agreement Co-ordination

referred to in sub-article (7) between national competent authorities, with

national

the provisions of this Part shall be implemented by each national competent

authorities.

competent authority with reference to matters relating to or involving

innovative technology arrangements or services subject to any

mandatory provisions in the legislation establishing the said

authorities, provisions on their functions and powers or any other

special law relating to their jurisdiction or competence. For all intents

and purposes this Part shall be deemed to form part of the laws

establishing the relevant competent authorities and shall be applied

mutatis mutandis.

In the following provisions

(a)

the term "Authority" when applied by another

national competent authority shall be a reference to the said

authority itself with the Authority being considered to be

another national competent authority;

(b) the term "this Act" shall be a reference to the special

law establishing the relevant authority or any other special law

which they may be entitled to administer or enforce;

(c)

the term "confidentiality" shall refer to information

which is sensitive to a specific context of a commercial nature,

refers to personal data of an applicant or licencee or is

confidential to protect the national interest but shall not be

interpreted to refer to matters which are statistical, operational,

administrative, related to research and other such matters.

(2) The Authority shall act in conjunction with other national

competent authorities when

(a) their remit may affect the providers of services

relating to the innovative technology authorisations or affect

innovative technology activities and sectors governed by this

Act and any other special law which the Authority is entitled to

administer or enforce;

(b) other special laws simultaneously impact on the

innovative technology arrangements regulated by the Authority

and the other national competent authorities; and

(c)

matters of common interest arise in connection with

the application of this Act and of any other special law which

the Authority is entitled to administer or enforce.

(3) (a)

The Authority on the one hand and other national

competent authorities on the other hand shall provide each other with

the support, guidance and information, excluding any information

which is confidential, necessary in the relevant context for the

application of

(i) the provisions of this Act, or any other special

law which the Authority is entitled to administer or

enforce, and any regulations made thereunder;

(ii) the special laws and regulations administered

by the other national competent authorities;

(iii) any other relevant special law of common

interest to the Authority and the other national

competent authority;

(iv) the communication required between national

competent authorities when two, or more, approvals or

authorisations for or with reference to the same applicant

may be issued by two, or more, competent authorities;

(v) the type of support which each of the national

competent authorities referred to in sub-paragraph (iv)

shall give to each other in matters of common interest

with regard to the issue of innovative technology

authorisations;

(vi) the exercise of joint monitoring and supervision

by two, or more, national competent authorities in the

case of two, or more, approvals or authorisations being

issued as referred to in sub-paragraph (iv); and

(vii) notwithstanding the provisions of any other law,

any agreement reached between the relative national

competent authorities as to which one of them shall

exercise the power of lead authority in such

circumstances,

which information shall be provided within an appropriate time-frame

taking into consideration the particular circumstances of the issues

(b) Notwithstanding the provisions of any other law but

subject to any confidentiality obligations, as defined in this Part,

which each Authority may have, the Authority and the national

competent authorities are permitted to share information necessary

for the implementation of the provisions of this Part without

restrictions. In respect of the information exchanged, the receiving

authority shall ensure the same level of confidentiality as is binding

upon the originating authority by applicable law.

(4) Where a higher degree of specialisation is required to be

relied upon or assumed by one competent authority with reference to

another, the authority enjoying the specialisation shall establish a

specialised unit with a focus on knowledge relevant to other areas of

specialisation for the co-ordination and communication with the other

authority in order to ensure consistent, streamlined and efficient

processes of analysis and decision making in the processing of

applications and ongoing supervision.

(5) In carrying out its functions under this Act and any special

law it is entitled to administer or enforce, the Authority shall,

consistently with the provisions in this Part -

(a) seek the support and make use of the resources and

facilities made available to it by other national competent

authorities with reference to their areas of competence so as to

achieve the purpose of efficiency as stated in this Act and other

applicable laws generally;

(b) when addressing investigation or enforcement issues

under this Act simultaneously with those under other special

laws relating to subject matters falling within the competence of

other national competent authorities, it shall, where the

competence for such investigation or enforcement at law lies

within the other national competent authorities, follow the lead

of investigation and enforcement by the other national

competent authorities responsible for the subject matter and

support as necessary in the context; and

(c)

it shall generally seek the design, development and

implementation of innovative technology arrangements in all

areas of regulation for itself and for and in collaboration with

other national competent authorities, including with reference to

compliance with and enforcement of special regulatory laws.

(6) The Authority and the other national competent authorities

shall co-ordinate with regard to the recognition of qualifications and

competencies of persons and organisations which review and audit

the innovative technology arrangements in the authorisation

processes which each are responsible for and shall maintain and

publicise lists of such persons for use by the respective industries

falling under their statutory areas of responsibility.

(7) The Authority and the other national competent authorities

shall from time to time enter into memoranda of understanding among

themselves so as to clarify any matters which they consider useful to

clarify and to address issues of detail and practice which they consider

relevant to achieve the best outcomes in the implementation of the

principles of this Part, together with any reservations they may wish to

record on the basis of provisions of law applicable to themselves.

A copy of any such memoranda of understanding shall be

delivered to the Joint Regulatory Efficiency Board.

In so far as matters are such as need to be decided upon by

an authority in an independent and autonomous manner, the provisions

of the articles in this Part shall be interpreted accordingly and shall not

impinge on such independence and autonomy.

(1) In assessing an application for an innovative

technology authorisation, the Authority shall avoid duplicating

procedures, controls, reviews and assessments carried out by other

national competent authorities relating to the same persons or

innovative technology arrangements, as long as such other processes

have been conducted within a reasonable time from the assessment of

the relevant application, as may be established by the Authority.

(2) The Authority may rely on other national competent

authorities, in the collation of information and making assessments on

specific matters, if they agree that the review and assessment is

covering the same ground. This reliance may take place on all relevant

matters, including those relating to identification and the

consideration of whether a person or innovative technology

arrangement is fit and proper for the role referred to in the application

Provided that the Authority may, on a case by case basis,

also take into account procedures and controls already carried out by

a competent authority in any other jurisdiction which the Authority

considers to provide equivalent safeguards to those provided under

Maltese law, or as may be established by the Authority.

(3) When requested to rely on procedures and controls or other

measures carried out by a competent authority in another jurisdiction,

the Authority shall be authorised to subject such measures to

verification and shall not be bound to accept them if, in the

Authority’s discretion, such procedures, controls or other measures

do not provide equivalent safeguards to those provided under Maltese

law or as may be established by the Authority.

(4) In assessing an application for an innovative technology

authorisation, where it considers it justified on the basis of a risk-

based examination of the applicant, information available to the

Authority and previous regulatory performance and circumstances of

the applicant, the Authority shall apply the principle of simplification

of procedures and requirements for an efficient processing of the

application.

(1) There shall be a Joint Regulatory Efficiency Board Joint Regulatory

which shall be a body established for the purpose of ensuring Efficiency

Board.

effective cooperation between the Authority and the other competent

authorities in the area of innovative technology uses and which shall

have the functions set out in this article.

(2) The Board shall be composed of the persons nominated in

accordance with the First Schedule, who shall be persons having

senior or executive authority with decision-taking powers in the

relevant competent authorities. The Minister shall appoint a person

who shall be independent from the regulatory authorities as Chairman

of the Board, from time to time, after consulting the relevant national

competent authorities.

(3) Each member of the Board may appoint one (1) other

representative, with similar powers and capacity as the member

appointing him, to participate as a non-voting observer at meetings of

the Board. The Chairman may co-opt other non-voting observers if

there are vacancies at any time.

(4) (a)

The Board shall have the function to facilitate co-

operation between the relevant authorities in matters impacting on the

use of technology, innovation and the development of Malta as an

innovative technology arrangements hub as well as the

implementation of other guiding principles underlying this Act.

(b)

In addition, it shall have the following functions

(i) to formulate policy recommendations designed

to support the use of innovative technology

arrangements in as wide a manner as possible in all

sectors where it is necessary for the continued

development of Malta’s economy, attractiveness for

investment, including for start-ups, education and

technical development of its workforce and supporting

qualifications and which may be communicated to all or

one or more of the relevant competent authorities or

other relevant statutory bodies or public institutions;

(ii) to give advice about whether and how an

authority or public institution should act in respect of

innovative technology arrangements, where the issue

appears to the Joint Regulatory Efficiency Board to be

relevant to the development of innovative technology

arrangement uses and related services in Malta;

(iii) to act as the medium to establish national

standards when asked to do so by any national

competent authority with reference to innovative

technology arrangements and their uses, and in

particular to adopt codes of best practices against which

the competent authorities benchmark their requirements

in carrying out their functions,

and any such recommendation, advice or assessment made by the

Board shall be taken into consideration by any public authority or

public institution in Malta in the execution of its functions.

(5) It shall be the duty of such public authority or public

institution to seek the opinion of the Board prior to exercising any

functions in matters which may impact on innovative technology

arrangements or services.

(6) The Board shall also seek to establish protocols and

procedures to ensure that when the use of innovative technology

arrangements falls within the remit of one or more competent

authority, clear lines of communication and decision-taking are

established to ensure that duplication is avoided, that information

submitted to one can be relied upon by the other, that analysis carried

out by one can be used and relied upon when needed by the other and

that regulatory decisions by one can be relied upon by the other so as

to achieve simplicity, efficiency and consistency of process.

(7) To the extent applicable in the specific context, the

following provisions shall operate subject to any reservations in the

relevant laws or in any memorandum of understanding entered into

by the relevant authority based on the principles of independence and

autonomy with which they are bound to carry out their respective

obligations

(a)

where there are any inefficiencies created within the

system the Board may direct authorities to change their

procedures and adopt best practices in any context, generally or

specifically, and the relevant national competent authority shall

engage with the Board and fully cooperate in resolution of the

inefficiencies;

(b) without prejudice to the mandatory and policy

obligations of the national competent authorities involved in a

dispute or deadlock, in case a dispute or deadlock develops

between two or more national competent authorities on how to

address an issue which arises in relation to a policy approach, a

formal procedure, application process or otherwise, the following

shall apply

(i) the Chairman of the Board shall, on being asked

to do so by any member of the Board, or an applicant for

authorisation to any such authority, constitute a review

committee of the Board made up of the relevant

stakeholders in the issue and he, or another independent

person appointed by him, shall chair the committee;

(ii) the Chairman shall invite submissions by the

relevant authorities on the subject matter of the dispute

or deadlock; and

(iii) after hearing all relevant persons, the Chairman

shall determine in writing the manner in which the dispute

or deadlock should be resolved and the relevant authorities

shall act in accordance with such decision which shall be

final.

All such decisions shall then be referred to the Board which

shall develop broader policies based on that experience and decision

for dissemination among all authorities for the avoidance of the same

issues in other cases and each of the national competent authorities

shall adopt and implement the said solutions in their own operations

within three (3) months of receiving such direction. Each authority

shall advise the Board in writing when it has done so.

(8) The Board shall meet as often as may be necessary or

expedient but in any case not less frequently than once every month.

The meetings shall be convened by the Chairman either on his own

initiative or on the written request of any two members.

(9) The Board may act notwithstanding any vacancy amongst

its members provided there is a quorum consisting of not less than

three (3) members present at the meeting.

(10) The Board may from time to time invite representatives of

authorities, public bodies and institutions which may not have the

power to nominate members of the Board when the competence,

mandate and functions render it relevant to any discussion taking

place or determination of a policy or other decision being made and

this for such meetings, or part thereof, as are relevant in the context.

(11) Subject to the provisions of this article, the Board shall

regulate its own procedure.

(12) The Minister shall have the power to allocate funds to the

Board for the proper exercise of its functions, in accordance with

annual budgetary estimates which shall be presented to him by the

Board for his consideration.

(13) For the purposes of this article "Board" shall mean the

Joint Regulatory Efficiency Board.

PART XI

Miscellaneous Provisions

(1) The Minister may, acting on the advice of the

Authority, make regulations to give effect to the provisions of this

Act, or to prescribe anything that is to be or which may be prescribed

in terms of this Act, any special law which the Authority is entitled to

administer or enforce or any other regulatory instrument and provide

for any matter consequential, incidental to or connected therewith.

(2) Without prejudice to the generality of the foregoing, the

Minister may, by such regulations

(a) regulate recognition and authorisation processes

under this Act or any other special law which the Authority is

entitled to administer or enforce; and the overall requirements

and conditions for such recognition and authorisations, their

grant, amendment, renewal, suspension, revocation and

termination and other similar actions;

(b) regulate persons involved in activities regulated by

or under this Act or any other special law which the Authority is

entitled to administer or enforce; and all matters related thereto

including the exemption of certain persons or categories of

persons from any or all requirements of recognition and

authorisations;

(c)

establish methods of review relating to the processes

and procedures adopted by the Authority in carrying out its

functions;

(d) lay down any penalties for any breaches of the

provisions of this Act;

(e)

implement any international convention or any EU

Regulation or Directive, to the extent necessary, to which Malta

has adhered to in the context of the innovative technology

arrangements sector;

(f)

lay down rules establishing any fees and tariffs

which may be levied by the Authority in relation to the

recognition of any innovative technology arrangements or

services under the provisions of this Act or any special law

which the Authority is entitled to administer or enforce;

(g) lay down rules for the better carrying out of any of

the provisions of this Act;

(h) amend, revoke or substitute any of the definitions or

Schedules;

(i)

lay down rules which are to apply to the operation of

innovative technology arrangements so as to ensure high

standards of security and integrity, to establish such audits

including security audits which need to be carried out prior to

launch and generally to protect users and investors;

(j)

lay down rules which are to apply in case of forking

at the protocol, networking and, or application layer of any

innovative technology arrangement, or material implementation

thereof, any transfers of controlling or qualifying interests, any

merger or division thereof, any migration to Malta or from

Malta, any reorganisation or restructuring and any such events,

whether the innovative technology arrangement is owned or

controlled by a legal organisation or not, and determine, in the

particular case, the manner in which the rules applicable to legal

organisations, including segregated cells thereof, apply to such

events even when such legal organisations own or control

innovative technology arrangements;

(k) lay down rules on qualifying shareholders, members

or token holders with reference to the application of the

provisions of this Act or any other special law which the

authority is entitled to administer or enforce and in case of other

relevant laws, after consultation with the relevant Minister who

may be entrusted with the administration or the supervision of

such law or, if a regulatory law, the administration of which is

entrusted to a national regulatory authority with such authority;

(l)

lay down rules with respect to any aspect of trading

on an innovative technology arrangement;

(m) lay down rules for the notification of any activities in

or from Malta by or relating to innovative technology

arrangements or services when such activities or services are

subject to recognition by the Authority under this Act or any

other special law which the Authority is entitled to administer or

enforce and recognition is not sought by the relevant persons

based on their decision not to or based on the fact that they enjoy

authorisation in another country; and

(n) issue further guidance regarding the form,

accessibility and minimum contents of information to be made

available to users of innovative technology arrangements in the

English language on relevant matters as described in the Act.

The Minister may direct or authorise the Authority to establish

all necessary details to meet any of the above requirements and

conditions by way of guidelines and other binding regulatory

instruments to be issued by the Authority under article 6 which shall be

ancillary to or independent of any regulations made under the above

powers.

(3) The Minister may make regulations to establish a

supervisory body or institution to monitor and supervise the functions

and activities of the Authority under this Act and to establish the

principles which shall guide the said supervisory body in carrying out

its functions, its constitution, mode of procedure and any other matter

which shall be necessary for the proper functioning of such

supervisory body.

(4) The Minister may make regulations laying down rules on

specific processes whereby any type of innovative technology

services or any type of innovative technology arrangements is

recognised under the provisions of this Act or any other special law

which the Authority is entitled to administer or enforce, including the

tests to be applied to establish when an innovative technology

arrangement or person is fit and proper.

(5) Without prejudice to the generality of the foregoing, the

Minister may, acting on the advice of the Authority, and in

conjunction with the Minister for Finance, make regulations

providing for the taxation of the activities of and transactions

involving innovative technology arrangements and innovative

technology services providers and any other matter related thereto.

(6) The Minister shall, with the support of the Authority,

promote initiatives, including the establishment of structures

dedicated to the purpose, for the review of all the laws of Malta in

order to ensure that such laws are rendered compatible and consistent

with innovative technology arrangements in order to achieve the best

outcomes and ecosystem for the use of such innovative technology

arrangements.

(7) Regulations made under this Act, and any amendment or

revocation of such regulations, may be published in the English

language only.

In this Act and in any regulations made thereunder, if there Conflict

is any conflict between the English and Maltese texts, the English text between texts.

shall prevail.

Sub-article (1) of article 32A of the Second Schedule to the Consequential

amendment to

Civil Code shall be amended as follows

the Civil Code.

(a)

in paragraph (b) thereof, the word "and" shall be

deleted;

(b) in paragraph (c) thereof, for the words "and do all

relative and ancillary acts." there shall be substituted the words

"and do all relative and ancillary acts; and"; and

(c)

immediately after paragraph (c) thereof, there shall

be added the following new paragraph

"(d) a foundation may, subject to such authorisations

as may be necessary under applicable laws, issue tokens

and carry out any trading activity resulting from such

foundation owning, administering or otherwise

operating an innovative technology arrangement, as

defined in the Malta Digital Innovation Authority Act, Act No. XXXI

of 2018.

2018 or carrying out such other acts involving tokens to

establish rights, powers, benefits or purposes with

reference to users or beneficiaries as may be stated in any

whitepaper relating to the issue of such tokens.".

Sub-article (4) of article 38 of the Voluntary Organisations Consequential

amendment to

Act shall be amended as follows

the Voluntary

Organisations

Act.

(a) paragraph (g) thereof shall be re-numbered as

paragraph (h); and

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

be added the following new paragraph

"(g) income which may be payable to voluntary

organisations

resulting

from

such

voluntary

organisations owning, administering or otherwise

operating an innovative technology arrangement, as

defined in the Malta Digital Innovation Authority Act,

2018;".