ACT No. XXVI of 2019 AN ACT to amend various financial services laws.

I assent.

(L.S.)

GEORGE VELLA

President

2nd August, 2019

ACT No. XXVI of 2019

AN ACT to amend various financial services laws.

BE IT ENACTED by the President, by and with the advice and

consent of the House of Representatives, in this present Parliament

assembled, and by the authority of the same, as follows

The short title of this Act is the Various Financial Services

Laws (Amendment) Act, 2019.

PART I

AMENDMENTS TO THE BANKING ACT

This Part amends the Banking Act and it shall be read and

construed as one with the Banking Act, hereinafter in this Part referred

to as "the principal Act".

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

article 2 of the

amended as follows

principal Act.

(a) immediately before the definition "Additional Tier 1

instruments" there shall be added the following new definitions

" "account information service" shall have the same

meaning as that assigned to it under article 2(1) of the

Financial Institutions Act;

"account information service provider" shall have the

same meaning as that assigned to it under article 2(1) of the

Financial Institutions Act;

"account servicing payment service provider" shall

have the same meaning as that assigned to it under article

2(1) of the Financial Institutions Act;";

(b) immediately after the definition "Additional Tier 1

instruments" there shall be added the following new definition

" "Arbiter" means the Arbiter for Financial Services

appointed under article 14 of the Arbiter for Financial Cap. 555.

Services Act;";

(c) immediately after the definition " EEA State " there

shall be added the following new definition

" "electronic money institution" shall have the same

meaning as that assigned to it under article 2(1) of the

Financial Institutions Act;";

(d) immediately after the definition "own funds" there

shall be added the following new definition

" "PAD" means Directive 2014/92/EU of the

European Parliament and of the Council of 23 July 2014 on

the comparability of fees related to payment accounts,

payment account switching and access to payment

accounts with basic features, as may be amended from time

to time and including any implementing measures,

implementing technical standards, regulatory technical

standards and similar measures that have been or may be

issued thereunder;"; and

(e) immediately after the definition "parent undertaking"

there shall be added the following new definitions

" "payment account" shall have the same meaning as

that assigned to it under article 2(1) of the Financial

Institutions Act;

"payment initiation service" shall have the same

meaning as that assigned to it under article 2(1) of the

Financial Institutions Act;

"payment initiation service provider" shall have the

same meaning as that assigned to it under article 2(1) of the

Financial Institutions Act;

"payment institution" shall have the same meaning as

that assigned to it under article 2(1) of the Financial

Institutions Act;

"payment service" means any business activity set

out in the Second Schedule to the Financial Institutions

Act;

"Payment Services Directive" means Directive (EU)

2015/2366 of the European Parliament and of the Council

of 25 November 2015 on payment services in the internal

market, amending Directives 2002/65/EC, 2009/110/EC

and 2013/36/EU and Regulation (EU) No 1093/2010, and

repealing Directive 2007/64/EC, as may be amended from

time to time, and includes any implementing measures,

implementing technical standards, regulatory technical

standards and similar measures that have been or may be

issued thereunder;

"payment service user" shall have the same meaning

as that assigned to it under article 2(1) of the Financial

Institutions Act;".

Sub-article (1) of article 3 of the principal Act shall be

amended as follows

(a) in paragraph (e) thereof, for the words "or EU

Regulation." there shall be substituted the words "or EU

Regulation;"; and

(b) immediately after paragraph (e) thereof, as amended,

there shall be added the following new paragraphs

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

requirements of the PAD, and in so doing may also

establish or maintain measures alternative to those referred

to in Article 10(2) to (6) of the PAD, provided that

(i) it is clearly in the interest of the

consumer;

(ii) there is no additional burden for the

consumer; and

(iii) the switching as defined in Article 2(18)

of the PAD is completed within, as a maximum, the

same overall time-frame as that indicated in Article

10(2) to (6) of the PAD;

(g) set up a specific mechanism to ensure that

consumers who do not have a payment account as defined

in Article 2(3) of the PAD in their territory, and who have

been denied access to such a payment account for which a

fee is charged by credit institutions, will have effective

access to a payment account with basic features in terms of

the PAD, free of charge;

(h) regulate products and services offered by credit

institutions.".

Article 4 of the principal Act shall be amended as follows

Amendment of

article 4 of the

principal Act.

(a) in sub-article (7) thereof, for the words "may make,

amend or revoke Banking Rules as may be required for the

purpose of implementing any guidelines, recommendations and

individual decisions issued by the EBA under Articles 16, 17(3)

and 18(3) of Regulation (EU) No. 1093/2010." there shall be

substituted the words "may issue, amend or revoke Banking

Rules for the purpose of implementing any guidelines,

recommendations, decisions, opinions or any other instrument

issued by the EBA, as may be required.";

(b) in sub-article (8) thereof, for the words "may make,

amend or revoke Banking Rules as may be required for the

purpose of implementing any opinions and recommendations

issued by the ECB under Articles 127(4) and 132(1) of the

Treaty on the Functioning of the European Union." there shall be

substituted the words "may issue, amend or revoke Banking

Rules for the purpose of implementing any guidelines,

recommendations, decisions, opinions or any other instrument

issued by the ECB, as may be required.".

In sub-article (3) of article 7 of the principal Act, for the Amendment of

words "if it refuses an application it shall inform the applicant, in article

principal Act.

writing, of the reasons for the refusal." there shall be substituted the

words "if it refuses an application it shall inform the applicant, in

writing, of the reasons for the refusal within the time-frames referred

to in sub-article (2).".

In sub-article (5) of article 9 of the principal Act, for the

words "shall specify a period in which" there shall be substituted the

words "shall specify a period, being a period not less than forty-eight

hours and not longer than thirty calendar days, in which".

Sub-article (4) of article 17B of the principal Act shall be

Article 19A of the principal Act shall be amended as follows

(a) sub-article (1) thereof shall be substituted by the

following

"(1) Where a credit institution intends to outsource

its material services or activities, it shall first inform the

competent authority accordingly."; and

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

recognition of the outsourcing service provider" there shall be

substituted the words "the information to be submitted regarding

the outsourcing service provider".

Immediately after article 19A of the principal Act there shall

be added the following new articles

(1) Credit institutions shall grant payment

institutions, electronic money institutions and account

information service providers access to a credit

institution’s payment account services on an objective,

non-discriminatory and proportionate basis.

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

b e s u ff i c i e n t l y e x t e n s i v e a s t o a l l o w p a y m e n t

institutions, electronic money institutions and account

information service providers to provide payment

services in an unhindered and efficient manner.

(3) In the event that a credit institution does not

allow a payment institution, an electronic money

institution, or an account information service provider,

to have access to the credit institution’s payment

account services, such institution shall provide the

competent authority with duly motivated reasons for

any such rejection.

(4) The competent authority shall, in case of an

event as referred to in sub-article (3), notify the Central

Bank of said event together with the reasons provided

by the credit institution, without undue delay.

(1) Credit institutions shall establish a

framework with appropriate mitigation measures and

control mechanisms to manage the operational and

security risks, relating to the payment services they

provide. As part of that framework, credit institutions

shall establish and maintain effective incident

management procedures, including for the detection

and classification of major operational and security

incidents.

(2) Credit institutions shall provide to the Central

Bank on an annual basis or at shorter intervals, as may

be determined by the competent authority in co-

operation with the Central Bank, an updated and

comprehensive assessment of the operational and

security risks relating to the payment services they

provide and on the adequacy of the mitigation measures

and control mechanisms implemented in response to

those risks.

(3) The competent authority shall co-operate with

the Central Bank in the assessment and processing of

documents referred to in sub-article (2).

(4) The competent authority may issue, amend or

revoke Banking Rules as may be required in order to

better implement the provisions of this article.

(1) In case of a major operational or security

incident as referred to in article 19C and where Malta is

the home Member State, credit institutions shall,

without undue delay, notify the Central Bank. Upon

receipt of such notification, the Central Bank shall

promptly notify the competent authority.

(2) Where the incident has or may have an impact

on the financial interests of its payment service users,

the credit institution concerned shall, without undue

delay, inform its payment service users of the incident

and of all the measures that they can take to mitigate the

adverse effects of the incident.

(3) Upon receipt of the notification referred to in

sub-article (1), the Central Bank shall, in co-operation

with the competent authority, assess the relevance of

the incident to the relevant authorities in Malta, and

notify any such authorities accordingly.

(4) The competent authority shall, in co-operation

with the Central Bank, co-operate with the EBA and the

ECB for the purposes of assessing the relevance of the

incident and informing other relevant European Union

and national authorities in accordance with Article

96(2) of the Payment Services Directive.

(5) Where the competent authority receives a

notification of a major operational or security incident

in accordance with sub-article (1), it shall where

appropriate, upon the basis of that notification and in

co-operation with the Central Bank, take all the

necessary measures to protect the immediate safety of

the financial system.

(6) Credit institutions shall, at least on an annual

basis, provide to the Central Bank statistical data on

fraud relating to different means of payment.

(7) The competent authority may issue, amend or

revoke any Banking Rules as may be required to better

implement the provisions of this article.

(8) For the purposes of this article, the terms

"home Member State" and "host Member State" shall

have the same meaning as that assigned to them under

article 2(1) of the Financial Institutions Act.".

11. In the marginal note to article 23 of the principal Act, for the

words "Suspected offences" there shall be substituted the words

"Suspected breaches.".

12. In paragraph (b) of article 24 of the principal Act, for the

words "into the suspected commission of any offence under this Act,"

there shall be substituted the words "into the suspected commission of

any breach under this Act,".

13. Immediately after the second proviso of sub-article (9) of

article 25 of the principal Act there shall be added the following new

"(9A) The competent authority shall communicate to the

EBA the names of the authorities or bodies that may receive

information as described in sub-articles (8) and (9).

(9B) In order to implement sub-article (9), the authorities

or bodies referred to in sub-article (8), shall communicate to the

competent authority which disclosed the information, the names

and responsibilities of the persons to whom it is to be sent.".

14. Sub-article (8) of article 29 of the principal Act shall be Deletion of

article 29 of the

principal Act.

15. Paragraph (b) of article 30 of the principal Act shall be Amendment of

article 30 of the

substituted by the following

principal Act.

"(b) make available to the public, in paper or in electronic form,".

16. Article 34 of the principal Act shall be amended as follows

Amendment of

article 34 of the

principal Act.

(a) the first proviso of sub-article (4) thereof shall be

substituted by the following

"Provided that the said officers, auditors or experts

may divulge such information for the purpose of the

performance of their duties, or the exercise of their

functions, only in summary and collective form as

specified in sub-article (4), or when lawfully required to do

so, by any court or under a provision of any law:";

(b) sub-article (8) thereof, shall be substituted by the

following

"(8) The competent authority, when processing

personal data for the purposes of the Act and any

regulations and, or Banking Rules issued thereunder, shall

do so in accordance with any applicable legislation on data

protection.".

17. Immediately after article 34 of the principal Act, as amended, Addition of

article 34A to

there shall be added the following new article

the principal

Act.

(1) Credit institutions may, when necessary

to safeguard the prevention, investigation and detection

of payment fraud, process personal data.

(2) The provision of information to individuals

about the processing of personal data, the processing of

such personal data and any other processing of personal

data for the purposes of this Act and any regulations

and, or Rules issued thereunder shall be carried out in

accordance with any applicable data protection

legislation.

(3) Unless otherwise permitted under other

provisions of this Act and under applicable legislation,

credit institutions shall only access, process and retain

personal data necessary for the provision of their

services with the explicit consent of those making use

of their services.".

18. Immediately after article 36 of the principal Act there shall be

added the following new articles

Any complaints made by any person making

use of a payment service provided by a credit institution

or by other interested third parties, including consumer

associations within the meaning of the Consumer

Affairs Act, in relation to any alleged infringements of

the provisions of this Act transposing the Payment

Services Directive by a credit institution licensed in

terms of this Act, or an agent or a branch established in

Malta under the right of establishment of a credit

institution in another Member State, shall be submitted

to the Arbiter in terms of the Arbiter for Financial

Services Act.

(1) Credit institutions that, before 12 January

2016,

have performed in Malta activities of payment

Services Directive.

initiation service providers and account information

service providers shall not until eighteen months after

the date of entry into force of the regulatory technical

standards referred to in Article 98 of the Payment

Services Directive, be prohibited from continuing to

perform such activities in Malta in accordance with the

currently applicable regulatory framework.

(2) Until credit institutions acting as account

servicing payment service providers comply with the

regulatory technical standards referred to in Article 98

of the Payment Services Directive, such credit

institutions shall not block or obstruct the use of

payment initiation services or account information

services for the accounts that they are servicing.".

PART II

AMENDMENTS TO THE FINANCIAL INSTITUTIONS ACT

19. This Part amends the Financial Institutions Act and it shall be

read and construed as one with the Financial Institutions Act,

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

20. Article 2 of the principal Act shall be substituted by the

2. (1)

In this Act, unless the context otherwise

requires

"account information service" means an

online service to provide consolidated

information on one or more payment accounts

held by the payment service user with either

another payment service provider or with more

than one payment service provider;

"account information service provider"

means a payment service provider that has been

registered in accordance with this Act or that

holds an equivalent registration in another

country in terms of the Payment Services

Directive to provide solely account information

services;

"account servicing payment service

provider" means a payment service provider

providing and maintaining a payment account for

a payer;

"acquiring of payment transactions" means

a payment service provided by a payment service

provider contracting with a payee to accept and

process payment transactions that result in a

transfer of funds to the payee;

"agent" means a person who acts on behalf

of a financial institution in providing those

services listed under the First Schedule, other

than issuing electronic money;

"Arbiter" means the Arbiter for Financial

Services appointed under article 14 of the Arbiter

for Financial Services Act;

"authentication" means a procedure which

allows the payment service provider to verify the

identity of a payment service user or the validity

of the use of a specific payment instrument,

including the use of the user’s personalised

security credentials;

"average outstanding electronic money"

means the average total amount of financial

liabilities related to the electronic money in issue

at the end of each calendar day over the preceding

six calendar months, calculated on the first

calendar day of each calendar month, and applied

for that calendar month;

"body corporate" means a body of persons

having a legal personality distinct from that of its

members;

"branch" means a place of business other

than the head office which is a part of a financial

institution not having a legal personality and

which carries out directly some or all of the

transactions as licensed or registered, inherent in

the business of a financial institution; all the

places of business set up in Malta by a financial

institution with a head office in another Member

State shall be regarded as a single branch;

"Central Bank" means the Central Bank of

Malta as defined by the Central Bank of Malta

Act;

"close links" shall have the same meaning

as that assigned to it in paragraph (38) of Article

4(1) of the CRR;

"Commission Delegated Regulation (EU)

No. 241/2014" means Commission Delegated

Regulation (EU) No. 241/2014 of 7 January 2014

supplementing Regulation (EU) No. 575/2013 of

the European Parliament and of the Council with

regard to regulatory technical standards for Own

Funds requirements for institutions, as may be

amended from time to time;

"Common Equity Tier 1 capital" shall have

the same meaning as that assigned to it in Article

50 of the CRR;

"company" means a limited liability

company constituted in Malta in accordance with

the Companies Act or any law which may from

time to time be in force;

"competent authority" means the Malta

Financial Services Authority established by the

Malta Financial Services Authority Act;

"consumer" means a natural person who in

payment service contracts covered by the

provisions of the Payment Services Directive, as

transposed in directives issued by the Central

Bank under the Central Bank of Malta Act, is

acting for purposes other than his or her trade,

business or profession;

"control" in relation to a body corporate

means the power to determine in any manner the

financial and operating policies of the body

corporate;

"controller" means a person who alone or

together with others exercises control in relation

to a body corporate;

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

European Parliament and of the Council of 26

June 2013 on access to the activity of credit

institutions and the prudential supervision of

credit institutions and investment firms,

amending Directive 2002/87/EC and repealing

Directives 2006/48/EC and 2006/49/EC, as may

be amended from time to time, and includes any

implementing measures, implementing technical

standards, regulatory technical standards and

similar measures that have been or may be issued

thereunder;

"credit facility" means the lending of a sum

of money by way of an advance, overdraft or

loan, or any other line of credit, including

discounting of bills of exchange and promissory

notes, guarantees, indemnities, acceptances, bills

of exchange endorsed pour aval and financial

leasing;

"credit institution" shall have the same

meaning as that assigned to it in the Banking Act;

"credit transfer" means a payment service

for crediting a payee’s payment account with a

payment transaction or a series of payment

transactions from a payer’s payment account by

the payment service provider that holds the

payer’s payment account, based on an instruction

given by the payer;

"CRR" means Regulation (EU) No. 575/

2013 of the European Parliament and of the

Council of 26 June 2013 on prudential

requirements for credit institutions and

investment firms and amending Regulation (EU)

No. 648/2012, as may be amended from time to

time, and includes any implementing measures,

implementing technical standards, regulatory

technical standards and similar measures that

have been or may be issued thereunder;

"digital content" means goods or services

which are produced and supplied in digital form,

the use or consumption of which is restricted to a

technical device and that do not include in any

way the use or consumption of physical goods or

services;

"Directive 86/635/EEC" means Council

Directive 86/635/EEC of 8 December 1986 on the

annual accounts and consolidated accounts of

banks and other financial institutions, as amended

from time to time, and includes any implementing

measures, implementing technical standards,

regulatory technical standards and similar

measures that have been or may be issued

thereunder;

"Directive 2002/21/EC" means Directive

2002/21/EC of the European Parliament and of

the Council of 7 March 2002 on a common

regulatory

framework

for

electronic

communications networks and services, as may

be amended from time to time, and includes any

implementing measures, implementing technical

standards, regulatory technical standards and

similar measures that have been or may be issued

thereunder;

"Directive 2004/39/EC" means Directive

2004/39/EC of the European Parliament and of

the Council of 21 April 2004 on markets in

financial

instruments

amending

Council

Directives 85/611/EEC and 93/6/EEC and

Directive

2000/12/EC of the European

Parliament and of the Council and repealing

Council Directive 93/22/EEC, as may be

amended from time to time, and includes any

implementing measures, implementing technical

standards, regulatory technical standards and

similar measures that have been or may be issued

thereunder;

"Directive 2008/48/EC" means Directive

2008/48/EC of the European Parliament and of

the Council of 23 April 2008 on credit agreements

for consumers and repealing Council Directive

87/102/EEC, as amended from time to time, and

includes

any

implementing

measures,

implementing technical standards, regulatory

technical standards and similar measures that

have been or may be issued thereunder;

"Directive 2013/34/EU" means Directive

2013/34/EU of the European Parliament and of

the Council of 26 June 2013 on the annual

financial statements, consolidated financial

statements and related reports of certain types of

undertakings, amending Directive 2006/43/EC of

the European Parliament and of the Council and

repealing Council Directives 78/660/EEC and 83/

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

and includes any implementing measures,

implementing technical standards, regulatory

technical standards and similar measures that

have been or may be issued thereunder;

"Directive (EU) 2015/849" means

Directive (EU) 2015/849 of the European

Parliament and of the Council of 20 May 2015 on

the prevention of the use of the financial system

for the purposes of money laundering or terrorist

financing, amending Regulation (EU) No. 648/

2012 of the European Parliament and of the

Council, and repealing Directive 2005/60/EC of

the European Parliament and of the Council and

Commission Directive 2006/70/EC, as amended

from time to time, and includes any implementing

measures, implementing technical standards,

regulatory technical standards and similar

measures that have been or may be issued

thereunder;

"director" includes an individual occupying

the position of director of a company, by whatever

name he may be called, empowered to carry out

substantially the same functions in relation to the

direction of the company as those carried out by a

director; and in respect of a company registered or

incorporated outside Malta, includes a member of

a local board or agent or representative of that

company;

"direct debit" means a payment service for

debiting a payer’s payment account, where a

payment transaction is initiated by the payee on

the basis of the consent given by the payer to the

payee, to the payee’s payment service provider, or

to the payer’s own payment service provider;

"EBA" means the European Banking

Authority established by Regulation (EU) No.

1093/2010 of the European Parliament and of the

Council of 24 November 2010 establishing a

European Supervisory Authority (European

Banking Authority), amending Decision No. 716/

2009/EC and repealing Commission Decision

2009/78/EC, as may be amended from time to

time;

"EEA State" means a State which is a

contracting party to the agreement on the

European Economic Area signed at Oporto on the

2nd May, 1992 as amended by the Protocol signed

at Brussels on the 17th March, 1993, and as

amended by any subsequent acts;

"electronic communications network"

means a network as defined in paragraph (a) of

Article 2 of Directive 2002/21/EC;

"electronic communications service" means

a service as defined in paragraph (c) of Article 2

of Directive 2002/21/EC;

"electronic money" means electronically,

including magnetically, stored monetary value as

represented by a claim on the issuer which is

issued on receipt of funds for the purpose of

making payment transactions and that is accepted

by a person other than the financial institutions

that issued the electronic money;

"Electronic Money Directive" means

Directive 2009/110/EC of the European

Parliament and of the Council of 16 September

2009 on the taking up, pursuit and prudential

supervision of the business of electronic money

institutions amending Directives 2005/60/EC and

2006/48/EC and repealing Directive 2000/46/EC,

as may be amended from time to time, and

includes

any

implementing

measures,

implementing technical standards, regulatory

technical standards and similar measures that

have been or may be issued thereunder;

"electronic money institution" means a

financial institution that has been licensed in

accordance with this Act and authorised to issue

electronic money or that holds an equivalent

authorisation in another country in terms of the

Electronic Money Directive to issue electronic

money;

"equity release financial products" means

products consisting of equity release credit

agreements where the creditor

(a) grants on loan a lump sum,

periodic payments or other forms of credit

disbursement in return for a sum deriving

from the future sale of a residential

immovable property or a right relating to

residential immovable property; and

(b) will not seek repayment of the

credit until the occurrence of the death of the

consumer or his move to long-term care or

any one or more other specified life events of

the consumer as may be defined by the

competent authority, unless the consumer

breaches his contractual obligations which

allows the creditor to terminate the credit

agreement

Provided that the creditor cannot

commence

proceedings,

judicial

or

otherwise, for the sale or other transfer of the

property securing the equity release financial

product for a period of at least thirty six (36)

months from the death of the consumer or his

move to long-term care

Provided further that, in the case

of a move into long-term care, the creditor

and the consumer may agree to retain the

equity release financial product even after

the lapse of such thirty six (36) month

period, for so long as such agreement

subsists, until the death of the consumer;

and any such other product as may be defined as an

equity release financial product by the competent

authority from time to time;

"European regulatory authority" means a

body that is in another Member State and is

empowered by law or regulation to supervise

payment

institutions,

electronic

money

institutions and, or account information service

providers;

"European right" means the right of

establishment and, or the freedom to provide

services;

"financial institution" means any person

who regularly or habitually undertakes the

carrying out of any activity listed in the First

Schedule for the account and at the risk of the

person carrying out the activity and who is

licensed or registered under this Act

Provided that any person offering

equity release financial products shall be

considered a financial institution irrespective of

whether such equity release financial products are

offered on a regular or habitual basis, or otherwise;

"Financial Institutions Rules" means a Rule

issued by the competent authority to regulate

financial institutions in terms of the powers under

this Act, and "Rule" shall be read accordingly;

"Financial Services Tribunal" or "Tribunal"

means the Financial Services Tribunal established

under the Malta Financial Services Authority Act;

"framework contract" means a payment

service contract which governs the future

execution of individual and successive payment

transactions and that may contain the obligation

and conditions for setting up a payment account;

"funding of terrorism" has the same

meaning as that assigned to it by the Prevention of

Money Laundering Act, as may be amended from

time to time;

"funds" means banknotes and coins,

scriptural money and electronic money;

"group" means a group of undertakings

which are linked to each other by a relationship

referred to in Article 22(1), (2) or (7) of Directive

2013/34/EU or undertakings as defined in

Articles 4, 5, 6 and 7 of Commission Delegated

Regulation (EU) No. 241/2014 that are linked to

each other by a relationship referred to in Article

10(1) or in Article 113(6) or (7) of the CRR;

"holding company" or "parent company"

has the same meaning as that assigned to the term

"parent company" in the Companies Act;

"home Member State" means either of the

following

(a) the Member State in which the

registered office of the payment service

provider is situated; or

(b) if the payment service provider

has no registered office under its national

law, the Member State in which its head

office is situated;

"host Member State" means the Member

State other than the home Member State in which

a payment service provider has an agent or a

branch, or provides payment services;

"initial capital" means paid up capital and

reserves as defined in a Financial Institutions

Rule;

"issuing of payment instruments" means a

payment service by a payment service provider

contracting to provide a payer with a payment

instrument to initiate and process the payer’s

payment transactions;

"licence" means a licence granted under this

Act to provide any of the activities listed in the

First Schedule;

"Member State" means a Member State of

the European Union and includes an EEA State;

"the Minister" means the Minister

responsible for the regulation of Financial

Services;

"money laundering" has the same meaning

as that assigned to it by the Prevention of Money

Laundering Act, as may be amended from time to

time;

"money remittance" means a payment

service where funds are received from a payer

without any payment accounts being created in

the name of the payer or the payee, for the sole

purpose of transferring a corresponding amount to

a payee or to another payment service provider

acting on behalf of the payee and, or where such

funds are received on behalf of and made

available to the payee;

"officer", in relation to a company, includes

a director, partner, manager or company secretary

or any person effectively acting in such capacity

whether formally appointed or not;

"outsourcing" means the use of a third party

(the outsourcing service provider) by a financial

institution to perform activities and, or

operational functions that would normally be

undertaken by the financial institution;

"outsourcing service provider" means a

supplier of goods, services or facilities, and which

may be an affiliated entity within a corporate

group or an entity that is external to the group;

"overseas regulatory authority" means an

authority that in a country or territory outside

Malta exercises any function corresponding to the

functions of the competent authority under this

Act;

"own funds" means funds as defined in

paragraph 118 of Article 4(1) of the CRR where at

least 75% of the Tier 1 capital is in the form of

Common Equity Tier 1 capital as referred to in

Article 50 of that Regulation and Tier 2 capital is

equal to or less than one third of Tier 1 capital;

"PAD" means Directive 2014/92/EU of the

European Parliament and of the Council of 23

July 2014 on the comparability of fees related to

payment accounts, payment account switching

and access to payment accounts with basic

features, as may be amended from time to time

and including any implementing measures,

implementing technical standards, regulatory

technical standards and similar measures that

have been or may be issued thereunder;

"payee" means a person who is the intended

recipient of funds that have been the subject of a

payment transaction;

"payer" means a person who holds a

payment account and allows a payment order

from that payment account or where there is no

payment account, a person who gives a payment

order;

"payment account" means an account held

in the name of one or more payment service users

which is used for the execution of payment

transactions;

"payment initiation service" means a

service to initiate a payment order at the request

of the payment service user with respect to a

payment account held at another payment service

provider;

"payment initiation service provider" means

a payment service provider that has been licensed

under this Act or that holds an equivalent

authorisation in another country in terms of the

Payment Services Directive to provide payment

initiation services;

"payment institution" means a company that

has been licensed in accordance with this Act or

that holds an equivalent authorisation in another

country in terms of the Payment Services

Directive to provide and execute payment

services throughout the European Union;

"payment

instrument"

means

any

personalised device and, or set of procedures

agreed between the payment service user and the

payment service provider and used in order to

initiate a payment order;

"payment order" means an instruction by a

payer or payee to his payment service provider

requesting the execution of a payment

transaction;

"payment service" means any business

activity set out in paragraph 2 of the Second

Schedule;

"Payment Services Directive" means

Directive (EU) 2015/2366 of the European

Parliament and of the Council of 25 November

2015 on payment services in the internal market,

amending Directives 2002/65/EC, 2009/110/EC

and 2013/36/EU and Regulation (EU) No. 1093/

2010, and repealing Directive 2007/64/EC, as

may be amended from time to time and includes

any implementing measures, implementing

technical

standards,

regulatory

technical

standards and similar measures that have been or

may be issued thereunder;

"payment service provider" means

(a) credit institutions, including

branches thereof as defined in article 2(1) of

the Banking Act where such branches are

located in the European Union, irrespective

of whether the head offices of those

branches are located within the European

Union or, in accordance with Article 47 of

the CRD and national law, if they are

located outside the European Union;

(b) electronic money institutions,

being companies that have been granted

authorisation under Title II of the Electronic

Money Directive to issue electronic money,

including branches thereof, in accordance

with Article 8 of that Directive and national

law, where such branches are located within

the European Union and their head offices

are located outside the European Union, in

so far as the payment services provided by

those branches are linked to the issuance of

electronic money;

(c) post office giro institutions that

are entitled under national law of any

Member State to provide payment services;

(d) payment institutions;

(e) account information service

providers;

(f) the ECB and national central

banks when not acting in their capacity as

monetary authority or other public

authorities; or

(g) Member States or their regional

or local authorities when not acting in their

capacity as public authorities;

"payment service user" means a person

making use of a payment service in the capacity

of payer, payee or both;

"payment system" means a funds transfer

system

with

formal

and

standardised

arrangements and common rules for the

processing, clearing and, or settlement of

payment transactions;

"payment transaction" means an act,

initiated by the payer or on his behalf by the

payee, of placing, transferring, or withdrawing

funds, irrespective of any underlying obligations

between the payer and the payee;

"personalised security credentials" means

personalised features provided by the payment

service provider to a payment service user for the

purposes of authentication;

"qualifying shareholding" shall have the

same meaning as that assigned to it in paragraph

(36) of Article 4(1) of the CRR

Provided that, in determining whether

the criteria for a qualifying shareholding are

fulfilled, the voting rights referred to in Articles 9

and 10 of Directive 2004/109/EC of the European

Parliament and of the Council of 15 December

2004 on the harmonisation of transparency

requirements in relation to information about

issuers whose securities are admitted to trading on

a regulated market and amending Directive 2001/

34/EC, and the conditions regarding aggregation

thereof set out in Article 12(4) and (5) of that

Directive, shall be taken into account

Provided further that, in determining

whether the criteria for a qualifying shareholding

are fulfilled, the competent authority shall not

take into account voting rights or shares which

investment firms or credit institutions may hold as

a result of providing the underwriting of financial

instruments or placing of financial instruments on

a firm commitment basis in terms of paragraph 6

of Section A of Annex 1 to Directive 2004/39/EC,

provided that those rights are not exercised or

otherwise used to intervene in the management of

the issuer and are disposed of within one year of

acquisition;

"reconstruction" has the same meaning as

that assigned to it by the Companies Act;

"registration" means a registration granted

under this Act to provide solely account

information services in terms of this Act;

"Regulation (EC) No. 1606/2002" means

Regulation (EC) No. 1606/2002 of the European

Parliament and of the Council of 19 July 2002 on

the application of international accounting

standards, as may be amended from time to time,

and includes any implementing measures,

implementing technical standards, regulatory

technical standards and similar measures that

have been or may be issued thereunder;

"Regulation (EU) No. 1093/2010" means

Regulation (EU) No. 1093/2010 of the European

Parliament and of the Council of 24 November

2010, establishing a European Supervisory

Authority (European Banking Authority),

amending Decision No. 716/2009/EC and

repealing Commission Decision 2009/78/EC, as

may be amended from time to time, and includes

any implementing measures, implementing

technical

standards,

regulatory

technical

standards and similar measures that have been or

may be issued thereunder;

"subsidiary" shall have the same meaning as

that assigned to "subsidiary undertaking" in the

Companies Act;

"third country" means a country that is not a

Member State or an EEA State;

"Tier 1 capital" shall have the same

meaning as that assigned to in Article 25 of the

CRR;

"Tier 2 capital" shall have the same

meaning as that assigned to it in Article 71 of the

CRR;

"trade bills" means bills of exchange and

promissory notes.

(2) In case of any conflict between the English and

the Maltese texts of this Act, the English text shall

prevail.

(3) The provisions of this Act shall be without

prejudice to the provisions of Directive 2008/48/EC as

transposed in the Consumer Credit Regulations, other

relevant European Union law or national measures

regarding conditions for granting credit to consumers

not harmonised by the Payment Services Directive that

comply with European Union Law.".

21. Immediately after article 2 of the principal Act, the heading Substitution of

"LICENSING REQUIREMENTS" of the principal Act shall be the

‘Licensing

substituted by the following

Requirements’

of the principal

Act.

"LICENSING

AND

REGISTRATION

REQUIRE-

MENTS.".

22. Article 3 of the principal Act shall be substituted by the Substitution of

article 3 of the

principal Act.

3. (1) No activities listed under the First

Schedule of this Act, other than account information

services, shall be transacted regularly or habitually, in

or from Malta, except b y a company that i s in

possession of a licence granted under this Act by the

competent authority

Provided that the activities listed under the

F i r s t S c h e d u l e of t h i s Ac t , o t h e r t h a n a c c o u n t

information services, may also be transacted in or from

Malta, by a legal person that is in possession of an

authorisation granted by another Member State under

the Payment Services Directive or the Electronic

Money Directive, in exercise of its European rights and

in accordance with the provisions of the Payment

Services Directive and the Electronic Money Directive.

(1A) No account information services shall be

transacted regularly or habitually in or from Malta,

except by a natural person or a company in possession

of a registration granted under this Act by the

competent authority

Provided that account information services

may also be transacted in or from Malta, by a natural or

legal person in possession of a registration granted by

another Member State under the Payment Services

Directive, in exercise of its European rights and in

accordance with the provisions of the Payment Services

Directive

Provided further that a financial institution

licensed in terms of article 4(1) shall not require a

registration in accordance with this sub-article, in order

to provide account information services.

(2) For the purposes of sub-article (1) and subject

to the provisions of sub-article (3), a person shall not be

deemed to be a financial institution by reason of the fact

that the person either

(a) belongs to a group and provides any

of the activities listed in the First Schedule,

except for activities 4 and, or 10 thereof, to

companies which are not banks or financial

institutions and that belong to the same group;

(b) is an undertaking and provides any of

the activities listed in the First Schedule, except

for activities 4 and, or 10 thereof, to other

undertakings, which are not banks or financial

institutions, and all such undertakings are

controlled directly or indirectly by the same

person;

(c) is an undertaking and provides any of

the activities listed in the First Schedule, except

for activities 4 and, or 10 thereof, to a person

which is not a bank or financial institution, that

directly or indirectly controls it; or

(d) draws and issues trade bills in the

normal course of business under hire purchase

agreements, or under sales on credit where trade

bills are drawn in respect of the price due

Provided that for the purposes of this

sub-article, a person shall be deemed to control an

undertaking if such person

(i) is a "parent company" as defined

in article 2(2)(a) of the Companies Act; or

(ii) has all of the following

characteristics

(aa) power

over

the

undertaking, based on the current

ability to direct the relevant activities

which significantly affect returns;

(bb) exposure, or right to

variable returns from its involvement

with the undertaking; and

(cc) the ability to use its power

over the undertaking to affect the

amount of the person’s returns.

For the purposes of this sub-article

"person" means a natural person or an

undertaking; and

"undertaking" means a body corporate or

incorporate which carries on a trade or business.

(2A) Sub-article (1) shall not apply to persons that

carry out any of the following activities

(a) payment

transactions

effected

exclusively in cash directly by the payer to the

payee, without any intermediary intervention;

(b) payment transactions effected by the

payer to the payee through a commercial agent

authorised by means of an agreement to negotiate

or conclude the sale or purchase of goods or

services, exclusively on behalf of the payer or the

payee;

(c) professional physical transport of

banknotes and coins, including their collection,

processing and delivery;

(d) payment transactions consisting of the

non-professional cash collection and delivery

within the framework of a non-profit or charitable

activity;

(e) services where cash is provided by the

payee to the payer as part of a payment

transaction following an explicit request by the

payment service user just prior to the execution of

the payment transaction, by means of a payment

for the purchase of goods or services;

(f) cash-to-cash

currency

exchange

operations, where the funds are not held on a

payment account;

(g) payment transactions based on any of

the following documents drawn on the payment

service provider with the scope of placing funds

at the disposal of the payee

(i) paper cheques governed by the

Geneva Convention of 19 March 1931

providing a uniform law for cheques;

(ii) paper cheques similar to those

referred to in sub-paragraph (i) and

governed by the laws of Member States that

are not a party to the Geneva Convention of

19 March 1931 providing a uniform law for

cheques;

(iii) paper-based drafts in accordance

with the Geneva Convention of 7 June 1930

providing a uniform law for bills of

exchange and promissory notes;

(iv) paper-based drafts similar to

those referred to in sub-paragraph (iii) and

governed by the laws of Member States that

are not party to the Geneva Convention of 7

June 1930 providing a uniform law for bills

of exchange and promissory notes;

(v) paper-based vouchers;

(vi) paper-based travellers’ cheques;

(vii) paper-based

postal

money

orders as defined by the Universal Postal

Union;

(h) payment transactions carried out

within a payment or securities settlement system

between settlement agents, central counter-

parties, clearing houses and, or central banks and

other participants of the system and payment

service providers, without prejudice to Article 35

of the Payment Services Directive, as transposed

in directives issued by the Central Bank under the

Central Bank of Malta Act;

(i) payment transactions related to

securities asset servicing including dividends,

income or other distributions, redemption or sale

carried out by persons referred to in paragraph

(h), by investment firms, credit institutions,

collective investment undertakings, or asset

management companies providing investment

services and, or any other entities allowed to have

the custody of financial instruments;

(j) services provided by technical service

providers that support the provision of payment

services, without them entering at any time into

possession of the funds to be transferred,

including processing and storage of data, trust and

privacy protection services, data and entity

authentication, information technology (IT) and

communication network provision, provision and

maintenance of terminals and devices used for

payment services, with the exclusion of payment

initiation services and account information

services;

(k) services based on specific payment

instruments that can be used only in a limited

way, provided they meet one of the following

conditions

(i) instruments allowing the holder

to acquire goods or services only in the

premises of the issuer, or within a limited

network of service providers under a direct

commercial agreement with a professional

issuer;

(ii) instruments that can be used

only to acquire a very limited range of

goods or services;

(iii) instruments valid only in a

single Member Sate provided at the request

of an undertaking or a public sector entity

and regulated by a national or regional

public authority for specific social or tax

purposes, to acquire specific goods or

services from suppliers having a

commercial agreement with the issuer

Provided that service providers

carrying out either of the activities referred

to in sub-paragraphs (i) and (ii) or both, for

which the total value of payment

transactions executed over the preceding

twelve months exceeds the amount of one

million euro (€1,000,000), shall send an

annual notification to the competent

authority containing a description of the

services offered, specifying under which

exclusion referred to in sub-paragraphs (i)

and (ii) the activity is considered to be

carried out

Provided further that, on the

basis of such a notification, the competent

authority shall take a duly motivated

decision on the basis of criteria referred to

in this paragraph where the activity does not

qualify as a limited network, and shall

inform the service provider accordingly;

(l) payment transactions by a provider of

electronic communication networks or services,

provided in addition to electronic communication

services for a subscriber to the network or

service

(i) for purchase of digital content

and voice-based services regardless of the

device used for the purchase or

consumption of the digital content and

charged to the related bill; or

(ii) performed from or by means of

an electronic device and charged to the

related bill within the framework of a

charitable activity, or for the purchase of

tickets

Provided that the value of any

single payment transaction referred to in

sub-paragraphs (i) and (ii) does not exceed

fifty euro (€50), and

- the cumulative value of

payment transactions for an individual

subscriber does not exceed three

hundred euro (€300) per month; or

- where a subscriber pre-funds

its account with the provider of the

electronic communications network or

service, the cumulative value of

payment transactions does not exceed

three hundred euro (€300) per month

Provided further that service

providers carrying out an activity referred to

in this paragraph shall send a notification to

the competent authority and provide the

competent authority with an annual audit

opinion, testifying that the activity complies

with the limits set out in this paragraph;

(m) payment transactions carried out

between payment service providers, their agents

or branches for their own account;

(n) payment transactions and related

services between a parent undertaking and its

subsidiary, or between subsidiaries of the same

parent undertaking, without any intermediary

intervention by a payment service provider, other

than an undertaking belonging to the same group;

and, or

(o) cash withdrawal services offered by

means of ATM by providers, acting on behalf of

one or more card issuers, that are not a party to

the framework contract with the customer

withdrawing money from a payment account, on

condition that those providers do not conduct

other payment services as referred to in the

Second Schedule

Provided that any person providing

such cash withdrawal service shall abide by any

requirements, as may be specified in a directive

issued by the Central Bank under the Central

Bank of Malta Act, transposing Article 3(o) of the

Payment Services Directive.

(3) In the event of reasonable doubt as to whether

an activity constitutes the business of a financial

institution, or whether the business of a financial

institution is being transacted or otherwise in or from

Malta by any person, the matter shall be conclusively

determined by the competent authority.

(3A) (a)

A person that is neither a payment

service provider, nor is explicitly excluded from the

scope of this Act, shall be prohibited from providing

payment services.

(b) Notwithstanding paragraph (a)

of this sub-article, the competent authority shall

inform the EBA of the services notified pursuant

to paragraphs (k) and (l) of sub-article (2A),

stating under which exclusion the activity is

carried out.

(c) The description of the activity notified

under paragraphs (k) and (l) of sub-article (2A)

shall be made publicly available in the public

register referred to in article 8D and the electronic

central register developed, operated and

maintained by the EBA in accordance with

Article 15 of the Payment Services Directive.

(4) The granting of a licence or registration, as

applicable, shall be subject to an annual fee as the

competent authority may determine from time to time.

(5) A licensed or registered financial institution

may not take deposits or other repayable funds from the

public within the meaning of the Banking Act.

(6) Where a person is already licensed under the

Banking Act or the Investment Services Act to carry

out an activity listed in the First Schedule, such person

shall not require a licence or registration for such an

activity under this Act." .

23. Article 3A of the principal Act shall be substituted by the

3A. (1) Notwithstanding the provisions of article

financial leasing of

3, any entity, whether established or operating in Malta

ships and aircrafts.

or otherwise, carrying out the activity of financial

leasing in or from Malta, and all related transactions

involving

(a) an aircraft registered or to be

registered in the National Aircraft Register as

defined in the Aircraft Registration Act or

registered in any other jurisdiction whatsoever

and any aircraft engine; or

(b) a ship registered or to be registered in

the register as defined in the Merchant Shipping

Act or registered in any other jurisdiction

whatsoever,

shall not require a licence from the competent authority

for the purposes of this Act, where

(i) such entity is owned and

controlled, or is a subsidiary of, or

exclusively funded by; and

(ii) any relevant financial leasing

transaction, or the relevant underlying asset,

being an aircraft, an aircraft engine, or a

ship, is exclusively financed by persons or

entities as described in Annex II to

Directive 2014/65/EU of the European

Parliament and of the Council of 15 May

2014 on markets in financial instruments, or

persons or entities who are recognised as

eligible counter-parties in accordance with

Article 30 of such Directive 2014/65/EU

Provided

that

in

the

interpretation and application of sub-

paragraphs (i) and (ii) and in order to ensure

compliance with their requirements, where

the ownership of such entity as described in

sub-paragraph (i), or of the entity financing

the transaction indicated in sub-paragraph

(ii), or its underlying assets is vested in a

trustee, or is otherwise held by another

intermediary on a fiduciary basis, the

criteria described in Annex II of Directive

2014/65/EU shall apply by reference to the

beneficial interests involved, and not to the

said trustee or intermediary.

(2) The provisions of this article shall only apply

to an entity where the business of such entity is limited

to the financial leasing of aircrafts, aircraft engines, or

ships as described in sub-article (1) and to activities that

are ancillary thereto, to the exclusion of other types of

assets and activities otherwise falling within the

purposes of this Act.".

24. Article 4 of the principal Act shall be substituted by the Substitution of

article 4 of the

principal Act.

4. (1) Any company with the intention of

transacting, regularly or habitually, activities listed

under the First Schedule of this Act in or from Malta,

other than account information services, shall before

regularly or habitually transacting any such activities,

apply in writing to the competent authority for a

licence under this Act

Provided that a legal person that is in

possession of an authorisation granted by another

Member State under the Payment Services Directive or

the Electronic Money Directive, may exercise its

European rights in accordance with the provisions of

the Payment Services Directive and the Electronic

Money Directive.

(1A) Any natural person or company with the

intention of transacting, regularly or habitually, account

information services shall, before regularly or

habitually transacting any such services, apply in

writing to the competent authority for a registration

under this Act

Provided that a natural or legal person that is in

possession of a registration granted by another Member

State under the Payment Services Directive, may

exercise its European rights in accordance with the

provisions of the Payment Services Directive.

(2) All applications for a licence or registration, as

applicable, shall be in such form and accompanied by

such information and shall conform to such conditions

as shall be prescribed from time to time by any

Financial Institutions Rule, and an application may only

be withdrawn by written notice given to the competent

authority at a time before the licence or registration

being applied for has been granted or refused.

(3) The competent authority shall have the power

to require any person to provide such information as it

shall deem necessary, for the purposes of determining

an application for a licence or a registration, as

applicable.

(4) The competent authority shall only grant a

licence or a registration if the information and evidence

accompanying the application complies with all the

requirements set out in the Financial Institutions Rule

referred to in sub-article (2) and if the competent

authority’s overall assessment is favourable, after

having scrutinised the application.

(5) The competent authority may, where relevant,

before granting a licence or a registration, consult the

Central Bank or other relevant public authorities.

(6) A licence to provide payment services or to

issue electronic money and a registration to provide

account information services, shall be valid in all

Member States and shall allow the payment institution,

the electronic money institution, or the account

information service provider concerned, to provide the

services that are covered by the licence or registration

throughout the European Union, pursuant to a European

right.".

25. Article 5 of the principal Act shall be substituted by the Substitution of

article 5 of the

principal Act.

5. (1) No company shall be granted a licence in

terms of this Act unless

(a) its initial capital whether in euro or in

any other currency acceptable to the competent

authority are equal to such amount, as may be

established by the competent authority in any

Financial Institutions Rule and as may be

appropriate for the activities to be undertaken by

the applicant;

(b) there are at least two individuals, or any

other number of individuals as may be otherwise

determined by the competent authority, who will

effectively direct the business of the financial

institution from Malta;

(c) the competent authority is satisfied that

the company has sound and prudent management

and has robust governance arrangements that

include a clear organisational structure with well

defined, transparent and consistent lines of

responsibility, effective procedures to identify,

manage, monitor and report the risks to which it is

or might be exposed, and adequate internal control

mechanisms, including sound administrative and

accounting procedures

Provided that such arrangements,

procedures

and

mechanisms

shall

be

comprehensive and proportionate to the nature,

scale and complexity of the services provided by

the company, as may be determined by the

competent authority from time to time and, or as

may be specified by a Financial Institutions Rule;

(d) the competent authority is satisfied that

taking into account the need to ensure the sound

and prudent management of the company,

shareholders having a qualifying holding,

controllers and all persons who will effectively

direct the business of the financial institution are

suitable persons to ensure its sound and prudent

management;

(e) the competent authority is satisfied that,

where there are close links between the company

and another person or persons, such links do not

prevent it from the effective exercise of its

supervisory functions;

(f) the competent authority is satisfied that

where there are close links between the company

and another person or persons, the laws, regulations

or administrative provisions of a third country

governing one or more persons with which the

company has close links, or difficulties involved in

the enforcement of those laws, regulations or

administrative provisions, do not prevent the

effective exercise of its supervisory functions; and

(g) it satisfies any other conditions for the

granting of a licence, as may be specified in a

Financial Institutions Rule

Provided that the company shall, after

being licensed under this Act, inform the competent

authority forthwith of any change in circumstances

concerning the application and shall be further

required to provide the competent authority with

information necessary to monitor compliance with

the conditions referred to in this sub-article on a

continuous basis.

(1A) No natural person or company shall be granted a

registration to carry out account information services

unless

(a) the competent authority is satisfied,

where applicable, that qualifying shareholders,

controllers and all persons who effectively direct

the business of the account information service

provider are suitable persons to ensure its sound

and prudent management;

(b) the competent authority is satisfied that

the natural person or company has sound and

prudent management and has robust governance

arrangements that include a clear organisational

structure with well defined, transparent and

consistent lines of responsibility, effective

procedures to identify, manage, monitor and report

the risks to which it is or might be exposed, and

adequate internal control mechanisms, including

sound administrative and accounting procedures

Provided that such arrangements,

procedures

and

mechanisms

shall

be

comprehensive and proportionate to the nature,

scale and complexity of the services provided by

the natural person or company, as may be

determined by the competent authority from time to

time and, or as may be specified by a Financial

Institutions Rule;

(c) the competent authority is satisfied that

where there are close links between the natural

persons or the company and another person or

persons, such links do not prevent it from the

effective exercise of its supervisory functions;

(d) the competent authority is satisfied that

where there are close links between the natural

person or the company and another person or

persons, the laws, regulations or administrative

provisions of a third country governing one or more

persons with which the company has close links, or

difficulties involved in the enforcement of those

laws, regulations or administrative provisions, do

not prevent the effective exercise of its supervisory

functions; and

(e) the natural person or company satisfies

any other conditions for the granting of a

registration as may be specified in a Financial

Institutions Rule

Provided that the natural person or

company shall, after being registered under this

Act, inform the competent authority forthwith of

any change in circumstances concerning the

application, and shall be further required to provide

the competent authority with information necessary

to monitor compliance with the conditions referred

to in this sub-article on a continuous basis.

(1B) A natural person or a company who applies for a

licence or a registration as applicable in terms of this

article, to provide payment initiation services and, or

account information services, shall as a condition for the

granting of its licence or registration, as applicable, also

be required to hold a professional indemnity insurance

covering the territories in which it offers services, or

some other comparable guarantee against liability. With

respect to an applicant who intends to provide payment

initiation services, the required professional indemnity

insurance or other comparable guarantee against liability,

shall be required to ensure that it can cover its liabilities

as specified in Articles 73, 89, 90 and 92 of the Payment

Services Directive, as transposed in directives issued by

the Central Bank under the Central Bank of Malta Act.

With respect to an applicant who intends to provide

account information services, the required professional

indemnity insurance or other comparable guarantee

against its liability shall be required vis-à-vis the account

servicing payment service provider or the payment

service user resulting from the unauthorised or fraudulent

access to, or the unauthorised or fraudulent use of

payment account information

Provided that the amount of the professional

indemnity insurance or other comparable guarantee

referred to in this sub-article shall be calculated in

accordance with the method as may be established in a

Financial Institutions Rule

Provided further that any information required

by the competent authority in order to calculate the

amount of the professional indemnity insurance or other

comparable guarantee required in terms of this sub-article

shall be provided to the competent authority in terms of a

Financial Institutions Rule.

(1C) Financial institutions required to hold a

professional indemnity insurance or other comparable

guarantee in accordance with sub-article (1B) shall

review, and if necessary recalculate, the minimum

monetary amount of their professional indemnity

insurance or other comparable guarantee at least on an

annual basis and as may be established in a Financial

Institutions Rule.

(2) The competent authority shall determine each

application for a licence or a registration within three

months of receipt of the application or, in the event that

the application does not comply with article 4(2) or

additional information is required, within three months of

compliance with the said sub-article or the submission of

the information required, as the case may be, whichever

is the later.

(3) The competent authority may grant or refuse to

grant a licence or a registration applied for under this Act,

and where it refuses an application, it shall inform the

applicant in writing with the reasons for the refusal.

(4) (a) In granting a licence or a registration, the

competent authority may subject a financial institution to

such conditions as it may deem appropriate and having

granted a licence, 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 competent authority may, from

time to time, issue and publish Financial Institutions

Rules in terms of article 13.

(5) Where the competent authority for any reason

fails to determine an application for a licence or a

registration within the time prescribed under sub-article

(2), such fact shall be deemed to constitute a refusal to

grant a licence or a registration, as applicable.

(6) Where a licensed or registered financial

institution provides any of the services referred to in the

First Schedule and at the same time intends to engage in

activities other than those listed in the First Schedule, it

shall not do so without the prior consent of the competent

authority. The competent authority may require the

establishment of a separate entity for the carrying out of

the business for which the financial institution is licensed

or registered, where the activities in which the financial

institution is engaged or intends to engage and that are

not listed in the First Schedule, impair or are likely to

impair, either the financial soundness of the financial

institution or the ability of the competent authority to

monitor the financial institution’s compliance with all

obligations set out in this Act and any regulations and, or

Rules issued thereunder.

(7) A financial institution licensed or registered in

Malta shall have its head office and its registered office in

Malta and shall carry out at least part of its licensable

and, or registrable activities in Malta

Provided that where a registered account

information service provider is a natural person, such a

natural person shall have its contact address in Malta.".

26. Article 5A of the principal Act shall be substituted by the

5A. (1) Without prejudice to the minimum level

of the capital requirements as may be set out in a

Financial Institutions Rule, the own funds of a financial

institution, other than an account information service

provider, shall not fall below the amount of initial

capital as may be set out in a Financial Institutions

Rule, or the amount of own funds as calculated in

accordance with a Financial Institutions Rule issued by

the competent authority, whichever is the higher.

(2) Notwithstanding

the

initial

capital

requirements, financial institutions providing any of the

services listed in the Second or the Third Schedule,

except for payment initiation services and account

information services, shall hold at all times own funds

calculated in accordance with one or more, where

applicable, of the methods as may be set out in a

Financial Institutions Rule.

(2A) Where a payment institution or an electronic

money institution belongs to the same group as another

payment institution, electronic money institution, credit

institution, investment firm, asset management

company or insurance undertaking, or where a payment

institution or an electronic money institution carries out

activities other than providing payment services or

issuing electronic money, as applicable, the multiple

use of elements eligible for own funds shall be

prohibited.

(2B) In the event that the conditions set out in

Article 7 of the CRR are satisfied, the competent

authority may choose not to apply sub-article (2) to

payment institutions or electronic money institutions

that are included in the consolidated supervision of the

parent credit institutions pursuant to the CRD.

(3) Where the amount of own funds of a financial

institution, other than an account information service

provider, falls below the amount established under sub-

articles (1) and (2), the competent authority shall

require the financial institution to take the necessary

measures to restore the level of own funds within such

period as the competent authority may determine

Provided that if the level of own funds of a

financial institution, other than an account information

service provider, is not restored within the determined

period, the competent authority may, in addition to the

power to impose an administrative penalty, exercise any

of the powers granted to it under the provisions of

article 6.".

27. Article 6 of the principal Act shall be amended as follows

Amendment of

article 6 of the

principal Act.

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

following

"Restriction, suspension and withdrawal of a licence

or a registration.";

(b) sub-article (1) thereof shall be substituted by the

following

"(1) The competent authority may withdraw,

suspend or restrict a licence or registration issued to a

financial institution where

(a) the financial institution expressly renounces the

licence or registration;

(b) the financial institution does not commence

business pursuant to the licence or registration as

applicable, within twelve months of its issue, or any later

date as may be specified by the competent authority, or has

ceased to engage in business for more than six months, or

for such other period of time as may be determined by the

competent authority;

(c) (i) the financial institution has obtained the

licence or registration through false statements or any other

irregular means; or

(ii) where any document or information

accompanying an application for a licence or a registration

or any information given in connection therewith is false in

any material particular; or

(iii) where the financial institution conceals

from, or fails to notify or submit to the competent

authority, any document or information or change therein,

which it was its duty to reveal or notify under this Act and

any regulations and, or Rules issued thereunder;

(d) the financial institution no longer fulfils the

conditions required for the granting of the licence or

registration, or any conditions stipulated in any Financial

Institutions Rule, or fails to inform the competent authority

on major developments in this respect;

(e) the financial institution is declared bankrupt or

goes into liquidation, or enters into a composition with its

creditors or is otherwise dissolved;

(f) the financial institution has ceased to operate as

a result of a merger with another financial institution;

(g) the financial institution is a branch of an

institution incorporated outside Malta, and the overseas

regulatory authority in the country of incorporation

withdrew the authorisation or registration of the institution;

(h) the financial institution would constitute a

threat to the stability of the payment system by continuing

its payment services or electronic money;

(i) the financial institution fails or is likely to fail

to comply with any of the provisions of this Act and any

regulations or Financial Institutions Rules issued

thereunder or with the conditions under which the licence

or registration is granted or any directive as may be issued

by the Authority;

(j) the financial institution has insufficient assets

to cover its liabilities; or

(k) the competent authority considers that, by

reason of the manner in which the financial institution is

conducting or proposes to conduct its affairs, or for any

other reason, these would constitute a threat to the stability

or integrity of the financial system.";

(c) sub-article (2) thereof shall be substituted by the

following

"(2) Where the competent authority withdraws,

suspends or restricts a licence or registration, it shall

inform the financial institution of the reasons for the

withdrawal, suspension or restriction of the licence or

registration.";

(d)

sub-article (3) thereof shall be deleted;

(e) sub-article (4) thereof shall be substituted by the

following

"(4) Restrictions of a licence or a registration issued

to a financial institution, that are imposed by the competent

authority pursuant to sub-article (1), shall be such

restrictions as the competent authority shall consider

appropriate for the proper compliance by the financial

institution with the provisions of this Act and any

regulations and, or Rules issued thereunder, in addition to

the conditions, if any, of its licence or registration and the

protection of the integrity of the country’s financial system,

and may include

(a) the requirement that the financial

institution be prohibited from undertaking any

transaction or transactions or any activity listed in the

First Schedule; or

(b) the requirement that the financial

institution be permitted to undertake any transaction

or transactions or any activity listed in the First

Schedule only upon such terms and conditions, as the

competent authority may prescribe.";

(f) immediately after sub-article (5) thereof there shall

be added the following new sub-article

"(5A) Where the competent authority varies or

removes any restrictions imposed under this article, it shall

inform the financial institution of the reasons for the

variation or removal of any such restrictions.";

(g) sub-article (6) thereof shall be substituted by the

following

"(6) A licence granted to a branch of an institution

incorporated outside Malta may only be withdrawn after

consultation with the overseas regulatory authority of the

country of incorporation, unless the competent authority

decides that the matter is urgent, or that there are

circumstances which make such prior consultation

inappropriate.";

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

following

"(7) Upon the restriction or withdrawal of a licence

or a registration of a financial institution incorporated in

Malta, the competent authority shall inform the overseas

regulatory authorities of the country in which the financial

institution or its subsidiaries are carrying on any activity

under the First Schedule or any other activity as the

competent authority may deem complementary to the

institution’s activities in Malta.";

(i) sub-article (8) thereof shall be substituted by the

following

"(8) Where the competent authority is satisfied that

the circumstances so warrant, it may at any time make

public any restriction imposed under this article.";

(j) immediately after sub-article (8) thereof there shall

be added the following new sub-article

"(9) The competent authority shall publish any

withdrawal or suspension of a licence or registration,

including those in the public register referred to in article

8D, and in the electronic central register developed,

operated and maintained by the EBA in accordance with

Article 15 of the Payment Services Directive.".

28. Article 7 of the principal Act shall be substituted by the Substitution of

article 7 of the

principal Act.

7. (1)

Where the competent authority proposes

(a) to vary any condition to which the

licence or registration is subject, or to impose a

condition thereon; or

(b) to withdraw, suspend or restrict, a

licence or registration or to vary any restriction

thereon,

it shall serve written notice of its intention on the

financial institution and shall specify the grounds upon

which the competent authority intends to take such

action.

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

state that the financial institution concerned may, within

such reasonable period after service thereof as may be

stated in the notice, being a period of not less than

forty-eight hours and not more than thirty days, make

representations in writing to the competent authority

giving reasons why such action should not be taken,

and the competent authority shall consider any such

representations before arriving to a final decision.

(3) Unless the competent authority considers that

the matter is urgent, it shall not impose or vary any

restriction or condition, or withdraw or suspend a

licence or a registration before the expiry of the period

as set out in sub-article (2).

(4) The competent authority shall, as soon as

practicable, notify its final decision in writing to any

financial institutions to whom notice has been served

under sub-article (1).".

29. Article 7A of the principal Act shall be substituted by the

7A. A financial institution licensed or registered

under this Act shall provide the competent authority

with particulars of any changes in the information

provided under this Act and any regulations and, or

Rules issued thereunder, as soon as such financial

institution becomes aware of such change.".

30. Immediately after article 7A of the principal Act, as

substituted, there shall be added the following new articles

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

conferred under this Act, the competent authority may,

in order to carry out the functions and duties prescribed

by the Malta Financial Services Authority Act and by

this Act and any regulations and, or Rules issued

thereunder, whenever it deems necessary, give by

notice in writing such directives as it may deem

appropriate in the circumstances.

(2) Any person to whom a notice is given in

accordance with sub-article (1) shall comply therewith

and give effect to any such directive within the time and

in the manner stated in the directive.

(3) The power to give directives under this article

shall include the power to vary, alter, add or withdraw

any directive, as well as the power to issue new or

further directives.

(4) Where the competent authority is satisfied that

the circumstances so warrant, it may at any time make

public any directive it has given under any of the

provisions of this article.

7C. A financial institution licensed or registered

under this Act shall provide its customers or potential

customers, including in any form or medium of

marketing activity or communication disseminated to

the public by means of all types of media, with a

statement of the fact that the financial institution is

licensed or registered, as applicable, by the competent

authority, together with the address of the competent

authority.".

31. Immediately after article 7C of the principal Act, as added, Substitution of

the heading "OBLIGATIONS OF LICENCE HOLDERS AND the

‘Obligations of

OTHERS" of the principal Act shall be substituted by the following: Licence

and Others’ of

the principal

"OBLIGATIONS

OF

FINANCIAL

AND

OTHER Act.

INSTITUTIONS" .

32. Article 8 of the principal Act shall be amended as follows

Amendment of

article 8 of the

principal Act.

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

following

"Opening of branches and subsidiaries.";

(b) sub-article (1) thereof shall be substituted by the

following

"(1) A financial institution, other than those

exercising a European right, shall inform the competent

authority in writing, before opening a new branch in

Malta.";

(c) sub-article (2) thereof shall be substituted by the

following

"(2) A financial institution intending to open a

branch or an office outside Malta to provide any of the

activities listed in the First Schedule, with the exception of

activities 4 or 10 thereof, and a financial institution

intending to open a branch or office in a third country in

order to provide any of the activities listed in the First

Schedule, shall require the prior written approval of the

competent authority.";

(d) immediately after sub-article (2) thereof there shall

be added the following new sub-articles

"(2A) A financial institution intending to provide the

activities listed in the Second or Third Schedules in

another Member State in exercise of a European right,

shall inform the competent authority in accordance with

the procedure set out in Article 28 of the Payment

Services Directive.

(2B) A financial institution intending to set up or

acquire a subsidiary in or outside Malta shall require

the prior written approval of the competent authority.";

(e)

sub-articles (3) to (6) thereof shall be deleted;

(f) immediately after sub-article (6) thereof there shall

be added the following new sub-article

(7) Financial institutions shall ensure that

branches acting on their behalf inform their customers

potential customers.

and potential customers of this fact.".

33. Article 8A of the principal Act shall be substituted by the

8A. (1) A financial institution intending to

provide any of the activities referred to in the Schedules

to this Act through an agent or, in the case of an

electronic money institution intending to appoint a

distributor to distribute or redeem electronic money,

shall communicate the following information to the

competent authority

(a) the name and address of the agent and,

or distributor;

(b) a description of the internal control

mechanisms that will be used by the agent in

order to comply with the obligations in relation to

money laundering and the funding of terrorism

under any anti-money laundering and combating

the funding of terrorism legislation;

(c) the identity of directors and persons

responsible for the management of the agent to be

used in the provision of the activities referred to

in the Schedules to this Act, and for agents other

than payment service providers, evidence that

they are fit and proper persons;

(d) the activities referred to in the

Schedules to this Act that are carried out by the

financial institution and for which the agent is

mandated; and

(e) where

applicable,

the

unique

identification code or number of the agent or

distributor

Provided that a person who is

appointed as agent of a financial institution shall

only act as agent in respect of those activities for

which the financial institution to which he will act

as agent, is licensed or registered under this Act.

(1A) In the event of material changes to the

particulars communicated to the competent authority at

the initial notification pursuant to paragraph (b) of sub-

article (1), the financial institution concerned shall

provide the competent authority with the updated

information without delay.

(2) An electronic money institution shall not issue

electronic money through agents

Provided that an electronic money institution

may, subject to such conditions as may be established

by the competent authority, distribute and redeem

electronic money through agents and, or distributors.

(3) The competent authority may subject the

person who will be appointed as agent to any of the

obligations imposed on the financial institution under

this Act.

(4) The competent authority shall, within two

months of receipt of the information referred to in sub-

article (1), communicate to the financial institution

whether the agent has been entered in the public

register referred to in article 8D

Provided that, if the competent authority is not

satisfied that the information provided is correct, it

shall take further action to verify the information before

entering the agent in the register

Provided further that, if after taking action to

verify the information, the competent authority is not

satisfied that the information provided pursuant to sub-

article (1) is correct, it shall refuse to enter the agent in

the public register referred to in article 8D and shall

inform the financial institution without undue delay.

(4A) An agent may only commence providing the

relevant activities upon entry in the public register

referred to in article 8D.

(4B) Where a payment institution or an electronic

money institution intends to provide payment services

in another Member State by engaging an agent or

establishing a branch, it shall also follow the

procedures set out in Article 28 of the Payment

Services Directive.

(5) Where a financial institution licensed or

holding an equivalent authorisation in another Member

State carries out the activities listed in any of the

Schedules in Malta through a branch or by engaging an

agent or distributor, the financial institution shall follow

the procedures established in any Financial Institutions

Rule

Provided that if the competent authority has

reasonable grounds to suspect that, through such

branch, agent or distributor, money laundering or the

funding of terrorism is being or has been committed or

attempted, or that the engagement of such branch or

agent could increase the risk of money laundering or

the funding of terrorism, it shall inform the Member

State in which the financial institution is established,

and may refuse to register the branch or agent, or may

withdraw the registration of the branch or agent.

(6) Financial institutions shall, without undue

delay and in accordance with the procedure provided

for in sub-articles (4) and (4A), communicate to the

competent authority any changes regarding the use of

agents or distributors, including additional agents or

distributors.

(7) A financial institution intending to provide its

activities through an agent in a third country shall

require the prior written approval of the competent

authority.

(8) Financial institutions shall ensure that agents

potential customers . or distributors acting on their behalf inform their

customers and potential customers of this fact.".

34. Article 8B of the principal Act shall be substituted by the

8B. (1) Where a financial institution intends to

outsource operational functions of its services it shall

inform the competent authority accordingly

Provided that the outsourcing of important

operational functions, including IT systems, shall not

be undertaken in such a way as to impair materially the

quality of the financial institution’s internal control and

the competent authority’s ability to monitor and retrace

the financial institution’s compliance with all of the

obligations established in this Act and any regulations

and, or Rules made thereunder.

(2) For the purpose of sub-article (1), an

operational function shall be regarded as important if a

defect or failure in its performance would materially

impair the continuing compliance of a financial

institution with the requirements of its licence or

registration, its other obligations under this Act or any

regulations and, or Rules issued thereunder, its financial

performance, or the soundness or continuity of its

services

Provided that financial institutions that

outsource important operational functions shall comply

with the following conditions

(a) the outsourcing shall not result in the

delegation by senior management of its

responsibility;

(b) the relationship and obligations of the

financial institution towards any person making

use of its services under this Act and any

regulations and, or Rules issued thereunder shall

not be altered;

(c) the conditions with which the

financial institution must comply with in order to

be licensed and remain so in accordance with this

Act and any of the regulations and, or Rules

issued thereunder shall not be undermined; and

(d) none of the other conditions subject to

which the financial institution’s licence or

registration was granted shall be removed or

modified.

(2A) Financial institutions shall, without undue

delay, communicate to the competent authority any

changes regarding the use of entities to which activities

are outsourced.

(3) The competent authority may issue a Financial

Institutions Rule, laying down the requirements for

outsourcing service providers and the provision of such

outsourced services.".

35. Article 8C of the principal Act shall be substituted by the Substitution of

article 8C of the

principal Act.

8C. (1) Where financial institutions rely on

third parties for the performance of operational

functions, those financial institutions shall take

reasonable steps to ensure that the requirements of this

Act and any regulations and, or Rules issued

thereunder are complied with.

(2) Financial institutions shall remain fully liable

for any acts of their employees, or any agent, branch or

entity to whom or to which activities may have been

outsourced." .

36. Article 8D of the principal Act shall be substituted by the

8D. (1) The competent authority shall establish

and maintain a public register in which the following

are entered

(a) financial institutions licensed or

registered in terms of this Act;

(b) agents of financial institutions in

Malta or in another Member State;

(c) branches of financial institutions,

established in or outside Malta, if those branches

provide services in another Member State;

(d) branches in Malta of payment

institutions authorised in another Member State;

(e) branches in Malta of account

information service providers authorised in

another Member State;

(f) account information service providers

registered under this Act exercising their

European right to provide services in another

Member State;

(g) account information service providers

authorised in another Member State exercising

their European right to provide services in Malta;

(h) the institutions referred to in

paragraphs (4) to (23) of Article 2(5) of the CRD

that are entitled under national law to provide

payment services;

(i) branches in Malta of electronic money

institutions authorised in another Member State;

(j) payment institutions and electronic

money institutions licensed under this Act

exercising their European right to provide

services in another Member State;

(k) payment institutions and electronic

money institutions authorised in another Member

State exercising their European right to provide

services in Malta;

(l) service providers carrying out services

based on specific payment instruments that can be

used only in a limited way, provided they satisfy

any of the following conditions

(i) instruments allowing the holder

to acquire goods or services only in the

premises of the issuer, or within a limited

network of service providers under direct

commercial agreement with a professional

issuer;

(ii) instruments that can be used

only to acquire a very limited range of

goods or services; and

(m) service providers carrying out

payment transactions by a provider of electronic

communication networks or services provided in

addition to electronic communication services for

a subscriber to the network or service

(i) for the purchase of digital

content and voice-based services, regardless

of the device used for the purchase or

consumption of the digital content and

charged to the related bill; or

(ii) performed from or by means of

an electronic device and charged to the

related bill within the framework of a

charitable activity, or for the purchase of

tickets.

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

identify the services for which the financial institution

is licensed or registered and it shall be publicly

available for consultation, accessible online and

updated without delay.

(3) Payment institutions shall be listed in the

register separately from account information service

providers.

(4) The competent authority shall enter in the

public r egister any withdrawal of a licence or

registration.

(5) The competent authority shall notify the EBA

of the reasons for the withdrawal of any licence or

registration.

(6) The competent authority shall, without delay,

notify the EBA of the information entered in the public

register.

(7) The competent authority shall be responsible

for the accuracy of the information specified in sub-

article (6) and for keeping that information updated.".

37. Article 8E of the principal Act shall be substituted by the

8E. (1) In the assessment of an application for

the opening of a branch by an electronic money

institution having its head office outside the European

Union, the c ompetent aut hority may not a pply

provisions which result in more favourable treatment

than that accorded to an electronic money institution

having its head office within the European Union.

(2) The competent authority shall notify the

European Commission of all authorisations for

branches of electronic money institutions having their

head office outside the European Union as stated in

sub-article (1)." .

38. Article 8F of the principal Act shall be substituted by the

8F. (1) Electronic money institutions shall issue

electronic money at par value on the receipt of funds.

(2) Upon request by the electronic money holder,

electronic money institutions shall redeem at any

moment and at par value the monetary value of the

electronic money held without delay.

(3) For the better carrying out of the provisions of

this article and to better transpose the provisions of the

Electronic Money Directive, the competent authority

may, from time to time, issue, amend or revoke

Financial Institutions Rules that shall be binding on

electronic money institutions as specified therein.".

Immediately after article 8F of the principal Act, as

substituted, there shall be added the following new article

8G. Without prejudice to any anti-money

laundering or combating the funding of terrorism

legislation, or other relevant European Union Law,

financial institutions other than account information

service providers, shall keep all appropriate records for

the purposes of this Act and any regulations and, or

Rules issued thereunder for at least five years." .

Article 9 of the principal Act shall be substituted by the Substitution of

article 9 of the

principal Act.

9. (1) If

" Notification of new

(a) any person takes or intends to take any

action to acquire or dispose, directly or indirectly,

of a qualifying shareholding in a financial

institution, or to further increase or reduce,

directly

or

indirectly,

such

qualifying

shareholding so that the proportion of the voting

rights, or of the share capital held by that person

in that financial institution reaches, exceeds or

falls below twenty per centum, thirty per centum

or fifty per centum, or so that the financial

institution becomes or ceases to be the subsidiary

of such person; or

(b) any financial institution takes or

intends to take action to sell or dispose of its

business or any significant part thereof, merge

with any other company, undergo any

reconstruction or vary its nominal or issued share

capital, or effect any material change in voting

rights,

without obtaining the prior approval of the competent au-

thority or, if after having obtained such approval it subse-

quently appears to the competent authority that any of

these actions, or the influence exercised by the person

who intends to take such action, is operating or is likely to

operate to the detriment of the prudent and sound man-

agement of the financial institution, without prejudice to

the provisions of article 22, the competent authority shall

express its opposition and shall have the power to take ap-

propriate measures to rectify the situation.

(1A) The appropriate measures referred to in sub-

article (1) may include

(i) restraining the person or

financial institution from taking or

continuing the action;

(ii) declaring the action to be null

and void;

(iii) requiring the person or financial

institution to take such steps as may be

necessary to restore the position existing

immediately before the action was taken;

(iv) restraining the person or

financial institution from exercising any

rights which the action would, if lawful,

have conferred upon them, including the

right to receive any payment or to exercise

any voting rights attached to the shares

acquired;

(v) restraining the person or

financial institution from taking any similar

action, or any other action within the

categories set out in paragraphs (a) and (b)

of sub-article (1); and, or

(vi) suspending the exercise of the

voting rights attached to the shares held by

the shareholders or members of the

financial institution in question.

(2) If as a result of an acquisition of shares in a

financial institution, the financial institution in which a

person proposes to acquire the shareholding would

become a subsidiary or be subject to the control of the

person acquiring those shares, it shall be within the

discretion of the competent authority to consider

whether any request made by such person for the

approval of t he competent authority under the

provisions of this article constitutes a request to apply

for a licence to conduct the business of a financial

institution under the provisions of this Act and any

regulations and, or Rules issued thereunder.

(3) Sub-article (1) shall apply whether or not any

of the relevant shares are listed on a regulated market in

terms of the Financial Markets Act, or on an equivalent

market in a third country.

(4) (a) Where a person intends to take any

action as set out in sub-article (1)(a) or (b), such person

shall notify the competent authority in writing of any

such decision in advance, indicating the size of the

intended shareholding and providing any relevant

information as and in the manner that the competent

authority may, by a Financial Institutions Rule, require,

including the form in which such notification shall be

made and the criteria adopted by the competent

authority in determining whether such person is a

suitable person.

(b) Where the qualifying shareholding is

acquired despite the opposition of the competent

authority, the said authority shall, regardless of any

other administrative penalty or other supervisory

measure that may be adopted, provide for the

suspension of the exercise of the voting rights of the

acquirer, the nullity of the votes cast, or the possibility

of annulling those votes.

(c) Where a person fails to comply with the

obligation to provide prior information in accordance

with paragraph (a) of this sub-article, the competent

authority shall have the power to take appropriate

measures in accordance with sub-article (1A).

(5) (a) A financial institution shall notify to the

competent authority, in writing, the full particulars of

any person who is proposed to become a controller or

director of the financial institution or any person who is

proposed to cease to be a controller or director of the

financial institution.

(b) If the competent authority is of the

opinion that any person who is or is proposed to

become a controller or director of a financial institution

is not a suitable person to be a controller or director, the

competent authority may make an order requiring such

a person to cease to be a controller or director, or

restraining such a person from becoming a controller or

director.

The competent authority may also issue, amend or

revoke any Financial Institutions Rule as may be

required in order to better implement the provisions of

this article.".

Article 10A of the principal Act shall be substituted by the Substitution of

article 10A of

the principal

Act.

10A. The granting of interest or of any other benefit

related to the length of time during which an electronic

money institution holds electronic money shall be

prohibited.".

Article 10B of the principal Act shall be substituted by the

10B. (1) A payment institution providing payment

services as referred to in paragraphs 2(a) to (f) of the

Second Schedule and an electronic money institution

shall safeguard all funds received from any person

making use of its services, or received through another

payment service provider for the execution of payment

transactions, or in exchange for electronic money that

has been issued.

(2) For the better carrying out of the provisions of

this Act on safeguarding requirements, the competent

authority may, from time to time, issue, amend or

revoke any Financial Institutions Rule which shall be

binding on financial institutions as specified therein.".

Article 11 of the principal Act shall be substituted by the

11. Notwithstanding any investigation provided

for in this Act

to meet obligations.

(a) where a financial institution considers

that it has failed to comply with, or that it is likely

to fail to comply with any of the provisions of this

Act and any regulations and, or Financial

Institutions Rules issued thereunder, or with the

conditions under which the licence or registration

was granted, it shall forthwith inform the

competent authority and the Central Bank in

writing;

(b) where the competent authority

becomes aware that a financial institution has

failed to comply with, or that it is likely to fail to

comply with any of the provisions of this Act and

any regulations and, or Financial Institutions

Rules issued thereunder, or with the conditions

under which the licence or registration was

granted, it shall forthwith inform the Central

Bank in writing;

(c) where the Central Bank becomes

aware that a financial institution has failed to

comply with, or that it is likely to fail to comply

with, any of the provisions of this Act and any

regulations and, or Financial Institutions Rules

issued thereunder, or with the conditions under

which the licence or registration was granted, it

shall forthwith inform the competent authority in

writing.".

Immediately after article 11 of the principal Act, as Addition of

article 11A to

substituted, there shall be added the following new article

the principal

Act.

11A. (1) Payment institutions, electronic

money institutions and account information service

providers shall establish a framework with appropriate

mitigation measures and control mechanisms to

manage the operational and security risks relating to

the payment services they provide. As part of that

framework, payment institutions, electronic money

institutions and account information service providers,

shall establish and maintain effective incident

management procedures, including for the detection

and classification of major operational and security

incidents.

(2) Payment institutions, electronic money

institutions and account information service providers

shall provide to the Central Bank, on an annual basis or

at shorter intervals as may be determined by the

competent authority in co-operation with the Central

Bank, an updated and comprehensive assessment of the

operational and security risks relating to the payment

services they provide, and on the adequacy of the

mitigation measures and control mechanisms

implemented in response to those risks.

(3) The competent authority shall co-operate with

the Central Bank in the assessment and processing of

documents referred to in sub-article (2).

(4) The competent authority may issue, amend or

revoke Financial Institutions Rules as may be required

in order to better implement the provisions of this

article.".

Immediately after article 11A of the principal Act, as added, Addition of

article 11B to

there shall be added the following new article

the principal

Act.

11B. (1) In the case of a major operational or

security incident and where Malta is the home Member

State, payment institutions, electronic money

institutions and account information service providers

shall notify the Central Bank, without undue delay.

Upon receipt of such notification, the Central Bank

shall promptly notify the competent authority.

(2) Where the incident has or may have an impact

on the financial interests of its payment service users,

the payment institution, electronic money institution or

the account information service provider concerned

shall, without undue delay, inform its payment service

users of the incident and of all measures that they can

take to mitigate the adverse effects of the incident.

(3) Upon receipt of the notification referred to in

sub-article (1), the Central Bank shall, in co-operation

with the competent authority, assess the relevance of

the incident to the relevant authorities in Malta, and

notify any such authorities accordingly.

(4) The competent authority shall, in cooperation

with the Central Bank, cooperate with the EBA and the

ECB for the purpose of assessing the relevance of the

incident to other relevant European Union and national

authorities in accordance with Article 96(2) of the

Payment Services Directive.

(5) Where the competent authority receives a

notification of a major operational or security incident

in accordance with sub-article (1), it shall, where

appropriate upon the basis of that notification and in

cooperation with the Central Bank, take all of the

necessary measures to protect the immediate safety of

the financial system.

(6) Payment institutions, electronic money

institutions and account information service providers

shall, at least on an annual basis, provide to the Central

Bank statistical data on fraud relating to different

means of payment.

(7) The competent authority may issue, amend or

revoke any Financial Institutions Rule, as may be

required, in order to better implement the provisions of

this article.".

Article 12 of the principal Act shall be substituted by the

" Powers and duties

12. (1) The Minister, acting on the advice of the

competent authority, may make regulations to give effect

to the provisions of this Act, and without prejudice to the

generality of the foregoing may, by such regulations, in

particular, do any of the following

(a) amend any of the Schedules to this Act;

(b) exempt any person from any one or

more provisions of this Act, including an

exemption from requiring a licence or a

registration under this Act, subject to such

variations,

additions,

adaptations

and

modifications as may be prescribed and subject to

such conditions or other requirements, including

other forms of authorisation and notification

procedures, as may be prescribed;

(c) transpose, implement and give effect to

the requirements of the Electronic Money

Directive and the Payment Services Directive

Provided that, when any of the options

referred to in Article 107(1) of the Payment

Services Directive are made use of, the Minister

shall inform the European Commission of the use

of any such options as well as of any subsequent

changes thereof;

(d)

transpose, implement and give effect

to the provisions, requirements, obligations and

commitments relating to the regulation of payment

institutions and electronic money institutions

arising out of membership in, affiliation or

relationship with international or regional

organisations, or groupings of countries, or arising

out of any treaty, convention or other international

agreement whether bilateral, regional or

multilateral to which Malta is a party;

(e) provide that any other law or any

provision thereof, shall not apply to matters falling

under the regulations and in particular, may

exempt activities as may be designated from the

application of any article or provision of the Civil

Code;

(f) transpose, implement and, or give

effect to the requirements of the PAD, and in so

doing may also establish or maintain measures

alternative to those referred to in Article 10(2) to

(6) of the PAD

Provided that

(i) it is clearly in the interest of the

consumer;

(ii) there is no additional burden for

the consumer; and

(iii) the switching as defined in

Article 2(18) of the PAD is completed

within, as a maximum, the same overall time

frame as that indicated in Article 10(2) to (6)

of the PAD;

(g) set up a specific mechanism to ensure

that consumers who do not have a payment account

as defined in Article 2(3) of the PAD in their

territory, and who have been denied access to such

a payment account for which a fee is charged by

credit institutions, will have effective access to a

payment account with basic features in terms of the

PAD, free of charge;

(h) transpose, implement and, or give

effect to the provisions and requirements of

Directives, Regulations and any other legislative

measures of the European Union requiring

transposition and, or implementation as they may

be amended from time to time, including any

implementing measures that have been or may be

issued thereunder and relating, but not limited to

licence holders as may be specified therein; any

such regulations strictly related to transposition or

implementation as aforesaid, may contain

provisions which are inconsistent with the

provisions of this Act or any other law, and for this

purpose may provide that any provision in this Act

or in any other law shall not apply to matters

falling under the regulations and in case of such

inconsistency, the provisions in any such

regulations shall prevail;

(i) regulate products and services offered

by financial institutions.

(2) Regulations made under this article may be

made subject to such exemptions or conditions as may be

specified therein, may make different provisions for

different cases, circumstances or purposes and may give

to the competent authority such powers of adaptation of

the regulations as may be specified.

(3) Where regulations have been issued in terms of

this article the competent authority may issue, amend or

revoke any Financial Institutions Rule within the

meaning of this Act to better carry out and implement the

provisions of the regulations.".

Article 13 of the principal Act shall be amended as follows

Amendment of

article 13 of the

principal Act.

(a) sub-article (1) thereof shall be substituted by the

following

"(1) It shall be the duty of the competent authority

to carry out the functions assigned to it by this Act and any

regulations and, or Rules issued thereunder and to ensure

that financial institutions carrying out business in or from

Malta comply with this Act, any regulations and, or Rules

issued thereunder and with the conditions of their licence

or registration. In carrying out such functions, the

competent authority shall ensure that the controls exercised

for checking continued compliance in terms of this Act,

and any regulations and, or Rules issued thereunder are

proportionate, adequate and responsive to the risks to

which financial institutions are exposed. The said functions

consist, inter alia, of the following

(a) to require the financial institution, in

terms of article 14, to provide any information

needed to monitor compliance specifying the purpose

of the request as appropriate and the time limit by

which the information is to be provided;

(b) to carry out on-site inspections at the

financial institution, at any agent or branch thereof

providing services under the responsibility of the

financial institution, or at any entity to which

activities are outsourced;

(c) to withdraw, suspend or restrict any

licence or registration pursuant to article 6; and

(d)

to issue non-binding recommendations

and guidelines, Rules within the meaning of this

article and binding administrative provisions in terms

of this Act and any regulations and, or Rules issued

thereunder.";

(b) immediately after sub-article (1) thereof there shall

be added the following new sub-articles

"(1A) Notwithstanding the requirements of

article 5A(1), (2A) and (2) and Articles 7 and 9 of the

Payment Services Directive, the competent authority

may take steps as referred to in sub-article (1) to

ensure sufficient capital for the activities carried out

by a financial institution and, or to ensure compliance

with Article 5(1B), in particular where the activities of

a financial institution other than those listed in the

Schedules impair or are likely to impair the financial

soundness of the financial institution concerned.

(1B) Without prejudice to the procedures for the

withdrawal of a licence or a registration, or to article

22, or to national provisions of criminal law and to any

other power granted to the competent authority under

the provisions of this Act and any regulations and, or

Rules issued thereunder or under the provisions of the

Malta Financial Services Authority Act, where the

competent authority is satisfied that a financial

institution’s conduct amounts to a breach of any of the

provisions of this Act or any regulations and, or Rules

issued thereunder, or of any directive, restriction and, or

suspension imposed, or of any other request or order

made by the competent authority pursuant to the

provisions of this Act or any regulations and, or Rules

issued thereunder, or the Malta Financial Services

Authority Act, or a licence condition, or a condition

required for the granting of a licence or a registration;

the competent authority may adopt or impose on any

such financial institution and, or on those who

effectively control the business of such financial

institution, any measures as it may deem appropriate

aimed specifically at ending observed breaches or the

causes of such breaches.

(1C) The competent authority shall possess all

powers and adequate resources necessary for the

performance of its duties and shall guarantee

independence from economic bodies and avoid

conflicts of interest.";

(c) sub-article (2) thereof shall be substituted by the

following

"(2) The competent authority may issue, amend or

revoke any Financial Institutions Rule as may be required

for carrying into effect any of the provisions of this Act

and any regulations and, or Financial Institution Rules

issued thereunder. The said Rules may establish additional

requirements and conditions in relation to activities of

financial institutions, the conduct of their business, their

relations with customers, the public and other parties, their

responsibilities to the competent authority, reporting

requirements and any other matters, as the competent

authority may consider appropriate.";

(d) immediately after sub-article (2) thereof there shall

be added the following new sub-articles

"(2A) The competent authority may issue, amend or

revoke any Financial Institutions Rule as may be required

for the purpose of implementing any guidelines,

recommendations, decisions, opinions or any other

instrument issued by the EBA, as may be required.

(2B) A Financial Institutions Rule shall be binding

on financial institutions and others as may be specified

therein.";

(e) sub-article (3) thereof shall be substituted by the

following

"(3) A Financial Institutions Rule and any

amendment or revocation thereof shall be officially

communicated to all financial institutions and the

competent authority shall make copies thereof available to

the public, upon request.";

(f)

sub-article (5) thereof shall be deleted;

(g) immediately after sub-article (5) thereof there shall

be added the following new sub-articles

"(6) The competent authority shall, as soon as

possible, notify the European Commission that it has been

designated in part, to ensure and monitor the effective

compliance with the Payment Services Directive. The

competent authority shall inform the European

Commission of the provisions of the Payment Services

Directive for which it is responsible. The competent

authority that has been designated in part, to ensure and

monitor effective compliance with the Payment Services

Directive, shall immediately notify the European

Commission of any subsequent change concerning its

designation and competence.

(7) Nothing in this Act shall be taken to imply that

the competent authority is required to supervise activities

of financial institutions other than for the provision of the

services listed in the Schedules to this Act.

(8) The powers, functions and duties conferred

upon the competent authority in this Act and any

regulations and, or Rules issued thereunder transposing

Title II of the Payment Services Directive, shall be vested

in the competent authority when the competent authority is

the home Member State.

(9) The competent authority shall ensure that

financial institutions do not derogate to the detriment of

their customers, from the provisions of this Act and any

regulations and, or Rules issued thereunder, except where

explicitly provided for therein

Provided that financial institutions may,

without prejudice to article 10, decide to grant more

favourable terms to their customers.".

Immediately after article 13 of the principal Act, as amended,

there shall be added the following new article

" Reasons and

13A. Any measure taken by the competent authority,

communication.

or by the competent authority in collaboration with the

Central Bank as applicable, pursuant to the European

Passport Rights for Financial Institutions Regulations

and article 23(1) involving administrative penalties or

restrictions on the exercise of a European right shall be

properly justified and communicated to the payment

institution, the electronic money institution or the

account information service provider concerned.".

Article 14 of the principal Act shall amended as follows

(a) sub-article (1) thereof shall be substituted by the

following

"(1) A financial institution shall submit to the

competent authority such information and documentation

as the competent authority may require either on a periodic

and, or on an ad hoc basis, in the discharge of its duties

under this Act and any regulations and, or Rules issued

thereunder or any other law, and the competent authority

may enquire into and ask for clarification of any

information submitted.";

(b) sub-article (2) thereof shall be substituted by the

following

"(2) All periodic information and documentation

required under sub-article (1) shall be submitted in such

form and at such periods as the competent authority may

from time to time prescribe by any Financial Institutions

Rules and, or at such periods as the competent authority

may require in writing.";

(c)

sub-article (3) thereof shall be deleted;

(d) sub-article (4) thereof shall be substituted by the

following

"(4) The provisions of this article shall also apply to

all branches, agencies or offices in Malta of a financial

institution which are not incorporated in Malta.";

(e) sub-article (5) thereof shall be substituted by the

following

"(5) A financial institution shall submit to the

Central Bank such information as the said Bank may

require in the discharge of its duties and the Central Bank

may enquire into and ask for clarifications on any

information so submitted.";

(f) sub-article (6) thereof shall be substituted by the

following

"(6) The competent authority may, by notice in

writing, require a financial institution or any of its officers

to do all or any of the following

(a) to furnish to the competent authority, at

such time and place and in such form as it may

specify, such information and documentation as it

may require and of such description as may be so

specified in the notice;

(b) to furnish to the competent authority any

information or documentation aforesaid verified in

such manner as it may specify; and, or

(c) to attend before the competent authority,

or before a person appointed by it, at such time and

place as it may specify, to answer questions and

provide information and documentation as the

competent authority may reasonably require, for the

performance of its functions under this Act and any

regulations and, or Rules issued thereunder.";

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

following

"(7) The competent authority may retain copies of

any documents submitted in terms of this article.".

Article 15 of the principal Act shall be amended as follows

(a) sub-article (1) thereof shall be substituted by the

following

"(1) The competent authority may, whenever it

deems necessary or expedient, appoint an inspector or

inspectors to investigate and report on the affairs, nature,

conduct or state of a financial institution’s business or any

particular aspect of it, or to report on the ownership or

control of the financial institution.";

(b) immediately after sub-article

(3)

thereof

the

following new sub-articles shall be added

"(4) Any investigation being carried out pursuant to

sub-articles (1) and (2) shall be notified in writing to the

person under investigation.

(5) It shall be the duty of every person who is or

was an officer, employee, agent, or auditor of a person

under investigation in terms of this Act and any regulations

and, or Rules issued thereunder, or any person appointed to

draw up a report in respect of that person under this Act

and any regulations and, or Rules issued thereunder and

any person who has a qualifying shareholding in, or is a

controller the said person under investigation

(a) to produce to the inspector or inspectors

appointed under sub-article (1), within such time and

at such place as may be required by the inspector or

inspectors concerned, all the documents relating to

the person under investigation which are in his

custody or power;

(b) to attend before the inspector or

inspectors at such time and place as the inspector or

inspectors may require; and, or

(c) otherwise to give to the inspector or

inspectors all assistance in connection with the

investigation which he is reasonably able to give, and

the inspector or inspectors concerned may retain

copies of or extracts from, any documents produced

to them under paragraph (a).

(6) An inspector exercising powers by virtue of an

appointment under this article shall, if so required, produce

evidence of his authority.

(7)

No person shall

(a) without any lawful excuse fail to produce

any document which it is his duty to produce under

sub-article (5);

(b) without any lawful excuse fail to attend

before an inspector or inspectors appointed under

sub-article (1), when required to do so; or

(c) without any lawful excuse fail to answer

any question which is put to him by an inspector or

inspectors appointed under sub-article (1) with

respect to any person who is under investigation.

(8) A statement made by a person in compliance

with a requirement imposed by virtue of this article may be

used as evidence against him.".

Article 16 of the principal Act shall be substituted by the Substitution of

article 16 of the

principal Act.

16. (1) Any officer, employee or agent of the

competent authority, or an inspector appointed under

article 15(1), may on producing evidence of his

authority, if required to do so, enter into premises

occupied by a person on whom a notice has been served

under article 14, or whose affairs are being investigated

under article 15, for the purpose of obtaining the

information or documents required by that notice, or

otherwise for the purpose of the investigation, and of

exercising any of the powers conferred by the said

articles.

(2) Where any officer, employee or agent of the

competent authority, or an inspector appointed under

article 15(1), has reasonable cause to believe that if

such notice as is referred to in sub-article (1) were

served it would not be complied with, or that any

documents to which it could relate would be removed,

tampered with or destroyed, such person may on

producing evidence of his authority, if required to do

so, enter into any premises referred to in sub-article (1)

for the purpose of obtaining any information or

documents specified in the authority, being

information or documents that could have been

required under such notice, as is referred to in sub-

article (1).

(3) For the purposes of any action taken under the

provisions of this article, the competent authority may

request the assistance of the Commissioner of Police,

who may for such purpose exercise such powers as are

vested in him for the prevention of criminal offences

and the enforcement of law and order

Provided that where an entry as is mentioned

in this article involves premises that are occupied for

the purpose of habitation, such entry shall be carried

out in the presence of an officer of the Police of a rank

not below that of inspector and shall not take place

between nine in the evening and five in the morning." .

Immediately after article 16 of the principal Act, as

substituted, there shall be added the following new article

16A. (1) Where the competent authority has

reasonable grounds for suspecting that a person has

contravened or has failed to comply with any of the

provisions of this Act and any regulations and, or Rules

issued thereunder, it may, by notice in writing, require

that person or any other person

(a) to provide at such place as may be

specified in the notice, and either forthwith or at

such time as may be so specified, such

information as it may reasonably require for the

purpose of investigating the suspected

contravention or failure to comply;

(b) to produce, at such place as may be

specified in the notice, and either forthwith or at

such time as may be so specified, such documents

or documents of such description as may be

specified therein, which it may reasonably require

for that purpose; and, or

(c) to attend at such place and time as

may be specified in the notice and answer

questions relevant for determining whether such a

contravention or failure to comply has occurred.

(2) The competent authority or their duly

authorised officer, employee or agent may retain copies

of or extracts from any documents submitted in terms

of this article.

(3) Any officer, employee or agent of the

competent authority may between five o’clock in the

morning and nine o’clock at night, on producing, if

required, evidence of his authority, enter into any

premises occupied by a person on whom a notice has

been served under sub-article (1), for the purpose of

obtaining the information or the documents required by

the notice, asking the questions referred to in paragraph

(c) of sub-article (1) and, or exercising the powers

conferred by sub-article (2).

(4) No person shall without any lawful excuse fail

to comply with a requirement imposed on him under

this article or intentionally obstruct a person in the

exercise of the rights conferred by sub-article (3).

(5) A statement made by a person in compliance

with a requirement imposed by virtue of this article

may be used as evidence against him.".

Immediately after article 16A as added to the principal Act

there shall be added the following new article

16B. No person who knows or suspects that an

investigation is being or is likely to be carried out under

this Act, or an investigation is being or is likely to be

carried out into the suspected commission of any breach

under this Act and any regulations and, or Rules issued

thereunder may falsify, conceal, destroy or otherwise

dispose of, or cause or permit the falsification,

concealment, destruction or disposal of documents that

he knows or suspects are, or would be relevant to such

an investigation, unless he proves that he had no

intention of concealing facts disclosed by such

documents from persons carrying out such an

investigation.".

Article 17 of the principal Act shall be substituted by the

17. (1) If, whether from any report made under

article 14 or 15 or otherwise, it appears to the

competent authority that any of the circumstances

control of financial

indicated in article 6(1) apply, the competent authority

may, without prejudice to the powers of the said

authority to impose restrictions, or to withdraw or

suspend a licence or a registration under the provisions

of article 6(1)

(a) require the financial institution

forthwith to take such steps as the competent

authority may consider necessary to remedy or

rectify the matter;

(b) appoint a competent person to advise

the financial institution in the proper conduct of

its business;

(c) appoint a competent person to take

charge of the assets of the financial institution or

any portion of them for the purpose of

safeguarding the interests of the integrity of the

financial system in Malta;

(d) appoint a competent person to take

over the business of the financial institution,

either to carry on that business, or to carry out

such other function or functions in respect of such

business or part thereof, as the competent

authority may direct;

(e) require the financial institution to

wind up its business or to wind up its business in

Malta;

(f) appoint a competent person to act as

liquidator for the purpose of winding up the

affairs of the financial institution; and, or

(g) determine the remuneration to be paid

by the financial institution to any competent

person appointed under this sub-article.

(2) Upon receipt of a report or information

otherwise received as is mentioned in sub-article (1),

the competent authority shall inform the Central Bank.

(3) Where a competent person is appointed by the

competent authority

(a) under sub-article (1)(b), the financial

institution shall act in accordance with the advice

given by such person, unless and until the

competent authority otherwise directs;

(b) under sub-article (1)(c), the financial

institution shall deliver to such person all the

assets of which he is placed in charge, and all the

powers, functions and duties of the financial

institution in respect of those assets, whether

exercisable by the company in the general

meeting or by the board of directors, or by any

other person, including the legal and judicial

representation of the financial institution, shall be

exercisable by and vested in him to the exclusion

of the financial institution; and, or

(c) under sub-article (1)(d), the financial

institution shall submit its business to the control

of such person and shall provide him with such

facilities as he may require in order to carry on

that business, or to carry out the functions

assigned to him under that paragraph, and all the

powers, functions and duties of the financial

institution, whether exercisable by the company

in the general meeting or by the board of

directors, or by any other person, including the

legal and judicial representation of the financial

institution in all matters shall be exercisable by

and vested in him, to the exclusion of any other

person.

(4) Where a person is appointed under sub-article

(1)(c) or (d)

(a) any function, power or duty

exercisable by any other person, including the

curator of a bankrupt, or any other person

appointed by or under any other law and relating

to any assets or business of which the person

appointed under either of the paragraphs aforesaid

is placed in charge or in control, shall unless or

until the competent authority otherwise directs, or

an express provision of the law specifically

provides otherwise, cease to be so exercisable;

(b) the person appointed under either of

the paragraphs aforesaid shall in respect of such

property, partnerships, firms or other business as

the competent authority may specify, and in

which the financial institution has an interest,

whether directly or indirectly, including any

interest arising from advances or loans made, or

credit facilities given, or any liability undertaken,

have such powers, functions and duties, including

legal and judicial representation, as the competent

authority may direct, and any such power,

function or duty shall be exercisable by and

vested in such person, to the exclusion of any

other person

Provided that

(i) the competent authority shall

have the power to direct that all or any of

the powers, functions or duties aforesaid

should be exercisable by any other person,

and in any such case, with effect from such

date or dates as the competent authority

may specify and unless and until the

competent authority otherwise directs, the

powers, functions and duties to which the

direction of the competent authority applies

shall be exercisable by and vested in such

other person appointed for the purpose, to

the exclusion of all others;

(ii) where the competent authority is

of the opinion that the financial institution

has ceased to have any interest as aforesaid,

it shall direct that any powers, functions and

duties exercisable under this paragraph shall

cease to be so exercisable, but any such

direction shall not affect anything done, or

omitted to be done by virtue or by reason of

any of the aforesaid powers, functions or

duties;

(iii) the person appointed under

either of the paragraphs aforesaid shall have

the power to require any other person to

provide him with such facilities as he may

deem necessary to carry out any of the

powers, functions or duties under this

article;

(iv) the provision of law relating to

bankruptcy and in particular Part III of the

Commercial Code shall cease to apply to,

and shall cease to operate in respect of any

property, partnership, firm or other business

specified by the competent authority under

paragraph (b), unless and until, or except to

the extent that the competent authority

otherwise directs; and in any such case the

person appointed as aforesaid shall, subject

to any directions of the competent authority

given in the interest of the creditors, act as if

those provisions did not exist and as if any

declaration of bankruptcy had not been

made;

(v) any person appointed by the

competent authority under any of the

provisions of this article shall submit six

monthly reports of his activities and annual

accounts of all transactions carried out by

him in the performance of his functions,

audited by an independent auditor, to the

Minister who will place such reports and

accounts on the Table of the House of

Representatives within fifteen days.

(5) Where a person is appointed under sub-article

(1)(f), such person shall be the liquidator of the

company for all purposes of law to the exclusion of any

other person.

(6) The provisions of this article shall have effect

notwithstanding any other provision of any enactment,

and notwithstanding any deed, contract, instrument or

other document whatsoever.

(7) The foregoing provisions of this article vesting

exclusive powers of representation in a person

appointed by the competent authority thereunder shall

apply also to any act or proceedings commenced or

instituted before such representation is vested as

aforesaid, and in respect of any such act or proceedings,

any other person acting or purporting to act, or in

respect of whom action is taken in that capacity shall

cease to be a party to and shall be excluded from any

such act or proceedings.

(8) No person shall in any way obstruct a person

appointed under sub-article (1) in the performance of

any of his functions, powers or duties under this

article.".

Immediately after article 17 of the principal Act, the heading

"AUDITORS" shall be substituted by the following

"ACCOUNTING,

STATUTORY

AUDIT

AND

AUDITORS".

Immediately after article 17 and the subsequent heading of the

principal Act, as substituted, there shall be added the following new

17A. (1) Directive 86/635/EEC, Directive 2013/

34/EU and Regulation (EC) No. 1606/2002 shall,

mutatis mutandis, apply to financial institutions.

(2) Unless exempted under Directive 2013/34/EU

and, where applicable, Directive 86/635/EEC, the

annual accounts and consolidated accounts of financial

institutions shall be audited by statutory auditors or

audit firms within the meaning of Directive 2006/43/EC

of the European Parliament and of the Council of 17

May 2006 on statutory audits of annual accounts and

consolidated accounts, amending Council Directives

78/660/EEC and 83/349/EEC and repealing Council

Directive 84/253/EEC, as amended from time to time.

(3) Payment institutions and electronic money

institutions shall provide to the competent authority

separate accounting information for payment services

and for the activities referred to in paragraphs 3(a), (b)

and (c) of the Second Schedule, that shall be subject to

an auditor’s report, as may be stipulated in a Financial

Institutions Rule.

(4) The auditor’s report referred to in sub-article

(3) shall be prepared, where applicable, by the statutory

auditors or an audit firm.".

Immediately after article 17A, as added to the principal Act, Addition of

article 17B to

there shall be added the following new article

the principal

Act.

17B. Every financial institution shall, not later than

four months from the closing of its financial year or at

any other time as may be authorised in writing by the

competent authority

(a) forward to the competent authority,

and

(b) make available to the public, in paper

or in electronic form,

a copy of its audited financial statements or

consolidated financial statements, as may be applicable,

drawn up and published in such manner as may be

specified in accordance with a Financial Institutions

Rule.".

Article 18 of the principal Act shall be amended as follows

Amendment of

article 18 of the

principal Act.

(a) sub-article (1)(a) thereof shall be substituted by the

following

"(1) (a) Every financial institution shall each year

appoint an approved statutory auditor or audit firm whose

duty shall be to audit the annual accounts and consolidated

accounts of the financial institution in accordance with

article 17A.";

(b) sub-article (6) thereof shall be substituted by the

following

"(6) If, in his capacity as an auditor of a financial

institution, or due to a direct request by the competent

authority under article 14 or 15, an auditor becomes aware

of any matter which relates to and may have a serious

adverse effect upon the stability and soundness of the

financial institution, or a branch or office in Malta of a

financial institution not incorporated in Malta, or the

integrity of the financial system in Malta, he shall

immediately inform the competent authority through the

financial institution’s management, or if circumstances so

warrant, inform directly the competent authority.";

(c) immediately after sub-article (6), as substituted, there

shall be added the following new sub-articles

"(6A) In his capacity as an auditor of a financial

institution, or due to a direct request by the competent

authority, an auditor shall promptly notify the competent

authority of any fact or decision concerning that financial

institution of which that auditor has become aware while

carrying out his tasks, that is liable to

(a) constitute a material breach of this Act

and of any regulations and, or Rules issued

thereunder which set out the licensing or registration

conditions, or which specifically govern the activities

of financial institutions;

(b) affect the ongoing functioning of the

financial institution; or

(c) lead to refusal to certify the accounts or to

the expression of reservations

Provided that an auditor shall also have

the duty to report any fact or decision of which that

auditor becomes aware in the course of carrying out

his tasks, in an undertaking having close links

resulting from a control relationship with the

financial institution within which he is carrying out

that task.

(6B) Any disclosure in good faith to the competent

authority pursuant to sub-article (6A) shall not constitute a

breach of any restriction on disclosure of information

imposed by contract or by any legislative, regulatory or

administrative provision and shall not expose such persons

to any liability. Unless there are compelling reasons not to

do so, such disclosure shall be made simultaneously to the

board of directors of the financial institution.

Article 19 of the principal Act shall be substituted by the Substitution of

article 19 of the

principal Act.

19. No duty, including professional secrecy, to

which

(a) an auditor of a financial institution

may be subject shall be regarded as contravened

by reason of his communicating in good faith to

the competent authority, whether or not in

response to a request from it, any information or

opinion on a matter of which the auditor has

become aware in his capacity as auditor of that

institution and that is relevant to any functions of

the competent authority under the provisions of

this Act, or is required to be communicated by

virtue of this Act and, or any regulations or Rules

issued thereunder; and

(b) a person appointed to make a report

under article 14 or 15 may be subject shall be

regarded as contravened by reason of

communicating in good faith to the competent

authority any matter which relates to the business

or affairs of the financial institution in relation to

which the report is made.".

Article 20 of the principal Act shall be amended as follows

Amendment of

article 20 of the

principal Act.

(a) sub-article (1) thereof shall be substituted by the

following

"(1) Without prejudice to sub-article (1A) and on

the basis of international agreements or upon

reciprocity agreements, the competent authority may, in

the case of a financial institution or branch operating in

Malta, which is totally or partially owned by a foreign

person, or in the case of a financial institution totally or

partially owned by Maltese residents that is operating

abroad, share its supervisory duties with an overseas

regulatory authority.";

(b) immediately after sub-article (1) thereof there shall

be added the following new sub-article

"(1A) The competent authority shall co-operate with

European regulatory authorities and, where appropriate

with the ECB, the Central Bank and the national central

banks of the other Member states, the EBA and other

relevant authorities designated under European Union, or

national law applicable to payment service providers.";

(c) sub-article (2) thereof shall be substituted by the

following

"(2) The competent authority may further exchange

information with the following

(a) overseas

regulatory

authorities

responsible for the licensing and, or registration, and

for the supervision of payment institutions, electronic

money institutions and, or account information

service providers, solely for their supervisory and

regulatory purposes and, or for such other purposes

as may be specifically agreed upon with the

competent authority;

(b) the ECB, other Member States’ central

banks and the Central Bank, in their capacity as

monetary and oversight authorities and, where

appropriate, other public authorities responsible for

overseeing payment and settlement systems;

(c) other relevant authorities designated

under the Payment Services Directive, Directive

2015/849, and other European Union law applicable

to payment service providers, such as laws applicable

to money laundering and funding of terrorism; and,

or

(d) the EBA, in its capacity of contributing to

the consistent and coherent functioning of

supervising mechanisms as referred to in paragraph

(a) of Article 1(5) of Regulation (EU) No. 1093/

2010. (d) sub-article (4) thereof shall be substituted by the

following

"(4) The competent authority shall notify the

relevant European regulatory authority whenever it intends

to carry out an on-site inspection in the territory of the

latter

Provided that the competent authority may

upon agreement delegate to the relevant European

regulatory authority the task of carrying out on-site

inspections of the institution concerned.";

(e) sub-article (5) thereof shall be substituted by the

following

"(5) The competent authority shall further,

upon a request in writing, disclose to the ECB and, or

to the Central Bank any information in the possession

of or accessible to the competent authority that is

required for the discharge of the duties of the ECB

and, or the Central Bank under the law.".

Immediately after article 20 of the principal Act there shall be Addition of

article 20A to

added the following new article

the principal

Act.

20A. (1) Where the competent authority

considers that in a particular matter, cross-border co-

operation with European regulatory authorities

referred to in Articles 26, 28, 29, 30 or 31 of the

Payment Services Directive does not comply with the

relevant conditions set out in those provisions, it may

refer the matter to the EBA and request its assistance

in accordance with Article 19 of Regulation (EU) No.

1093/2010.

(2) Where the competent authority has referred the

matter to the EBA and requested its assistance in

accordance with sub-article (1), or where a European

regulatory authority has referred a matter to the EBA

and requested its assistance in accordance with Article

27(1) of the Payment Services Directive, it shall defer

its decision pending resolution by the EBA under

Article 19 of Regulation (EU) No. 1093/2010.".

Immediately after article 20A of the principal Act, as added, Addition of

article 20B to

there shall be added the following new article

the principal

Act.

20B. In ensuring and monitoring effective

compliance with the provisions of this Act and any

regulations and, or Rules issued thereunder

transposing the Payment Services Directive, the

competent authority shall collaborate closely with the

Central Bank and with the Arbiter as may be required,

in order to ensure that every authority may discharge

its respective duties effectively.".

Article 21 of the principal Act shall be substituted with the Substitution of

article 21 of the

principal Act.

21. Any person who is aggrieved by a directive,

decision and, or measure taken by the competent

authority pursuant to the Act and any regulations or

Rules issued thereunder, may appeal to the Tribunal

within such period and under such conditions as

established under the Malta Financial Services

Authority Act.".

Article 22 of the principal Act shall be amended as follows

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

following

"Criminal offences.";

(b) sub-article (1) thereof shall be substituted by the

following

"(1) Any person who

(a) fails to comply with any directive issued

by the competent authority under this Act;

(b) without reasonable excuse alters,

suppresses, conceals, destroys or refuses to produce

any document which he is lawfully required to

produce by any person under this Act and any

regulations and, or Rules issued thereunder;

(c) furnishes information or makes a

statement, promise or forecast which he knows to be

misleading, false or deceptive, or dishonestly

conceals any material facts;

(d) recklessly furnishes information or

recklessly makes (dishonestly or otherwise) a

statement, promise or forecast which is misleading,

false or deceptive;

(e) fails to comply with any lawful order or

requirement of the Financial Services Tribunal; or

(f) contravenes or fails to comply with any

of the provisions of articles 3(1), 3(1A), 9, 16A(4),

16B, 24A(b), 25(2) and (4),

shall be guilty of a criminal offence.";

(c)

sub-article (2) thereof shall be deleted;

(d) sub-article (4) thereof shall be substituted by the

following

"(4) A person guilty of a criminal offence under the

provisions of this article shall be liable on conviction to a

fine (multa) not exceeding five hundred thousand euro

(€500,000) or to a term of imprisonment not exceeding

three years, or to both such fine and imprisonment.";

(e) sub-article (5) thereof shall be substituted by the

following

"(5) No criminal proceedings for a criminal offence

against this Act shall be commenced without the consent of

the Attorney General.".

Article 23 of the principal Act shall be substituted by the Substitution of

article 23 of the

principal Act.

23. (1) Without prejudice to the procedures

for the withdrawal, suspension or restriction of a

licence or a registration and to any other power

granted to the competent authority under the

provisions of this Act and any regulations and, or

Rules issued thereunder, or under the provisions of the

Malta Financial Services Authority Act, where any

person fails to comply with any of the conditions

imposed in a licence and, or where the competent

authority is satisfied that a person’s conduct amounts

to a breach of any of the provisions of this Act and of

any regulations and, or Rules issued thereunder, the

competent authority may, by notice in writing and

without recourse to a court hearing, impose on such

person an administrative penalty which may not

exceed one hundred and fifty thousand euro

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

as the case may be, aimed specifically at ending such

breaches or the causes of such breaches.

(1A) Any administrative penalty imposed by the

competent authority under sub-article (1) shall be

effective, proportionate and dissuasive, and shall be

imposed in accordance with this article.

(1B) The Minister may, acting on the advice of the

competent authority, make regulations as shall be

deemed appropriate to provide for the establishment

and imposition of administrative penalties and other

administrative measures on licence holders or others as

may be specified therein.

(2) The imposition by the competent authority of

an administrative penalty in terms of this article shall be

without prejudice to any other consequence of the act or

omission of the offender under civil or criminal law

Provided that in all cases where the competent

authority imposes an administrative penalty in respect

of anything done or omitted to be done by any person,

and such act or omission also constitutes a criminal

offence, no proceedings may be taken or continued

against the said person in respect of such criminal

offence.

(3) The provisions of article 16(4) of the Malta

Financial Services Authority Act shall, mutatis

mutandis, apply with reference to a "notice" therein

being construed as a reference to a notice as referred to

in sub-article (1) of this article.

(4) The competent authority may, unless such

disclosure would seriously jeopardise the financial

markets, or cause disproportionate damage to the

parties involved, publish any administrative penalty

imposed in terms of this article and, or in terms of this

Act

Provided that in cases where, in terms of

article 21, an appeal has been filed by the person on

whom such administrative penalty or penalties have

been imposed, the competent authority shall, without

undue delay, also publish on its official website and

through any other means it considers appropriate,

information on the status of the appeal and the outcome

thereof.".

Paragraph (a) of article 24 of the principal Act shall be

substituted by the following

"24. No person

(a) who has been adjudged bankrupt, or has made a

composition with his creditors, or has been an officer of a

financial institution which has had its licence or

registration withdrawn under article 6(1) and who has not

been exempted in writing by the competent authority from

the provision of this article; or".

Immediately after article 24 of the principal Act, as amended, Addition of

article 24A to the

there shall be added the following new article

principal Act.

" Duties of officers.

24A. Every officer of a financial institution shall

take all reasonable steps

(a) to secure compliance by the financial

institution with all of the provisions of this Act and

any regulations and, or Rules issued thereunder, and

with the conditions of its licence or registration; and

(b) to ensure that no incorrect information is

provided to the competent authority either wilfully or

as the result of gross negligence.".

Article 25 of the principal Act shall be amended as follows

Amendment of

article 25 of the

principal Act.

(a) sub-article (2) thereof shall be substituted by the

following

"(2) No person, including past and present officers

of a financial institution or of a branch thereof, and agents

of a financial institution, shall disclose any information

relating to the affairs of that institution or of a customer of

that institution which he has acquired in the performance of

his duties or in the exercise of his functions under this Act

and any regulations and, or Rules issued thereunder except

(a) when authorised to do so under any of the

provisions of this Act;

(b) for the purpose of the performance of his

duties or in the exercise of his functions;

(c) when lawfully required to do so by any

court or under a provision of any law.";

(b) sub-article (3) thereof shall be substituted by the

following

"(3) Where an officer of a financial institution has

reason to believe that a transaction or a proposed

transaction could involve money laundering, or the funding

of terrorism, he shall act in compliance with the reporting

and other obligations set out in any anti-money laundering

and combating the funding of terrorism legislation and

such disclosure shall not constitute a breach of

confidentiality.";

(c)

sub-article (4) thereof shall be substituted by the

following

"(4) Without prejudice to the provisions of article

20, persons who work or who have worked for the

competent authority, as well as experts acting on behalf of

the competent authority, without prejudice to cases falling

within the ambit of criminal law, are bound by the duty of

professional secrecy. The said persons and experts shall not

disclose information obtained from financial institutions in

the course of carrying out supervisory and other duties and

which is governed by the duty of professional secrecy,

unless such disclosure of information be done in summary

or collective form, so as not to enable the identity of the

financial institution, to whom such information relates, to

be ascertained

Provided that the said officers, auditors or

experts may divulge such information, for the purpose of

the performance of their duties, or the exercise of their

functions, or when lawfully required to do so by any court

or under a provision of any law.";

(d) sub-article (5) thereof shall be substituted by the

following

"(5) Notwithstanding the provisions of any other

law, a financial institution may, if circumstances so

warrant, communicate any information which is in its

possession and which relates to the affairs of a customer, to

other members of the group of which that financial

institution forms part.";

(e) sub-article (6) thereof shall be substituted by the

following

"(6) For the purposes of sub-article (5), the term

"group" shall include any body corporate registered or

operating in Malta or in a foreign jurisdiction and forming

part of the group, and that is further licensed or otherwise

authorised under the laws of Malta or of that jurisdiction to

carry out any activity equivalent to the business of

banking, or of the issuing of electronic money, or any of

the activities referred to in the Schedule to the Banking

Act.";

(f)

immediately after sub-article (7) thereof the

following new sub-articles shall be added

"(8) Without prejudice to the provisions of article

20, any exchange of information between the competent

authority and any European regulatory authority, the ECB,

the Central Bank, national central banks of other Member

States, the EBA or any other relevant authorities

designated under European Union or national law

applicable to payment services providers in accordance

with article 20(1A) and (2) shall, in order to ensure the

protection of individual and business rights, also be subject

to the obligation of professional secrecy.

(9) The provisions of sub-articles (4) and (8) shall

be applied taking into account, mutatis mutandis, Articles

53 to 61 of the CRD.".

Immediately after article 25 of the principal Act, the heading Substitution of

"CONSUMER COMPLAINTS" of the principal Act shall be the

‘Consumer

substituted by the following heading

Complaints’ of

the principal

Act.

"DATA PROTECTION".

Article 26 of the principal Act shall be deleted.

Deletion of

article 26 of the

principal Act.

Immediately after article 26 of the principal Act, as deleted, Addition of

article 26A to

there shall be added the following new article

the principal

Act.

" Data protection.

26A. (1) Financial institutions may, when

necessary to safeguard the prevention, investigation and

detection of payment fraud, process personal data.

(2) The provision of information to individuals

about the processing of personal data and the

processing of such personal data and any other

processing of data for the purposes of this Act and any

regulations and, or Rules issued thereunder, shall be

carried out in accordance with any applicable data

protection legislation.

(3) Financial institutions shall only access, process

and retain personal data necessary for the provision of

their services with the explicit consent of those making

use of their services.".

Article 27 of the principal Act shall be substituted by the Substitution of

article 27 of the

principal Act.

27. The objective of this Act is, in part, to

implement the provisions of the Payment Services

Directive, in particular Titles I, II, Chapter 4 of Title IV,

Articles 95, 96, 100, 103 and 107 in part, Articles 109,

111 and 115, and the Annexes thereof and of the

Electronic Money Directive and shall be interpreted and

applied accordingly.".

Immediately after article 27 of the principal Act there shall be

added the following new article

28. (1) Payment institutions that have been

granted a licence to provide payment services as

referred to in paragraph (7) of the Annex of Directive

2007/64/EC shall retain that licence for the provision of

those payment services which are considered to be

payment services as referred to in paragraph 2(c) of the

Second Schedule where, by 13 January 2020, the

competent authority has evidence that the requirements

set out in paragraph (c) of Articles 7 and 9 of the

Payment Services Directive are satisfied.

(2) Legal persons that, before 12 January 2016,

have performed in Malta activities of payment initiation

service providers and account information service

providers, shall, until eighteen months after the date of

entry into force of the regulatory technical standards

referred to in Article 98 of the Payment Services

Directive, not be prohibited from continuing to perform

such activities in Malta in accordance with the

applicable regulatory framework.

(3) Until individual account servicing payment

service providers comply with the regulatory technical

standards referred to in sub-article (2), account

servicing payment service providers shall not block or

obstruct the use of payment initiation services or

account information services for the account that they

are servicing.

(4) Financial institutions in possession of a licence

on the entry into force of this Act are required to

include a statement that the financial institution is

licensed or registered, as applicable, by the competent

authority, together with the address of the competent

authority in any form or medium of marketing activity

or communication disseminated to the public, by any

other means considered appropriate within three

months after the entry into force of this article.".

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

the First

Schedule to the

principal Act.

(a) in item (1) thereof, for the words "commercial

transactions including forfeiting);" there shall be substituted the

words "commercial transactions including forfaiting);";

(b) in item (4) thereof, for the words "Payment services

as defined" there shall be substituted the words "Payment

services set out";

(c) in item (7)(e) thereof, for the words "transferable

instruments" there shall be substituted the words "transferable

securities".

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

the Second

amended as follows

Schedule to the

principal Act.

(a) the objective thereof shall be substituted by the

following

The purpose of this Schedule is to set out the

regulatory framework under which payment services as

referred to in the First Schedule, may be carried out.";

(b)

paragraph (1) thereof shall be deleted;

(c) paragraph (2) thereof shall be substituted by the

following

2. The following activities shall be considered as

payment services

(a) services enabling cash to be placed on

a payment account as well as all the operations

required for operating a payment account;

(b) services enabling cash withdrawals

from a payment account as well as all the

operations required for operating a payment

account;

(c) execution of payment transactions,

including transfers of funds on a payment account

with the user’s payment service provider or with

another payment service provider

(i) execution of direct debits,

including one-off direct debits;

(ii) execution

of

payment

transactions through a payment card or a

similar device;

(iii) execution of credit transfers,

including standing orders;

(d) execution of payment transactions

where the funds are covered by a credit line for a

payment service user

(i) execution of direct debits,

including one-off direct debits;

(ii) execution

of

payment

transactions through a payment card or a

similar device;

(iii) execution of credit transfers,

including standing orders;

(e) issuing of payment instruments and, or

acquiring of payment transactions;

(f) money remittance;

(g) payment initiation services; and

(h) account information services.";

(d) paragraph (3) thereof shall be substituted by the

following

"3. Apart from the provision of payment services,

payment institutions may engage in the following

activities

(a) The provision of operational and

closely related ancillary services such as ensuring

execution of payment transactions, foreign

exchange services strictly in relation to payment

services, safekeeping activities, and storage and

processing of data;

(b) The operation of payment systems,

without prejudice to Article 35 of the Payment

Services Directive as transposed in a directive

issued by the Central Bank under the Central

Bank of Malta Act;

(c) Without prejudice to any applicable

European Union or national law, and without

prejudice to the provisions of article 5(6),

business activities other than the provision of

payment services;

(d) Payment institutions may grant credit

related to payment services referred to in

paragraph (1)(d) or (e) of this Schedule only if the

following requirements are met

(i) the credit is ancillary and granted

exclusively in connection with the execution of a

transaction;

(ii) notwithstanding national rules on

providing credit by credit cards, the credit granted

in connection with a payment and executed with

the act shall be repaid within a short period which

shall in no case exceed twelve months;

(iii) such credit is not granted from the

funds received or held for the purpose of

executing a payment transaction; and

(iv) the own funds of the payment

institution are at all times and, to the satisfaction

of the competent authority, appropriate in view of

the overall amount of credit granted.";

(e) immediately after paragraph (3) thereof there shall be

added the following new paragraphs

"4. When payment institutions engage in the

provision of one or more payment services, they may

only hold payment accounts used exclusively for

payment transactions.

5. Any funds received by payment institutions

from payment service users with a view to the provision

of payment services shall not constitute a deposit or

other repayable funds within the meaning of article 2 of

the Banking Act, or electronic money within the

meaning of article 2.".

Paragraph (1) of the Third Schedule to the principal Act shall

be deleted.

PART III

AMENDMENTS TO THE MALTA FINANCIAL

SERVICES AUTHORITY ACT

This Part amends the Malta Financial Services Authority Act

and it shall be read and construed as one with the Malta Financial

Services Authority Act, hereinafter in this Part referred to as "the

principal Act".

Immediately after article 2 of the principal Act there shall be

added the following new article

"2A. In this Act and in any regulations made thereunder, if

there is any conflict between the English and Maltese texts, the

English text shall prevail.".

Immediately after sub-article (2) of article 3 of the principal

Act there shall be added the following new sub-articles

"(3) Save as expressly provided for in this Act or in

any other Act administered by the Authority, the

Authority shall act independently and shall not seek or

take instructions from any other body or person.

(4) The provisions of article 72 of the Financial

Administration and Audit Act shall not apply to the

Authority.".

Immediately after paragraph (g) of sub-article (1) of article 4

of the principal Act there shall be added the following new paragraph

"(gA) to provide and foster further training, knowledge and

education on all matters relating to financial services;".

In sub-article (1) of article 7 of the principal Act, the words

"but in no case not less frequently" shall be substituted by the words

"but in any case not less frequently".

Article 16 of the principal Act shall be amended as follows

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

substituted by the following

"(b) issue a directive in writing requiring a person to

do or to refrain from doing any act, including such

prohibitions, restrictions and conditions as may be

specified in the directive; and any person to whom or to

which the notice is given shall obey, comply with and

otherwise give effect to any such directive within the time

and in the manner stated in the directive;";

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

there shall be added the following new paragraph

"(c) appoint a qualified person or otherwise require

a person to appoint a qualified person, whenever it deems it

necessary or expedient, to carry out such tasks under such

terms and conditions as the Authority may direct. All fees

and expenses to be charged by the qualified person in

relation to, or incidental to such appointment, shall be paid

by the person in relation to whom the qualified person is

appointed, unless determined otherwise by the Authority.

The Authority may issue Rules or guidelines laying down

the procedures and requirements relating to such

appointment; and such Rules may also lay down the

powers, duties and obligations of the qualified person.";

(c) immediately after sub-article (2) thereof, as

amended, there shall be added the following new sub-article

"(2A) (a) Without prejudice to the powers

conferred to the Authority under this Act or any other law,

the Authority may appoint a skilled person to assist it in the

fulfilment of any of its functions under this Act or any

other law.

(b) Where a skilled person is appointed in

terms of this sub-article, the following provisions

shall apply

(i) any person appointed as a skilled

person shall be a person who, in the opinion of

the Executive Committee, possesses the

expertise necessary to provide the assistance

required by the Authority in terms of his

appointment;

(ii) the person in relation to whom the

skilled person is appointed shall co-operate

with the skilled person and provide any

information and documentation, as may be

required, by such skilled person in the

fulfilment of his appointment;

(iii) where such skilled person is

appointed in relation to a particular person, the

Authority may require such person to pay all

fees and expenses charged by the skilled

person;

(iv) the Authority may require the

skilled person, inter alia, to provide it with a

report relating to the assistance provided to the

Authority in terms of his appointment; and

(v) a report drawn up by the skilled

person in terms of sub-paragraph (iv) and

endorsed by the Authority in writing, shall for

all purposes have the same effect as a document

drawn up by the Authority

Provided that where a skilled person

is appointed to draw up an independent report,

this provision shall not apply with respect to

such independent report.".

PART IV

AMENDMENTS TO THE FINANCIAL MARKETS ACT

This Part amends the Financial Markets Act, and it shall be read

and construed as one with the Financial Markets Act, hereinafter in this

Part referred to as "the principal Act".

Immediately after article 20 of the principal Act, there shall

be added the following new article

20A. (1) Without prejudice to any of the powers

conferred on it under this Act, the Listing Authority

may, whenever it deems it necessary, give by notice in

writing, such directives as it may deem appropriate in

the circumstances; and any person to whom or to which

the notice is given shall obey, comply with and

otherwise give effect to any such directive within the

time and in the manner stated in the directive or

subsequent directives.

(2) The power to issue directives under this article

shall include the power to vary, alter, add to or

withdraw any directive, as well as the power to issue

subsequent new directives.

(3) Where the Listing Authority is satisfied that

the circumstances so warrant, it may at any time make

public any directive it has given under any of the

provisions of this article.

(4) Any person to whom or to which a directive is

given under this article may appeal against such

directive to the Tribunal in accordance with Part VI of

this Act.".

In sub-article (1) of article 42 of the principal Act, the words Amendment of

"under articles 4(11), 16(9), 17(3), 18(6), 20(4), 27A" shall be article

principal Act.

substituted by the words "under articles 4(11), 16(9), 17(3), 18(6),

20(4), 20A(4), 27A".

PART V

AMENDMENTS TO THE COMPANIES ACT

This Part amends the Companies Act, and it shall be read and Amendments to

construed as one with the Companies Act, hereinafter in this Part the

Act.

referred to as "the principal Act".

In sub-article (2) of article 180 of the principal Act, the words Amendment of

"not be required to be sent to a debenture holder who is not entitled to article

the principal

receive notices of general meetings." shall be substituted by the words: Act.

"not be required to be sent to

(a) a debenture holder who is not entitled to

receive notices of general meetings; and

(b) members of a company who have been duly

given notice of a general meeting of the company at which

the company’s annual accounts shall be laid in accordance

with article 181, and where the company has made

available to its members an electronic copy of such annual

accounts, either on its website or otherwise, and has

informed its members accordingly

Provided that the company shall provide a

printed copy of such annual accounts to any member upon

written request.".

Passed by the House of Representatives at Sitting No. 248 of the

10th July, 2019.

ANĠLU FARRUGIA

Speaker

RAYMOND SCICLUNA

Clerk of the House of Representatives

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