ACT No. LXXII of 2021 AN ACT to further amend various financial services laws.

I assent.

(L.S.)

GEORGE VELLA

President

28th December, 2021

ACT No. LXXII of 2021

AN ACT to further amend various financial services laws.

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

consent of the House of Representatives, in this present Parliament

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

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

commencement.

Services Laws (Amendment No. 3) Act, 2021.

(2) Article 33 of this Act shall come into force on such date as the

Minister responsible for the regulation of financial services may, by

notice in the Gazette, establish.

PART I

AMENDMENTS TO THE MALTA FINANCIAL SERVICES

AUTHORITY ACT

This Part amends the Malta Financial Services Authority Act Amendment to

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

Financial

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

Authority Act.

principal Act".

Sub-item (1) of item 1 of the First Schedule to the principal

Act shall be amended by the following

(a) immediately before the definition "the CRR" there

shall be added the following new definition

" "the 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, amending

Directive 2002/87/EC and repealing Directives 2006/48/

EC and 2006/49/EC, as amended from time to time, and

includes any implementing measures that have been or

may be issued thereunder;"; and

(b) in the definition "the CRR", for the words "on

prudential requirements for credit institutions and investment

firms and amending" there shall be substituted the words "on

prudential requirements for credit institutions and amending".

PART II

AMENDMENTS TO THE INVESTMENT SERVICES ACT

This Part amends the Investment Services Act and it shall be

read and construed as one with the Investment Services Act,

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

Article 2 of the principal Act shall be amended by the

following

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

following

(i) the definition "agricultural commodity

derivatives" shall be substituted by the following

new definition

"

"agricultural

commodity

derivatives" means derivative contracts

relating to products listed in Article 1 and

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

Regulation (EU) No. 1308/2013, as well as

to products listed in Annex I to Regulation

(EU) No. 1379/2013 of the European

Parliament and of the Council of 11

December

on

the

common

organisation of the markets in fishery and

aquaculture products, amending Council

Regulations (EC) No. 1184/2006 and (EC)

No. 1224/2009 and repealing Council

Regulation (EC) No. 104/2000, as amended

from time to time;";

(ii) immediately after the definition

"Alternative Investment Fund Manager or AIFM"

there shall be added the following new definition

" "binding legal instrument" means

any directly applicable measures, including,

but not limited to, any implementing

technical

standards,

any

regulatory

technical standards or any similar measures,

issued under European Union legislation;";

(iii) immediately after the definition

"competent authority" there shall be added the

following new definition

" "compliance with the group capital

test" means compliance by a parent

undertaking in an investment firm group

with the requirements of Article 8 of the

IFR;";

(iv) immediately after the definition

"Conduct of Business Rules" there shall be added

the following new definitions

" "consolidated basis" means the same

as the meaning assigned to it in point (48) of

Article 4(1) of the CRR;

"consolidating supervisor" means the

same as the meaning assigned to it in point

(41) of Article 4(1) of the CRR;";

(v) immediately after the definition

"derivatives" there shall be added the following

new definition

" "Directive 2002/87/EC" means

Directive 2002/87/EC of the European

Parliament and of the Council of 16

December 2002 on the supplementary

supervision of credit institutions, insurance

undertakings and investment firms in a

financial conglomerate and amending

Council Directives 73/239/EEC, 79/267/

EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC

and 93/22/EEC, and Directives 98/78/EC

and 2000/12/EC of the European Parliament

and of the Council, as amended from time to

time, and includes any implementing

measures that have been or may be issued

thereunder;";

(vi) immediately after the definition

""document" or "documentation"" there shall be

added the following new definition

" "EBA" means the European Banking

Authority established by Regulation (EU)

No. 1093/2010;";

(vii) immediately after the definition

"ESRB" there shall be added the following new

definitions

" "EU parent financial holding

company" means the same as the meaning

assigned to it in point (31) of Article 4(1) of

the CRR;

"EU parent institution" means the

same as the meaning assigned to it in point

(29) of Article 4(1) of the CRR;

"EU parent mixed financial holding

company" means the same as the meaning

assigned to it in point (33) of Article 4(1) of

the CRR;";

(viii) immediately after the definition

"exempted person" there shall be added the

following new definitions

" "financial holding company" means

the same as the meaning assigned to it in

point (20) of Article 4(1) of the CRR;

"financial institution" means a

financial institution as defined in point (14)

of Article 4(1) of the IFR;";

(ix) immediately after the definition "host

Member State or EEA State" there shall be added

the following new definitions

" "the IFD" means Directive (EU)

2019/2034 of the European Parliament and

of the Council of 27 November 2019 on the

prudential supervision of investment firms

and amending Directives 2002/87/EC,

2009/65/EC, 2011/61/EU, 2013/36/EU,

2014/59/EU and 2014/65/EU, as amended

from time to time, and includes any binding

legal instruments, guidelines and other

measures that have been or may be issued

thereunder;

"the IFR" means Regulation (EU)

2019/2033 of the European Parliament and

of the Council of 27 November 2019 on the

prudential requirements of investment firms

and amending Regulations (EU) No. 1093/

2010, (EU) No. 575/2013, (EU) No. 600/

2014 and (EU) No. 806/2014, as amended

from time to time, and includes any binding

legal instruments, guidelines and other

measures that have been or may be issued

thereunder;";

(x) immediately after the definition

"investment agreement" there shall be added the

following new definitions

" "investment firm" means an

investment firm as defined in Article 4(1) of

the MiFID;

"investment firm group" means an

investment firm group as defined in point

(25) of Article 4(1) of the IFR;

"investment holding company" means

an investment holding company as defined

in point (23) of Article 4(1) of the IFR;";

(xi) immediately after the definition

"Minister" there shall be added the following new

definitions

" "mixed-activity holding company"

means a parent undertaking other than a

financial holding company, an investment

holding company, a credit institution, an

investment firm, or a mixed financial

holding company within the meaning of

Directive 2002/87/EC, the subsidiaries of

which include at least one investment firm;

"mixed financial holding company"

means the same as the meaning assigned to

it in regulation 2 of the Financial

Conglomerates Regulations;";

(xii) immediately after the definition

"overseas regulatory authority" there shall be

added the following new definitions

" "parent financial holding company"

means the same as the meaning assigned to

the term "parent financial holding company

in a Member State" in point (30) of Article

4(1) of the CRR;

"parent institution" means the same as

the meaning assigned to the term "parent

institution in a Member State" in point (28)

of Article 4(1) of the CRR;

"parent mixed financial holding

company" means the same as the meaning

assigned to the term "parent mixed financial

holding company in a Member State" in

point (32) of Article 4(1) of the CRR;";

(xiii) immediately after the definition

"regulated market" there shall be added the

following new definitions

" "Regulation (EU) No. 1092/2010"

means Regulation (EU) No. 1092/2010 of

the European Parliament and of the Council

of 24 November 2010 on European Union

macro-prudential oversight of the financial

system and establishing a European

Systemic Risk Board, as amended from

time to time, and includes any

implementing 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

amended from time to time, and includes

any implementing measures that have been

or may be issued thereunder;

"Regulation (EU) No. 1094/2010"

means Regulation (EU) No. 1094/2010 of

the European Parliament and of the Council

of 24 November 2010 establishing a

European Supervisory Authority (European

Insurance and Occupational Pensions

Authority), amending Decision No. 716/

2009/EC and repealing Commission

Decision 2009/79/EC, as amended from

time to time, and includes any

implementing measures that have been or

may be issued thereunder;";

(xiv) immediately after the definition

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

added the following new definitions

" "resolution entity" means the same

as the meaning assigned to it in sub-

regulation (1) of regulation 2 of the

Recovery and Resolution Regulations;

"resolution group" means the same as

the meaning assigned to it in sub-regulation

(1) of regulation 2 of the Recovery and

Resolution Regulations;"; and

(xv) immediately after the definition

"structured finance products" there shall be added

the following new definition

" "sub-consolidated basis" means the

same as the meaning assigned to it in point

(49) of Article 4(1) of the CRR;"; and

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

shall be added the following new sub-articles

"(1A) For the purposes of applying the

requirements and supervisory powers laid down

in this Act and any regulations and Investment

Services Rules made or issued thereunder

transposing the CRD, in any binding legal

instruments issued under the CRD, or in the CRR,

on a consolidated or sub-consolidated basis in

accordance with this Act and any regulations and

Investment Services Rules made or issued

thereunder transposing the CRD, any binding

legal instruments issued under the CRD, and in

accordance with the CRR, the terms "institution",

"parent institution", "EU parent institution" and

"parent undertaking" shall also include

(a) financial holding companies and

mixed financial holding companies that

have been granted approval in accordance

with article 10CA of this Act and, or Article

21a of the CRD;

(b) designated

institutions

controlled by an EU parent financial

holding company, an EU parent mixed

financial holding company, a parent

financial holding company in a Member

State or a parent mixed financial holding

company in a Member State where the

relevant parent is exempted in accordance

with article 10CA(5) of this Act and, or

Article 21a(4) of the CRD; and

(c) financial holding companies,

mixed financial holding companies or

institutions designated pursuant to article

16AA(1)(f) of this Act and, or Article

21a(6)(d) of the CRD

Provided that for the purposes of this

sub-article

(i) the term "control" means the

same as the meaning assigned to it in point

(37) of Article 4(1) of the CRR, and the

term "controlled" shall be construed

accordingly; and

(ii) the term "institution" means the

same as the meaning assigned to it in point

(3) of Article 4(1) of the CRR.

(1B) Reference to the "approval" of

financial holding companies or mixed financial

holding companies in this Act and any regulations

and, or Investment Services Rules issued

thereunder, means an approval granted by the

competent authority in terms of article 10CA of

this Act or an approval granted through the joint

decision of the competent authority and any

European regulatory authority in terms of article

10CA of this Act and Article 21a of the CRD as

the case may be.

(1C) Reference to the "exemption" of

financial holding companies or mixed financial

holding companies in this Act and any regulations

and, or Investment Services Rules issued

thereunder, means an exemption granted by the

competent authority in terms of article 10CA of

this Act or an exemption granted through the joint

decision of the competent authority and any

European regulatory authority in terms of article

10CA of this Act and Article 21a of the CRD, as

the case may be.".

Article 2A of the principal Act shall be amended as follows

Amendment of

article 2A of the

principal Act.

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

and the UCITS Directive, and the Commission" there shall be

substituted the words "the MiFIR, the UCITS Directive, the IFD

and the IFR, and the Commission" and immediately thereafter

there shall be added the following new sub-article

"(2A) The competent authority shall have the

expertise, resources, operational capacity, powers and

independence necessary to carry out its functions and

exercise its powers at law."; and

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

the MiFIR or the UCITS Directive, the competent authority

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

MiFIR, the UCITS Directive, the IFD or the IFR, the competent

authority shall:".

Article 6 of the principal Act shall be amended as follows

Amendment of

article 6 of the

principal Act.

(a) immediately after paragraph (e) of sub-article (1)

thereof there shall be added the following new paragraph

"(f) grant a licence to an applicant which has an

investment holding company or a mixed financial holding

company as its parent undertaking unless it is satisfied that

the members of the management body of such parent

undertaking are of sufficiently good repute and possess

sufficient knowledge, skills and experience to effectively

perform their duties, taking into account the specific role of

an investment holding company or mixed financial holding

company."; and

(b)

sub-article (5) thereof shall be amended as follows

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

following

"(b) certain types of licences;"; and

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

categories of holders;" there shall be substituted the words

"certain types of licence holders;".

Article 7 of the principal Act shall be amended as follows

(a)

in sub-article (2) thereof

(i) in paragraph (f) thereof, for the words "of the

licence holder; and" there shall be substituted the words "of

the licence holder; or"; and

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

grant of such licence." there shall be substituted the words

"the grant of such licence:" and immediately thereafter

there shall be added the following new proviso

"Provided that an investment services

licence shall automatically be cancelled if the licence

holder is either declared bankrupt, or goes into

liquidation, or makes a composition with its creditors,

or is otherwise dissolved.";

(b) in paragraph (f) of sub-article (3) thereof, for the

words "of the manager or trustee or custodian of the scheme, or

their equivalent." there shall be substituted the words "of the

manager or trustee or custodian of the scheme, or their

equivalent:" and immediately thereafter there shall be added the

following new proviso

"Provided that a collective investment scheme

licence shall automatically be cancelled if the licence

holder is either declared bankrupt, or goes into liquidation,

or makes a composition with its creditors, or is otherwise

dissolved."; and

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

(1)." there shall be substituted the words "sub-article (2).".

Immediately after article 8 of the principal Act there shall be

added the following new article

8A. (1) The competent authority may decide to

apply the requirements of the CRR pursuant to point (c)

of the first sub-paragraph of Article 1(2) of the IFR to

an investment firm to carry out any of the activities

listed in points (3) and (6) of Section A of Annex I to

MiFID, where the total value of the consolidated assets

of such investment firm is equal to or exceeds five

billion euro (€5,000,000,000), calculated as an average

of the previous twelve (12) months, and one or more of

the following criteria apply

(a) such investment firm carries out those

activities on such a scale that the failure or the

distress of the investment firm could lead to

systemic risk;

(b) the investment firm is a clearing

member as defined in point (3) of Article 4(1) of

the IFR; and, or

(c)

the competent authority considers it

to be justified in light of the size, nature, scale and

complexity of the activities of the investment firm

concerned, taking into account the principle of

proportionality and having regard to one or more

of the following factors

(i) the importance of the investment

firm for the economy of Malta or of the

European Union;

(ii) the

significance

of

the

investment firm’s cross-border activities;

(iii) the interconnectedness of the

investment firm with the financial system.

(2)

Sub-article (1) shall not apply to commodity

and emission allowance dealers, collective investment

undertakings or insurance undertakings.

(3) Where the competent authority decides to

apply the requirements of the CRR to an investment

firm in accordance with sub-article (1), that investment

firm shall be supervised for compliance with prudential

requirements under Titles VII and VIII of the CRD as

transposed in national law.

(4) Where the competent authority decides to

revoke a decision taken in accordance with sub-article

(1), it shall inform the investment firm without delay

Provided that, any decision taken by the

competent authority under sub-article (1) shall cease to

apply where an investment firm no longer meets the

threshold referred to in that sub-article, calculated over

a period of twelve consecutive months.

(5) For the purposes of this article, the term

"investment firm" means an investment firm licensed

under this Act.".

In sub-article (1) of article 9 of the principal Act, for the

words "an investment services licence and the manager" there shall be

substituted the words "an investment services licence, an investment

holding company or mixed financial holding company and the

In paragraph (b) of sub-article (6) of Article 10A of the

principal Act, for the words "the CRD or the Solvency Directive."

there shall be substituted the words "the CRD, the IFD, or the Solvency

Immediately after article 10C of the principal Act there shall

be added the following new article

10CA. (1) Parent financial holding companies,

parent mixed financial holding companies, EU parent

financial holding companies and EU parent mixed

holding companies.

financial holding companies, which are established in

Malta or in another Member State or EEA State and

which have an investment firm as a subsidiary, shall

seek the approval or exemption, as the case may be, of

the competent authority acting, as the consolidating

supervisor, in accordance with this article. Other

financial holding companies or mixed financial holding

companies, established in Malta or in another Member

State or EEA State and which have an investment firm

as a subsidiary, shall seek the approval or exemption, as

the case may be, of the competent authority, acting as

the consolidating supervisor, in accordance with this

article where they are required to comply with the CRD

or the CRR on a sub-consolidated basis

Provided that in accordance with article 10D

where the competent authority is not the consolidating

supervisor, financial holding companies and mixed

financial holding companies established in Malta and

which have an investment firm as a subsidiary, shall

seek the approval or exemption, as the case may be, of

the consolidating supervisor determined in accordance

with Article 111 of the CRD.

(2) For the purposes of seeking an approval or

exemption, as the case may be, in terms of sub-article

(1), financial holding companies and mixed financial

holding companies referred to therein shall, where

(a) the competent authority is not the

consolidating supervisor but the financial holding

company or the mixed financial holding company

is established in Malta; or

(b) the financial holding company or the

mixed financial holding company is established in

a Member State or an EEA State other than Malta

and the competent authority is the consolidating

supervisor,

provide the competent authority with the following

information

(a) the structural organisation of the

group of which the financial holding company or

the mixed financial holding company, as the case

may be, forms part, with a clear indication of its

subsidiaries and, where applicable, parent

undertakings, and the location and type of activity

undertaken by each of the entities within the

group;

(b) information regarding the nomination

of at least two persons effectively directing the

financial holding company or mixed financial

holding company, as the case may be, and

compliance with the requirements on the

qualification of directors set out in Investment

Services Rules;

(c) the

internal

organisation

and

distribution of tasks within the group;

(d) any other information that may be

necessary to carry out the assessments referred to

in sub-articles (3) and (4) as may be requested by

the competent authority.

(3) All applications for an approval or exemption,

as the case may be, in terms of this article shall be in

such form and accompanied by such information and

shall conform with any such requirements as may be

established, from time to time, by Investment Services

Rules.

(4) Approval may be granted to a financial holding

company or a mixed financial holding company, as the

case may be, pursuant to this article only where all of

the following conditions are fulfilled

(a) the internal arrangements and

distribution of tasks within the group are adequate

for the purpose of complying with the

requirements imposed by this Act and any

regulations made and Investment Services Rules

issued thereunder transposing the CRD and by the

CRR on a consolidated or sub-consolidated basis

and, in particular, are effective to

(i) coordinate all the subsidiaries of

the financial holding company or mixed

financial holding company, as the case may

be, including, where necessary, through an

adequate distribution of tasks among

subsidiary institutions;

(ii) prevent or manage intra-group

conflicts; and

(iii) enforce the group-wide policies

set by the parent financial holding company

or parent mixed financial holding company

throughout the group;

(b) the structural organisation of the

group of which the financial holding company or

mixed financial holding company, as the case may

be, is part does not obstruct or otherwise prevent

the effective supervision of the subsidiary

institutions or parent institutions as concerns the

individual, the consolidated and, where

appropriate the sub-consolidated obligations to

which they are subject

Provided that the assessment of this

criterion shall take into account, in particular

(i) the position of the financial

holding company or the mixed financial

holding company, as the case may be, in a

multi-layered group;

(ii) the shareholding structure; and

(iii) the role of the financial holding

company or mixed financial holding

company, as the case may be, within the

group;

(c) the requirements on the qualification

of directors laid down in Investment Services

Rules, are complied with.

(5) An exemption may be granted to a financial

holding company or mixed financial holding company,

as the case may be, pursuant to this article only where

all of the following conditions are met

(a) the financial holding company’s

principal activity is to acquire holdings in

subsidiaries or, in the case of a mixed financial

holding company, its principal activity with

respect to institutions or financial institutions is to

acquire holdings in subsidiaries;

(b) the financial holding company or

mixed financial holding company, as the case may

be, has not been designated as a resolution entity

in any of the group’s resolution groups in

accordance with the resolution strategy

determined by the relevant resolution authority

pursuant to the BRRD;

(c) a subsidiary credit institution is

designated as responsible to ensure the group’s

compliance with prudential requirements on a

consolidated basis and is given all the necessary

means and legal authority to discharge those

obligations in an effective manner;

(d) the financial holding company or

mixed financial holding company, as the case may

be, does not engage in taking management,

operational or financial decisions affecting the

group or its subsidiaries that are institutions or

financial institutions;

(e) there is no impediment to the effective

supervision of the group on a consolidated basis

Provided that where financial holding

companies or mixed financial holding companies are

exempted from approval in accordance with this sub-

article, they shall not be excluded from the perimeter of

consolidation as laid down in the provisions of this Act

and any regulations made and Investment Services

Rules issued thereunder transposing the CRD and in the

CRR.

(6) Where the competent authority is the

consolidating supervisor, it shall monitor compliance

with the conditions referred to in sub-article (4) or,

where applicable, sub-article (5) on an ongoing basis.

(7) (a) Financial holding companies and mixed

financial holding companies shall provide the

c o m p e t e n t a u t h o r i t y, w h e r e i t i s a c t i n g a s t h e

consolidating supervisor, with the information required

to monitor on an ongoing basis the structural

organisation of the group and compliance with the

conditions referred to in sub-article (4).

(b) Financial holding companies and

mixed financial holding companies exempted in

terms of sub-article (5) shall provide the

competent authority, where it is acting as the

consolidating supervisor, with the information

required to monitor on an ongoing basis the

structural organisation of the group and

compliance with the conditions referred to in sub-

article (5).

(c) The competent authority shall share

the information received in terms of this sub-

article with the European regulatory authority

where the financial holding company or the

mixed financial holding company, as the case may

be, is established.

(8) Where the competent authority is the

consolidating supervisor and has established that the

conditions set out in sub-article (5) are no longer met,

the financial holding company or mixed financial

holding company, as the case may be, shall seek

approval in accordance with this article.

(9) For the purpose of taking decisions on the

approval or the exemption from approval, as the case

may be, referred to in sub-articles (4), (5) and (8) and,

or in sub-articles (3), (4) or (7) of Article 21a of the

CRD, where

(i) the competent authority is not the

consolidating supervisor but the financial holding

company or the mixed financial holding company,

as the case may be, is established in Malta; or

(ii) the financial holding company or the

mixed financial holding company, as the case may

be, is established in a Member State or an EEA

State other than Malta and the competent

authority is the consolidating supervisor,

the competent authority shall work together with the

European regulatory authority acting as the

consolidating supervisor or with the European

regulatory authority in the Member State or EEA State

where the financial holding company or the mixed

financial holding company is established, as the case

may be, in full consultation.

(10) Where the competent authority is the

consolidating supervisor, it shall prepare an assessment

on the matters referred to in sub-articles (4), (5) and (8),

as applicable, and shall forward that assessment to the

European regulatory authority in the Member State or

EEA State where the financial holding company or the

mixed financial holding company is established, as the

case may be.

(11) The competent authority, whether acting as the

consolidating supervisor or whether it is in receipt of an

assessment referred to in Article 21a(8) of the CRD

from the European regulatory authority acting as the

consolidating supervisor, shall do everything within its

power to reach a joint decision on the approval or the

exemption from approval, as the case may be, referred

to in sub-articles (4), (5) and (8) and, or in sub-articles

(3), (4) and (7) of Article 21a of the CRD, with the

European regulatory authority in the Member State or

EEA State where the financial holding company or the

mixed financial holding company is established or with

the European regulatory authority acting as the

consolidating supervisor, as the case may be, within

two months of receipt of that assessment

Provided that the joint decision shall be duly

documented and reasoned and where the competent

authority is the consolidating supervisor, it shall

communicate the joint decision to the financial holding

company or the mixed financial holding company, as

the case may be.

(12) In the event of a disagreement between the

competent authority and the European regulatory

authority acting as the consolidating supervisor or the

European regulatory authority in the Member State or

EEA State where the financial holding company or the

mixed financial holding company is established, as the

case may be, the competent authority shall refrain from

taking the joint decision referred to in sub-article (11)

and shall refer the matter to the EBA in accordance

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

such cases, the competent authority shall adopt a joint

decision with the European regulatory authority acting

as the consolidating supervisor or with the European

regulatory authority in the Member State or EEA State

where the financial holding company or the mixed

financial holding company is established, as the case

may be, in conformity with the decision of the EBA

Provided that the matter shall not be referred to

the EBA after the end of the two-month period referred

to in sub-article (11) or after a joint decision has been

reached.

(13) In the case of mixed financial holding

companies, where the coordinator appointed in terms of

Article 10 of Directive 2002/87/EC is neither the

competent authority, nor the European regulatory

authority acting as the consolidating supervisor, nor the

European regulatory authority in the Member State or

EEA State where the mixed financial holding company

is established, the agreement of the said coordinator

shall be required for the purposes of the decisions or

joint decisions referred to in sub-articles (4), (5) and (8)

and, or sub-articles (3), (4) and (7) of Article 21a of the

CRD, as applicable. Where the agreement of the

coordinator is required, the competent authority shall

refer any disagreements to the relevant European

Supervisory Authority, namely, to the EBA or the

European Supervisory Authority (European Insurance

and Occupational Pensions Authority) (EIOPA),

established by Regulation (EU) No. 1094/2010, which

shall take its decision within one month of receipt of the

referral. Any decision taken in accordance with this

paragraph shall be without prejudice to the obligations

under Directive 2002/87/EC or the Solvency II

Directive.

(14) Where approval of a financial holding

company or mixed financial holding company, as the

case may be, pursuant to this article is refused and the

competent authority is the consolidating supervisor, the

competent authority shall notify the applicant of the

decision and the reasons therefor within four months of

receipt of the application, or where the application is

incomplete, within four months of receipt of the

complete information required for the decision. Refusal

may be accompanied, where necessary, by any of the

measures referred to in article 16AA

Provided that a decision to grant or refuse

approval shall, in any event, be taken within six months

of receipt of the application.

(15) For the purposes of this article

(a) the term "financial institution" means

the same as the meaning assigned to it in point

(26) of Article 4(1) of the CRR;

(b) the term "group" means a group as

defined in point (138) of Article 4(1) of the CRR;

(c) the term "institution" means an

institution as defined in point (3) of Article 4(1)

of the CRR;

(d) the term "investment firm" means an

investment firm as defined in point (2) of Article

4(1) of the CRR;

(e) the term "parent undertaking" means a

parent undertaking as defined in point (15) of

Article 4(1) of the CRR;

(f) the term "resolution authority" means

an authority designated by a Member State or an

EEA State in accordance with Article 3 of the

BRRD;

(g) the term "subsidiary" means a

subsidiary as defined in point (16) of Article 4(1)

of the CRR.

(16) The provisions of this article shall be without

prejudice to the provisions of article 10.".

Sub-article (1) of article 12 of the principal Act shall be Amendment of

article 12 of the

amended as follows

principal Act.

(a) in paragraph (c) thereof, for the words "licence

holders or any categories thereof as may be specified," there

shall be substituted the words "licence holders or any types

thereof as may be specified,";

(b) in paragraph (k) thereof, for the words "of the AIFM

Directive, the BRRD, the CRD, the MiFID, the MiFIR and the

UCITS Directive;", there shall be substituted the words "of the

AIFM Directive, the BRRD, the CRR, the CRD, the MiFID, the

MiFIR, the UCITS Directive, the IFD, and the IFR;"; and

(c) in paragraph (l) thereof, for the words "of the CRD

and the CRR, as may be" there shall be substituted the words "of

the CRD, the CRR, the IFD and the IFR, as may be".

Article 13 of the principal Act shall be amended as follows

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

following

"(1) Without prejudice to any powers of the

competent authority arising under any other law, the

competent authority shall have the power to require

information from

(a) any person who is or was providing, or

who appears to be or to have been providing, an

investment service;

(b)

a collective investment scheme;

(c) any person who is or was carrying on, or

who appears to be or has been carrying on activities

in connection with such a scheme;

(d) any person who has issued, or appears to

have issued an advertisement falling within the

provisions of article 11(1);

(e)

an auditor of a licence holder; or

(f) any other person who appears to be in

possession of relevant information.";

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

substituted, there shall be added the following new sub-articles

"(1A) Without prejudice to sub-article (1), the

competent authority shall have the power to require

information from

(a)

investment firms established in Malta;

(b) investment

holding

companies

established in Malta;

(c) mixed financial holding companies

established in Malta and their subsidiaries;

(d) mixed-activity

holding

companies

established in Malta;

(e) persons belonging to the entities referred

to in points (a) to (d);

(f) third parties to whom the entities referred

to in points (a) to (d) have outsourced operational

functions or activities.

(1B) Without prejudice to the generality of sub-

articles (1) and (1A), the competent authority may, by

notice in writing, require any person referred to in the said

sub-articles 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, including the power to require existing

telephone and existing data traffic records, with

respect to any such service, scheme or advertisement

as aforesaid, or with respect to any person with

whom the licence holder has close links within the

meaning of article 6;

(b) to furnish to the competent authority any

information or documentation aforesaid verified in

such manner as it may specify;

(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 with respect

to any such service, scheme or advertisement as

aforesaid."; and

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

following

"(2) The competent authority may examine and

make copies or extracts of any documents furnished or

provided under this article.".

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

words "referred to in article 13(1)(i) to (iv).", there shall be substituted

the words "referred to in article 13(1)(a) to (d) and (1A).".

In paragraph (g) of sub-article (2) of article 15 of the principal

Act, for the words "of the AIFM Directive, the BRRD, the CRD, the

MiFID Directive and the UCITS Directive;" there shall be substituted

the words "of the AIFM Directive, the BRRD, the CRD, the MiFID,

the UCITS Directive, and the IFD;".

Article 16 of the principal Act shall be amended as follows

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

purpose of obtaining there the information", there shall be

substituted the words "for the purpose of obtaining and, or

verifying there the information"; and

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

be added the following new sub-article

"(2A) Without prejudice to sub-articles (1) and (2),

any officer, employee or agent of the competent authority,

on producing, if required, evidence of his authority, may

enter premises occupied by a person on whom a notice has

been served under article 13 and by any other person

included in the supervision of compliance with the group

capital test, where the competent authority is the group

supervisor, in order to conduct an inspection

Provided that the exercise of the right of entry

under this sub-article in relation to any person included in

the supervision of compliance with the group capital test

where the competent authority is the group supervisor,

shall be subject to the prior notification of other competent

authorities concerned.".

Immediately after article 16A of the principal Act there shall

be added the following new article

16AA. (1) Without prejudice to any other power of

measures related to

the

competent authority under this Act or any other law,

where the competent authority is the consolidating

holding companies. supervisor and has established that the conditions set

out in article 10D(4) are not met or have ceased to be

met, the competent authority shall take the appropriate

supervisory measures to ensure or restore, as the case

may be, continuity and integrity of consolidated

supervision and ensure compliance with the

requirements laid down in this Act and any regulations

made and Investment Services Rules issued thereunder

transposing the CRD, in any binding legal instruments

issued under the CRD, and in the CRR, on a

consolidated basis. In the case of a mixed financial

holding company, the supervisory measures applied by

the competent authority as the consolidating supervisor

shall, in particular, take into account the effects on the

financial conglomerate. The supervisory measures

referred to in this sub-article shall include

(a) withdrawing the approval granted to a

financial holding company or mixed financial

holding company in terms of article 10D;

(b) suspending the exercise of voting

rights attached to the shares of the subsidiary

institutions held by the financial holding company

or mixed financial holding company;

(c) issuing administrative measures or

administrative penalties, in terms of this Act and

any regulations made or Investment Services

Rules issued thereunder, against the financial

holding company, the mixed financial holding

company or the directors and managers, subject to

the provisions of national law transposing

Articles 65 to 72 of the CRD;

(d) issuing instructions or directions to

the financial holding company or mixed financial

holding company to transfer to its shareholders

the participations in its subsidiary institutions;

(e) issuing a directive to the financial

holding company or mixed financial holding

company in terms of article 15;

(f) designating on a temporary basis

another financial holding company, mixed

financial holding company or institution within

the group as responsible for ensuring compliance

with the requirements laid down in this Act and,

or any regulations made and, or Investment

Services Rules issued thereunder transposing the

CRD, in the CRD and, or in the CRR on a

consolidated basis;

(g) restricting or prohibiting distributions

or interest payments to shareholders;

(h) requiring financial holding companies

or mixed financial holding companies to divest

themselves from, or reduce, holdings in

institutions or other financial sector entities;

(i) requiring financial holding companies

or mixed financial holding companies to submit a

plan on return, without delay, to compliance;

(j) restraining any person within financial

holding companies or mixed financial holding

companies and, or financial holding companies or

mixed financial holding companies from taking,

or continuing to take, any action as a result of

which the conditions set out in article 10D(4) are

not met or have ceased to be met;

(k) requiring any person within financial

holding companies or mixed financial holding

companies and, or financial holding companies or

mixed financial holding companies to take such

steps as may be necessary to restore the position

existing immediately before any action, as a result

of which the conditions set out in article 10D(4)

are not met or have ceased to be met, was taken;

(l) restraining any person within financial

holding companies or mixed financial holding

companies and, or financial holding companies or

mixed financial holding companies from

exercising any rights which a lawful action, as a

result of which the conditions set out in article

10D(4) are not met or have ceased to be met,

would have conferred upon them, including the

right to receive any payment or to exercise any

voting rights attaching to the shares acquired;

(m) any measure under article 15A

Provided that in exercising any of its powers

under article 15A, the provisions of the said article shall

apply mutatis mutandis, and provided further that any

reference to "the licence holder" shall be deemed to be

reference to "the financial holding company" and, or

"the mixed financial holding company", as applicable.

(2) Where the competent authority intends to

withdraw an approval in accordance with sub-article

(1)(a), it shall serve written notice of its intention on the

financial holding company or mixed financial holding

company; such notice shall specify the grounds upon

which the competent authority intends to take such

action and shall specify a period, being a period not less

than forty-eight hours and not more than thirty calendar

days, in which the financial holding company or mixed

financial holding company shall be entitled to make

representations to the competent authority as to why

such action should not be taken. Unless the competent

authority decides that the matter is urgent, it shall not

withdraw an approval before the expiry of such period.

(3) For the purpose of taking decisions on the

supervisory measures referred to in sub-article (1),

where the financial holding company or the mixed

financial holding company is established in a Member

State or in an EEA State other than Malta and the

competent authority is the consolidating supervisor, the

competent authority shall work together with the

European regulatory authority in the Member State or

EEA State where the financial holding company or the

mixed financial holding company is established, as the

case may be, in full consultation.

(4) Where the competent authority is not the

consolidating supervisor but the financial holding

company or the mixed financial holding company is

established in Malta, the competent authority shall, for

the purposes of taking decisions on the supervisory

measures referred to in Article 21a(6) of the CRD, work

together with the European regulatory authority acting

as the consolidating supervisor, in full consultation.

(5) Where the competent authority is the

consolidating supervisor and where the financial

holding company or the mixed financial holding

company is not established in Malta, the competent

authority shall prepare an assessment on the matters

referred to in sub-article (1), and shall forward that

assessment to the European regulatory authority in the

Member State or EEA State where the financial holding

company or the mixed financial holding company is

established.

(6) The competent authority, whether acting as the

consolidating supervisor or whether it is in receipt of an

assessment referred to in Article 21a(8) of the CRD from

the European regulatory authority acting as the

consolidating supervisor, shall do everything within its

powers to reach a joint decision on the measures referred

to in sub-article (1) of this article and, or in Article

21a(6) of the CRD, with the European regulatory

authority in the Member State or EEA State where the

financial holding company or the mixed financial

holding company is established or with the European

regulatory authority acting as the consolidating

supervisor, as the case may be, within two months of

receipt of that assessment

Provided that the joint decision shall be duly

documented and reasoned and where the competent

authority is the consolidating supervisor, it shall

communicate the joint decision to the financial holding

company or the mixed financial holding company.

(7) In the event of a disagreement between the

competent authority and the European regulatory

authority acting as the consolidating supervisor or with

the European regulatory authority in the Member State

or EEA State where the financial holding company or

the mixed financial holding company is established, as

the case may be, the competent authority shall refrain

from taking the joint decision referred to in sub-article

(6) and shall refer the matter to the EBA in accordance

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

such cases, the competent authority shall adopt a joint

decision with the European regulatory authority acting

as the consolidating supervisor or with the European

regulatory authority in the Member State or EEA State

where the financial holding company or the mixed

financial holding company is established, as the case

may be, in conformity with the decision of the EBA

Provided that the matter shall not be referred to

the EBA after the end of the two month period referred

to in sub-article (6) or after a joint decision has been

reached.

(8) In the case of mixed financial holding

companies, where the coordinator appointed in terms of

Article 10 of Directive 2002/87/EC is neither the

competent authority, nor the European regulatory

authority acting as the consolidating supervisor, nor the

European regulatory authority in the Member State or

EEA State where the mixed financial holding company

is established, the agreement of the said coordinator

shall be required for the purposes of the decisions or

joint decisions referred to in sub-article (1) of this

article and, or in Article 21a(6) of the CRD, as

applicable. Where the agreement of the coordinator is

required, the competent authority shall refer any

disagreements to the relevant European Supervisory

Authority, namely, to the EBA or to the European

Supervisory Authority (European Insurance and

Occupational Pensions Authority) (EIOPA), established

by Regulation (EU) No. 1094/2010, which shall take its

decision within one month of receipt of the referral.

Any decision taken in accordance with this sub-article

shall be without prejudice to the obligations under

Directive 2002/87/EC or the Solvency II Directive.

(9) For the purposes of this article

(a) the term "group" means a group as

defined in point (138) of Article 4(1) of the CRR;

(b) the term "institution" means an

institution as defined in point (3) of Article 4(1)

of the CRR;

(c) the term "participation" means the

same as the meaning assigned to in point (35) of

Article 4(1) of the CRR; and

(d) the term "subsidiary" means a

subsidiary as defined in point (16) of Article 4(1)

of the CRR.".

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

Directive and the UCITS Directive, including", there shall be article

the principal

substituted the words "the MiFID, the UCITS Directive, and the IFD, Act.

Immediately after article 16B, as amended, the sub-title "CO-

OPERATION WITH EUROPEAN REGULATORY AUTHORITIES

AND OTHER BODIES", shall be substituted by the sub-title "CO-

OPERATION WITH REGULATORY AUTHORITIES AND OTHER

BODIES".

Article 17 of the principal Act shall be amended as follows

(a) immediately after sub-article (1) thereof, there shall

be added the following new sub-article

"(1A)The competent authority shall cooperate with

other local regulatory authorities or bodies which are also

responsible for the supervision of credit institutions and

financial institutions and shall exchange with such local

regulatory authorities or bodies, without delay, any

information which is essential or relevant to the exercise of

their functions.";

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

and the UCITS Directive.", there shall be substituted the words

"the MiFIR, the UCITS Directive, the IFD and the IFR.", for the

words "the MiFID Directive and the UCITS Directive, the

competent authority may use" there shall be substituted the

words "the MiFID, the UCITS Directive and the IFD, the

competent authority may use" and immediately after the proviso

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

"(2A) Without prejudice to the generality of sub-

article (2), the competent authority shall, for the purposes

of its duties pursuant to the IFR and the IFD as transposed

in national law, exchange information about investment

firms with European regulatory authorities without delay,

including the following

(a) information about the management and

ownership structure of the investment firm;

(b) information about compliance with own

funds requirements by the investment firm;

(c) information about compliance with the

concentration risk requirements and liquidity

requirements of the investment firm;

(d) information about the administrative and

accounting procedures and internal control

mechanisms of the investment firm; and

(e) any other relevant factors that may

influence the risk posed by the investment firm

Provided that for the purposes of this sub-article

the term "investment firm" means an investment firm

licensed under this Act.";

(c) in paragraph (f) of sub-article (7) thereof, for the

words "the MiFIR." there shall be substituted the words "the

MiFIR; or" and immediately thereafter there shall be added the

following new paragraph

"(g) to monitor the prudential rules set out in the

IFD and the IFR.";

(d) in sub-article (9) thereof, for the words "of the

BRRD, CRD and the CRR, as may be prescribed." there shall be

substituted the words "of the BRRD, CRD, the CRR, the IFD and

the IFR, as may be prescribed.";

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

AIFM Directive, the CRD, the CRR, the MiFID, the MiFIR or

the UCITS Directive are being", there shall be substituted the

words "of the AIFM Directive, the CRD, the CRR, the MiFID,

the MiFIR, the UCITS Directive, the IFD and the IFR are being";

and

(f) in sub-article (12) thereof, for the words "of the

AIFM Directive, the CRD, the CRR, the MiFID, the MiFIR or

the UCITS Directive are being" there shall be substituted the

words "of the AIFM Directive, the CRD, the CRR, the MiFID,

the MiFIR, the UCITS Directive, the IFD or the IFR are being".

Article 17A of the principal Act shall be amended as follows

Amendment of

article 17A of

the principal

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

Act.

following

"Co-operation in supervisory functions, verifications,

on-site checks, inspections and investigations."; and

(b) immediately after sub-article (3) thereof there shall

be added the following new sub-articles

"(4) Without prejudice to any other provision of this

Act, the competent authority may request the cooperation

of a European regulatory authority to verify information

about investment firms, investment holding companies,

mixed financial holding companies, financial institutions,

ancillary services undertakings, mixed-activity holding

companies or subsidiaries, including subsidiaries which are

insurance companies, that are located in the territory of the

European regulatory authority concerned.

(5) Without prejudice to any other provision of this

Act, a European regulatory authority may request the

cooperation of the competent authority to verify

information about investment firms, investment holding

companies, mixed financial holding companies, financial

institutions, ancillary services undertakings, mixed-activity

holding companies or subsidiaries, including subsidiaries

which are insurance companies, that are located in Malta.

(6) Where a European regulatory authority makes a

request in terms of sub-article (2), the competent authority

shall, within the framework of its powers

(a)

carry out the verification itself;

(b) allow the European regulatory authority

who made that request to carry out such verification;

(c) request an auditor or expert to carry out

the verification impartially and to report the results

promptly

Provided that for the purposes of

paragraphs (a) and (c), the European regulatory

authority that made the request shall be allowed to

participate in the verification.

(7)

Where a European investment firm carries out

its activities through a branch in Malta, the European

regulatory authority of the home Member State may, after

having informed the competent authority, carry out, itself

or through intermediaries that it appoints for that purpose,

inspections of such a branch and on-site checks of the

information referred to in article 17(2A).

(8) Without prejudice to sub-article (7), where

Malta is the host Member State, the competent authority

shall, for supervisory purposes and where the competent

authority considers it to be relevant for reasons of stability

of the financial system in Malta, have the power to carry

out, on a case-by-case basis, on-site checks and inspections

of the activities carried out by branches of European

investment firms on its territory and require information

from a branch about its activities

Provided that, before carrying out such checks

and inspections, the competent authority shall, without

delay, consult the European regulatory authority of the

home Member State

Provided further that, as soon as possible

following the completion of those on-site checks and

inspections, the competent authority shall communicate to

the European regulatory authority of the home Member

State the information obtained and findings that are

relevant for the risk assessment of the European investment

firm concerned.".

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

article 17F of

amended by the following

the principal

Act.

(a) in paragraph (i) thereof, for the words "insurance

undertakings and the supervision of financial markets;" there

shall be substituted the words "insurance undertakings, financial

institutions and financial markets, including financial entities

licensed to operate as central counterparties where central

counterparties have been recognised under Article 25 of

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

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

financial institutions;" there shall be substituted the words "other

financial institutions:"; and

(c) immediately after paragraph (v) thereof there shall be

added the following new proviso

"Provided that, for the purposes of this paragraph, the

term "financial insitutions" means both financial institutions

as defined in point (26) of Article 4(1) of the CRR and as

defined in point (14) of Article 4(1) of the IFR;".

Article 18 of the principal Act shall be amended as follows

Amendment of

article 18 of the

principal Act.

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

following

"(1) An auditor of the holder of a licence shall have

the duty to report immediately to the competent authority

any fact or decision concerning that licence holder of

which he becomes aware in his capacity as auditor of such

licence holder which –

(a) is likely to lead to a serious qualification

or refusal of the auditor’s report on the accounts of

such licence holder;

(b) constitutes or is likely to constitute a

material breach of this Act or any regulations or

Rules issued thereunder, including the legal or

regulatory requirements applicable to the licence

holders in or under this Act;

(c) may affect the continuous functioning of

the licence holder;

(d) may lead to the refusal to certify the

licence holder’s accounts or to the expression of

reservations; or

(e) relates to any other matter which may be

prescribed."; and

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

be added the following new sub-article

"(6) The competent authority may require the

replacement of a person referred to in sub-article (1) if that

person acts in breach of his obligations under paragraphs

(a) to (d) of sub-article (1).".

Sub-article (2) of article 19 of the principal Act shall be

amended by the following

(a) in paragraph (i) thereof, for the words "(2) and (4)."

there shall be substituted the words "(2) and (4);"; and

(b) immediately after paragraph (i) thereof there shall be

added the following new paragraph

"(j) any measure taken in terms of paragraphs (a) to

(l) of article 16AA(1).".

Article 26 of the principal Act shall be amended as follows

(a)

in sub-article (1) thereof

(i) for the words "Information obtained by the

competent authority" there shall be substituted the words

"Other than for the proper discharge of their duties or

functions under this Act or any other Act, or as may be

otherwise provided in any other law, information obtained

by the competent authority" and for the words "in the

discharge of any functions under any of the said

provisions, shall be treated" there shall be substituted the

words "in the discharge of their duties or any functions,

shall be treated"; and

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

UCITS Directive, and" there shall be substituted the words

"the UCITS Directive, the IFD and the IFR and";

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

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

"(1A) Notwithstanding the provisions of sub-article

(1), information obtained by the competent authority or by

its officers, employees or agents, as well as by inspectors,

auditors and experts, who are or were engaged by the

competent authority, in the course of their duties and, or

pursuant to the IFR or the IFD as transposed in national

law, shall be treated as confidential and protected by the

duty of professional secrecy, and shall not be disclosed to

any other person, except in the following cases

(a) where it is necessary for the proper

discharge of their duties or functions under this Act

or any other Act, or as may be otherwise provided in

any other law;

(b) where the information is disclosed in

summary or aggregate form, provided that individual

investment firms or persons cannot be identified,

without prejudice to cases covered by criminal law;

(c) in civil or commercial proceedings,

where the investment firm to which the information

relates has been declared bankrupt or is being

compulsorily wound up, such information does not

concern third parties and the disclosure of such

information is necessary for carrying out those

proceedings;

(d) in proceedings initiated under article 19;

(e)

to monitor the prudential rules set out in

the IFD as transposed in national law and in the IFR;

(f) to

impose

penalties

and

other

administrative measures;

(g) in an appeal against a decision of the

competent authority, including court proceedings;

(h) to the Commission of the European

Union when the information is necessary for the

exercise of the powers of the Commission of the

European Union; and, or

(i) to the EBA, ESMA, the ESRB, central

banks of the Member States or EEA States, the

European System of Central Banks and the European

Central Bank, in their capacity as monetary

authorities, and, where appropriate, public authorities

responsible for overseeing payment and settlement

systems, where that information is necessary for the

performance of their tasks.

(1B) Natural and legal persons and other bodies,

other than those mentioned in sub-article (1A), that receive

information pursuant to the IFR or the IFD as transposed in

national law shall only use that information for the

purposes expressly provided by the competent authority or

by law."; and

(c) in sub-article (2) thereof, for the words "of Article 81

of the MiFID and of Article 102 of the UCITS Directive", there

shall be substituted the words "of Article 81 of the MiFID,

Article 15 of the IFD, and of Article 102 of the UCITS

Directive".

Immediately after article 31 of the principal Act there shall be

added the following new articles

Investment holding companies and mixed

financial holding companies shall be included in the

supervision of compliance with the group capital test.

(1) Where two or more European investment

Assessment of third

country supervision

firms that are subsidiaries of the same parent

undertaking, the head office of which is in a third

country, are not subject to effective supervision at

group level, the competent authority shall, together

with any other European regulatory authority involved,

assess whether the European investment firms are

subject to supervision by the third-country supervisory

authority which is equivalent to the supervision set out

in the IFD as transposed in national law and in Part One

of the IFR.

(2) Where the assessment referred to in sub-article

(1) concludes that no such equivalent supervision

applies, the competent authority shall adopt appropriate

supervisory techniques which achieve the objectives of

supervision in accordance with Article 7 or 8 of the

IFR. Those supervisory techniques shall be decided by

the competent authority where it would have been the

group supervisor had the parent undertaking been

established in the European Union, after consulting the

European regulatory authorities involved. Any

measures taken pursuant to this paragraph by the

competent authority shall be notified to the European

regulatory authorities involved, to EBA and to the

Commission of the European Union.

(3) Without prejudice to sub-article (2), where the

competent authority would have been the group

supervisor had the parent undertaking been established

in the European Union, it may require the establishment

of an investment holding company or mixed financial

holding company in the European Union and apply

Article 7 or 8 of the IFR to that investment holding

company or mixed financial holding company.

Where the parent undertaking of an investment

firm licensed under this Act is a mixed-activity holding

company, the competent authority may supervise

transactions between such investment firm and the

mixed-activity holding company and the subsidiaries of

the latter, and require the said investment firm to have in

place adequate risk management processes and internal

control mechanisms, including sound reporting and

accounting procedures to identify, measure, monitor and

control those transactions.".

PART III

AMENDMENTS TO THE BANKING ACT

28. 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".

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

amended as follows

(a) immediately before the definition "director" there

shall be added the following new definition

" "Directive (EU) 2019/2034" means Directive (EU)

2019/2034 of the European Parliament and of the Council

of 27 November 2019 on the prudential supervision of

investment firms and amending Directives 2002/87/EC,

2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and

2014/65/EU, as amended from time to time, and includes

any binding legal instruments, guidelines and other

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

(b) in the definition "licence", for the words "licence

granted in terms of article 5 or 7;" there shall be substituted the

words "licence granted in terms of article 5, 6A or 7;"; and

(c) immediately after the definition "Regulation (EU)

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

definition

" "Regulation (EU) 2019/2033" means Regulation

(EU) 2019/2033 of the European Parliament and of the

Council of 27 November 2019 on the prudential

requirements of investment firms and amending

Regulations (EU) No. 1093/2010, (EU) No. 575/2013,

(EU) No. 600/2014 and (EU) No. 806/2014, as amended

from time to time and includes any binding legal

instruments, guidelines and other measures that have been

or may be issued thereunder;".

30. Immediately after article 6 of the principal Act, there shall be

added the following new article

6A. (1) Undertakings referred to in point (1)(b)

licensing of credit of Article 4(1) of the CRR which have already obtained

institutions referred

to in point (1)(b) of a licence pursuant to articles 3, 5 and 6 of the

Article 4(1) of the Investment Services Act shall submit an application for

a licence in accordance with articles 5 and 6, at the

latest on the day when either of the following events

takes place

(a) the average of monthly total assets,

calculated over a period of twelve consecutive

months, is equal to or exceeds thirty billion euro

(€30,000,000,000); or

(b) the average of monthly total assets

calculated over a period of twelve consecutive

months is less than thirty billion euro

(€30,000,000,000), and the undertaking is part of

a group in which the total value of the

consolidated assets of all undertakings in the

group that individually have total assets of less

than thirty billion euro (€30,000,000,000) and

that carry out any of the activities referred to in

paragraphs (3), (4), (6) and (7) of the First

Schedule annexed to the Investment Services Act

is equal to or exceeds thirty billion euro

(€30,000,000,000), both calculated as an average

over a period of twelve consecutive months.

(2) The undertakings referred to in sub-article (1)

may continue carrying out the activities referred to in

point (1)(b) of Article 4(1) of the CRR until they obtain

the licence referred to in sub-article (1).

(3) Where the competent authority, after receiving

the information in accordance with Article 95a of the

MiFID, determines that an undertaking is to be

authorised as a credit institution in accordance with

Articles 5 and 6, it shall notify the undertaking.

(4) Pursuant to sub-article (1), the competent

authority shall ensure that the process is as streamlined

as possible and that any information already pertaining

to the competent authority shall be taken into account.".

31. Immediately after paragraph (a) of sub-article (2) of article 9 Amendment of

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

principal Act.

"(aa) uses its licence exclusively to engage in the activities

referred to in point (1)(b) of Article 4(1) of the CRR and has, for

a period of five consecutive years, average total assets below the

thresholds set out in that Article;".

32. Sub-article (2) of article 25 of the principal Act shall be

substituted by the following

"(2) The competent authority may further, on the basis of

Malta’s international commitments, exchange information with

overseas regulatory authorities in other Member States or transmit

information to the ESRB, the EBA or the European Securities and

Markets Authority established by Regulation (EU) No. 1095/2010,

in accordance with this Act and any regulations made and Banking

Rules issued thereunder transposing the CRD, with any binding

legal instruments issued under the CRD, with the CRR, with

Regulation (EU) 2019/2033, with Article 15 of Regulation (EU)

No. 1092/2010, with Articles 31, 35 and 36 of Regulation (EU)

No. 1093/2010, with Articles 31 and 36 of Regulation (EU) No.

1095/2010, with Directive (EU) 2019/2034 and with other

Directives applicable to credit institutions. Such information shall

be subject to professional secrecy provided for under this Act and

any regulations issued thereunder.".

33. Article 29A of the principal Act shall be deleted.

34. Sub-article (5) of article 34 of the principal Act shall be

substituted by the following

"(5) The provisions of sub-article (4) shall not prevent the

competent authority from exchanging information with overseas

regulatory authorities in other Member States and authorities in

other Member States responsible for the supervision of

investment firms or transmitting information to the ESRB, the

EBA or the European Securities and Markets Authority

established by Regulation (EU) No. 1095/2010, in accordance

with the Act and any regulations made and Banking Rules issued

thereunder transposing the CRD, with any binding legal

instruments issued under the CRD, with the CRR, with

Regulation (EU) 2019/2033, with Article 15 of Regulation (EU)

No. 1092/2010, with Articles 31, 35 and 36 of Regulation (EU)

No. 1093/2010 and with Articles 31 and 36 of Regulation (EU)

No.1095/2010, with Directive (EU) 2019/2034 and with other

Directives applicable to credit institutions. Such information

shall be subject to the provisions of sub-article (4)

Provided that the provisions of sub-article (4) shall

not prevent the competent authority from publishing the outcome

of stress tests carried out in accordance with the Banking Act S.L. 371.16.

(Supervisory Review) Regulations or Article 32 of Regulation

(EU) No. 1093/2010 or from transmitting the outcome of the

stress tests to the EBA for the purpose of publication by the EBA

of the results of Union-wide stress tests.".

In paragraph (e) of sub-article (1) of article 35 of the principal Amendment of

Act, for the words "of articles 2A, 5(1) and (2), 6(1), 12" there shall be article

principal Act.

substituted the words "of articles 2A, 5(1) and (2), 6(1), 6A, 12".

PART IV

AMENDMENTS TO THE FINANCIAL INSTITUTIONS ACT

This Part amends the Financial Institutions Act and it shall be Amendment to

read and construed as one with the Financial Institutions Act, the

Institutions 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) in the definition "CRD", for the words "supervision

of credit institutions and investment firms, amending" there shall

be substituted the words "supervision of credit institutions,

amending"; and

(b) in the definition "CRR", for the words "requirements

for credit institutions and investment firms and amending" there

shall be substituted the words "requirements for credit

institutions and amending".

Passed by the House of Representatives at Sitting No. 530 of the

14th December, 2021.

ANĠLU FARRUGIA

Speaker

RAYMOND SCICLUNA

Clerk of the House of Representatives

€3.69