BANKING ACT (preamble—bankingact)

CHAPTER 371

BANKING ACT

To regulate the business of banking.

15th November, 1994

ACT XV of 1994 as amended by Acts XXIV, XXV of 1995, VI of 2001,

XVII of 2002, IV, IX of 2003, XIII of 2004,XX of 2007 Legal Notice 425 of

2007; Acts III,XVII of 2009, II of 2010, II, X of 2011, XX of 2013, X XXI of

2015, X, XXXI of 2017, XLIV of 2018 and XXVI of 2018. and XXVI of 2019,

XIII of 2020, LXXI of 2021 , LXXII of 2021 , XXXVI of 2024 , XI and XXIX

of 2025.

The short title of this Act is the Banking Act.

(Article 2(2))

List of Additional Activities

1. Financial leasing;

2. Payment Services as defined in the Financial Institutions

Act;

3. Issuing and administering other means of payment

(travellers’ cheques, bankers’ drafts and similar instruments)

insofar as this activity is not covered by activity 2 above;

4. Guarantees and commitments;

5. Trading for own account or for account of customers in

(a) money market instruments (cheques, bills, certificates

of deposit, and similar instruments);

(b) foreign exchange;

(c) financial futures and options;

(d) exchange and interest-rate instruments;

(e) transferable securities.

6. Participation in securities issues and the provision of

services related to such issues;

7. Advice to undertakings on capital structure, industrial

strategy and related questions and advice as well as services

relating to mergers and the purchase of undertakings;

8. Money broking;

9. Portfolio management and advice;

10. Safekeeping and administration of securities;

11. Credit reference services;

12. Safe custody services;

13. Issuing electronic money including electronic money tokens

as defined in point (7) of Article 3(1) of the MiCA Regulation;

14. Issuing of asset-referenced tokens as defined in point (6) of

Article 3(1) of the MiCA Regulation;

15. Crypto-asset services as defined in point (16) of Article 3 of

the MiCA Regulation.

(1)

In this Act, unless the context otherwise requires -

"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;

"Additional Tier 1 instruments" means capital instruments that meet

the conditions laid down in Article 52(1) of the CRR;

"Arbiter" means the Arbiter for Financial Services appointed under

article 14 of the Arbiter for Financial Services Act;

"bank" or "credit institution" shall have the same meaning as that

assigned to it in point (1) of Article 4(1) of the CRR;

"Banking Rule" means a Rule issued by the competent authority

under various articles of this Act;

"binding legal instrument" means any directly applicable

measures, including, but not limited to, any implementing technical

standards, regulatory technical standards or similar measures,

issued under European Union legislation;

"body corporate" means a body of persons having a legal

personality distinct from that of its members;

"branch" shall have the same meaning as that assigned to it in

point (17) of Article 4(1) of the CRR;

"the BRRD" means Directive 2014/59/EU of the European

Parliament and of the Council of 15 May 2014 establishing a

framework for the recovery and resolution of credit institutions and

investment firms and amending Council Directive 82/891/EEC, and

Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC,

2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and

Regulations (EU) No. 1093/2010 and (EU) No. 648/2012, of the

European Parliament and of the Council, as amended from time to

time, and includes any binding legal instruments, guidelines and other

measures that have been or may be issued thereunder;

"business of banking" means the business of a person who as set

out in article 2A accepts deposits of money from the public

withdrawable or repayable on demand or after a fixed period or

after notice or who borrows or raises money from the public

(including the borrowing or raising of money by the issue of

debentures or debenture stock or other instruments creating or

acknowledging indebtedness), in either case for the purpose of

employing such money in whole or in part by lending to others or

otherwise investing for the account and at the risk of the person

accepting such money;

"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

point (38) of Article 4(1) of the CRR;

"Common Equity Tier 1 instruments" means capital instruments that

meet the conditions laid down in Article 28(1) to (4), Article 29(1) to

(5) or Article 31(1) of the CRR;

"company" means a limited liability company constituted in

Malta in accordance with the Commercial Partnerships Ordinance *

or the Companies Act, or any law which may from time to time be

in force, or a company registered, licensed or holding an equivalent

authorisation in another country outside Malta under the laws of

any country provided that such company, if not constituted in

Malta, would qualify to be so registered or licensed under the laws

of Malta;

"competent authority" means the Malta Financial Services

Authority established by the Malta Financial Services Authority Act;

"Conduct of Business Rules" means Rules, other than Banking

Rules, which are issued by the competent authority in terms of article

4;

"connected person" means a person whose information is provided

to the bank by, or on behalf of, a customer of the bank or by, or on

behalf of, a person who seeks to become a customer of the bank, in

connection with services from the bank requested by such customer, or

by such person seeking to become a customer of the bank, provided

that the information is required by the bank for the purposes of

*Repealed by Act XXV of 1995 ( Chapter 386 ).

fulfilling a statutory obligation;

"consolidated basis" shall have the same meaning as that assigned to

it in point (48) of Article 4(1) of the CRR;

"consolidating supervisor" shall have the same meaning as that

assigned to it in point (41) of Article 4(1) of the CRR;

"controller" is a person who, alone or together with others,

exercises control in relation to a body corporate;

"covered deposits" means covered deposits as defined in regulation

2 of the Depositor Compensation Scheme Regulations;

"t he CRD " means D irecti ve 20 13 /3 6/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 binding legal instruments, guidelines and other 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 and bills of exchange endorsed pour aval;

"the 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 amended from time to

time, and includes any implementing measures that have been or

may be issued thereunder;

"deposit" means a sum of money paid-in on terms under which it

will be repaid, with or without interest or a premium and either on

demand or at a time or in circumstances agreed by or on behalf of

the person making the payment and the person receiving it;

"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 binding legal

instruments, guidelines and other measures that have been or may

be issued thereunder;

"Directive 2004/109/EC" means 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, as

a m e n d e d f r o m t i m e t o t i m e , and includes any binding legal

instruments, guidelines and other measures that have been or may be

issued thereunder;

"Directive 2009/138/EC" means Directive 2009/138/EC of the

European Parliament and of the Council of 25 November 2009 on

t he taki ng -u p and pu rsui t of t he b usi ness o f In surance and

Reinsurance (Solvency II), as amended from time to time, and

includes any binding legal instruments, guidelines and other

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 binding legal instruments, guidelines and other

measures that have been or may be issued thereunder;

"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;"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,

licensed or holding an equivalent authorisation outside Malta

includes a member of a local board or agent or representative of

that company

"Provided that in respect of a financial holding company or a

mixed financial company established outside Malta, "director"

shall also include a member of the management body of the

financial holding company or mixed financial holding company;

"DORA Regulation" means Regulation (EU) 2022/2554 of the

European Parliament and of the Council of 14 December 2022 on

digital operational resilience for the financial sector and amending

Regulations (EC) No. 1060/2009, (EU) No. 648/2012, (EU) No. 600/

2014, (EU) No. 909/2014 and (EU) 2016/1011, as may be amended

from time to time, and includes any binding legal instruments,

guidelines and other measures that have been or may be issued

thereunder;

"EBA" means the European Banking Authority established by

Regulation (EU) No 1093/2010;

"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 money institution" shall have the same meaning as that

assigned to it under article 2(1) of the Financial Institutions Act;

"eligible deposits" means deposits that are not excluded from

protection pursuant to regulation 9 of the Depositor Compensation

Scheme Regulations, and includes deposits held in an account entitled

to compensate pursuant to regulation 12(5) Depositor Compensation

Scheme Regulations;

"ESCB central banks" shall have the same meaning as that

assigned to it in point (45) of Article 4(1) of the CRR;

"ESFS" means European System of Financial Supervision;

"ESRB" means the European Systemic Risk Board established by

Regulation (EU) No. 1092/2010;

"EU parent financial holding company" shall have the same

meaning as that assigned to it in point (31) of Article 4(1) of the

CRR;

"EU parent institution" shall have the same meaning as that

assigned to it in point (29) of Article 4(1) of the CRR;

"EU parent mixed financial holding company" shall have the

same meaning as that assigned to it in point (33) of Article 4(1) of

the CRR;

"European Resolution Authority" means an authority which is

situated in a country or territory outside Malta that is in a Member

State or an EEA State and which exercises any function

corresponding to the functions of the Resolution Committee under

the Malta Financial Services Authority Act and the Recovery and

Resolution Regulations issued thereunder;

"financial holding company" shall have the same meaning as that

assigned to it in point (20) of Article 4(1) of the CRR;

"financial institution" shall have the same meaning as that

assigned to it in point (26) of Article 4(1) of the CRR;

"financial instrument" shall have the same meaning as that

assigned to it in point (50) of Article 4(1) of the CRR;

"financial sector entity" shall have the same meaning as that

assigned to it in point (27) of Article 4(1) of the CRR;

"Financial Services Tribunal" or "the Tribunal" means the

Financial Services Tribunal established under the Malta Financial

Services Authority Act;

"GDPR" means Regulation (EU) 2016/679 of the European

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

natural persons with regard to the processing of personal data and

on the free movement of such data, and repealing Directive 95/46/

EC, as amended from time to time, and includes any binding legal

instruments, guidelines and other measures that have been or may

be issued thereunder;

"group" shall have the same meaning as that assigned to it in

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

"holding company" has the same meaning as is assigned to the

term "parent company" in the Companies Act;

"home Member State" shall have the same meaning as that

assigned to it in point (43) of Article 4(1) of the CRR;

"host Member State" shall have the same meaning as that

assigned to it in point (44) of Article 4(1) of the CRR;

"initial capital" shall have the same meaning as that assigned to it

in point (51) of Article 4(1) of the CRR;

"institution" shall have the same meaning as that assigned to it in

point (3) of Article 4(1) of the CRR;

"insurance undertaking" shall have the same meaning as that

assigned to it in point (5) of Article 4(1) of the CRR;

"investment firm" shall have the same meaning as that assigned

to it in point (2) of Article 4(1) of the CRR;

"licence", in relation to the business of banking, means a licence

granted in terms of article 5, 6A or 7;

"Malta’s international commitments" means commitments,

responsibilities and obligations arising out of European Union law,

or membership of, or affiliation to, or relationship with, any

international, global or regional organisations or grouping of

countries or out of any treaty, convention or other international or

reciprocity agreement, however called, whether bilateral or

multilateral, to which Malta or the competent authority is a party;

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

holding company or financial holding company established outside

Malta, which are appointed in accordance with the law of the

jurisdiction in which such a company is established, which are

empowered to set the company's strategy, objectives and overall

direction, and which oversee and monitor management decision-

making, and include the persons who effectively direct the business

of the company;

"manager" means a person who is placed in charge of the

business or part of the business of a company or otherwise who has

a substantial supervisory role with the power to make policy and

executive decisions on behalf of the company;

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

includes an EEA State;

"MiCA Regulation" means Regulation (EU) 2023/1114 of the

European Parliament and of the Council of 31 May 2023 on markets

in crypto-assets, and amending Regulations (EU) No. 1093/2010 and

(EU) No. 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937,

as may be amended from time to time, and includes any binding legal

instruments, guidelines and other measures that have been or may be

issued thereunder;

"MiFID" means Directive 2014/65/EU of the European

Parliament and of the Council of 15 May 2014 on markets in

financial instruments and amending Directive 2002/92/EC and

Directive 2011/61/EU, as amended from time to time, and includes

any binding legal instruments, guidelines and other measures that

have been or may be issued thereunder;

"MiFIR" means Regulation (EU) No. 600/2014 of the European

Parliament and of the Council of 15 May 2014 on markets in

financial instruments and amending Regulation (EU) No 648/2012,

as may be amended from time to time, and includes any binding

legal instruments, guidelines and other measures that have been or

may be issued thereunder;

"Minister" means the Minister responsible for the regulation of

Financial Services;

"mixed activity holding company" shall have the same meaning as

that assigned to it in point (22) of Article 4(1) of the CRR;

"mixed financial holding company" shall have the same meaning as

that assigned to it in point (21) of Article 4(1) of the CRR;

"money laundering" has the same meaning ascribed to it by the

Prevention of Money Laundering Act;

"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 an arrangement of any form between a credit

institution and an outsourcing service provider by means of which that

outsourcing service provider performs a process, a service or an

activity that would otherwise be undertaken by the credit institution;

"outsourcing service provider" means a third-party entity that is

undertaking an outsourced process, service or activity, or parts thereof,

under an outsourcing arrangement;

"overseas regulatory authority" means an authority which in a

country or territory outside Malta exercises any function

corresponding to the functions of the competent authority under

this Act;

"own funds" shall have the same meaning as that assigned to it in

point (118) of Article 4(1) of the CRR;

"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 and includes any binding legal instruments,

guidelines and other measures that have been or may be issued

thereunder;

"parent financial holding company" shall have the same meaning as

that assigned to the term "parent financial holding company in a

Member State" in point (30) of Article 4(1) of the CRR;

"parent institution" shall have the same meaning as that 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" shall have the same

meaning as that assigned to the term "parent mixed financial holding

company in a Member State" in point (32) of Article 4(1) of the CRR;

"parent undertaking" shall have the same meaning as that

assigned to it in point (15) of Article 4(1) of the CRR;

"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

D i r e c t i v e s 2 0 0 2 / 6 5 / E C , 2 0 0 9 / 11 0 / E C a n d 2 0 1 3 / 3 6 / E U a n d

Regulation (EU) No 1093/2010, and repealing Directive 2007/64/

EC, as may be amended from time to time, and includes any binding

legal instruments, guidelines and other 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;

"qualifying holding" or "qualifying shareholding" shall have the

same meaning as that assigned to it in point (36) of Article 4(1) of

the CRR;

"recognised jurisdiction" means

(a) a Member State and Switzerland;

(b) any country that is a member of the Organisation for

Economic Co-operation and Development (OECD);

(c) a country that is a signatory of the International

Organisation of Securities Commissions (IOSCO)

Multilateral Memorandum of Understanding;

(d) a country that is a signatory of the International

Association of Insurance Supervisors (IAIS)

Multilateral Memorandum of Understanding;

(e) any jurisdiction which is a member of the Basel

Committee on Banking Supervision;

(f)

any jurisdiction falling within the Recommendations

on the equivalence of confidentiality regimes issued

by the EBA from time to time; or

(g)

any other jurisdiction with whom the competent authority

has signed a Memorandum of Understanding;

"reconstruction" has the same meaning as in the Companies Act;

"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 binding legal

instruments, guidelines and other 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 binding legal instruments,

guidelines and other 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 binding legal instruments, guidelines and other measures that

have been or may be issued thereunder;

"Regulation (EU) No. 1095/2010" means Regulation (EU) No.

1095/2010 of the European Parliament and of the Council of 24

November 2010 establishing a European Supervisory Authority

(European Securities and Markets Authority), amending Decision

No. 716/2009/EC and repealing Commission Decision 2009/77/EC,

as amended from time to time, and includes any binding legal

instruments, guidelines and other measures that have been or may be

issued thereunder;

"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;

"reinsurance undertaking" shall have the same meaning as that

assigned to it in point (6) of Article 4(1) of the CRR;

"representative office" means, in relation to a body corporate,

unincorporated body or association formed in accordance with or

existing under the laws of a country outside Malta, premises in

Malta from which the business of banking is promoted or assisted

in any way, and in relation to a body corporate, unincorporated

body or association formed in accordance with and existing under

the laws of Malta, premises outside Malta from which the business

of banking is promoted or assisted in any way;

"resolution authority" means an authority designated by a

Member State in accordance with Article 3 of the BRRD;

"resolution entity" shall have the same meaning as that assigned

to it in regulation 2(1) of the Recovery and Resolution Regulations;

"Resolution Fund" means the resolution financing arrangement

under the Recovery and Resolution Regulations;

"resolution group" shall have the same meaning as that assigned

to it in regulation 2(1) of the Recovery and Resolution Regulations;

"Scheme" means the Depositor Compensation Scheme established

under regulation 4 of the D e p o s i t o r C o m p e n s a t i o n S c h e m e

Regulations;

"senior management" means those natural persons who exercise

e x e c u t i v e f u n c t i o n w i t h i n a cr e d i t i n s t i t u t i o n a n d w h o a r e

responsible, and accountable to the board of directors, for the day-

to-day management of the credit institution;

"sub-consolidated basis" shall have the same meaning as that

assigned to it in point (49) of Article 4(1) of the CRR;

"subsidiary" shall have the same meaning as that assigned to it in

point (16) of Article 4(1) of the CRR;

"third country" means a country that is not a Member State;

"third-country group" means a group of which the parent

undertaking is established in a third country;

"Tier 2 instruments" means capital instruments or subordinated

loans that meet the conditions laid down in Article 63 of the CRR;

"Third-Country Resolution Authority" means an authority which

is in a country or territory that is not a Member State and is

responsible for carrying out functions comparable or equivalent to

those of the Resolution Committee under the Malta Financial

Services Authority Act and the Recovery and Resolution

Regulations issued thereunder;

"UCITS" means undertakings for collective investment in

transferable securities in terms of Directive 2009/65/EC of the

European Parliament and of the Council of 13 July 2009 on the

coordination of laws, regulations and administrative provisions

relating to undertakings for collective investment in transferable

securities (UCITS) (recast), as amended from time to time,

including any implementing measures that have been or may be

issued thereunder;

"working days" means days other than Saturdays, Sundays and

the Public Holidays and the National Holidays referred to in the

National Holidays and Other Public Holidays Act.

(1A) For the purposes of applying the requirements and

supervisory powers laid down in this Act and any regulations and

Banking 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 Banking Rules made or issued

thereunder transposing the CRD, any binding legal instruments

issued under the CRD, and 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 11B 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 11B(5) and, or Article 21a(4) of the CRD

(c) financial holding companies, mixed financial holding

companies or institutions designated pursuant to

article 29AA(1)(f) and, or Article 21a(6)(d) of the

CRD.

(1B) For the purposes of applying the requirements and

supervisory powers laid down in Articles 4(5), 14(2), 14(2A),

14(5), 17E, 19(1), 19(3), 20(1), 25(7), 25(10), 30A on a

consolidated or sub-consolidated basis in accordance with this Act

and any regulations and Banking Rules made or issued thereunder

transposing the CRD, any binding legal instruments issued under

the CRD, and with the CRR, the term "credit institution" shall also

include

(a) financial holding companies and mixed financial

holding companies that have been granted approval in

accordance with article 11B 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 11B(5) and, or Article 21a(4) of the CRD;

(c) financial holding companies, mixed financial holding

companies or institutions designated pursuant to

article 29AA(1)(f) and, or Article 21a(6)(d) of the

CRD.

(1C) Reference to the "approval" of financial holding companies

or mixed financial holding companies in this Act and any

regulations and, or Banking Rules issued thereunder, shall mean an

approval granted by the competent authority in terms of article 11B

or an approval granted through the joint decision of the competent

authority and an overseas regulatory authority in terms of article

11B of this Act and Article 21a of the CRD, as the case may be.

(1D) Reference to the "exemption" of financial holding

companies or mixed financial holding companies in this Act and

any regulations and, or Banking Rules issued thereunder, shall

mean an exemption granted by the competent authority in terms of

article 11B or an exemption granted through the joint decision of

the competent authority and an overseas regulatory authority in

terms of article 11B of this Act and Article 21a of the CRD, as the

case may be.

(2) The business activities of a credit institution may, besides

the business of banking, include any or all of the additional

activities listed in the First Schedule as may be determined by the

competent authority.

(3) The objective of this Act is, in part, to transpose and

implement the relevant provisions of the BRRD, the CRD and the

CRR, and shall be interpreted and applied accordingly.

(4) In this Act and in any regulations made thereunder, if there

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

English text shall prevail.

A person that is not a credit institution shall be prohibited

from carrying on the business of taking deposits or other repayable

funds from the public. A person shall be deemed to be accepting

deposits of money as a regular feature of his business, if, whether

as principal or as agent, he advertises or solicits for such deposits,

without regard to the terms and conditions under which such

deposits are solicited or received and without regard to whether

certificates or other instruments are issued in respect of any such

deposits

Provided that this article shall not apply to the taking of

deposits or other funds repayable by a Member State or by a

M e m b e r St a t e ’s r e g i o n a l o r l o c a l a u t h o r i t i e s o r b y p u b l i c

international bodies of which one or more Member States are

members or to cases expressly covered by national or European

Union law, provided that those activities are subject to regulations

and controls intended to protect depositors and investors

Provided further that the acceptance of money against any

issue of debentures or debenture stock or other instruments creating

or acknowledging indebtedness offered to the public in accordance

with any law in force in Malta shall not of itself be deemed to

constitute acceptance of deposits of money for the purposes of this

Act and any regulations made and, or Banking Rules and, or Conduct

of Business Rules issued thereunder.

(Article 6(1))

List of entities that are not subject to the requirement to apply to

the competent authority for a licence under this Act

1. The Central Bank and central banks of other Member States;

2. Post office giro institutions;

3. In Denmark, the "Eksport Kredit Fonden", the "Eksport

Kredit Fonden A/S", the "Danmarks Skibskredit A/S" and the

"KommuneKredit

4. In Germany, the "Kreditanstalt für Wiederaufbau",

"Landwirtschaftliche Rentenbank", "Bremer Aufbau-Bank GmbH",

"Hamburgische Investitions- und Förderbank", "Investitionsbank

Berlin", "Investitionsbank des Landes Brandenburg",

"Investitionsbank Schleswig-Holstein", "Investitions- und Förderbank

Niedersachsen – NBank", "Investitions- und Strukturbank Rheinland-

Pfalz", "Landeskreditbank Baden-Württemberg – Förderbank", "LfA

F ö r d e r b a n k B a y e r n " , " N RW. B A N K " , " S a a r l ä n d i s c h e

Investitionskreditbank AG", "Sächsische Aufbaubank – Förderbank",

"Thüringer Aufbaubank", undertakings which are recognised under the

"Wohnungsgemeinnützigkeitsgesetz" as bodies of State housing policy

and are not mainly engaged in banking transactions, and undertakings

recognised under that law as non-profit housing undertakings;

5. In Estonia, the "hoiu-laenuühistud", as cooperative

undertakings that are recognised under the "hoiu-laenuühistu seadus

6. In Ireland, the Strategic Banking Corporation of Ireland,

credit unions and friendly societies;

7. In Greece, the "Ταμείο Παρακαταθηκών και Δανείων"

(Tamio Parakatathikon kai Danion);

8. In Spain, the "Instituto de Crédito Oficial

9. In France, the "Caisse des dépôts et consignations

10. In Croatia, the "kreditne unije" and the "Hrvatska banka za

obnovu i razvitak

11. In Italy, the "Cassa depositi e prestiti

12. In Latvia, the "krājaizdevu sabiedrības", undertakings that

are recognised under the "krājaizdevu sabiedrību likums" as

cooperative undertakings rendering financial services solely to their

members;

13. In Lithuania, the "kredito unijos" other than the "centrinės

kredito unijos

14. In Hungary, the "MFB Magyar Fejlesztési Bank Zártkörűen

Működő Részvénytársaság" and the "Magyar Export-Import Bank

Zártkörűen Működő Részvénytársaság

15. In Malta, "The Malta Development Bank" established in

terms of the Malta Development Bank Act;

16. In the Netherlands, the "Nederlandse Investeringsbank voor

Ontwikkelingslanden NV", the "NV Noordelijke

Ontwikkelingsmaatschappij", the "NV Limburgs Instituut voor

Ontwikkeling en Financiering", the "Ontwikkelingsmaatschappij

Oost-Nederland NV" and kredietunies;

17. In Austria, undertakings recognised as housing associations

in the public interest and the "Österreichische Kontrollbank AG

18. In Poland, the "Spółdzielcze Kasy Oszczędnościowo —

Kredytowe" and the "Bank Gospodarstwa Krajowego

19. In Portugal, the "Caixas Económicas" existing on 1 January

1986 with the exception of those incorporated as limited companies

and of the "Caixa Económica Montepio Geral

20. In Slovenia, the "SID-Slovenska izvozna in razvojna banka,

d.d. Ljubljana

21. In Finland, the "Teollisen yhteistyön rahasto Oy/Fonden för

industriellt samarbete AB", and the "Finnvera Oyj/Finnvera Abp

22. In Sweden, the "Svenska Skeppshypotekskassan.

(1) The Minister, acting on the advice of the competent

authority, may make, amend or revoke 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) transpose, implement and, or give effect to the

requirements of the BRRD, the CRD and the CRR;

(b) transpose Directive 2001/24/EC of the European

Parliament and of the Council of the European Union

of 4 April 2001 on re-organisation and winding-up of

credit institutions with respect to credit institutions

established in Malta and of branches of credit

institutions established outside Malta, and different

provisions may be made for different cases or classes

of cases, and account shall be taken of Malta’s

international commitments in this regard. Such

regulations may provide for the implementation of

detailed re-organisation measures and procedures,

including the following matters: the publication and

submission of information in such language or

languages and in such newspapers or other

publications as may be prescribed; the submission of

information to creditors, and the manner and

procedure thereof; the notification to creditors and the

procedure for the submission of claims or

representations; measures for the protection of the

rights of creditors and other third parties, including

netting arrangements; consultation between the

competent authority and any other regulatory,

administrative or judicial authorities in Malta and

outside Malta with competence over the winding-up or

re-organisation of credit institutions or of branches

thereof; the publication of decisions relating to such

winding-up or re-organisation procedures; the

establishment of Banking Rules governing the

applicability of the proper or applicable law and other

issues of conflict of laws;

(c) 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 to licence holders and others 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 of 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, such

provisions in any such regulations shall prevail;

(d) adopt, where necessary, any Communications issued by

the European Commission;

(e) prescribe that a breach of any regulations made under

this Act may amount to a criminal offence as may be

specified, and such regulations may impose

punishments in respect of any breach, not exceeding a

fine (multa) of two million euro (€2,000,000) or

imprisonment for a term not exceeding three years, or

both such fine and imprisonment, and a higher fine

(multa) may be imposed where deemed necessary or

appropriate for any breach or failure of compliance

with any EU Directive or EU Regulation or with any

regulations made under this article to transpose or to

give effect to any EU Directive or EU Regulation;

BANKING

(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;

(i)

transpose, implement and, or give effect to options and

discretions set out in the provisions of Directives,

Regulations and any other legislative measures or

binding legal instruments of the European Union, as

may be amended from time to time, and to implement

options and discretions set out in any guidelines,

recommendations, decisions, opinions or any other

instrument issued by the ECB;

(j)

impose such fees and charges in respect of any request,

application or other matter that may be submitted to the

competent authority under this Act, including the fees

and charges in respect of any permission, licence,

authorisation, exemption or other benefit, as well as any

fees and charges in respect of the competent authority’s

regulatory, supervisory or investigative functions under

this Act or any regulations made or Rules issued

thereunder.

(2)

(a) The Minister may, after consultation with the

competent authority and the Central Bank, if he deems

it expedient in the public interest so to do, by order

published in the Gazette declare any day or days to be

a bank holiday or holidays.

(b) On any day declared to be a bank holiday under this

article, whether such day is also a public holiday or

not, no bank shall do any business with the public

except to the extent allowed by the order.

(c) The Minister may, after consultation with the competent

authority and the Central Bank, if he deems it expedient

in the public interest so to do, by regulations or by an

order published in the Gazette, establish the opening

hours of banks.

(3)

The Minister may, after consultation with the competent

authority and the Central Bank, if he deems it expedient in the public

interest so to do, by regulations or by an order published in the Gazette,

ensure that services, that are deemed to be essential for the continuation

of banking business, such as the transportation of money and the

guarding services, continue to be provided during a period as specified

by the regulations.

(1) It shall be the duty of the competent authority to carry out

the functions and duties prescribed by this Act and any regulations

made and Banking Rules and Conduct of Business Rules issued

thereunder, by any binding legal instruments issued under the CRD,

and by the CRR, and to ensure that credit institutions licensed under

this Act or carrying out their activities in Malta and financial holding

companies and mixed financial holding companies of credit

institutions comply with this Act and any regulations, directives,

Banking Rules and Conduct of Business Rules made or issued

thereunder, with any binding legal instruments issued under the CRD,

with the CRR and with the conditions of their licence or approval, as

applicable. In pursuance of that duty the competent authority shall at

all times afford such co-operation to the Central Bank as the Central

Bank may require in the discharge of its duties.

(2) The competent authority shall be the authority appointed

for the purposes of Article 131(1) of the CRD and Articles 124 and

164 of the CRR and shall act jointly with the designated authority as

appointed in terms of the Central Bank of Malta Act (Appointment

of Designate Authority to implement Macro-Prudential

Instruments) Regulations.

(3) The competent authority shall notify the European

Commission and the EBA of its functions and duties.

(4) The competent authority shall, in the exercise of its general

duties, duly consider the potential impact of its decisions on the

stability of the financial system in the other Member States

concerned and, in particular, in emergency situations, based on the

information available at the relevant time.

(5) The competent authority shall monitor the activities of

credit institutions, and where applicable, of financial holding

companies and mixed financial holding companies, so as to assess

compliance with the requirements of the CRR, any binding legal

instruments issued under the CRD, this Act and any regulations made

and Banking Rules and Conduct of Business Rules issued thereunder.

(6) The competent authority may make, amend or revoke Banking

Rules and Conduct of Business Rules as may be required for carrying

into effect any of the provisions of this Act and any regulations made

thereunder, and to transpose, implement and give effect to the

provisions and requirements of Directives, Regulations and any other

legislative matters of the European Union requiring transposition or

implementation

(7)

The competent authority may issue, amend or revoke

Banking Rules and, or Conduct of Business Rules for the purpose of

implementing any guidelines, recommendations, decisions, opinions

or any other instrument issued by the EBA, as may be required.

(8) The competent authority 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.

(9) Banking Rules and Conduct of Business Rules shall be

binding on licence holders "and other persons as may be specified

therein.

(10) Banking Rules and Conduct of Business Rules and any

amendment or revocation thereof shall be officially communicated

to credit institutions and to financial holding companies and mixed

financial holding companies and the competent authority shall make

copies thereof available to the public.

(1) In the exercise of its duties, the competent authority

shall take into account the convergence in respect of supervisory

tools and supervisory practices in the application of this Act and

a n y r e g u l a t i o n s m a d e a n d Banking Rules issued thereunder

transposing the CRD, of any binding legal instruments issued under

the CRD, and of the CRR. For that purpose, the competent authority

shall -

(a) as party to the ESFS, cooperate with trust and full

mutual respect, in particular when ensuring the flow of

appropriate and reliable information between the

competent authority and other parties to the ESFS in

accordance with the principle of sincere cooperation

set out in Article 4(3) of the Treaty on European

Union;

(b) participate in the activities of the EBA and, as

appropriate, in the colleges of supervisors;

(c) make every effort to comply with those guidelines and

recommendations issued by the EBA in accordance

with Article 16 of Regulation (EU) No. 1093/2010 and

to respond to the warnings and recommendations

issued by the ESRB pursuant to Article 16 of

Regulation (EU) No. 1092/2010;

(d) cooperate closely with the ESRB.

(2) The competent authority shall not be inhibited by other

national legislative provisions in the performance of its duties as

member of the EBA and the ESRB, or its duties under the CRD and

the CRR.

(1) Without prejudice to any of the powers conferred on it

in this Act, the competent authority may, whenever it deems

necessary, give, by notice in writing, such directives as it may deem

appropriate in the circumstances in order to carry out the functions

and duties prescribed by the Malta Financial Services Authority

Act, by this Act and by any regulations made and Banking Rules and

Conduct of Business Rules issued thereunder, by the CRR and by any

binding legal instruments issued under the CRD

Provided that, without prejudice to the generality of the

foregoing, the competent authority may give any such directive

even

(i)

to financial holding companies and mixed financial

holding companies exempted in terms of article

11B(5);

(ii) where a credit institution, financial holding company or

mixed financial holding company ceases to hold a licence

or approval, as the case may be, for whatever reason, or

such licence or approval, as the case may be, ceases to

have effect

Provided further that any directive given in terms of this

A c t a n d a n y r e g u la t i o n s m a d e t h e r e u n d e r s h a l l , un l e s s t h e

competent authority otherwise directs, continue to apply even when

a credit institution, financial holding company or mixed financial

holding company ceases to hold a licence or approval, as the case

may be, for whatever reason, or such licence or approval, as the

case may be, ceases to have effect.

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

sub-article (1) shall obey, comply with and otherwise 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 Act and any

regulations made thereunder shall include the power to vary, alter,

add to 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 Act and any

regulations made thereunder.

Without prejudice to the functions, powers and duties

assigned to the competent authority by this Act, the competent

authority shall also have the functions, powers and duties assigned

to it under the Malta Financial Services Authority Act and under

any regulations made thereunder for the purposes of transposing

the provisions of the BRRD.

(1) No business of banking shall be transacted in or from

Malta except by a company which is in possession of a licence

granted under this Act by the competent authority.

(2) No credit institution licensed or holding an equivalent

a u t h o r i s a t i o n o u t s id e M a l t a m a y o p e n a b r a n c h , a ge n c y o r

representative office or set up any subsidiary in Malta unless it is in

possession of a licence granted under this Act by the competent

authority

Provided that a credit institution licensed or holding an

equivalent authorisation in a Member State or EEA state shall be

entitled to exercise its rights under European Union Law.

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

of banking or of accepting deposits is or is not being transacted in

or from Malta by any person, the matter shall be conclusively

determined by the competent authority.

(4) The granting of a licence shall be subject to fees as may be

prescribed in accordance with article 3.

(5) The Minister may, after consulting the competent authority,

establish or recognise other forms of authorisation and notification

procedures, subject to such conditions, additions, adaptations, and

modifications and exemptions as may be prescribed; and different

provisions may be made for different cases or classes of cases,

under such terms and conditions as may be prescribed, and account

shall be taken of Malta’s international commitments.

(1) Any company desirous of commencing the business of

banking in Malta shall, before commencing any such business,

apply in writing to the competent authority for a licence under this

Act

Provided that the entities listed in the Second Schedule shall

not be required to apply to the competent authority for a licence

under this Act, and the provisions of this Act and of any regulations

made and, or any Banking Rules and, or Conduct of Business Rules

issued thereunder, and the CRR shall accordingly not apply thereto,

unless otherwise specifically provided for in this Act, or in any

regulations made or Banking Rules or Conduct of Business Rules

issued thereunder.

(2) All applications for a licence shall be in such form and

accompanied by such information, including a programme of

operations setting out the types of business envisaged and the

structural organisation of the credit institution, an indication of the

parent undertakings, financial holding companies and mixed financial

holding companies within the group and a description of the

arrangements, processes and mechanisms referred to in article 17B,

and shall conform with such requirements as may be prescribed from

time to time by a Banking Rule. Such requirements shall be notified

to the EBA

Provided that before a licence is granted or refused, an

application may only be withdrawn by written notice to the

competent authority.

(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 for

the purposes of determining whether to restrict or withdraw a

licence.

(4) The competent authority shall not consider the economic

needs of the market as a criterion when examining an application

for a licence.

(1)

Undertakings referred to in point (1)(b) of Article

4(1) of the CRR which have already obtained a licence pursuant to

articles 3, 5 and 6 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.

(1)

No company shall be granted a licence unless -

(a) its initial capital amounts to not less than five million

euro (€5,000,000) or an equivalent amount in another

currency as may be specified in a Banking Rule

Provided that the competent authority may, by a

provision contained in a Banking Rule or as required

through a condition in a credit institution’s licence,

increase the amount laid down in this paragraph

Provided further that the initial capital shall comprise

only one or more of the items referred to in Article

26(1)(a) to (e) of the CRR;

(b) there are at least two individuals who effectively direct

the business of the company;

(c) the competent authority is notified of the identities of

the shareholders or members whether direct or

BANKING

indirect, that have qualifying holdings and of the

amounts of those holdings or, where there are no

qualifying holdings, of the twenty largest shareholders

or members

Provided that in determining whether the criteria for a

qualifying holding are fulfilled, the voting rights

referred to in Articles 9 and 10 of Directive 2004/109/

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 voting rights or shares which

credit institutions hold as a result of providing the

underwriting of financial instruments or placing of

financial instruments on a firm commitment basis

included under point (6) of Section A of Annex I to

MiFID shall not be taken into account, 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;

(d) the competent authority is satisfied that the

shareholders or members mentioned in paragraph (c),

controllers and all individuals who will effectively

direct the business of the credit institution are suitable

persons to ensure its sound and prudent management.

The competent authority shall be satisfied with the

suitability of the individuals who will effectively

direct the business if the requirements referred to in

article 14(2) and (2A) are met. The competent authority

shall be satisfied of the suitability of the shareholders

or members mentioned in paragraph (c), in accordance

with the criteria set out in article 13A(9). Article 13A(8)

and (10) and article 13B shall apply;

(e) the competent authority is satisfied that, where there

are close links between the company and another

person or persons, such links do not through any law,

regulation, administrative provision or in any other

manner prevent it from exercising effective

supervision of the company, once in possession of a

licence, under the provisions of this Act and any

regulations made and, or Banking Rules and, or Conduct

of Business Rules issued thereunder

Provided that the competent authority shall not grant a

licence where the laws, regulations or administrative

provisions of a third country governing one or more

persons with which the credit institution has close

links, or difficulties involved in the enforcement of

those laws, regulations and administrative provisions,

prevent the effective exercise of its supervisory

functions

Provided further that in respect of this paragraph (e),

the credit institution shall inform the competent

authority forthwith of any change in circumstances

concerning the application of this said paragraph (e)

and shall further provide the competent authority with

the information necessary to monitor compliance with

the conditions referred to in this paragraph (e) on a

continuous basis;

(f)

the competent authority is satisfied that the

arrangements, processes and mechanisms referred to in

article 17B enable sound and effective risk

management by that credit institution.

(2) The competent authority shall determine each application

for a licence within six months of receipt of the application or, if

the application does not comply with article 6(2) or additional

information is required, within six months of compliance with the

said sub-article or the furnishing of the information as the case may

be, whichever be the later. In any event an application shall be

determined within twelve months of its receipt.

(3) The competent authority shall determine an application by

doing any of the following

(a) granting a licence without conditions;

(b) granting a licence subject to such conditions as it may

deem appropriate;

(c) refusing to grant a licence

and 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).

(4) In granting a licence the competent authority may subject it

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.

(5) Where the competent authority for any reason fails to

determine an application for a licence within the time prescribed

under sub-article (2), such fact shall be deemed to constitute a

refusal to grant a licence and shall be subject to a right of appeal in

accordance with article 10.

(6) A credit institution licensed under this Act shall provide the

com peten t au thority wi th particulars of any changes in the

information provided under this Act as soon as such credit

institution becomes aware of such change.

(7) A credit institution licensed in terms of this article shall have

its head office and its registered office in Malta.

(8) The competent authority shall notify the EBA of every licence

issued to a credit institution in terms of the Act and any regulations

or Banking Rules made thereunder.

(Deleted by Act II. 2011.9.).

(1) The competent authority shall, before issuing a licence

to a credit institution, consult the overseas regulatory authorities of

another Member State where the credit institution is -

(a) a subsidiary of a credit institution authorised in that

other Member State;

(b) a subsidiary of the parent undertaking of a credit

institution authorised in that other Member State;

(c) controlled by the same persons as those who control a

credit institution authorised in that other Member

State.

(2) The competent authority shall, before issuing a licence to a

credit institution, consult the overseas authority that is responsible for

the supervision of insurance undertakings or investment firms in

the Member State concerned where the credit institution is -

(a) a subsidiary of an insurance undertaking or investment

firm authorised in the European Union;

(b) a subsidiary of the parent undertaking of an insurance

undertaking or investment firm authorised in the

European Union;

(c) controlled by the same persons as those who control an

insurance undertaking or investment firm authorised in

the European Union.

(3) The competent authority shall consult with the relevant

overseas authorities referred to in sub-articles (1) and (2) when

assessing the suitability of the shareholders and the reputation and

experience of the directors in terms of article 7(1)(d) involved in

the management of another entity of the same group.

(4) The competent authority shall exchange any information

regarding the suitability of shareholders and the reputation and

experience of directors which is of relevance for the issuing of a

licence and for the ongoing assessment of compliance with the

relevant overseas authorities referred to in sub-articles (1) and (2).

(1) A company licensed or holding an equivalent

authorisation in another country outside Malta which carries on the

business of banking shall not establish a representative office in

Malta unless it has given not less than two months’ notice to the

competent authority that it proposes to establish such an office.

Such notice shall -

(a) specify the name it is proposed to use in relation to the

activities of the representative office and the address

of such office;

(b) be

accompanied

by

a

certified

copy

of

the

authorisation of the company to conduct the business

of banking in a country other than Malta.

(2) A company mentioned in sub-article (1) having a

representative office in Malta shall likewise notify the competent

authority -

(a) at least two months in advance of any proposed change

in name of the representative office;

(b) of any change in its authorisation to conduct the business

of banking in a country other than Malta, no more than

two months after such change.

(3) The competent authority may, at any time, serve on a

representative office in Malta a notice objecting to the name or the

proposed name of such office.

(4) The competent authority shall not give a notice pursuant to

sub-article (3) unless it considers that the name or proposed name

is misleading to the public or otherwise undesirable, and upon

receipt of such notice, the representative office shall not use the

name to which the competent authority has objected in relation to

activities conducted in Malta.

(5) The competent authority may, by notice in writing, require

any company having a representative office in Malta or which has

given notice pursuant to sub-article (1) to provide the competent

authority with such information or documents as the competent

authority may reasonably require, and the said company shall

comply with such notice in the period as is reasonably specified by

the notice.

(6) A representative office in Malta shall supply the competent

authority with a copy of any document which it is required to

provide to the Registrar of Companies no later than the time by

which such document must be provided to the said Registrar.

(7) The competent authority may by a Banking Rule provide

that the provisions of articles 20 to 24 shall apply to representative

offices in Malta in the same manner as they apply to credit

institutions subject to such variations and conditions as may be

established in the Banking Rule.

(8) The competent authority may by Banking Rule impose on

companies which have established or which propose to establish

representative offices in Malta such requirements as the competent

authority considers appropriate in connection with those offices

and the activities conducted from them.

(9) The competent authority may, within the two months

referred to in sub-article (1), order a company referred to in the said

sub-article (1) not to establish a representative office in Malta and

at any time thereafter order the closure of any representative office

so established.

Companies which have established, or which intend to

establish representative offices in Malta may be required to pay fees as

may be prescribed in accordance with the provisions of article 3.

BANKING

(1) A licence shall automatically cease to have any effect if

the holder -

(a) renounces the licence; or

(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;

(b) is declared bankrupt or goes into liquidation or change

in its authorisation to conduct the business or is

otherwise dissolved; or

(c) has ceased to operate as a result of a merger with

another credit institution; or

(d) in the case of a credit institution licensed or holding an

equivalent authorisation in a third country and which

has been granted a licence under this Act to open a

branch in Malta, has had its authorisation withdrawn

by the overseas regulatory authority in the third

country within which the credit institution has been

authorised.

(2) The competent authority may only restrict or withdraw the

licence issued to a credit institution in any of the following cases

where such a credit institution -

(a) does not make use of the licence within twelve

months, expressly renounces the licence or has ceased

to engage in business for more than six months, if no

provision was made for the licence to lapse in such

cases;

(b) has obtained the licence through false statements or

any other irregular means;

(c) no longer fulfils the conditions under which the

licence was issued;

(d) no longer meets the prudential requirements set out in

Parts Three, Four or Six of the CRR, except for the

requirements laid down in Articles 92a and 92b of the

CRR, or imposed under regulations 9(1)(a) and 10(1)

and (2) of the Banking Act (Supervisory Review)

Regulations or can no longer be relied on to fulfil its

obligations towards its creditors, and, in particular, no

longer provides security for the assets entrusted to it

by its depositors;

(e) commits one of the breaches referred to in regulation

7(1) of the Administrative Penalties, Measures and

Investigatory Powers Regulations;

(f)

conceals from, or fails to notify to the competent

authority of any document or information or change

therein which it was its duty to reveal or notify under

this Act or any regulations made or any Banking Rules

or Conduct of Business Rules issued thereunder;

(g) fails to comply with any of the provisions of this Act

or any regulations made or Banking Rules issued

thereunder or with the conditions under which the

licence is issued;

(h) has insufficient assets to cover its liabilities;

(i)

has suspended payment or is about to suspend

payment.

(3) Restrictions imposed by the competent authority pursuant

to sub-article (2) shall be such restrictions as the competent

authority shall consider appropriate for the proper compliance by

the credit institution with the provisions of this Act and any

regulations made and, or Banking Rules and, or Conduct of Business

Rules issued thereunder and the conditions, if any, of its licence and

for the protection of depositors and may include (without prejudice

to the generality hereof) -

(a) the removal of any officer of the credit institution or

the replacement of any officer by such person as the

competent authority may designate;

(b) the requirement for any person who directly or

indirectly possesses a qualifying shareholding in the

credit institution to divest himself of all or part of that

holding;

(c) the requirement for the credit institution to take or

refrain from any action;

(d) the requirement that the credit institution be prohibited

from undertaking any transaction or transactions or

any class of business or be permitted to undertake any

transaction or transactions or any class of business

only upon such terms as the competent authority may

prescribe.

(4) The competent authority shall have the power to vary or

remove any restrictions imposed under this article.

(5) Where the competent authority intends to restrict or

withdraw a licence or to vary any restriction, it shall serve written

notice of its intention on the credit institution; such notice shall

specify the grounds upon which the competent authority intends to

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

forty-eight hours and not longer than thirty calendar days, in which the

credit institution 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 impose or vary any restriction or withdraw a licence

before the expiry of such period.

(6) A licence granted for the establishment in Malta of a branch

of a credit institution licensed or holding an equivalent

authorisation in a third country may only be withdrawn after

consultation with the overseas regulatory authorities of the country

within which it has been authorised, unless the competent authority

decides that the matter is urgent or that there are circumstances

which make such prior consultation inappropriate.

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

institution licensed in Malta, the competent authority shall inform

the overseas regulatory authorities of the countries in which the

credit institution or its subsidiaries are carrying on the business of

banking. The competent authority shall notify the EBA of every

withdrawal of a licence together with the reasons for such a

withdrawal.

(8) Where the competent authority is satisfied that the

circumstances so warrant, it may at any time make public any

action it has taken under this article.

Any person who is aggrieved by a decision and, or measure

taken by the competent authority pursuant to this Act, or any

regulations made or Banking Rules or Conduct of Business Rules

issued thereunder, or the CRR, or any binding legal instruments issued

under the CRD, may appeal against the decision and, or measure to the

Financial Services Tribunal within such period and under such

conditions as established under the Malta Financial Services

Authority Act.

(1) A credit institution licensed in Malta shall inform the

competent authority in writing before opening a new branch,

agency or office in Malta.

(2) Unless with the written consent of the competent authority,

no credit institution licensed in Malta may open a new branch,

agency or representative office or set up or acquire any subsidiary

in any place outside Malta

Provided that a credit institution licensed in Malta which

intends to exercise its rights under the European Passport Rights

for Credit Institutions Regulations shall only be required to notify

the competent authority in terms of the said Regulations.

(3) A credit institution licensed in Malta shall not establish a

branch, subsidiary or representative office in a third country where

the secrecy laws or other regulations of that country prohibit the

information flows deemed necessary for adequate consolidated

supervision.

(4) Where Malta is the host Member State, the competent

authority shall not require authorisation or endowment capital for

branches of credit institutions authorised in other Member States.

The establishment and supervision of such branches shall be

effected in accordance with article 17B, the European Passport

Rights for Credit Institutions Regulations and regulation 13 of the

Banking Act (Supervisory Review) Regulations.

(1) The competent authority shall not apply provisions

which result in more favourable treatment to a branch of a credit

institution having its head office in a third country, than that

accorded to branches of credit institutions having their head office

in the European Union, when commencing or continuing to carry

out their business.

(1A) Branches of credit institutions which have their head

office in a third country and which are licensed in Malta to open

such branches, shall report to the competent authority, at least

annually, the following information

(a) the total assets corresponding to the activities of the

branch in Malta;

(b) information on the liquid assets available to the

branch, in particular availability of liquid assets in

Member State currencies;

(c) the own funds that are at the disposal of the branch;

(d) the deposit protection arrangements available to

depositors in the branch;

(e) the risk management arrangements;

(f)

the governance arrangements, including the key

function holders for the activities of the branch as may

be set out in a Banking Rule;

(g) the recovery plans covering the branch

(h) any other information that may be requested by the

competent authority, as it may consider necessary to

enable comprehensive monitoring of the activities of

the branch.

(2) The competent authority shall notify the EBA of the

following

(a) all the licences granted to credit institutions, having

their head office in a third country, to open a branch in

Malta and any subsequent changes to such licences;

(b) total assets and liabilities of the branches in Malta of

credit institutions having their head office in a third

country which are licensed to open such branches, as

periodically reported;

(c) the name of the third-country group to which a branch of

a credit institution having its head office in a third

country which has been granted a licence to open such a

branch belongs.

(3)

Where

(a) credit institutions having their head office in a third

country are licensed to open branches in Malta; or

(b) credit institutions licensed in terms of this Act are part

of a third-country group,

the competent authority shall cooperate closely with overseas

regulatory authorities which supervise credit institutions in other

Member States that are part of the same third-country group and, or

with authorities in other Member States which supervise

investment firms that are part of the same third-country group and,

or with overseas regulatory authorities which supervise branches in

other Member States of credit institutions having their head office

in a third country that are part of the same third-country group, as

applicable, to ensure that all activities of that third-country group

in the European Union are subject to comprehensive supervision,

so as to prevent the circumvention of the requirements applicable to

third-country groups pursuant to this Act and, or any regulations

made and, or any Banking Rules issued thereunder, and, or the

CRD, and, or the CRR, and to prevent any detrimental impact on

the financial stability of the European Union.

(1)

Parent financial holding companies, parent mixed

financial holding companies, EU parent financial holding companies

and EU parent mixed financial holding companies, which are

established in Malta or in another Member State and which have a

credit institution 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 and mixed financial holding companies

established in Malta or in another Member State and which have a

credit institution 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 21a of the CRD,

where the competent authority is not the consolidating supervisor,

financial holding companies and mixed financial holding companies

established in Malta and which have a credit institution 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

(i)

the competent authority is not the consolidating

supervisor but the financial holding company or the

mixed financial holding company is established in

Malta; or

(ii) the financial holding company or the mixed financial

holding company is established in a Member 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 set

out in article 14(7) on the qualification of directors;

(c) information regarding compliance with the criteria set

out in article 7 concerning shareholders and members;

(d) the internal organisation and distribution of tasks

within the group;

(e) any other information that may be necessary to carry

out the assessments referred to in sub-articles (4) and

(5) 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 such requirements as may

be prescribed, from time to time, by a Banking Rule.

(4)

Approval 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 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 Banking Rules issued

thereunder transposing the CRD, by any binding legal

instruments issued under 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

(iii) enforce the group-wide policies set by the

parent financial holding company or parent mixed

financial holding company throughout the group;

BANKING

(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 in

accordance with 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 mixed financial holding company, as the

case may be, in a multi-layered group;

(ii)

the shareholding structure

(iii) the role of the financial holding company

or mixed financial holding company, as the case may be,

within the group;

(c) the criteria set out in article 7(1)(c), (d) and (e), and

the requirements laid down in article 14(7) 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

(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 holding 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 this Act and any regulations made and

Banking Rules issued thereunder transposing the CRD, in

any binding legal instruments issued under 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, in sub-article (5), on an ongoing

basis.

(7)

(a)

Financial holding companies and mixed financial

holding companies 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 (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 overseas regulatory

authority in the Member State 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 other than Malta and the competent

authority is the consolidating supervisor,

the competent authority shall work together with the overseas

regulatory authority acting as the consolidating supervisor or with

the overseas regulatory authority in the Member 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 overseas regulatory authority in the Member 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 overseas 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 overseas regulatory authority in the Member

State where the financial holding company or the mixed financial

holding company is established or with the overseas 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 overseas regulatory authority acting as the

consolidating supervisor or the overseas regulatory authority in the

Member 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 overseas regulatory authority acting as the consolidating

supervisor or with the overseas regulatory authority in the Member

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 overseas regulatory

authority acting as the consolidating supervisor, nor the overseas

regulatory authority in the Member 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 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 Directive 2009/138/

EC.

(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 thereof 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 29AA

Provided that a decision to grant or refuse approval shall, in

any event, be taken within six months of receipt of the application.

(1)

Without prejudice to the derogation provided for in

article 38(3), a credit institution licensed in terms of this Act which is

part of a third-country group having as part of the same group one or

more other credit institution or one or more investment firm, licensed

in Malta or authorised in another Member State, shall have a single

intermediate EU parent undertaking that is established either in Malta

or in another Member State.

(2)

The competent authority may allow a credit institution

referred to in sub-article (1) to have two intermediate EU parent

undertakings where it determines that the establishment of a single

intermediate EU parent undertaking

(a) would be incompatible with a mandatory requirement

for separation of activities imposed by the rules or the

overseas regulatory authority of the third country

where the ultimate parent undertaking of the third-

country group has its head office; or

(b) would render resolvability less efficient than in the

case of two intermediate EU parent undertakings

according to an assessment carried out by the relevant

resolution authority of the intermediate EU parent

undertaking.

(3)

An intermediate EU parent undertaking shall be a credit

institution licensed in terms of article 7 or authorised in accordance

with Article 8 of the CRD, or a financial holding company or mixed

financial holding company that has been granted approval in terms of

article 11B and, or Article 21a of the CRD

Provided that, where a second intermediate EU parent

undertaking must be set up in connection with investment activities to

comply with a mandatory requirement as referred to in sub-article (2),

the second intermediate EU parent undertaking may be an investment

firm holding an investment services licence in terms of article 6 of the

Investment Services Act or is authorised in accordance with Article

5(1) of the MiFID, that is subject to the BRRD.

(4)

Sub-articles (1), (2) and (3) shall not apply where the total

value of assets in the European Union of the third-country group is less

than forty billion euro (€40,000,000,000).

(5)

For the purposes of this article

(a) the total value of assets in the European Union of the third-

country group shall be the sum of the following

(i)

the total value of assets of each institution

in the European Union forming part of the third-country

group, as resulting from its consolidated balance sheet or

as resulting from their individual balance sheet, where an

institution's balance sheet is not consolidated

(ii)

the total value of assets of each branch of

the third-country group authorised in the European Union

in accordance with the CRD, MiFID or MiFIR;

(b) the term "institution" shall also include investment firms.

(6)

The competent authority shall notify the EBA with the

following information in respect of each third-country group operating

in Malta

(a) the names and the total value of assets of institutions

belonging to a third-country group;

(b) the names and the total value of assets corresponding

to branches authorised in Malta in accordance with the

provisions of national law transposing the CRD, the

MiFID or MiFIR, and the types of activities that they

are licensed to carry out;

(c) the name and the type as referred to in sub-article (3)

of any intermediate EU parent undertaking set up in

Malta and the name of the third-country group of

which it is part.

(7)

A credit institution forming part of a third-country group

shall meet at least one of the following conditions

(a) it has an intermediate EU parent undertaking;

(b) it is an intermediate EU parent undertaking;

(c) it is the only institution in the European Union of the

third-country group; or

(d) it is part of a third-country group with a total value of

assets in the European Union of less than forty billion

euro (€40,000,000,000).

(1) Subject to sub-articles (2) and (3), save with the

written permission of the competent authority, no person other than

a credit institution with a current licence may use the word "bank"

or any of its derivatives or other words as may indicate or purport

to indicate the carrying on of the business of banking in any

language in the description or title under which such person is

carrying on business, or make any such use on any letter paper, in

any notice or advertisement, or in any other similar manner.

(2) A credit institution licensed or holding an equivalent

authorisation in another country outside Malta may use the name

used in the country where it is licensed or holds an equivalent

authorisation, save that, where there is a risk that the use of such a

name may be misleading, such credit institution shall add such

explanatory particulars to its name as the competent authority shall

direct.

(3) Every credit institution shall use as part of its description or

title the word "bank" or one or more of its derivatives.

(1) Notwithstanding anything contained in any other law,

any person or persons acting in concert (hereinafter referred to in

this Act as the "proposed acquirer"), who have taken a decision

either to -

(a) acquire, directly or indirectly, a qualifying share-

holding in a credit institution;

(b) increase, directly or indirectly, an existing

shareholding which is not a qualifying shareholding so

as to cause it to become a qualifying shareholding in a

credit institution; or

(c) further increase, directly or indirectly, such qualifying

shareholding in a credit institution as a result of which

the proportion of the voting rights or of the capital

held would reach or exceed twenty per centum, thirty

per centum or fifty per centum or so that the credit

institution would become its subsidiary,

(hereinafter referred to in this Act as the "proposed acquisition"),

shall notify the competent authority in writing of any such

decision, indicating the size of the intended shareholding and

providing any relevant information as and in the manner that the

competent authority may by a Banking 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.

(2) Notwithstanding anything contained in any other law, any

person who -

(a) acquires, directly or indirectly, at least five per centum

but less than ten per centum of the share capital or of

the voting rights in a credit institution; or

(b) increases, directly or indirectly, an existing

shareholding so that the proportion of the voting rights

or of the capital held would amount to at least five per

centum but less than ten per centum,

shall inform the competent authority in writing, indicating the size

of the shareholding and providing any relevant information as and

in the manner that the competent authority may by a Banking Rule

require. Such Banking Rule may provide, inter alia, general

guidance as to when the shareholding would be deemed to result in

significant influence.

(3) Notwithstanding anything contained in any other law, any

person who has taken a decision either to -

(a) dispose, directly or indirectly, of a qualifying

shareholding in a credit institution;

(b) reduce, directly or indirectly, a qualifying

shareholding so as to cause it to cease to be a

qualifying shareholding; or

(c) reduce, directly or indirectly, a qualifying

shareholding so that the proportion of the voting rights

or of the capital held would fall below twenty per

centum, thirty per centum or fifty per centum or so that

the credit institution would cease to be its subsidiary,

shall notify the competent authority in writing of any such decision

indicating the size of the intended shareholding and providing any

relevant information as and in the manner that the competent

authority may by a Banking Rule require.

(4) Sub-articles (1), (2) and (3) shall apply irrespective of

whether or not any of the relevant shares are shares listed on any

regulated market within the meaning of the Financial Markets Act

or on an equivalent market in a third country.

(5) Credit Institutions shall, on becoming aware of any

acquisitions or disposals of holdings in their capital that cause

holdings to exceed or fall below one of the thresholds referred to in

this article, inform the competent authority of those acquisitions or

disposals

Provided that credit institutions admitted to trading on a

regulated market shall, at least annually, notify the competent

authority of the names of the shareholders and members possessing

qualifying holdings and the sizes of such holdings as shown by the

information received at the annual general meetings of

shareholders and members or as a result of compliance with the

regulations relating to companies admitted to trading on a regulated

market or as requested by the competent authority.

(6) If any person takes or decides to take any action set out in

sub-article (1) or (3) without notifying the competent authority or

obtaining its approval in terms of article 13A, then, without

prejudice to any other penalty which may be imposed under this

Act, the competent authority shall have the power to make an

order

(a) restraining such person or credit institution from

taking, or continuing with, such action;

(b) declaring such action to be void and of no effect;

(c) requiring such person or credit institution to take such

steps as may be necessary to restore the position

existing immediately before the action was taken;

(d) restraining such person or credit institution from

exercising any rights which such action would, if

lawful, have conferred upon them, including the right

to receive any payment or to exercise any voting rights

attaching to the shares acquired;

(e) restraining such person or credit institution from

taking any similar action or any other action within the

categories set out in sub-articles (1) and (3).

(7) Without prejudice to any other provision of this Act, where

the influence exercised by any person acquiring or proposing to

acquire a qualifying shareholding is, or is likely, to operate to the

detriment of the sound and prudent management of the credit

institution, the competent authority may exercise any of its powers

under this Act to put an end to such situation, including the power

to issue directives as it may deem reasonable in the circumstances.

(8) The competent authority, may, by means of a Banking Rule

issued under this Act indicate the circumstances when persons are

to be regarded as "acting in concert".

(1) The competent authority shall, promptly and in any

event within two working days following receipt of the notification

required under article 13(1), as well as following the possible

subsequent receipt of the information referred to in sub-article (4),

acknowledge receipt thereof in writing to the proposed acquirer.

(2) The competent authority shall have a maximum of sixty

working days as from the date of the written acknowledgement of

receipt of the notification required under article 13(1) and all

documents required by the competent authority to be attached to

such notification (hereinafter referred to in this Act as the

"assessment period") to carry out the assessment on the basis of

such information as may be determined by a Banking Rule issued

for this purpose

Provided that where the approval or exemption, as the case

may be, of a financial holding company or mixed financial holding

company in terms of article 11B and, or Article 21a of the CRD,

takes place concurrently with the assessment referred to in this

article, the assessment period referred to in this sub-article shall be

suspended for a period exceeding twenty working days until the

procedure set out in article 11B and, or Article 21a of the CRD, is

complete.

(3) The competent authority shall inform the proposed acquirer

of the date of the expiry of the assessment period at the time of

acknowledging receipt.

(4) The competent authority may, during the assessment period,

if necessary and no later than on the fiftieth working day of such

period, request any further information that is necessary to

complete the assessment. Such a request shall be made in writing

and shall specify the additional information needed.

(5) During the period between the date of request for additional

information by the competent authority and the receipt of a

response thereto by the proposed acquirer, the assessment period

shall be suspended. The suspension period shall not exceed twenty

working days. Any further requests by the competent authority for

completion or clarification of the information shall be at its

discretion but shall not result in a suspension of such period.

(6) The competent authority may extend the suspension period

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

proposed acquirer is -

(a) situated or regulated in a third country; or

(b) a person not subject to supervision under -

(i) the CRD;

(ii) Directive 2009/65/EC of the European

Parliament and of the Council of 13 July 2009

on the coordination of laws, regulations and

administrative

provisions

relating

to

undertakings for collective investment in

transferable securities (UCITS) (recast), as

amended from time to time;

(iii) Directive 2009/138/EC; or

(iv) MiFID or MiFIR.

(7) The competent authority shall, upon completion of the

assessment referred to in sub-article (2) and not later than the date

of the expiry of the assessment period, issue a notice

(a) granting unconditional approval to the proposed

acquisition;

(b) granting approval to the proposed acquisition subject

to such conditions as the competent authority may

deem appropriate; or

(c) refusing the proposed acquisition.

(8) In making the assessment referred to in sub-article (2), the

competent authority shall neither impose any prior conditions in

respect of the level of shareholding that must be acquired nor

examine the proposed acquisition in terms of the economic needs of

the market.

(9) In assessing the notification provided for in article 13(1)

and the information referred to in sub-articles (4) and (5) of this

article, the competent authority shall, in order to ensure the sound

and prudent management of the credit institution in which an

acquisition is proposed, and having regard to the likely influence of

the proposed acquirer on the credit institution, assess the suitability

of the proposed acquirer and the financial soundness of the

proposed acquisition in accordance with the following criteria -

(a) the reputation of the proposed acquirer;

(b) the reputation, knowledge, skills and experience, as set

out in article 14(2) and (2A), of any director who will

direct the business of the credit institution as a result of

the proposed acquisition;

(c) the financial soundness of the proposed acquirer, in

particular in relation to the type of business pursued

and envisaged in the credit institution in which the

acquisition is proposed;

(d) whether the credit institution will be able to comply

and continue to comply with the prudential

requirements based on this Act and any regulations

and Banking Rules issued thereunder, on any binding

legal instruments issued under the CRD, and on the

CRR, and where applicable, other European Union

laws, in particular 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

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, as amended from

time to time, including whether the group of which it

will become a part has a structure that makes it

possible to exercise effective supervision, effectively

exchange information among the competent authority

and the overseas regulatory authorities in other Member

States and determine the allocation of responsibilities

among the competent authority and the overseas

regulatory authorities;

(e) whether there are reasonable grounds to suspect that,

in connection with the proposed acquisition, money

laundering or terrorist financing within the meaning of

Article 1 of Directive (EU) 2015/849 is being or has

been committed or attempted, or that the proposed

acquisition could increase the risk thereof.

(10) The competent authority may oppose the proposed

acquisition only if there are reasonable grounds for doing so on the

basis of the criteria set out in sub-article (9) or if the information

provided by the proposed acquirer is incomplete.

(11) If the competent authority, upon completion of the

assessment, decides to oppose the proposed acquisition, it shall,

within two working days, and not exceeding the assessment period,

inform the proposed acquirer in writing specifying the reasons for

such decision. The competent authority may, whether at the request

o f su c h p r o p os e d a c q ui r e r o r n o t , i s s u e a p u b l ic st a t e m e n t

indicating such reasons.

(12) If the competent authority does not oppose the proposed

acquisition in writing within the assessment period, such proposed

acquisition shall be deemed to be approved.

(13) Without prejudice to any other penalty which may be

imposed under this Act, where a qualifying shareholding in a credit

institution is acquired notwithstanding the refusal of the competent

authority, the exercise of the corresponding voting rights shall be

suspended and any of the votes cast in contravention of this sub-

article shall be null and void.

(14) The competent authority may fix a maximum period for

concluding the proposed acquisition and extend it where

appropriate.

(15) Notwithstanding the provisions of sub-articles (1) to (6),

where two or more proposals to acquire or increase qualifying

shareholdings in the same credit institution have been notified to

the competent authority, the latter shall treat the proposed acquirers

in a non-discriminatory manner.

(1) The competent authority shall work in full consultation

with overseas regulatory authorities in other Member States when

carrying out the assessment referred to in article 13A(2) if the

proposed acquirer is one of the following

(a) a credit institution, assurance undertaking, insurance

undertaking, reinsurance undertaking, investment firm

or UCITS management company authorised in another

Member State or EEA State or in a sector other than

that in which the acquisition is proposed;

(b) the parent undertaking of a credit institution, assurance

undertaking, insurance undertaking, reinsurance

undertaking, investment firm or UCITS management

company authorised in another Member State or EEA

State or in a sector other than that in which the

acquisition is proposed; or

(c) the person controlling a credit institution, assurance

undertaking, insurance undertaking, reinsurance

undertaking, investment firm or UCITS management

company authorised in another Member State or EEA

State or in a sector other than that in which the

acquisition is proposed.

(2) The competent authority shall, without undue delay,

provide any information which is essential or relevant for the

assessment referred to in article 13A(2) to the overseas regulatory

authority requesting such information. Upon request, the competent

authority shall communicate to the overseas regulatory authority all

relevant information and shall communicate on its own initiative all

essential information. A decision by the competent authority in

terms of article 13A shall indicate any views or reservations

expressed by the overseas regulatory authority responsible for the

proposed acquirer.

(3) Where the assessment referred to in article 13A takes place

concurrently with the approval or exemption, as the case may be, of

a financial holding company or mixed financial holding company

in terms of article 11B of this Act and, or Article 21a of the CRD,

the competent authority shall coordinate, as appropriate, with the

overseas regulatory authority acting as the consolidating supervisor

and, or with the overseas regulatory authority of the Member State

where the financial holding company or mixed financial holding

company is established, as the case may be.

(1) Notwithstanding anything contained in any other law

and without prejudice to articles 11B, 13(1) and 13(3) and Article 21a

of the CRD, the consent of the competent authority given in writing

shall be required before any credit institution may lawfully

(a) sell or dispose of its business or any significant part

thereof;

(b) merge with any other company, whether a credit

institution or otherwise;

(c) undergo any reconstruction or division; or

(d) increase or reduce its nominal or issued share capital

or effect any material change in the voting rights

Provided that this will be without prejudice to the

provisions of the CRR on the conditions for reducing

own funds.

(2) It shall be the duty of all directors and qualifying

shareholders of a credit institution to notify the competent

authority forthwith in writing upon becoming aware that such

credit institution intends to take any of the actions set out in sub-

article(1).

(3) Within three months of receipt of such notification or

receipt of such information as the competent authority may

lawfully require, whichever is the later, the competent authority

shall issue a notice -

(a) granting unconditional consent to the taking of the

action;

(b) granting consent to the taking of the action subject to

such conditions as the competent authority may deem

appropriate; or

(c) refusing consent to the taking of the action,

and if it refuses to grant consent it shall inform the person or the

credit institution concerned in writing of the reason for its refusal.

(4) If any person or any credit institution takes or decides to

take any action set out in sub-article (1) without obtaining the

consent of the competent authority, then, without prejudice to any

other penalty which may be imposed under this Act, the competent

authority shall have the power to make an order

(a) restraining such person or credit institution from

taking or continuing with such action;

(b) declaring such action to be void and of no effect;

(c) requiring such person or credit institution to take such

steps as may be necessary to restore the position

existing immediately before the action was taken;

(d) restraining such person or credit institution from

exercising any rights which such action would, if

lawful, have conferred upon them, including the right

to receive any payment or to exercise any voting rights

attaching to the shares acquired;

(e) restraining such person or credit institution from

taking any similar action or any other action within the

categories set out in sub-article (1).

In determining whether the criteria for a qualifying

shareholding are fulfilled, the voting rights referred to in Articles 9,

10 and 11 of Directive 2004/109/EC and the conditions regarding

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

Directive, shall be taken into account

Provided 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 credit

institutions may hold as a result of providing the underwriting of

financial instruments on a firm commitments basis in terms of point

6 of Section A of Annex 1 to the MiFID, 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.

(1) Any person who is a controller or director of a credit

institution shall be a suitable person to exercise such control.

(2) Credit institutions, financial holding companies and mixed

financial holding companies shall ensure that directors are at all times

of sufficiently good repute and possess sufficient knowledge, skills

and experience to perform their duties.

(2A) Directors of credit institutions, financial holding

companies and mixed financial holding companies shall, in

particular, fulfil the following requirements

(a) all directors shall commit sufficient time to perform

their functions in the credit institution, financial

holding company or mixed financial holding company,

as the case may be;

(b) the number of directorships which may be held by a

director at the same time shall take into account

individual circumstances and the nature, scale and

complexity of the activities of the credit institution,

the financial holding company or the mixed financial

holding company, as the case may be

Provided that a director of a credit institution that

is significant in terms of its size, internal organisation

and the nature, the scope and the complexity of its

activities shall, from 1 July 2014, not hold more than

one of the following combinations of directorships at

the same time -

(i)

one directorship having an executive role with

two directorships having a non-executive role;

(ii) four directorships having a non-executive role;

(c) for the purposes of paragraph (b), the following shall

count as a single directorship -

(i)

directorships having an executive or non-

executive role held within the same group;

(ii)

directorships having an executive or non-

executive role held within –

(aa) institutions which are members of the

same institutional protection scheme

provided that the conditions set out in

Article 113(7) of the CRR are fulfilled; or

(bb) undertakings (including non-financial

entities) in which the credit institution,

financial holding company or the mixed

financial holding company, as the case

may be, holds a qualifying holding.

(3) The following directorships shall not be taken into

consideration for the purposes of sub-article (2A)(b)

(a) directors who are directly or indirectly appointed to

represent the interests of the Government of Malta;

and

(b) directors appointed in organisations which do not

pursue

predominantly

commercial

objectives,

including directorships in non-profit-making or

charitable organisations.

(4) The competent authority may authorise directors to hold

one additional directorship having a non-executive role. The

competent authority shall notify the EBA of such authorisations on

a regular basis.

(5) The board of directors and, where applicable, the management

body, of credit institutions, financial holding companies and mixed

financial holding companies, shall possess adequate collective

knowledge, skills and experience to be able to understand the credit

institution’s activities, including the main risks. The overall

composition of the board of directors and, where applicable, the

management body, shall reflect an adequately broad range of

experience.

(6) Each director of a credit institution, financial holding company

and mixed financial holding company shall act with honesty, integrity

and independence of mind to effectively assess and challenge the

decisions of the senior management where necessary and to

effectively oversee and monitor management decision-making

Provided that, where a director is also a member of an

affiliated company or affiliated entity, this shall not in itself

constitute an obstacle to acting with independence of mind.

(7) The directors of a financial holding company or mixed

financial holding company, being a parent to a credit institution,

s h a l l b e o f s u ff i c ie n t l y g o o d r e p u t e a n d p o s s e s s su ff i c i e n t

knowledge skills and experience as referred to in sub-articles (1) to

(6) and any additional requirements as may be specified in a Banking

Rule to perform those duties, taking into account the specific role of

a financial holding company or mixed financial holding company, as

the case may be.

(8) A credit institution, financial holding company and mixed

financial holding company, as the case may be, shall forthwith

notify to the competent authority –

(a) full particulars of all persons who are controllers or

directors of the credit institution, financial holding

company and mixed financial holding company, as the

case may be;

(b) full particulars of any person who is proposed to

become a controller or director of the credit

institution, financial holding company and mixed

financial holding company, as the case may be;

(c) full particulars of any person who is proposed to cease to

be a controller or director of the credit institution,

financial holding company and mixed financial holding

company, as the case may be.

(9) A credit institution, financial holding company and mixed

financial holding company shall furnish the competent authority with

any further information it may require concerning any existing or

proposed controller or director.

(10) If the competent authority is of the opinion that any person

who is or is proposed to become a controller or director of a credit

institution, financial holding company or mixed financial holding

company, as the case may be, is not a suitable person to be a

controller or director, or does not fulfil the requirements set out in

sub-articles (1) to (6), or any additional requirements as may be

specified in a Banking Rule, the competent authority may give 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

Provided that the competent authority shall in particular verify

whether the requirements set out in sub-articles (1) to (6) and any

additional requirements as may be specified in a Banking Rule are still

fulfilled where they have reasonable grounds to suspect that money

laundering or terrorist financing is being or has been committed or

attempted, or there is increased risk thereof in connection with that

credit institution, financial holding company or mixed financial

holding company, as the case may be.

(11) For the purposes of this article control includes the power

to determine in any manner the financial and operating policies of a

body corporate, the power to appoint or remove the majority of the

members of the board of directors or, where applicable, the

management body, or the power to cast the majority of votes at

meetings of the board of directors or equivalent governing body.

(12) 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) A credit institution shall not -

(a) grant any credit facility against the security of its own

shares or against any other securities issued by the

credit institution itself or against any shares or any

other securities of another body corporate in which the

credit institution has control;

(b) grant or permit to be outstanding credit facilities or

extend other banking services, under terms and

conditions more favourable than the credit institution

would have otherwise applied -

(i)

to any one of its directors or their spouses

whether jointly or severally, as well as with third

parties

Provided that, in any case where unsecured

credit facilities are granted, these shall not in the

aggregate exceed the sum of twenty-three

thousand, two hundred and ninety-three euro

and seventy-three cents (€23,293.73);

(ii) to any person in whom or in which the credit

institution or any one or more of its directors is

interested as a director, partner, manager, agent

or member or to any person of whom or of which

any one or more of the credit institution's

directors is a guarantor;

(iii) to any body of persons in which the credit

institution or any one or more of its directors

jointly or severally maintains control, not being

itself a credit institution or the parent

undertaking of the credit institution, a subsidiary

of this parent undertaking or a subsidiary of the

credit institution;

and where the competent authority has reason to

believe that such favourable terms and conditions have

been applied, it shall have the power to require the

credit institution to rectify the position and if the credit

institution fails to take the necessary action to rectify

the position as required, the competent authority shall

take such measures as it deems appropriate until the

position is rectified;

(c) grant to or permit to be outstanding in respect of any

officer other than a director, or any employee,

unsecured credit facilities which in the aggregate

exceed twelve months’ emolument of such officer or

employee

Provided that the competent authority may by

Banking Rule extend the restrictions listed in

paragraphs (a), (b) and (c) or any of them to other

officers, employees or shareholders of credit

institutions or to other categories of persons in such

manner and to such extent as may be specified;

(d) without the consent of the competent authority acquire

or hold shares in another company which is not a

credit institution, which exceeds five per centum of

that company's issued share capital or any other

subsequent acquisition which exceeds the per centum

amount approved by the competent authority;

(e) purchase, acquire or otherwise hold any immovable

property or any right thereon except as may be

reasonably necessary for the purpose of conducting its

business or housing or providing amenities for its

staff

Provided that this paragraph shall not prevent a

credit institution -

(i)

from letting part of any building which is used

for the purpose of conducting its business; or

(ii) from securing a debt on any immovable property

and, in the event of default in payment of such

debt, from acquiring or holding such property,

for realisation within twelve months, or any

longer period as may be determined by the

competent authority;

(iii) in other instances from acquiring immovable

property with the prior approval of the

competent authority the original cost of which

property shall not in the aggregate exceed five

per centum of the credit institution’s own funds.

(2) In sub-article (1)(b) and (c) the expression "unsecured

credit facilities" shall mean credit facilities made without security

or, in respect of any credit facility made with security, any part

thereof which at any time exceeds the market value of the assets

constituting that security, or where the competent authority is

satisfied that there is no established market value, on the basis of a

valuation approved by the competent authority itself.

(Deleted by Act X. 2015.22).

(Deleted by Act X. 2015.23).

(Deleted by Act X. 2015.24).

The competent authority shall issue a Banking Rule as it

shall consider appropriate for the regulation of capital buffers.

(Deleted by Act X. 2015.26).

The competent authority may issue a Banking Rule as it

considers appropriate for the implementation of measures aimed at

addressing credit risks arising from the assessment of the quality of

a credit institution’s asset portfolio.

(1) Every credit institution shall put in place robust

governance arrangements which include a clear organisational

structure with well defined, transparent and consistent lines of

responsibility, effective processes to identify, manage, monitor and

report the risks it is or might be exposed to, adequate internal control

mechanisms including sound administrative and accounting

procedures, network and information systems that are established and

managed in accordance with the DORA Regulation, and remuneration

policies and practices that are consistent with and promote sound

and effective risk management

Provided that such remuneration policies and practices

shall be gender neutral.

(2) The arrangements, processes and mechanisms referred to in

sub-article (1), shall be comprehensive and proportionate to the

nature, scale and complexity of the risks inherent in the business

model and the credit institution’s activities. Credit institutions shall

take into account the technical criteria laid down in a Banking

Rule.

(3)

Every credit institution shall also ensure that its internal

control mechanisms and administrative and accounting procedures

permit the checking of compliance with the rules adopted in

accordance with the provisions of this Act and any regulations made

and, or Banking Rules and, or Conduct of Business Rules issued

thereunder, with any binding legal instruments issued under the CRD,

and with the CRR at all times.

(4)

Deleted by Act XXVI.2019.8.

(5) A credit institution shall cooperate closely with the

Resolution Committee established under the Malta Financial

Services Authority Act, and with any relevant European Resolution

Authorities or Third-Country Resolution Authorities and shall provide

them with all information necessary for the preparation and

drafting of a viable resolution plan setting out options for the

orderly resolution of the credit institution in the case of failure, in

accordance with the principle of proportionality.

All credit institutions shall have in place sound, effective

and complete strategies and processes to assess and maintain on an

on-going basis, the amounts, types and distribution of internal

capital that they consider adequate to cover the nature and level of

risks to which they are or might be exposed. These strategies and

processes shall be subject to regular internal review to ensure that

they remain comprehensive and proportionate to the nature, scale

and complexity of the activities of the credit institution concerned.

The competent authority shall issue a Banking Rule providing for,

inter alia the internal capital adequacy assessment process that has

to be maintained by credit institutions in relation to their risk

profile.

(Deleted by Act X. 2015.29).

Credit institutions shall have in place adequate risk

management processes and internal control mechanisms, in

accordance with the Banking Act (Supervisory Review)

Regulations and as may be prescribed from time to time in a

Banking Rule, including sound reporting and accounting

procedures in order to identify, measure, monitor and control

transactions with their parent mixed activity holding company and

its subsidiaries appropriately. Credit institutions shall report any

significant transaction with those entities other than the one

referred to in Article 394 of the CRR

Provided that those procedures and significant transactions

shall be subject to overview by the competent authority.

(1) The competent authority shall require a credit

institution to take the necessary measures at an early stage to

address relevant problems in circumstances where -

(a) the credit institution does not meet the requirements of

this Act or any regulations made or Banking Rules issued

thereunder, of any binding legal instruments issued under

the CRD or of the CRR;

(b) the competent authority has evidence that the credit

institution is likely to breach this Act or any regulations

made or Banking Rules issued thereunder, any binding

legal instruments issued under the CRD or the provisions

of the CRR, within the following twelve months.

(2) For the purposes of sub-article (1), the powers of the

competent authority shall include the supervisory powers referred

to in regulation 9 of the Banking Act (Supervisory Review)

Regulations.

(3) The competent authority shall apply supervisory measures

in accordance with the level of application of the requirements of

Part One, Title II of the CRR.

The competent authority may issue a Banking Rule

specifying what shall constitute the specified liquid assets and the

deposit liabilities of a credit institution and laying down the

minimum holding of specified assets as a proportion of deposit

liabilities which a credit institution must hold.

(1) A credit institution shall submit to the competent

authority -

(a) periodic statements showing its assets and liabilities

and profit and loss position on an individual and,

where appropriate, on a consolidated basis including

analysis thereof;

(b) such information as is required by the competent

authority for prudential supervision, conduct supervision

and, or statistical purposes;

(c) all the information necessary for the assessment of its

compliance with this Act and any regulations made and,

or Banking Rules and, or Conduct of Business Rules

issued thereunder, with any binding legal instruments

issued under the CRD, and with the CRR, as the

competent authority may require;

(d) such separate statements relating to its offices and

branches outside Malta in such form and at such times

as the competent authority may require in the

discharge of its duties.

(1A) A financial holding company and a mixed financial holding

company shall submit to the competent authority all the information

necessary for the assessment of its compliance with this Act and any

regulations made or Banking Rules issued thereunder, with any binding

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

competent authority may require.

(2) A credit institution shall submit to the Central Bank such

information as the Central Bank may require in the discharge of its

duties and the Central Bank may enquire into and ask for

clarification of any information so submitted.

(3)

A credit institution shall register all its transactions and

document systems and processes, which are subject to this Act and any

regulations made and, or Banking Rules and, or Conduct of Business

Rules issued thereunder, to any binding legal instruments issued under

the CRD, and to the CRR, in such a manner that the competent authority

may be able to verify compliance with the requirements of the CRR, of

any binding legal instruments issued under the CRD, of this Act and of

any regulations made or Banking Rules and, or Conduct of Business

Rules issued thereunder at all times.

(4) Without prejudice to article 11A, the provisions of this article

shall also apply to all branches, agencies or representative offices in

Malta of a credit institution which is not licensed in Malta.

(5) All statements 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 a Banking Rule and, or

as may be prescribed in any applicable binding legal instrument.

(6) All statements and other information furnished by any

credit institution, financial holding company and mixed financial

holding company, as the case may be, under sub-articles (1), (1A) and

(2) shall, unless otherwise provided in this Act or in any other law, be

regarded as secret and confidential except as between that credit

institution, financial holding company or mixed financial holding

company, as the case may be, and the competent authority or the

Central Bank as the case may be save that the competent authority

shall furnish such information under this article as may be required

by the Minister or the Central Bank and shall inform the Minister

and the Central Bank if at any time in its opinion there is concern

regarding the state of affairs of that credit institution.

(1) Where a credit institution intends to outsource its

material services or activities, it shall first inform the competent

authority accordingly.

(2) The competent authority may issue a Banking Rule laying

down what constitutes material services or activities, the requirements

for the information to be submitted regarding the outsourcing service

provider and the provision of such outsourced services.

(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 be sufficiently

extensive as to allow payment 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)

Without prejudice to the application of Chapter II of

the DORA Regulation, 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) Deleted by Act XI.2025.33.

(2)

Deleted by Act XI.2025.33.

(3)

Deleted by Act XI.2025.33.

(4)

Deleted by Act XI.2025.33.

(5)

Deleted by Act XI.2025.33.

(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)

Deleted by Act XI.2025.33.

(1) Every credit institution licensed in terms of this Act, and

where applicable, a financial holding company or a mixed financial

holding company, shall submit to the competent authority any

information which it may reasonably require in the exercise of its

duties under this Act or any regulations made or Banking Rules or

Conduct of Business Rules issued thereunder, the CRR or any binding

legal instruments issued under the CRD, and the competent authority

may enquire into and ask for clarification of any information so

submitted.

(2) Any request for information or for clarification thereof

under this article shall be made by notice in writing and shall

require the recipient to provide the information at such time or

times or at such intervals or in respect of such period or periods as

may be specified by the notice.

(3)

Further, the competent authority may -

(a) by notice in writing served on a credit institution, a

financial holding company or a mixed financial holding

company, require the credit institution, financial holding

company or mixed financial holding company, as the case

may be, to provide a report by an accountant or other

person with relevant professional skill on, or on any

aspect of, any matter about which the competent

authority has required or could require the credit

institution, financial holding company or mixed financial

holding company, as the case may be, to provide

information under sub-article (1);

(b) by notice in writing served on a credit institution, a

financial holding company or a mixed financial holding

company, require the credit institution, financial holding

company or mixed financial holding company, as the case

may be, to produce within such time and at such place as

may be specified in that notice, such document or

documents of such description as may be so specified

in the notice;

(c) authorise an officer, servant or agent of the competent

authority, on producing evidence of his authority, to

require any credit institution, financial holding company

or mixed financial holding company, to provide him

forthwith with such information, or to produce to him

forthwith such documents, as he may specify, being

such information or documents as the competent

authority may reasonably require for the performance

of its functions under this Act or any regulations made

or Banking Rules or Conduct of Business Rules issued

thereunder.

(4) The accountant or other person appointed by a credit

institution, a financial holding company or a mixed financial holding

company to make any report required under sub-article (3)(a) shall

be a person nominated or approved by the competent authority; and

the competent authority may require the report to be in such form

as is specified in the notice.

(5) Where, by virtue of sub-article (3), any person has power to

require the production of any documents from a credit institution, a

financial holding company or a mixed financial holding company, that

person shall have the same power to require the production of those

documents from any person who appears to be in possession of

them.

(6) The power under this article to require a credit institution, a

financial holding company or a mixed financial holding company, or

any other person to produce any documents includes the power -

(a) if the documents are produced, to take copies of them

or extracts from them and to require the credit

institution, financial holding company, mixed financial

holding company, or person concerned, or any other

person who is a present or past officer of, or is or was

at any time employed by or acting as an employee of,

the credit institution, financial holding company and

mixed financial holding company in question, to provide

an explanation of any of them; and

(b) if the documents are not produced, to require the

person who was required to produce them to state, to

the best of his knowledge and belief, where they are.

(7) If it appears to the competent authority to be desirable in

the interests of the depositors or potential depositors of a credit

institution to do so, or if otherwise required to fulfil its supervisory

responsibilities, it may also exercise the powers conferred by sub-

articles (1) and (3) in relation to any person who is or has at any

relevant time been -

(a) a holding company, subsidiary or a company which is

a connected person of that credit institution;

(b) a subsidiary or a person which is a company connected

to a holding company of that credit institution;

(c) a holding company of a subsidiary of that credit

institution; or

(d) a controller of that credit institution; or

(e) an outsourcing

service

provider

of

that

credit

institution.

(8) The competent authority may by notice in writing served on

any person who is or is to be an officer of a credit institution,

financial holding company or mixed financial holding company, as the

case may be, require him to furnish, within such time as may be

specified in the notice, such information or documents as the

competent authority may reasonably require for determining

whether he is a suitable person to hold the particular position which

he holds or is to hold.

(9) The competent authority may exercise the powers conferred

by sub-articles (1) and (3) in relation to any person who has a

qualifying shareholding in a credit institution, financial holding

company or mixed financial holding company, if it considers that the

exercise of those powers is desirable in the interests of the

depositors or potential depositors of that credit institution.

(10) A statement made by a person in compliance with a

requirement imposed by virtue of this article may be used in

evidence against him.

(11) The competent authority shall have the power to recover

from a credit institution, financial holding company or mixed financial

holding company reported on under sub-article (3) the costs and

expenses incurred in relation to such report.

(1) Any officer, employee, agent or inspector of the

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

authority -

(a) enter any premises occupied by a person on whom a

notice has been served under article 20 above or article

22 below for the purpose of obtaining there the

information or documents required by that notice;

(b) enter any premises occupied by any person on whom a

notice could be served under article 20 above or article

22 below for the purpose of obtaining there such

information or documents as are specified in the

authority, being information or documents that could

have been required by such a notice; but the competent

authority shall not authorise any person to act under

this paragraph unless it has reasonable cause to believe

that if such a notice were served it would not be

complied with or that any documents to which it would

relate would be removed, tampered with or destroyed

Provided that where an entry as is mentioned in this sub-

article involves premises that are occupied for the purposes 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

moreover not take place between nine in the evening and five in the

morning.

(2) No person shall intentionally obstruct a person exercising

rights conferred by this article.

(1) If it appears to the competent authority desirable to do

so in the interests of the depositors or potential depositors of a

credit institution, or if otherwise required to fulfil its supervisory

responsibilities, it may appoint one or more competent persons, as

inspectors, to investigate and report on -

(a) the nature, conduct or state of the credit institution’s

business or any particular aspect of it, or

(b) the ownership or control of the credit institution,

and the competent authority shall give written notice of any such

appointment to the credit institution concerned.

(2) If a person appointed under sub-article (1) thinks it

necessary for the purposes of his investigation, he may also

investigate the business of any person who is or has at any relevant

time been -

(a) a holding company, subsidiary or a company which is

a connected person of the credit institution under

investigation;

(b) a subsidiary or a company which is a connected person

of a holding company of that credit institution;

(c) a holding company of a subsidiary of that credit

institution; or

(d) a controller of that credit institution; or

(e) an outsourcing

service

provider

of

that

credit

institution.

(3) The competent authority may exercise the powers conferred

by sub-article (1) in relation to any person who has a qualifying

shareholding in a credit institution if it considers that the exercise

of those powers is desirable in the interests of the depositors or

potential depositors of that credit institution.

(4) Where a person appointed under sub-article (1) decides to

investigate the business of any person by virtue of sub-article (2) or

sub-article (3) he shall inform that person by notice in writing.

(5) It shall be the duty of every person who is or was an officer,

employee, agent, banker or auditor of a body which is under

investigation under this Act and any regulations made and, or Banking

Rules and, or Conduct of Business Rules issued thereunder, or any

person appointed to make a report in respect of that body under this

Act and any regulations made and, or Banking Rules and, or Conduct

of Business Rules issued thereunder and anyone who has a qualifying

shareholding in, or is a controller of, that body -

(a) to produce to the persons appointed under sub-article

(1), within such time and at such place as they may

require, all documents relating to the body concerned

which are in his custody or power;

(b) to attend before the persons so appointed at such time

and place as they may require; and

(c) otherwise to give those persons all assistance in

connection with the investigation which he is

reasonably able to give,

and tho se pe rson s m ay t ake copi es of o r e xtracts from any

documents produced to them under paragraph (a) above.

(6) A person 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 lawful excuse fail to produce any documents

which it is his duty to produce under sub-article (5);

(b) without lawful excuse fail to attend before the persons

appointed under sub-article (1) when required to do so;

or

(c) without lawful excuse fail to answer any question

which is put to him by persons so appointed with

respect to any credit institution which is under

investigation or a body which is being investigated by

virtue of sub-article (2) or (3).

(8) A statement made by a person in compliance with a

requirement imposed by virtue of this article may be used in

evidence against him.

(9) The competent authority shall have the power to recover

from a credit institution reported on under sub-article (1) the costs

and expenses incurred in relation to such report.

(10) For the purposes of this article, reference to a credit

institution shall include reference to persons appearing to be

carrying out the business of banking.

(1) Where the competent authority has reasonable grounds

for suspecting that a person has contravened or has failed to comply

with any provision of this Act or any regulations made or Banking

Rules or Conduct of Business 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 which it may

reasonably require for that purpose;

(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 take copies of or extracts from any

documents produced under 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 any

premises occupied by a person on whom a notice has been served

under sub-article (1) for the purpose of obtaining there the

information or documents required by the notice, putting the

questions referred to in paragraph (c) of that sub-article or

exercising the powers conferred by sub-article (2).

(4) No person shall without 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 in

evidence against him.

No person who knows or suspects that an investigation is

being or is likely to be carried out -

(a) under article 20, article 22 or article 23; or

(b) into the suspected commission of any breach under this

Act,

may falsify, conceal, destroy or otherwise dispose of, or cause or

permit the falsification, concealment, destruction or disposal of,

documents which 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 the documents from persons carrying

out such an investigation.

(1) On the basis of Malta’s international commitments, the

competent authority may share its supervisory duties with overseas

regulatory authorities in the case of a credit institution licensed in

terms of this Act and operating in the country of such overseas

regulatory authority or a branch established in Malta and having its

head office in another Member State.

(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.

(2A)

Notwithstanding article 17(1) of the Malta Financial

Services Authority Act and articles 19(6), 34(2), 34(4) and 34(7), the

competent authority may also, subject to the conditions set out in sub-

articles (2B) and (4A), transmit or share certain information with the

following

(a) the International Monetary Fund and the World Bank,

for the purposes of assessments for the Financial

Sector Assessment Program;

(b) the Bank for International Settlements, for the

purposes of quantitative impact studies;

(c) the Financial Stability Board, for the purposes of its

surveillance function

Provided that where the disclosure of information in terms

of this sub-article involves the processing of personal data, any

processing of p ersonal data w ill be in accordance with the

requirements laid down in the GDPR.

(2B) The competent authority may only share confidential

information with the international bodies referred to in sub-article

(2A) following an explicit request and where at least the following

conditions are met

(a) the request is duly justified in light of the specific

tasks performed by the requesting body in accordance

with its statutory mandate;

(b) the request is sufficiently precise as to the nature,

scope and format of the required information, and the

means of its disclosure or transmission;

(c) the requested information is strictly necessary for the

performance of the specific tasks of the requesting

body and does not go beyond the statutory tasks

conferred on the requesting body;

(d) the information is transmitted or disclosed exclusively

to the persons directly involved in the performance of

the specific task;

(e) the persons having access to the information are

subject to professional secrecy requirements at least

equivalent to those referred to in article 34(4).

(3) Notwithstanding article 17(1) of the Malta Financial Services

Authority Act and articles 19(6) and 34(2), the competent authority

may also conclude cooperation agreements, providing for exchanges

of information, with third country overseas regulatory authorities

or with authorities or bodies of third countries in accordance with

sub-articles (7) and (8), only if the information disclosed is subject

to a guarantee that professional secrecy requirements at least

equivalent to those referred to in article 34(4) are complied with

Provided that such exchange of information shall be for the

purpose of performing the supervisory tasks of the authorities or

bodies mentioned in this sub-article

Provided further that where the information originates in

another Member State, it shall only be disclosed with the express

agreement of the overseas authority which has disclosed it, and where

appropriate, solely for the purposes for which the overseas authority

gave its agreement.

(4) The competent authority may disclose information under

the provisions of sub-article (2) only to the extent that the authorities

receiving the information restrict its use for supervisory and

regulatory purposes or for such other purposes as may specifically

be agreed upon with the competent authority.

(4A) Where a request is made by any of the entities referred to

in sub-article (2A), the competent authority may only transmit

aggregate or anonymised information and may only share other

information at the premises of the competent authority.

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

international agreements, or upon reciprocity agreements, authorise

overseas regulatory authorities to carry out themselves, or through

the intermediation of competent persons they appoint, on-site

inspections for supervisory and regulatory purposes in branches or

subsidiaries of credit institutions having their head office in the

country of the overseas regulatory authority making the inspection

Provided that on-the-spot checking and inspection of

branches established in Malta of credit institutions authorised in

another Member State, shall be carried out in accordance with the

European Passport Rights for Credit Institutions Regulations.

(6) Nothing in this Act or in any other law shall prevent the

competent authority from transmitting information to the following

for the purposes of their tasks -

(a) the Central Bank, ESCB central banks and other

bodies with a similar function in their capacity as

monetary authorities when the information is relevant

for the exercise of their respective statutory tasks,

including the conduct of monetary policy and related

liquidity provision, oversight of payments, clearing

and settlement systems and the safeguarding of

stability of the financial system;

(b) contractual or institutional protection schemes as

referred to in Article 113(7) of the CRR;

(c) where appropriate, other public authorities responsible

for overseeing payment systems;

(d) the ESRB, the European Insurance and Occupational

Pensions Authority established by Regulation (EU)

No. 1094/2010 and the European Securities and

Markets Authority established by Regulation (EU) No.

1095/2010, where that information is relevant for the

exercise of their tasks under Regulations (EU) No.

1092/2010, (EU) No. 1094/2010 or (EU) No. 1095/

2010

Provided that the competent authority shall take the

appropriate measures to remove obstacles preventing it from

transmitting information in accordance with this sub-article

Provided further that information received in accordance

with this sub-article shall be subject to professional secrecy

requirements at least equivalent to those referred to in article 34(4)

Provided further that in an emergency situation, including a

situation as described in Article 18 of Regulation (EU) No. 1093/

2010 or a situation of adverse developments in markets arises,

which potentially jeopardises the market liquidity and the stability

of the financial system, the competent authority shall communicate

without delay information to the ESCB central banks where that

information is relevant for the exercise of their statutory tasks,

including the conduct of monetary policy and related liquidity

provision, the oversight of payments, clearing and settlement

systems, and to the ESRB where such information is relevant for

the exercise of its statutory tasks.

(7) The provisions of article 17(1) of the Malta Financial

Services Authority Act and of article 34(2), (4) and (7) shall not

preclude the exchange of information between the competent

authority and other authorities in Malta; between the competent

authority and overseas regulatory authorities in other Member

States; or between the competent authority and the following, in the

discharge of their supervisory functions -

(a) authorities entrusted with the public duty of

supervising other financial sector entities and the

authorities responsible for the supervision of financial

markets;

(b) authorities or bodies charged with responsibility for

maintaining the stability of the financial system in

Member States through the use of macro-prudential

rules;

(c) reorganisation bodies or authorities aiming

at

protecting the stability of the financial system;

(d) contractual or institutional protection schemes as

referred to in Article 113(7) of the CRR;

(e) bodies involved in the liquidation and bankruptcy of

institutions and in other similar procedures;

(f)

persons responsible for carrying out statutory audits of

the accounts of institutions, insurance undertakings

and financial institutions;

(g) authorities responsible for supervising the obliged

entities listed in points (1) and (2) of Article 2(1) of

Directive (EU) 2015/849 for compliance with that

Directive, and financial intelligence units in other

Member States;

(h) authorities or bodies responsible for the application of

rules on structural separation within a banking group;

Provided that the provisions of article 34(4) and (7) shall

not preclude the disclosure to bodies which administer deposit-

guarantee schemes and investor compensation schemes of

information necessary for the exercise of their functions

Provided further that the information received shall in any

event be subject to professional secrecy requirements at least

equivalent to those referred to in article 34(4).

(8) Notwithstanding article 17(1) of the Malta Financial Services

Authority Act, the provisions of sub-articles (2) and (3) and of articles

19(6), 34(2), 34(4), 34(5) and 34(7), the competent authority shall

exchange information w i t h t h e a u t h o r i t i e s r e s p o n s i b l e f o r

overseeing -

(a) the bodies involved in the liquidation and bankruptcy

of institutions and in other similar procedures;

(b) contractual or institutional protection schemes as

referred to in Article 113(7) of the CRR;

(c) persons charged with carrying out statutory audits of

the accounts of institutions, insurance undertakings

and financial institutions

Provided that in the cases referred to in this sub-article, the

com petent authority shall require fulfilment of at least the

following conditions

(i)

that the information is exchanged for the

purpose of performing the tasks referred to in

this sub-article;

(ii) that the information received is subject to

professional secrecy requirements at least

equivalent to those referred to in article 34(4);

(iii) where the information originates in another

Member State, that it is not disclosed without the

express agreement of the overseas regulatory

authorities which have disclosed it and, where

appropriate, solely for the purposes for which

those authorities gave their agreement

Provided further that where the authorities or bodies

referred to in this sub-article perform their task of detection or

investigation through the assistance of persons appointed for that

purpose in view of their specific competence and not employed in

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

information with the authorities or bodies responsible under the law

for the detection and investigation of breaches of company law, to

such persons, and shall require the fulfilment of at least the

following conditions

(i) that the information is exchanged for the

purpose of detecting and investigating breaches

of company law;

(ii) that the information received is subject to

professional secrecy requirements at least

equivalent to those referred to in article 34(4);

(iii) where the information originates in another

Member State, that it is not disclosed without the

express agreement of the overseas regulatory

authorities which have disclosed it and, where

appropriate, solely for the purposes for which

those authorities gave their agreement.

(9) Notwithstanding article 17(1) of the Malta Financial Services

Authority Act and the provisions of articles 19(6), 34(4) and 34(7),

the competent authority may authorise the disclosure of certain

information to other government departments of other Member

States’ central government ad ministrations responsible for

legislation on the supervision of institutions, financial institutions

and insurance undertakings and to inspectors acting on behalf of

those departments

Provided that such disclosures may be made only where

necessary for reasons of prudential supervision and prevention and

resolution of failing credit institutions. Without prejudice to sub-

article (10), persons having access to the information shall be

subject to professional secrecy requirements at least equivalent to

those referred to in article 34(4)

Provided further that in an emergency situation, including a

situation as described in Article 18 of Regulation (EU) No. 1093/

2010 or a situation of adverse developments in markets arises,

which potentially jeopardises the market liquidity and the stability

of the financial system, the competent authority may disclose

information which is relevant to the departments referred to in this

sub-article in all Member States concerned.

(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.

(10) Notwithstanding article 17(1) of the Malta Financial Services

Authority Act, and the provisions of articles 19(6), 34(4) and 34(7),

the competent authority may disclose certain information relating to

the prudential supervision of credit institutions to parliamentary

enquiry committees, courts of auditors and other entities in charge

of enquiries in Malta, under the following conditions -

(a) that the entities have a precise mandate under Maltese

law to investigate or scrutinise the actions of the

competent authority or for laws on the supervision of

credit institutions;

(b) that the information is strictly necessary for fulfilling

the mandate referred to in paragraph (a);

(c) the persons with access to the information are subject

to professional secrecy requirements at least

equivalent to those referred to in article 34(4);

(d) where the information originates in another Member

State, such information shall not be disclosed without

the express agreement of the overseas regulatory

authorities which have disclosed it and, solely for the

purposes for which those overseas regulatory

authorities gave their agreement

Provided that where the disclosure of information relating

to prudential supervision involves the processing of personal data,

any processing by the entities referred to in this sub-article shall

comply with any applicable data protection legislation.

(11) The competent authority shall not disclose in terms of sub-

articles (9) and (10), any information received under Article 52,

Article 53(2) and Article 56 of the CRD, except with the express

consent of the overseas regulatory authority of the Member State in

which such an on-the-spot check or inspection was carried out or of

the overseas regulatory authority of the Member State which

disclosed such information.

(12) Notwithstanding article 17(1) of the Malta Financial Services

Authority Act and of articles 19(6) and 34(2), the competent authority

may communicate information referred to in sub-articles (2) and (3)

and in articles 34(4), 34(5) and 34(7), to a clearing house or other

similar body recognised under national law for the provision of

clearing or settlement services of the relevant national market, if it

considers that it is necessary to communicate such information in

order to ensure the proper functioning of these bodies in relation to

defaults or potential defaults by market participants

Provided that the information received under this article

shall be subject to the conditions of professional secrecy at least

equivalent to those referred to in article 34(4)

Provided further that information received by the competent

authority under Article 53(2) of the CRD may not be disclosed by the

competent authority without the express consent of the overseas

regulatory authority in another Member State and the authority in

another Member State responsible for the supervision of investment

firms which had disclosed it.

(13) There shall be meetings held between a credit institution,

its appointed auditors and the competent authority on a trilateral or

bilateral basis as circumstances may warrant. These meetings may

be called by any of the parties concerned but shall always be

chaired by the competent authority.

The competent authority shall cooperate closely with

overseas regulatory authorities in all matters with respect to

supervision on a consolidated basis. Such cooperation shall be

regulated through the Supervisory Consolidation Regulations.

(Deleted by Act X. 2015.38).

(Deleted by Act X. 2015.39).

(1) The disclosure in good faith to the competent authority

by -

(a) an auditor of a credit institution, financial holding

company or mixed financial holding company, as the case

may be; or

(b) a person appointed to make a report under article

20(3)(a) or article 22(1),

of any fact or decision referred to in article 31(9) 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 involve such persons in any

liability. Such disclosure shall be made simultaneously to the board

of directors or to the management body, as applicable, of the credit

institution, financial holding company or mixed financial holding

company, as the case may be, unless there are compelling reasons not

to do so.

(2) In relation to a person appointed to make a report under

article 20(3)(a), this article applies to any matter of which he

becomes aware in his capacity as the person making the report and

which -

(a) relates to the business or affairs of the credit

institution in relation to which a report is made or any

associated body of that credit institution; or

(b) if by virtue of article 20(7) the report relates to an

associated body of a credit institution, to the business

or affairs of that body.

(3) In relation to a person appointed to make a report under

article 22(1), this article applies to any matter of which he becomes

aware in his capacity as the person making the report and which -

(a) relates to the business or affairs of the credit

institution in relation to which his report is made or

any associated body of that credit institution, or

(b) if, by virtue of article 22(2), the report relates to an

associated body of a credit institution, to the business

or affairs of that body.

(4) In this article "associated body", in relation to an

institution, means any such body as is mentioned in article 20(7) or

in article 22(2).

(5) In relation to an auditor of a credit institution, financial

holding company and mixed financial holding company, as the case

may be, this article shall apply to any matter falling within article

31(9).

Repealed by Act XVII. 2002.182.

Notwithstanding any investigation provided for in this Act

and any regulations made and, or Banking Rules and, or Conduct of

Business Rules issued thereunder -

(a) where a credit institution, financial holding company or

mixed financial holding company establishes that it is

likely to become unable to meet its obligations or that

it is about to suspend payment, it shall forthwith

inform the competent authority and the Governor of

the Central Bank in writing;

(b) where the competent authority becomes aware that a

credit institution, financial holding company or mixed

financial holding company is likely to become unable to

meet its obligations or that it is about to suspend

payment, it shall forthwith inform the Governor of the

Central Bank in writing;

(c) where the Central Bank becomes aware that a credit

institution, financial holding company or mixed financial

holding company is likely to become unable to meet its

obligations or that it is about to suspend payment, it

shall forthwith inform the competent authority in

writing.

Without prejudice to the powers arising under article 3, the

Minister, acting on the advice of the competent authority, may

make regulations to establish schemes or other arrangements with

such distinct legal personality or otherwise as may be prescribed,

for the protection of depositors in cases where credit institutions

are unable to satisfy their obligations towards depositors and to

regulate the management and the financing of any such schemes or

arrangements for compensation and the contributions and levies to

be paid thereto, to set out minimum and maximum levels of

compensation, to exclude certain deposits from the application of

such schemes or arrangements, and to make provision for any other

aspect related to depositor protection schemes including rules on

advertising; and such schemes shall be exempt from the payment of

income tax as from the date of establishment of such schemes.

(1) If, whether from any report made under article 20 or

article 22 or otherwise, it appears to the competent authority that

any of the circumstances indicated in article 9(2) apply, the

competent authority, after consulting with the Central Bank, may,

without prejudice to the provisions of article 9(2) and to any other

powers conferred on the competent authority under this Act or any other

applicable law –

(a) require the credit 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 credit

institution in the proper conduct of its business;

(c) appoint a competent person to take charge of the assets

of the credit institution or any portion of them for the

purpose of safeguarding the interests of depositors;

BANKING

(d) appoint a competent person to assume control of the

business of the credit institution and either to carry on

that business or to carry out such other function or

functions in respect of such business, or part thereof,

including to take the necessary action for the credit

institution to be dissolved and wound up, as the competent

authority may direct;

(e) require the credit 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 credit

institution;

(g) fix the remuneration to be paid by the credit institution

to any person appointed under this sub-article;

(h) appoint a person to act as controller and, or to assume

control of a credit institution for the purposes of the

Controlled Companies (Procedure for Liquidation)

Act;

and having adopted any one or more of the measures

aforesaid, the competent authority may further adopt any

one or more measures, whether in addition thereto or in

substitution therefor.

(2) Where a competent person is appointed by the competent

authority

(a) under sub-article (1)(b), the credit 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 credit 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 credit institution in respect of those assets

whether exercisable by the company in general

meeting or by the board of directors or by any other

person, including the legal and judicial representation

of the credit institution, shall be exercisable by and

vest in him to the exclusion of the credit institution;

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

institution, whether exercisable by the company in

general meeting or by the board of directors or by any

other person, including for the purpose of the dissolution

and winding up of the credit institution as well as the legal

and judicial representation of the credit institution in all

matters, shall be exercisable by and vest in him to the

exclusion of any other person

Provided that the competent person shall not take any

decision for the purpose of the dissolution and winding up

of the credit institution unless the competent authority,

after consulting with the Central Bank, issues a directive to

that effect in terms of article 4B and any such directive

may contain such instructions, requirements and

conditions as the competent authority may consider

necessary, including with regard to the mode of winding

up.

(3)

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 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 credit

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

vest in such person to the exclusion of any other

person

Provided that

(i) the competent authority shall have 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 vest 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 credit 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;

(c) 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;

(d) 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.

(e) Deleted by Act XI.2025.34.

(3a) Any person appointed by the competent authority under

paragraphs (c), (d), (f) or (h) of sub-article (1) 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 shall place

such reports and accounts on the Table of the House within fifteen

(15) days.

(4) 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.

(5) 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.

(6) 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 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.

(7) 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.

(8)

Deleted by Act XXVI.2019.14.

(9) Upon receipt of a report as is mentioned in sub-article (1),

the competent authority shall inform the Central Bank on whether it

intends to take any action pursuant to such report and of any action

it intends to take thereon.

(10) Without prejudice to the powers of the competent authority

in terms of sub-article (1), the competent authority may also make an

application to the Civil Court (Commercial Section) for the dissolution

and winding up by the Civil Court (Commercial Section) of a credit

institution where it appears to the competent authority that a credit

institution should be dissolved and wound up by the Civil Court

(Commercial Section) for the reason set out in article 214(2)(b)(iii) of

the Companies Act, and where the Civil Court (Commercial Section)

accedes to the application the relevant provisions of the Companies

Act in relation to the dissolution and winding up by the Civil Court

(Commercial Section) and any other applicable provisions of any other

law shall apply.

(11) Any measure adopted in terms of sub-article (1) shall remain

in force notwithstanding that a credit institution ceases to hold a

licence for whatever reason or such licence ceases to have effect,

unless the competent authority otherwise directs.

Repealed by Act LXXII of 2021 .

(1) Without prejudice to any other power of the competent

authority under this Act or any other law, where the competent authority

is the consolidating supervisor and has established that the conditions

set out in article 11B(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 Banking 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 11B;

(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

BANKING

company;

(c) issuing administrative measures or administrative

penalties, in terms of this Act and any regulations

made or Banking 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

4B;

(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 Banking

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 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 11B(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 11B(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 11B(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 29 of this Act

Provided that in exercising any of its powers under article

29, the provisions of the said article shall apply mutatis mutandis, and

provided further that any reference to ''the credit institution'' 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 other than Malta and the competent authority is the

consolidating supervisor, the competent authority shall work together

with the overseas regulatory authority in the Member 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

overseas 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 overseas regulatory

authority in the Member 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 overseas 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 overseas regulatory authority in the Member State where the

financial holding company or the mixed financial holding company is

established or with the overseas 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 overseas regulatory authority acting as the

consolidating supervisor or with the overseas regulatory authority in

the Member 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 overseas regulatory authority acting as the consolidating

supervisor or with the overseas regulatory authority in the Member

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 overseas regulatory

authority acting as the consolidating supervisor, nor the overseas

regulatory authority in the Member 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 Directive 2009/138/EC.

Regulations, Banking Rules and Conduct of Business Rules

made under this Act and any amendment thereto or revocation

thereof may be made in the English language only.

Every credit institution, and, where applicable, financial

holding company and mixed financial holding company, 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 the Central

Bank, 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 Banking Rule.

(1) The

competent

authority

may

require

credit

institutions -

(a) to publish information referred to in Part Eight of the

CRR more than once per year and to set deadlines for

publication;

(b) to use specific media and locations for publications

other than the financial statements.

(2) The competent authority may require parent undertakings to

p u b l i sh a n n u a l l y, e i t h e r i n f u l l o r b y w a y o f r e f e r e n c e s t o

equivalent information, a description of their legal structure and

governance and organisational structure of the group of institutions

in accordance with Article 14(3), Article 74(1) and Article 109(2)

of the CRD .

31.(1)(a) Every credit institution shall each year appoint an

approved auditor or auditors whose duty shall be to

report on the financial statements of the credit

institution examined by them and on all financial

statements prepared by the credit institution.

(b) For the purpose of this article an approved auditor

shall be a person who is qualified to be an auditor in

accordance with the Companies Act, and holds the

authorisation of the competent authority to act as

auditor of a credit institution.

(2) If a credit institution fails to appoint an auditor under sub-

article (1) or, at any time fails to fill any vacancy in the office of an

auditor, the competent authority shall have the power to appoint an

auditor for that credit institution and shall fix the remuneration to

be paid by that credit institution to such auditor.

(3) The auditors’ report shall include statements as to the

following matters -

(a) whether they have obtained all the information and

explanations which to the best of their knowledge and

belief were necessary for the purpose of their audit;

(b) whether in their opinion, proper books of account have

been kept by the credit institution, so far as appears

from their examination of those books,

(c) whether the credit institution’s financial statements

dealt with by the report are in agreement with the

books of account;

(d) whether, in their opinion, and to the best of their

knowledge and according to the explanations given to

them, the said financial statements give the

information required by any law which may from time

to time be in force in the manner so required and give a

true and fair view.

(4) The report of the auditors shall be read together with the

report of the directors of the credit institution at the annual meeting

of shareholders.

(5) Every auditor of a credit institution shall have the right to

demand such information or explanation as he deems necessary in

the performance of his duties from any officer or employee of the

credit institution.

(6) A credit institution shall forthwith give written notice to the

competent authority -

(a) on the appointment of its auditors;

(b) if it proposes to give notice to its shareholders to -

(i)

replace its auditors at the expiration of their term

of office;

(ii) remove its auditors before the expiration of their

term of office;

(c) if the auditors cease to be auditors of the credit

institution for any reason other than those in paragraph

(b).

(7) The competent authority may require a credit institution to

change its appointed auditors where, in the competent authority’s

opinion, such auditors are considered unfit for this appointment at

any time during their term of office.

(8) An auditor shall immediately advise the competent

authority if -

(a) he resigns;

(b) he does not seek to be re-appointed; or

(c) he decides to qualify the audit report.

(9) In his capacity as an auditor of a credit institution or due to

a direct request by the competent authority under article 20 or

under article 22, an auditor shall promptly notify the competent

authority of any fact or decision concerning that credit institution

of which he has become aware while carrying out his tasks, which

is liable to -

(a) constitute a material breach of this Act or any

regulations made or Banking Rules or Conduct of

Business Rules issued thereunder which lay down the

licensing conditions or which specifically govern the

activities of credit institutions;

(b) affect the ongoing functioning of the credit institution;

(c) affect the depositors of the credit institution, of the

branches in Malta of a credit institution authorised by

an overseas regulatory authority or of any connected

person which is a credit institution;

(d) 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 he becomes aware in the course of

carrying out his tasks in an undertaking having close links resulting

from a control relationship with the credit institution within which

he is carrying out that task.

(9A) The competent authority may require the replacement of an

auditor if that auditor acts in breach of his obligations under sub-

article (9).

(10) Notwithstanding any of the provisions of the foregoing sub-

articles, the competent authority may in the case of a credit

institution not licensed in Malta grant exemption by way of

Banking Rule from any of the requirements of this article provided

that the same does not materially detract from the main objects of

this article.

(11) In so far as the provisions of this article are inconsistent

with the provisions of the Companies Act, the provisions of this

article shall prevail and the provisions of the said Act shall, to the

extent of the inconsistency, not apply to credit institutions.

(1) No person -

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

composition with his creditors or has been an officer

of a credit institution which has had its licence

withdrawn under article 9(2); and who has not been

exempted in writing by the competent authority from

the provisions of this article; or

(b) who is interdicted or incapacitated or who has been

involved in money laundering or found guilty of a

crime affecting public trust, theft, fraud, extortion or

of knowingly receiving property obtained by theft or

fraud,

shall act or continue to act as an officer of a credit institution.

Every officer of a credit institution shall take all reasonable

steps -

(a) to secure compliance by the credit institution with its

licence and with the provisions of this Act and any

regulations made and, or Banking Rules and, or Conduct

of Business Rules issued thereunder, and

(b) to ensure that no incorrect information is provided to

the competent authority either wilfully or as the result

of gross negligence.

Every officer of a financial holding company or a mixed

financial holding company shall take all reasonable steps –

(a)

to secure compliance by the financial holding

company or the mixed financial holding company, as the case

may be, with its approval and with this Act and any regulations

made or Banking Rules issued thereunder

(b)

to ensure that no incorrect information is

provided to the competent authority either wilfully or as the

result of gross negligence.

(1) Nothing in this Act shall authorise the Central Bank or

the competent authority to enquire or cause an enquiry to be made

in a credit institution into the affairs of any individual customer of

a credit institution except -

(a) for the purpose of ensuring compliance with any of the

provisions of this or any other Act, or

(b) for the purpose of enabling the Central Bank to satisfy

its responsibilities under the Central Bank of Malta

Act, or

(c) for the purpose of enabling the Central Bank or the

competent authority, as the case may be, to satisfy

their respective obligations arising under Malta’s

international commitments.

(2) No person, including past and present officers or agents of a

bank, financial holding company or mixed financial holding company,

shall disclose any information relating to the affairs of a bank or of

a customer of a bank, or relating to the affairs of a financial holding

company or a mixed financial holding company, which he has acquired

in the performance of his duties or the exercise of his functions

under this Act or any regulations made or Banking Rules or Conduct

of Business Rules issued thereunder except -

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

this Act or any regulations made or Banking Rules or

Conduct of Business Rules issued thereunder; or

(b) for the purpose of the performance of his duties or the

exercise of his functions;

(c) when lawfully required to do so by any court or tribunal or

under a provision of any law;

(d) for the purpose of enabling the Central Bank or the

competent authority, as the case may be, to satisfy

their respective obligations arising under Malta’s

international commitments; or

(e) when the customer expressly consents, in writing, to

the disclosure of information relating to his affairs, to

the extent authorised by the customer.

(3) Where an officer of a credit 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 the regulations

made under article 12 of the Prevention of Money Laundering Act,

and any procedures and guidance issued thereunder, and such

disclosure shall not constitute a breach of confidentiality.

(4) Officers of the competent authority and of the Central

Bank, including past and present officers, as well as auditors or

experts acting on behalf of the competent authority or the Central

Bank, shall be governed by the obligation of professional secrecy

and shall not disclose information obtained in the course of carrying

ou t s up e rv i s o r y a nd o th e r d u ti e s u n l e s s s u c h d is c l o s ur e o f

information be done in summary or collective form, such that

individual credit institutions cannot be identified, without prejudice to

the provisions of the Criminal Code

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

Provided further that where a credit institution has been

declared bankrupt or is being compulsorily wound up, confidential

information which does not concern third parties involved in

attempts to rescue that credit institution may be disclosed in civil or

commercial proceedings.

(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 credit institutions

and 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 (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.

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

(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 the publication by the EBA of the

results of Union-wide stress tests.

(6) Notwithstanding the provisions of the Professional Secrecy

Act and of article 257 of the Criminal Code, a credit institution

may, where necessary for the proper carrying out of its activities or

for the fulfilment of its obligations, communicate any information

which is in its possession and which is related to the affairs of a

customer or of a connected person to

(a) other members of the group of companies of which that

credit institution forms part, which carry out any

activities licensed or authorised by the competent

authority under this Act, the Trusts and Trustees Act,

the Investment Services Act, the Financial Institutions

Act or the Insurance Business Act, or which otherwise

carry out activities equivalent to those activities

mentioned in this paragraph, and which are authorised

by an overseas authority in a recognised jurisdiction, as

well as the credit institution’s holding company or

financial holding company or mixed financial holding

company or mixed activity holding company, where this

is necessary for the proper carrying out of its activities or

for the fulfilment of its obligations or for the carrying out

of risk management, audit or compliance processes of the

credit institution or of the group of companies of which it

forms part; or

(b)

any auditor or expert engaged by the credit institution

to carry out a compliance assessment, monitoring,

auditing or a similar review in relation to any of the

activities or risk management, audit or compliance

processes of the credit institution or of the group of

companies of which it forms part or in order to assess

the credit institution’s compliance with any statutory

obligations relating to the prevention of money

laundering and the funding of terrorism;

(c) an outsourcing service provider in whose favour a

credit institution has outsourced any of its activities.

This shall be without prejudice to article 19A

Provided that, for the purposes of this sub-article, any

such communication of information shall be made

subject to all proper controls and safeguards, so that it

shall be the responsibility of the credit institution to

ensure that the group company member, the auditor or

expert, or the outsourcing service provider, as the case

may be, is subject to equivalent obligations of data

protection, confidentiality and care as required under

Maltese law and any European Union law, including the

GDPR

Provided further that for the purpose of this article,

advertising, marketing or promotion, shall not, under

any circumstances, be considered as necessary for the

proper carrying out of the activities of a credit

institution or for the fulfilment of its obligations

Provided further that communication of information

made in terms of paragraphs (a) to (c) shall be without

prejudice to any provision of the Prevention of Money

Laundering and Funding of Terrorism Regulations.

(7) Where the competent authority receives confidential

information under sub-articles (4) and (5), it shall use s u c h

information only in the course of its duties and only for any of the

following purposes -

(a) to check that the conditions governing access to the

activity of credit institutions are met and to facilitate

monitoring, on a non-consolidated or consolidated

basis, of the conduct of such activity, especially with

regard to the monitoring of liquidity, solvency, large

exposures and administrative and accounting

procedures and internal control mechanisms;

(b) to impose penalties;

(c) in an appeal against a decision of the competent

authority pursuant to article 10 and in any court

proceedings before the Court of Appeal in terms of

article 21(14) of the Malta Financial Services Authority

Act;

(d) in court proceedings initiated pursuant to special

provisions provided for in European Union law

adopted in the field of credit institutions.

(8) The competent authority, when processing personal data for

the purposes of this Act and any regulations and, or Banking Rules

and, or Conduct of Business Rules issued thereunder, shall do so in

accordance with any applicable legislation on data protection.

(9) The provisions of article 25(2) and sub-articles (4), (5) and

(7) of this article shall be without prejudice to the powers of

investigation conferred on the European Parliament pursuant to

Article 226 of the Treaty on the Functioning of the European

Union.

(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.

(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 or any regulations made or Banking Rules or

Conduct of Business Rules issued thereunder;

(c) makes a statement, promise or forecast which he

knows to be misleading, false or deceptive, or

dishonestly conceals any material facts;

(d) recklessly makes (dishonestly or otherwise) a

statement, promise or forecast which is misleading,

false or deceptive; or

(e) contravenes or fails to comply with any of the

provisions of articles 2A, 5(1) and (2), 6(1), 6A, 12, 13,

17B, 21(2), 22(7), 23(4), 24, 28(a), 29(7), 32, 33(b),

and 34(2) and (4),

shall be guilty of an offence

Provided that, with respect to paragraphs (c) and (d), a

person shall be guilty of an offence if he makes the statement,

promise or forecast or conceals the facts for the purpose of

inducing, or is reckless as to whether it may induce, another person

(whether or not to the person to whom the statement, promise or

forecast is made or from whom the facts are concealed) -

(i)

to make, or refrain from making, a deposit with

him or any other person; or

(ii) to enter, or refrain from entering, into an

agreement for the purpose of making such a

deposit

Provided further that, with respect to paragraphs (c) and

(d), a person shall not be guilty of an offence unless -

(i)

the statement, promise or forecast is made in or

from Malta, or the facts are concealed in or from

Malta, or arrangements are made in or from

Malta for the statement, promise or forecast to

be made or the facts to be concealed;

(ii) the person on whom the inducement is intended

to or may have effect on is in Malta; or

(iii) the deposit is or would be made, or the

agreement is or would be entered into, in Malta.

(2) Any person who is knowingly a party to, or procures or aids

and abets the commission of any offence under sub-article (1), shall

be guilty of an offence and shall be liable to the same penalties as

the principal offender.

(3) Any person found guilty of an offence shall, on conviction,

b e l i ab l e t o a f i n e (m u l t a ) n o t e x c e e d i n g t w o m i l l i o n e u r o

(€2,000,000) or to a term of imprisonment not exceeding three

years or to both such fine and imprisonment.

(4) No proceedings for an offence under this Act shall be

commenced without the sanction of the Attorney General.

(1) Without prejudice to the provisions of articles

29AA(1)(c), 35 and 35B and to any regulations made under articles

3(1)(a), 3(1)(c) and 3(1)(e), 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, or any regulations

made or Banking Rules issued thereunder, or the CRR, or such

pe r s o n h a s f a i l e d to co m p l y w it h a d ir e c t iv e i s s u e d b y t h e

competent authority under this Act, or any regulation made or

Banking Rules or Conduct of Business Rules issued thereunder, or the

CRR, or any binding legal instruments issued under the CRD, the

competent authority may, by notice in writing and without recourse

to a court hearing, impose on such person an administrative penalty

of -

(a) up to twice the amount of the benefit derived from the

breach where that benefit can be determined;

(b) in the case of a natural person, up to five million euro

(€5,000,000); or

(c) in the case of a legal person, up to 10% of the total

annual net turnover of the undertaking in the preceding

business year including the gross income consisting of

interest receivable and similar income, income from

shares and other variable or fixed-yield securities, and

commissions or fees receivable in accordance with

Article 316 of the CRR

Provided that, in the case of a subsidiary of a parent

undertaking, the relevant gross income shall be the gross income

resulting from the consolidated account of the ultimate parent

undertaking in the preceding business year.

(2) 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.

(3) Where the competent authority decides to impose an

administrative penalty in terms of this Act or any regulations made

thereunder, it shall notify the person on whom the penalty is being

imposed by means of a notice in writing.

(4) Where the person upon whom the notice referred to in sub-

article (3) is served -

(a) fails to pay to the competent authority the amount of

the penalty within a period of thirty days of the service

of the notice, and fails to appeal from the decision of

the competent authority to the Financial Services

Tribunal; or

(b) appeals to the Financial Service Tribunal and fails

within a period of fifteen days from the decision of the

Tribunal to pay the administrative penalty as

confirmed or as reduced by that Tribunal,

then, in every case, the amount of the administrative penalty, as

originally imposed or as reduced, as the case may be, shall be due

to the competent authority as a civil debt, and the provisions of

sub-article (5) shall apply.

(5) A notice as is referred to in sub-article (3), or the decision

of the Financial Services Tribunal, as the case may be, shall upon

the service by judicial act of a copy thereof on the person indicated

in the notice, constitute an executive title for all effects and

purposes of Title VII of Part I of Book Second of the Code of

Organization and Civil Procedure.

(6) The imposition by the competent authority of an

administrative penalty in terms of this Act, or any regulations made

thereunder, shall be without prejudice to any other consequences 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.

(1) The competent authority shall publish, on its official

website and in any other media as it considers appropriate, any

administrative penalty or penalties imposed under the provisions of

this Act or of any regulations made or Banking Rules or Conduct of

Business Rules issued thereunder, of the CRR, or of any binding legal

instruments issued under the CRD. Such publications shall include

information on the type and nature of the breach and the identity of

the person on whom the penalty is imposed, without undue delay

after that person is informed of those penalties

Provided that in cases where 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 in any other media as it considers

appropriate, information on the status of the appeal and the

outcome thereof.

(2) The competent authority shall publish the penalties

imposed under the provisions of this Act or of any regulations made

or Banking Rules or Conduct of Business Rules issued thereunder, of

the CRR, or of any binding legal instruments issued under the CRD,

on an anonymous basis, in any of the following circumstances

(a) where the penalty is imposed on a natural person and,

following an obligatory prior assessment, publication

of personal data is found to be disproportionate;

(b) where publication would jeopardise the stability of

financial markets or an on-going criminal

investigation;

(c) where publication would cause, insofar as it can be

determined, disproportionate damage to the credit

institutions or natural persons involved

Provided that, with respect to paragraphs (a), (b) and (c),

publication on an anonymous basis in any such circumstances shall

be an exceptional measure which needs to be justified by a detailed

report compiled by the competent authority

Provided further that, where the circumstances referred to

in this sub-article are likely to cease within a reasonable period of

time, publication under this article may be postponed for such a

period of time.

(3) Information published in terms of this article shall remain

on the official website of the competent authority for a period of

not less than five years. Personal data shall be retained on the

official website of the competent authority and in any other media

i t c o n s i d e r s a p p r o p r i a t e o n l y f o r t h e p e r i o d n e c e s s a r y, i n

accordance with the provisions of Maltese legislation on data

protection.

In exercising its supervisory powers in accordance with this

Act and any regulations made and, or Banking Rules and, or Conduct

of Business Rules issued thereunder, with the CRR and with any

binding legal instruments issued under the CRD, the competent

authority shall, in its decisions, state the grounds on which such

decisions have been based.

The provisions of this Act shall not apply to the Central

Bank, save where and to the extent that the Central Bank is referred

to by name.

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 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.

(3) By way of derogation from article 11C(1), where a third-

country group operates through a credit institution licensed in terms of

this Act, and through one or more other institutions in the European

Union and with a total value of assets in the European Union equal to or

greater than forty billion euro (€40,000,000,000) on 27 June 2019, the

credit institution licensed in terms of this Act shall ensure that the

intermediate EU parent undertaking referred to in article 11C(1) or the

two (2) intermediate EU parent undertakings referred to in article

11C(2), as the case may be, shall be established by 30 December 2023.