INSOLVENCY PRACTITIONERS ACT

CHAPTER 632

INSOLVENCY PRACTITIONERS ACT

AN ACT to provide for the transposition of Directive (EU) 2019/1023,

and to regulate the insolvency practitioner, and to make provision for matters

ancillary or incidental thereto or connected therewith.

23rd December, 2022

ACT XXV of 2022.

PART I

Preliminary Provisions

(1)

The short title of this Act is the Insolvency

Practitioners Act.

(2)

The scope of this Act is to provide for a modern framework

to strengthen the efficiency and effectiveness of the existing legislative

framework relating to insolvency through regulation of the activities of

insolvency practitioners, and to partially transpose Directive (EU)

2019/1023 of the European Parliament and of the Council of 20 June

2019 on preventive restructuring frameworks, on discharge of debt and

disqualifications, and on measures to increase the efficiency of

procedures concerning restructuring, insolvency and discharge of debt,

and amending Directive (EU) 2017/1132 (Directive on restructuring

and insolvency).

In this Act, unless the context otherwise requires

"competent authority" means the Insolvency and Receivership

Service within the Malta Business Registry established by the Malta

Business Registry (Establishment as an Agency) Order;

"connected undertaking" means an undertaking which is effectively

managed or promoted as one practice with the registered firm or as a

related undertaking of the registered firm;

"EEA State" means a state which is a contracting party to the

agreement on the European Economic Area signed in Porto on 2 May

1992 as amended by the Protocol signed in Brussels on 17 March

1993, and as amended by any subsequent Acts;

"insolvency practitioner" means a person who is authorised, by the

competent authority, to carry out the functions of an insolvency

practitioner in accordance with article 4(2);

"Minister" means the Minister responsible for the Malta Business

Registry;

"principal" means every member of the administrative or

management body of a registered firm, and shall include any person

INSOLVENCY PRACTITIONERS

who is authorised to represent the registered firm for any judicial or

legal purpose, and any person who is responsible for directing the

fulfilment of any engagements taken on by the registered firm;

"recognised jurisdiction" means a state that is a member of the

European Union or an EEA State, or any other jurisdiction approved

by notice of the Minister from time to time for the purpose of this

definition;

"registered firm" means an entity, regardless of its legal form,

formed in accordance with article 6 and any connected undertaking;

"Tribunal" means the Administrative Review Tribunal established

by article 5(1) of the Administrative Justice Act.

PART II

Authorisation to Act as Insolvency Practitioner

(1)

No person shall exercise the functions of an

insolvency practitioner in terms of article 4, or hold himself out as

being available to act as an insolvency practitioner, unless he is duly

authorised by the competent authority.

(2)

A person shall not qualify for an authorisation under article

4 unless such person

(a)

is authorised to exercise the profession of an

advocate, accountant or auditor, whether in Malta or in another

recognised jurisdiction, or holds such other qualification as the

competent authority may, by directive, prescribe as being

sufficient

Provided that the issuance of an authorisation to

act as an insolvency practitioner in terms of this Act shall not,

of itself, entitle such person to carry out the functions of an

advocate, accountant or auditor, whether in Malta or in another

recognised jurisdiction, where the person would not otherwise

be so authorised;

(b)

has satisfied the competent authority that he

possesses sufficient competence in the fields of expertise

pertinent to the performance of the functions of an insolvency

practitioner, as may, from time to time, be further defined in

directives issued by the competent authority under this Act;

(c)

has satisfied the competent authority that he is fit

and proper to carry out the functions of an insolvency

practitioner, and has not had any previous authorisation granted

under this Act withdrawn due to misconduct; and

(d)

has satisfied such other additional criteria or

requirements as may, from time to time, be further provided for

in any regulations or directives made under this Act.

(3)

A person shall not qualify for an authorisation in terms of

article 4 where

(a)

he is interdicted,

incapacitated

or

is

an

undischarged bankrupt;

(b)

he has been convicted of any of the crimes

affecting public trust or of theft or of fraud or of knowingly

receiving property obtained by theft or fraud;

(c)

he is a minor who has not been emancipated; or

(d)

he is subject to a disqualification order in terms of

article 320 of the Companies Act.

(4)

Any person who, for the purpose of obtaining an

authorisation under this Act, gives any false information or otherwise

acts in a deceitful or fraudulent manner, shall be guilty of an offence

and shall, on conviction, be liable for each offence to a fine (multa) not

exceeding twelve thousand euro (€12,000) or to imprisonment of not

more than twelve (12) months or to both such fine and imprisonment.

(5)

Subject to the provisions of article 4, any person who carries

out the functions of an insolvency practitioner without being

authorised to do so under this Act, or holds himself out to a third party

as being a person who is authorised to act as an insolvency practitioner

when he is not so authorised, shall, on conviction, be liable for each

offence to a fine (multa) not exceeding twenty-five thousand euro

(€25,000) or to imprisonment of not less than two (2) years and not

more than five (5) years, or to both such fine and imprisonment.

(1)

An authorisation to exercise the functions of an

insolvency practitioner shall be issued by the competent authority

following an application by any person who, in the view of the

competent authority, has satisfied the requirements of article 3 and

such other conditions as the competent authority may, by directives,

prescribe.

(2)

Notwithstanding the provisions of any other law, an

authorisation issued by the competent authority shall entitle the

insolvency practitioner to

(a)

act as an insolvency practitioner for the purposes

of the Pre-Insolvency Act;

(b)

act as a bankruptcy trustee for the purposes of

Part III of the Commercial Code;

INSOLVENCY PRACTITIONERS

(c)

act as a liquidator, special controller,

administrator, provisional administrator, or special manager in

terms of the Companies Act; and

(d)

carry out any other function requiring the

competence of an insolvency practitioner as may be provided

for in any other law, or as the competent authority may, by

directives, prescribe.

(3)

Notwithstanding the provisions of this article, the competent

authority may at its own discretion provide for different categories of

authorisations.The competent authority may also, at its own discretion,

limit the provision of services by the insolvency practitioners so

authorised to one (1) or more categories only.

(4)

The Minister, acting on the recommendation of the

competent authority, may, from time to time, make regulations to

ensure that any function performed by the insolvency practitioner in

terms of sub-article (2)(c) is subject to oversight, supervision and

regulation that is at least commensurate with the provisions of this

Act.

(5)

For the purposes of this Act, a person shall not be deemed to

be exercising the functions of an insolvency practitioner where such

person is acting as the employee or assistant of an insolvency

practitioner and takes no material decisions without the express

direction of the insolvency practitioner

Provided that such a person may not hold himself out as an

insolvency practitioner in terms of article 5.

(1)

An insolvency practitioner shall be entitled to use the

designation "insolvency practitioner" and the abbreviation "IP".

(2)

Any person who, not being an insolvency practitioner,

assumes the title or designation of "insolvency practitioner" or its

abbreviation "IP", or in any other manner falsely indicates entitlement

to exercise the functions of an insolvency practitioner in Malta, shall

be guilty of an offence and shall, on conviction, be liable for each

offence to a fine (multa) not exceeding two thousand and three

hundred euro (€2,300) and in respect of a second or subsequent

offence to imprisonment for not more than three (3) months or to both

such fine and imprisonment

Provided that the use on any card, letterhead, sign, board,

plate, or other written, printed or engraved device, instrument or

document, of the words "insolvency practitioner" or the abbreviation

"IP", whether in the singular or plural form, in relation to a name, shall

be sufficient evidence of the knowledge of such use by the person in

relation to whose name the said words or abbreviations are used,

unless such person proves that the use was made without his

knowledge and that, upon becoming aware of the use, he took

adequate steps to stop it.

(1)

Any entity which provides evidence to the satisfaction

of the competent authority that it is capable of satisfying the

requirements of this Act, shall be entitled to be registered with the

competent authority as a registered firm and, subject to compliance at all

times with the requirements of this Act, shall, upon registration, be

authorised to carry out the functions of an insolvency practitioner in

terms of article 4(2)

Provided that the competent authority may, at its own

discretion, provide for different categories of authorisations. The

competent authority may also, at its own discretion, limit the provision

of services by the insolvency practitioners so authorised to one (1) or

more categories only.

(2)

The responsibility for the performance of any act or function

referred to in article 4(2) by a registered firm shall, at all times, be

assumed by at least one (1) principal, being an insolvency practitioner,

who shall be the person under whose instruction that act or function

shall be carried out. Upon assuming such responsibility a principal or

insolvency practitioner, shall become, and at all times remain, jointly

and severally liable with the registered firm for any act or function

carried out by the registered firm or by any officer, principal, agent, or

employee thereof

Provided that, where more than one (1) principal or

insolvency practitioner has assumed the said responsibility, such

persons shall be jointly and severally liable

Provided further that the registered firm shall, without undue

delay, furnish the competent authority with such information as the

competent authority may reasonably require or as may be prescribed in

this Act and any regulations or directives issued in terms of this Act, or

any other relevant law regarding the insolvency practitioner or

insolvency practitioners who are responsible for any act or function

carried out by a registered firm in terms of article 4(2).

(3)

A registered firm may hold itself out as being a registered

firm in, or together with, its name, as the case may be.

(4)

Upon the registration of the registered firm in terms of this

article, the principals shall, for so long as the registered firm is

registered, be authorised to act in the name and on behalf of the

registered firm.

(1)

A registered firm shall be entitled to use the

designation of "insolvency practitioners" and the abbreviation "IPs".

(2)

Any entity which makes use of the designation of

INSOLVENCY PRACTITIONERS

"insolvency practitioners" or the abbreviation "IPs", in relation to a

firm or entity that is not registered in terms of article 6 or which does

not satisfy the requirements of article 6, or which knowingly makes

use of a name falsely implying the existence of a registered firm, or

which does any other act with the intention to create the belief that any

one of the facts aforesaid exists when in fact it does not, shall be guilty

of an offence and shall, on conviction, be liable for each offence, in

respect of a first offence to a fine (multa) not exceeding two thousand

and five hundred euro (€2,500), and in respect of a second or

subsequent offence to a fine (multa) not exceeding twelve thousand

euro (€12,000) or to imprisonment for not more than three (3) months

or to both such imprisonment and fine, and in the case of a continuing

offence to an additional fine (multa) not exceeding two hundred and

fifty euro (€250) for each day during which the offence continues

Provided that the use on any card, letterhead, sign, board,

plate, advertisement or other written, printed or engraved device,

instrument or document, of the words "insolvency practitioners" or the

abbreviation "IPs", whether in the singular or plural form, in relation

to a name, shall be sufficient evidence of the knowledge of such use by

the person in relation to whose name the said words or abbreviations

are used, unless such person proves that the use was made without his

knowledge and that, upon becoming aware of the use, he took

adequate steps to stop it.

PART III

The Competent Authority

(1)

The competent authority shall be vested with the

responsibility and authority to regulate the activities of insolvency

practitioners and registered firms in the performance of their functions

in terms of article 4(2). The competent authority may also appoint

committees, of which the chairman shall be a member of the

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

remuneration, and shall otherwise assume competence for such other

functions as may be specified by this Act or as may by notice be

prescribed by the Minister from time to time.

(2)

In the performance of its functions in terms of this Act, the

competent authority

(a)

shall make its own rules and otherwise regulate

its own procedure; and

(b)

shall make use of such funds as the Minister or

the Malta Business Registry may from time to time make

available to it, as well as such funds as it may collect from any

administrative penalties or fees or otherwise in terms of any

regulations made under this Act.

(1)

The competent authority shall regulate the activities

of insolvency practitioners and registered firms in the performance of

their functions in terms of article 4(2), and shall also have the

following functions

(a)

to consider applications for the issuance of

authorisations in terms of article 4 and registrations in terms of

article 6;

(b) to oversee and regulate the conduct of insolvency

practitioners and registered firms in the exercise of their

functions in terms of article 4(2), and to establish appropriate

mechanisms and procedures as the competent authority may

deem conducive to the efficient and effective oversight and

regulation of the activities thereof;

(c)

to collaborate with the Judicial Studies Committee

or any other body responsible for the training of members of the

judicial authorities to ensure that members of the judicial

authorities responsible for adjudicating matters in relation to

those functions listed in article 4(2), receive suitable training;

(d)

to ensure that insolvency practitioners receive,

and are compelled to attend, suitable training on an ongoing

basis that shall be conducive to the effective performance of

their functions. In the event of a failure by the insolvency

practitioner to comply with any requirements as may be

prescribed by the competent authority from time to time in this

regard, the competent authority shall impose any administrative

penalties, other measures, or take any further action in terms of

articles 18 or 19 as the competent authority may deem

appropriate;

(e)

to publish supplementary rules regulating the

manner in which insolvency practitioners and registered firms

are to be remunerated in connection with the performance of

their functions in terms of article 4(2), if and as the competent

authority deems necessary;

(f)

to develop, publish, and maintain or adopt, a code

of practice providing guidance on the required conduct of

insolvency practitioners in the fulfilment of their functions in

terms of article 4(2) and their adherence to the provisions of

this Act, if and as the competent authority considers necessary;

(g)

to initiate and conduct investigations, as and

when necessary, in relation to the compliance of insolvency

practitioners and registered firms with the provisions of this

Act;

(h)

to address cases of professional misconduct and

INSOLVENCY PRACTITIONERS

other disciplinary proceedings in respect of insolvency

practitioners or registered firms who, by act or omission,

violate the provisions of this Act, any regulations or directives

made under it and, or any rules which the competent authority

adopts by directive, including rules contained in a published

code of conduct;

(i)

to distribute and disseminate knowledge to the

public about the role and functions of the insolvency

practitioner and registered firms and the options available to

debtors in financial distress, and any other matter as the

competent authority may deem relevant;

(j)

to take such measures as may be reasonably

necessary to protect the public interest and the integrity of the

role of insolvency practitioners, including the placing of

restrictions, the imposition of administrative penalties and other

similar measures on insolvency practitioners and registered

firms, or upon any person holding itself out as an insolvency

practitioner, or upon any person performing such functions

whether subsequent to an authorisation by the competent

authority or not, which unless otherwise stated in this Act shall

not exceed, for each individual incident, twelve thousand euro

(€12,000) for an insolvency practitioner or twelve thousand

euro (€12,000) for a registered firm, and, in addition, the

competent authority may also impose daily administrative

penalties, not exceeding one hundred and fifty euro (€150) per

day on insolvency practitioners who fail to comply with the

orders or directions of the competent authority;

(k)

to advise, make recommendations or otherwise

express its views to the Minister on how the procedures made

available in terms of the Pre-Insolvency Act, Part III of the

Commercial Code, or insolvency proceedings in terms of the

Companies Act or the Civil Code as applicable, may be

conducted in an efficient manner to expedite treatment of

procedures;

(l)

to advise, or make recommendations or otherwise

express its views to the Minister on any other matter which the

Minister is to consult with the competent authority, or on which

the competent authority is to make recommendations to the

Minister, or on which the views of the competent authority are

sought by the Minister;

(m) to facilitate the inclusion, by promoting in any

manner it may deem necessary, the use of electronic means of

communication in the course of the procedures in terms of

article 4(2), including with respect to

(i)

the filing of claims and applications;

(ii)

the submission of a proposed restructuring

plan, in terms of the Pre-Insolvency Act or the

submission of the proposed terms of a debt agreement or

bankruptcy order in terms of the Commercial Code;

(iii)

the notifications to creditors;

(iv)

the holding of sittings and meetings;

(v)

voting at all such sittings or meetings; and

(vi)

the lodging of challenges, objections and

appeals.

(n)

to inform any authority that it deems appropriate

of any sanctions or restrictions imposed by it or any other

matters that the competent authority considers necessary to

protect the public interest, on any insolvency practitioner or

registered firm;

(o)

to publish guidelines on the interpretation of this

Act and any regulations or directives issued under it, if and as

the competent authority may deem necessary; and

(p)

to collect and aggregate data in accordance with

Part VII of this Act.

(2)

The competent authority shall also publish annual reports

intended to summarise its annual activities and the performance of its

functions during the respective year, covering also the development of

the role and functions of insolvency practitioners in Malta, and to

provide information on recommendations issued and the results

thereof, as well as on the current supervisory and oversight

mechanisms employed by the competent authority, and such other

things as the competent authority may deem relevant.

(1)

The competent authority shall establish and maintain

a public register to be known as the Register of Insolvency

Practitioners, hereinafter referred to as the "Register", that shall

separately identify the following

(a)

the insolvency practitioners;

(b)

the registered firms;

(c)

any categorisation of the functions of each

insolvency practitioner, and the extent of the authorisation of

each insolvency practitioner and registered firm;

(d)

the insolvency practitioners whose authorisation

has been suspended, revoked or withdrawn in full or in part by

reference to any category of authorisation;

INSOLVENCY PRACTITIONERS

(e)

the registered firms whose registration has been

suspended, revoked or withdrawn in full or in part by reference

to any category of authorisation; and

(f)

the insolvency practitioners or registered firms

who are deemed by the competent authority to be in default of

their obligations in terms of this Act or of any regulations or

directives made under it.

(2)

The details kept in the Register shall include the following

details

(a)

the name and surname, in the case of an

insolvency practitioner, or the name and designation of the type

of legal entity of the registered firm, in the case of a registered

firm;

(b)

the office address and electronic mail address of

each insolvency practitioner and registered firm; and

(c)

in the case of a registered firm, a list of the

insolvency practitioners and the information of the insolvency

practitioners employed or otherwise connected with that

registered firm in terms of paragraph (a)

Provided that the Minister may, upon the recommendation

of the competent authority, prescribe further details to be kept in the

Register.

(3)

The competent authority shall be authorised to receive

further information from insolvency practitioners including

(a)

the date of birth, and identity card number or

passport number of the insolvency practitioners, and in the case

of the registered firms the registration number of the registered

firm, and the information in terms of this article in relation to any

insolvency practitioner employed or otherwise connected with

the registered firm;

(b)

the warrant or licence number of the insolvency

practitioners.

(4)

Every insolvency practitioner and registered firm shall

submit to the competent authority any information required in terms of

this article, and shall update the competent authority of any changes

without unnecessary delay and in no case later than fourteen (14) days

of such change.

(5)

Any change in the office address or electronic mail address

of an insolvency practitioner or registered firm shall become effective

against the competent authority within fourteen (14) days from the day

it notifies the competent authority with the change.

(1)

The competent authority shall have all the

supervisory and investigatory powers that are necessary for the

exercise of its functions under this Act, including but not limited to the

power

(a)

to request data, information, or documentation

held by any person in any form, as may be relevant to the

carrying out of the competent authority’s functions and to

receive or take a copy thereof;

(b)

to obtain information related, in any manner, to

the performance, by any person, of functions pertaining to an

insolvency practitioner or registered firm;

(c)

to carry out on-site inspections of the working

premises of the insolvency practitioners or registered firm;

(d)

to appoint experts to carry out verifications or

investigations;

(e)

to impose the administrative penalties, and other

measures available to it in terms of article 18; and

(f)

to refer matters for criminal prosecution

Provided that the powers made available to the competent

authority in terms of this article may be exercised by the competent

authority alone, or in collaboration with other authorities, or by

application to any competent judicial authority.

(2)

In the exercise of its functions in terms of article 9, the

competent authority may consult with such persons as it may deem

appropriate, and may also appoint committees, of which the chairman

shall be a member of the competent authority, thereby establishing

their remit and remuneration, for the carrying out of such studies or

other work as the competent authority may assign to them, including

but not limited to, the establishment and operation of a system of

quality assurance.

(3)

The competent authority shall be empowered to exchange

confidential information with the competent authorities of other

Member States.

(4)

The processing of personal data processed in the exercise of

the supervisory and investigatory powers pursuant to this article shall

be carried out in accordance with the Data Protection Act and

Regulation (EU) 2016/679 of the European Parliament and of the

Council of 27 April 2016 on the protection of natural persons with

regard to the processing of personal data and on the free movement of

such data, and repealing Directive 95/46/EC (General Data Protection

Regulation).

INSOLVENCY PRACTITIONERS

The Minister may, on the recommendation of the competent

authority, make regulations not inconsistent with the provisions of this

Act, to give better effect to any of such provisions and generally to

regulate the role and functions of insolvency practitioners and

registered firms, and, without prejudice to the generality of the

foregoing, such regulations may in particular include provisions with

respect to the punishments or administrative penalties to which a

person may become liable, or other consequences or effects in the

event of any violation or non-compliance with any provision of this

Act or of any regulation or directive issued under it.

(1)

The competent authority may issue directives or

guidelines regulating the activity of insolvency practitioners or

registered firms on the following

(a)

the establishment and definition of procedures

and generally accepted procedures applicable in the

performance of the functions of an insolvency practitioner in

terms of article 4(2);

(b)

criteria for eligibility to receive an authorisation

in terms of this Act and the manner in which the competent

authority shall determine the competence of applicants for an

authorisation in the pertinent fields of expertise;

(c)

conduct of insolvency practitioners and registered

firms and the required standards of quality control, competence,

integrity and independence;

(d)

clients’ accounts and monies held on behalf of

clients and third parties;

(e)

continued professional education;

(f)

the provision of such information as may be

required from insolvency practitioners and registered firms by

the competent authority in order to enable it to carry out any of

its functions under this Act;

(g)

the establishment of a system of registration and

renewals for an authorisation or registration issued in terms of

this Act;

(h)

the meaning and interpretation of any provision

of this Act and of any regulations or directives issued under it;

or

(i)

such other matters as may be prescribed by

regulation.

(2)

Directives and guidelines issued in terms of sub-article (1)

shall be published by the competent authority in such manner so as to

ensure effective dissemination thereof.

(3)

Directives and guidelines issued in terms of sub-article (1)

shall not become operative before the lapse of one week from the

publication made in terms of sub-article (2), or such later date as may

be specified therein.

PART IV

Conduct of Insolvency Practitioners

(1)

Every insolvency practitioner or registered firm shall

provide the competent authority with such information as the

competent authority may reasonably require, or as may be prescribed

in directives issued by the competent authority under this Act, and

shall give notice to the competent authority of any relevant change in

any information previously given to it within fourteen (14) days after

the date on which the change occurs.

(2)

Where, in the course of an investigation carried on by the

competent authority, an insolvency practitioner or registered firm

intentionally alters, hides or fails to disclose, or otherwise suppresses

information relevant to an investigation or that the competent authority

demands to see in pursuance of its functions under article 11, the

insolvency practitioner, or insolvency practitioners being responsible

for the performance of a registered firm’s functions in terms of article

4(2), shall on conviction be liable to a term of imprisonment of not less

than three (3) months and not more than two (2) years, or to a fine

(multa) not exceeding fifty thousand euro (€50,000), or to both such

fine (multa) and imprisonment.

(1)

Without prejudice to any other law regulating the

removal, resignation or substitution of an insolvency practitioner or

registered firm, an insolvency practitioner or registered firm shall, in

the case of their removal or resignation from an engagement to carry

out a function listed in article 4(2) during their term of appointment,

inform the competent authority in writing of such removal or

resignation, and shall, in the event of a resignation, give adequate

explanations for the reasons thereof.

(2)

The notification referred to in sub-article (1) shall be made

within fourteen (14) days from the removal or resignation as the case

may be.

Every person who acts in breach of his professional duties

in the exercise of his functions as an insolvency practitioner, shall, if

such act or omission amounts to gross negligence, bad faith or serious

misconduct, be liable on conviction to imprisonment for a period of

not less than one (1) year and not exceeding five (5) years, and the

court may also inflict on such person a fine (multa) not exceeding sixty

thousand euro (€60,000).

INSOLVENCY PRACTITIONERS

Any agreement or arrangement purporting to exempt an

insolvency practitioner or registered firm from any liability,

responsibility or duty relative to the execution of the functions in terms

of article 4(2), except under a policy of insurance to indemnify the

insolvency practitioner against any such liability or responsibility,

shall be null and void.

(1)

In the case of a breach of any of the provisions of this

Act, or of any regulations or directives issued under it, the competent

authority shall have the power to issue administrative penalties and

reprimands, and to take such other measures as it may deem

appropriate according to the circumstances of the case.

(2)

The competent authority shall have the power to take, or

impose, at least the following administrative penalties and other

measures for breaches of the provisions of the rules under this Act or

any regulations or directives issued under it

(a)

a notice requiring the person responsible for the

breach to cease the conduct and to abstain from any repetition

of that conduct, which notice shall also be communicated to any

other regulatory or supervisory authority to whose regulation

such person may be subject;

(b)

a public statement which indicates the person

responsible and the nature of the breach, published on the

website of the competent authority;

(c)

a temporary prohibition, of up to three (3) years’

duration, banning the insolvency practitioner or registered firm

from acting as an insolvency practitioner in terms of article

4(2); and

(d)

the imposition of administrative penalties in

accordance with article 9(1)(j).

(3)

When determining the type and level of administrative

penalties and other measures mentioned in sub-article (2) or otherwise

in terms of this Act, the competent authority shall take into account all

relevant circumstances, including, without limitation to

(a)

the gravity and the duration of the breach;

(b)

the degree of responsibility of the responsible

person;

(c)

the financial strength of the responsible person,

by reference to the annual income or total turnover thereof, as

the case may be;

(d)

the level of cooperation of the responsible person

with the competent authority; and

(e)

previous breaches by the responsible legal or

natural person.

(1)

Without prejudice to any administrative penalties, or

other measures that may be imposed in terms of article 18, the

competent authority may order that an authorisation or registration

issued in terms of this Act may be revoked, cancelled, suspended, or

subjected to other conditions or restrictions ordered by the competent

authority, in accordance with the provisions of this article, if the

person to whom such authorisation was issued or the registered firm or

any of the principals of the registered firm

(a)

has been found, in the course of an investigation

conducted by the competent authority, to have acted, including

through omissions, in

(i)

bad faith, serious misconduct or gross

negligence in the exercise of his functions as an

insolvency practitioner or registered firm;

(ii)

violation of any regulation made or

directive issued in terms of this Act, where the

regulation or directive provides for the suspension,

cancellation, withdrawal or subjection to conditions of

an authorisation or registration as a consequence of such

violation;

(iii) violation of any regulations or directives

with respect to professional standards, practices or

integrity;

(iv) violation of any code of conduct issued or

adopted by the competent authority;

(v)

a grievous discreditable

manner

to

insolvency practitioners; or

(vi) a manner which fails to comply with any

condition attached to an authorisation or registration

when such failure is of a material nature;

(b)

has been found guilty by a court of law

(i)

of an offence under this Act or any

regulations made thereunder;

(ii)

of an offence under the Companies Act; or

(iii) of a crime affecting public trust or of theft

or of fraud or of knowingly receiving property obtained

by theft or fraud or of any crime punishable by a term of

imprisonment exceeding one (1) year.

INSOLVENCY PRACTITIONERS

(2)

Without prejudice to the provisions of sub-article (1)

(a)

an authorisation may be withdrawn or cancelled

by the competent authority at the request of the insolvency

practitioner;

(b)

the registration of a registered firm may be

cancelled by the competent authority at the request of the

registered firm;

(c)

an authorisation may be revoked or cancelled by

order of the competent authority, whenever the competent

authority is of the opinion that there are material circumstances

concerning the insolvency practitioner that, had the

authorisation not been issued, would disqualify such person

from being eligible in terms of article 3; and

(d)

the registration of a registered firm may be

revoked or cancelled by order of the competent authority

whenever the competent authority is of the opinion that there

are material circumstances concerning the registered firm that,

if the registered firm had not been registered, would disqualify

it from being registered.

(3)

Where an authorisation or registration is suspended for a

time or subjected to conditions, the suspension or the conditions may

be lifted by the competent authority at any time.

(4)

Where an authorisation is withdrawn in terms of sub-article

(2)(a), or where a registration is cancelled under sub-article (2)(b), a

new authorisation may be issued, or a new registration may be made,

at any time if the conditions for such issue or registration are satisfied.

(5)

Upon the revocation or withdrawal of an authorisation

issued under this Act, or during such period when the authorisation is

suspended, the person to whom the authorisation was issued shall not

be authorised to carry out the functions of an insolvency practitioner in

terms of article 4(2), and upon the cancellation of any registration of a

registered firm, or for such period when such registration is suspended,

the firm shall cease to be registered.

PART V

Appeal

(1)

There shall lie a right of appeal to the Tribunal on

any decisions made by the competent authority as listed in article

21(1), which right shall be competent to any person aggrieved by the

decision

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

Tribunal shall also explain his juridical interest in impugning the

decision appealed from.

(2)

Unless otherwise provided by the Administrative Justice

Act or any regulations made thereunder, an appeal from the decisions

or orders referred to in article 21(1) shall be made by application and

shall be filed in the registry of the Tribunal within twenty (20) days

from the date of the said decision.

(1)

Unless otherwise provided by law, an appeal shall lie

to the Tribunal from the following decisions or orders made under this

(a)

any decision of the competent authority pursuant

to the issue of an authorisation in terms of article 4;

(b)

any decision of the competent authority to

revoke, withdraw, or suspend an authorisation, or subject such

authorisation to other conditions in terms of article 19;

(c)

any decision of the competent authority to refuse

to register a firm in terms of article 6;

(d)

any decision of the competent authority to

revoke, suspend, cancel or subject to other conditions the

registration of a registered firm in terms of article 19;

(e)

any decision of the competent authority which

acquits or is decided against an insolvency practitioner or

registered firm in cases of professional misconduct, following

an investigation carried out by the competent authority;

(f)

any decision of the competent authority pursuant

to a measure taken to protect the public interest and the

integrity of the role of the insolvency practitioner in terms of

article 9(1)(j);

(g)

any decision of the competent authority to impose

administrative penalties or reprimands or other measures in

terms of this Act;

(h)

any decision taken in terms of any regulations or

directives issued under this Act, when the regulation or

directive explicitly grants a right of appeal in terms of this

article; and

(i)

any other decision of the competent authority that

the appellant may reasonably demonstrate, to the satisfaction of

the Tribunal, to have materially and unfairly aggrieved the

appellant.

(2)

The decision of the competent authority shall not be

suspended pending appeal, and shall, in the interim, be adhered to by

all the parties to whom the decision applies.

INSOLVENCY PRACTITIONERS

(3)

The Tribunal, where it considers it to be appropriate, may on

the application of a party to the appeal, suspend the decision of the

competent authority, pending the final determination of the appeal.

The Tribunal, in deciding to suspend the decision, shall state its

reasons for doing so.

(1)

The provisions of this Act establishing offences and

punishments in respect thereof shall not affect the operation of any

other law establishing offences and punishments in respect of the same

acts or omissions and shall not, in particular, affect the application of

any higher punishments under any other law.

(2)

Any actions taken by the competent authority with respect

to professional misconduct or other proceedings pursuant to a

violation of the provisions of this Act or of any regulations or

directives made under it, shall be without prejudice to any proceedings

which may be taken against the person concerned under the provisions

of the Criminal Code or of any other law, and any proceedings so taken

shall be without prejudice to any proceedings that may be taken by the

competent authority.

PART VI

Discipline

(1)

The competent authority shall appropriately disclose

to the public all the measures taken and the administrative penalties

imposed on insolvency practitioners or registered firms in terms of this

Act or the regulations or directives issued under it including the

appropriate disclosure of administrative penalties imposed. The

disclosure required by this article may take place through a website

maintained by the competent authority, or through the Registry

established in terms of article 10.

(2)

Without prejudice to the generality of sub-article (1), the

competent authority shall notify, by registered mail, or by electronic

mail any decision taken by it, from which there shall lie the right of

appeal in terms of article 21, to any person to whom such decision

applies

Provided that, in the event that the person to whom such

decision applies cannot be reached or found, the person shall be

deemed to have been validly notified by leaving a copy of such

decision at the office address, place of business, or place of work of

such person, or with a person in his service, or with his attorney or

person authorized to receive his mail, or through a notice published

within a website maintained by the competent authority.

(1)

The competent authority shall publish on its website

at least any administrative penalties or other measures imposed for

breach of the provisions of this Act, or of the directives or regulations

made under it, in respect of which all rights of appeal have been

exhausted or have expired, as soon as reasonably practicable

immediately after the person concerned has been informed of that

decision, including information concerning the type and nature of the

breach and the identity of the person on whom the administrative

penalty or other measure has been imposed.

(2)

The competent authority shall publish on its website the

administrative penalties or other measures imposed on an anonymous

basis, and in a manner which is in conformity with Maltese law, in any

of the following circumstances

(a)

where, the administrative penalty or other

measure is imposed on a natural person, the required

publication of personal data is shown to be disproportionate by

an obligatory prior assessment of the proportionality of such

publication;

(b)

where publication would jeopardise the stability

of financial markets or an ongoing criminal investigation; or

(c)

where publication would cause disproportionate

damage to the institutions or individuals involved.

(3)

The competent authority shall ensure that any publication in

accordance with sub-article (1) is of proportionate duration and that it

remains on its website for a minimum period of five (5) years after all

rights of appeal have been exhausted or have expired.

(1)

The competent authority shall establish effective

mechanisms that encourage reporting of breaches of this Act, or of the

regulations or directives made under it.

(2)

The mechanisms referred to in sub-article (1) shall include

at least

(a)

specific procedures for the receipt of reports of

breaches and their follow-up;

(b)

protection of personal data concerning both the

person who reports the suspected or actual breach and the

person who is suspected of committing, or who has allegedly

committed that breach, in compliance with the principles laid

down in the Data Protection Act and Regulation (EU) 2016/679

of the European Parliament and of the Council of 27 April 2016

on the protection of natural persons with regard to the

processing of personal data and on the free movement of such

data, and repealing Directive 95/46/EC (General Data

Protection Regulation); and

(c)

appropriate procedures to ensure the right of the

accused person to a defence and to be heard before the adoption

of a decision concerning him, and the right to seek an effective

INSOLVENCY PRACTITIONERS

remedy before a tribunal against any decision or measure

concerning him.

(3)

Registered firms shall establish appropriate procedures for

their employees to report potential or actual breaches of this Act, or of

the regulations or directives made under it through a specific channel

or channels.

PART VII

Data Collection

(1)

The competent authority shall be responsible to

collect and aggregate, on an annual basis, national data on procedures

concerning

(a)

applications

for

preventive

restructuring

procedure in terms of the Pre-Insolvency Act

(b)

applications for the declaration of bankruptcy and

a discharge of debt in terms of Part III of the Commercial Code;

and

(c)

applications for winding up due to insolvency, by

companies or commercial partnerships in terms of the

Companies Act or by legal organisations in terms of the Civil

Code.

(2)

The type of information that shall be collected by the

competent authority shall be sorted with respect to each procedure

listed in sub-article (1), and shall include, but not be limited to

(a) the number of procedures that were applied for or

opened, and of procedures that are pending or were closed;

(b)

the average length of procedures from the

submission of the application for the commencement of court

proceedings, or from the opening thereof, to their closure;

(c)

the number of applications for preventive

restructuring procedures in terms of the Pre-Insolvency Act that

were declared inadmissible, were rejected or were withdrawn

before a preventive restructuring order was issued in terms

thereof; and

(d)

the number of procedures other than those

required under paragraph (c), sorted by the outcome of the

respective procedures.

(3)

The competent authority shall sort any data that shall be

collected and aggregated in terms of sub-article (2)(a), (b) and (d), by

reference to

(a)

the size of the debtors, not being natural persons;

(b)

whether debtors subject to procedures concerning

preventive restructuring proceedings in terms of the Pre-

Insolvency Act, or insolvency proceedings in terms of the

Companies Act or the Civil Code as applicable, are natural or

legal persons; and

(c)

whether the procedures leading to a discharge of

debt in terms of Part III of the Commercial Code concern only

natural persons in the course of a trade, business, craft or

profession, or all natural persons.

(4)

The competent authority shall also collect and aggregate, on

an annual basis, data on the number of debtors which were subject to

preventive restructuring proceedings in terms of the Pre-Insolvency

Act, or insolvency proceedings, and which, within the three (3) years

prior to the submission of the application or the opening of such

proceedings, had a restructuring plan confirmed in terms of the Pre-

Insolvency Act.

(5)

Any data to be collected and aggregated in terms of this

article shall be compiled for full calendar years ending on 31

December of each year, starting with the first full calendar year

following the date of application of the implementing acts referred to

in Article 29(7) of Directive (EU) 2019/1023 of the European

Parliament and of the Council of 20 June 2019 on preventive

restructuring frameworks, on discharge of debt and disqualifications,

and on measures to increase the efficiency of procedures concerning

restructuring, insolvency and discharge of debt, and amending

Directive (EU) 2017/1132 (Directive on restructuring and insolvency).

(6)

The Minister may, acting on the recommendation of the

competent authority, make regulations as may be conducive to the

fulfilment of the Article 29(7) of Directive (EU) 2019/1023 of the

European Parliament and of the Council of 20 June 2019 on preventive

restructuring frameworks, on discharge of debt and disqualifications,

and on measures to increase the efficiency of procedures concerning

restructuring, insolvency and discharge of debt, and amending

Directive (EU) 2017/1132 (Directive on restructuring and insolvency).

(7)

Every insolvency practitioner or registered firm shall be

required to maintain a record of the data set out in terms of this article,

in respect of their own functions, and the competent authority may, at

its own discretion, request the provision of such data from the

insolvency practitioner or registered firm by not less than fourteen (14)

days from the date of such request.

(8)

Where the competent authority makes a request to a relevant

person, body or authority to provide information that is materially

necessary for the fulfilment of the competent authority’s data

INSOLVENCY PRACTITIONERS

collection functions in terms of this article, the relevant person, body

or authority shall, to the extent that is permissible, provide the

requested information to the competent authority without undue delay.

(9)

Any person who breaches the provisions of this article

which impose upon him an obligation to collect, aggregate, store, or

sort data, or communicate that data to the competent authority, shall be

guilty of an offence and shall be liable on conviction for each offence,

in respect of the first offence to a fine (multa) not exceeding one

thousand and two hundred euro (€1,200) and in respect of a second or

subsequent offence to a fine (multa) not exceeding six thousand euro

(€6,000), and in the case of a continuing offence to an additional fine

(multa) not exceeding one hundred and twenty euro (€120) for each

day during which the offence continues.

PART VIII

Miscellaneous

(1)

The competent authority, when acting in any function

assigned to it under any provision of this Act, including the officers

and employees of the competent authority, and any body established

by this Act and any member, officer or employee of that body, and any

other person appointed to perform a function on the competent

authority’s behalf under this Act, shall not be liable in damages for

anything done or omitted to be done in the discharge or purported

discharge of any such function or otherwise in the exercise of their

duties in terms of this Act, unless the act or omission is shown to have

been done or omitted to be done, as the case may be, through wilful

misconduct.

(2)

No decision of the competent authority taken in accordance

with this Act or any regulations or directives made under it may be

suspended by use of the warrant of prohibitory injunction, except to

the extent that such decision infringes a fundamental human right of

the applicant as protected by the Constitution of Malta or the European

Convention Act.

A notice or other document to be given or served under this

Act, or any regulations or directives made under it, shall be deemed to

have been duly given or served on a person if, and on

(a)

the day it has been delivered personally to such

person;

(b)

the day it has been left at the address furnished by

him to the competent authority, or to the person’s last known

address;

(c)

the following day after it has been sent to him by

post at any of the aforesaid addresses or by electronic mail; or

(d)

the day as prescribed in paragraphs (a), (b) and

(c) to or on a secretary, clerk, manager or their equivalent, or to

any principal, with regards to a registered firm

Provided that a certificate issued by the competent authority

certifying that it has sent the notice or other document that shall be

given or served under this Act, or any regulations or directives made

under it, on a particular date shall be proof of its content.

PART IX

Transitory Provisions

(1)

Any person who, on the date of the coming into force

of this Act, is authorised to exercise the profession of an advocate,

accountant or auditor, and has been appointed as a provisional

administrator, liquidator, or a special controller within the meaning of

the Companies Act, or has otherwise served as an expert or practiced

as a lawyer within the Civil Court (Commercial Section), or the Civil

Court, First Hall in commercial law or shipping law related cases

within the preceding five (5) years from the coming into force of this

Act, or otherwise proves to the satisfaction of the competent authority,

that he has adequate experience in pre-insolvency, corporate

restructuring, business finance, or liquidation, may apply to the

competent authority to receive a provisional authorisation to carry out

the functions of an insolvency practitioner in terms of article 4(2).

(2)

An applicant shall annex to the application any

documentation or information as the competent authority may deem

relevant, and shall furnish any further information as the competent

authority may subsequently request.

(3)

The competent authority shall, if it is satisfied that the

applicant in terms of sub-article (1) has the necessary knowledge,

competence, experience and resources as it may consider to be

appropriate to carry out the functions of an insolvency practitioner,

issue to the applicant a provisional authorisation that shall entitle the

recipient to carry out the functions of an insolvency practitioner in

terms of article 4(2), and, provided that the conditions in article 6

subsist, to act as the principal for a registered firm.

(4)

Any person being provisionally authorised in terms of this

article shall be subject to the full scope and application of the

provisions of this Act, and the competent authority shall act in his

respect as though he was an insolvency practitioner and otherwise in

terms of this Act and any regulations or directives issued under it.

(5)

Without prejudice to the provisions of this article, all

provisional authorisations granted in terms of this article, irrespective

of the date of issuance thereof, shall expire within twenty four (24)

months from the date of coming into force of this Act.