7 tal-2003 - Regolamenti tal-2003 għal Skema ta' Garanzija ta’ Depożiti Arranġament tar-regolamenti

The title of these regulations is the Deposit Guarantee Scheme Citation and date of

Regulations, 2003, and shall come into force on such date as the Minister commencement.

may by Order in the Gazette establish, and different dates may be

appointed for different provisions or different purposes of these

regulations.

Interpretation.

(1) In these regulations, unless the context otherwise requires

“Act” means the Banking Act;

“branch” shall have the same meaning as that assigned to

the words in article 2 of the Act and, for the purposes of these

regulations, is a place of business which forms a legally dependent

part of a credit institution and from which some or all of the

activities for which the credit institution has been authorised are

conducted. All the places of business set up in any one country by

a credit institution whose head office is in Malta or in another

country shall be regarded as a single branch;

“business of banking” shall have the same meaning as that

assigned to the words in article 2 of the Act;

“Central Bank” means the Central Bank of Malta as defined

by the Central Bank of Malta Act;

“competent authority” means the competent authority under

the Act;

“credit institution” shall have the same meaning as that

assigned to the words in article 2 of the Act.

“deposit” shall have the same meaning as that assigned to the

words in article 2 of the Act;

“depositor” means a person who has entrusted a deposit to a

credit institution subject to the exclusions listed in the First

Schedule to these regulations;

“eligible deposit” shall have the same meaning assigned to it

by regulation 18 of these regulations;

“Financial Services Tribunal” means the Tribunal

established in terms of the Malta Financial Services Authority Act;

“joint account” means an account opened in the names of

two or more persons or over which two or more persons have rights

that may be exercised under the signature of one or more of those

persons;

“Management Committee” means the Compensation

Schemes Management Committee established under regulation 3

of these regulations;

“participant” means a credit institution participating in the

Scheme in terms of regulation 11 of these regulations;

“the Scheme” means the Deposit Guarantee Scheme

established under regulation 3 of these regulations.

Establishment of the

(1)

There shall be established a Deposit Guarantee

Scheme.

(2)

The Scheme shall be a body corporate having a distinct

legal personality and shall be capable, subject to the provisions of the

Act and of these regulations, of entering into contracts of borrowing or

otherwise incurring indebtedness for the purposes of its functions, of

acquiring, holding and disposing of any kind of property for the purposes

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

entering into all such transactions as are incidental or conducive to the

exercise or performance of its functions.

(3)

The Scheme shall be managed and administered by

and be under the general control of the Management Committee

appointed in terms of regulation 5 of these regulations.

(4)

The legal and judicial representation of the Scheme

shall vest in the chairperson of the Management Committee

Provided that and without prejudice to the foregoing, that the

Management Committee may vest any one or more of its members or

of the officers or agents of the Scheme with legal or judicial

representation.

Without prejudice to any other power or function conferred

on it by these regulations or by any other law, it shall be the function of

the Scheme>

(a)

to establish and maintain, after consultations with the

competent authority, arrangements for the making of payments to

depositors in accordance with these regulations;

(b)

to maintain a fund or funds out of which payments

shall be made to depositors and to meet such other payments or

expenses as may be paid out of the fund or funds in accordance

with these regulations;

(c)

to place contributions made by participants and any

other funds managed and administered by the Scheme on deposit

or to invest such contributions and funds;

(d)

to advise the competent authority on matters relating

to compensation of depositors; and

(e)

to process claims for compensation by depositors as

expeditiously as possible and to ensure that compensation is paid

out without undue delay.

(1) The Management Committee shall be appointed by Composition of the

Management

the competent authority and shall consist of a chairperson and not more Committee.

than six other members including>

(a) an officer, not below managerial grade, performing duties

with the competent authority possessing the necessary expertise

and experience in financial services;

(b) one person nominated by an association or other body

representing persons holding a licence under the Investment

Services Act and recognised for such purpose by the competent Cap. 370

authority;

(c) one person nominated by an association or other body

representing credit institutions and recognised for such purpose

by the competent authority;

(d) an officer, not below managerial grade, performing

duties with the Central Bank; and

(e) a person, who because of his experience, qualifications

or activities is considered as being able to state and represent the

point of view of consumers

Provided that whenever for any reason whatsoever, the

associations or other bodies representing licence holders and credit

institutions referred to in paragraphs (b) and (c) of sub-regulation 1 of

this regulation fail to nominate, within the time given to it by the

competent authority, the person it is required to nominate, the competent

authority shall appoint the persons, or the remaining person, at its

discretion.

(2) The members of the Management Committee shall

be appointed from among persons who, in the view of the competent

authority, have proven experience and are qualified in financial services,

management, or possess any other relevant professional or commercial

knowledge and experience.

(3) The member of the Management Committee

nominated by an association or other body representing licence holders

and the member nominated by an association or other body representing

credit institutions shall not be eligible for appointment if he has a

financial or other interest as is likely to affect prejudicially the discharge

by him of his functions under these regulations.

(4) Every member of the Management Committee,

including the chairperson, shall hold office, for such period and upon

such terms and conditions as may be determined by the competent

authority and indicated in the letter of appointment. Such term of

office shall be of not less than three years and not more than five years.

Every member of the Management Committee, including the

chairperson, shall be eligible for re-appointment.

(5) A member of the Management Committee may be

relieved of office by the competent authority on the grounds of inability

to perform the functions of his office, whether due to infirmity of mind

or of body, or of misbehaviour; and for the purposes of this paragraph,

repeated and unjustified non-attendance of meetings of the Management

Committee may be deemed to amount to misbehaviour.

(6) A member of the Management Committee may resign

from office by letter addressed to the competent authority.

(7) The competent authority may fill any vacancy

occurring in the Management Committee for any reason whatsoever,

but having regard to the provisions of sub-regulation (1) of this

regulation.

(8) Notice of the names of the members of the

Management Committee (and any resignation, dismissal and new

appointment) shall be published in the Gazette.

(9) The competent authority shall establish any

remuneration to be paid to the members of the Management Committee.

(10) The Consumer Complaints Manager appointed in terms

of Article 20 of the Malta Financial Services Authority Act shall serve Cap. 330

as secretary to the Management Committee and shall be responsible to

make the necessary preparations for the meetings of the Committee

and to keep the minutes thereof.

(1) The Management Committee shall have the power to Powers and duties

of the Management

appoint officers or agents of the Scheme and to grant them such powers Committee.

or authority as it may deem appropriate. In consultation with the

competent authority, the Management Committee may, for the better

fulfilment of its purpose, delegate specific parts of its business to be

conducted on its behalf by such body or person and under such

arrangement or arrangements as it may deem appropriate.

(2) The Management Committee may place contributions

made by participants in terms of regulation 12 of these regulations and

any other funds managed and administered by it on deposit or may

invest such contributions, having regard to the need for prudence.

(3) The Management Committee may take out insurance

policies, borrow or otherwise incur indebtedness on behalf of the Scheme

for the purposes of the Scheme’s functions, in any way and under any

terms it may consider appropriate, provided such borrowings do not

exceed 30 per cent of the net asset value of the Scheme.

(4) The Management Committee shall cause proper books

of account to be kept so that the financial position of the Scheme can be

ascertained with reasonable accuracy at any time.

Without prejudice to sub-regulation (1) of regulation 6 the Investment

Management Committee shall enter into such investment management management

administrative

and administrative support agreements as may be approved by the support agreements.

competent authority by not later than three months from the coming

into force of these regulations.

(1) The Management Committee shall prepare and Publication of

Financial

approve annual forecast statements of the expected costs and revenues Statements.

of the Scheme, and shall make available such forecast statements to all

participants.

(2) The Management Committee shall submit to the

competent authority an annual report on the discharge of its functions

and on the operation of the Scheme within two months from the financial

year end of the Scheme. Such annual report shall give details of the

exercise by the Management Committee of its powers of management

and shall include, inter alia -

(a) a statement showing the payments in and

payments out of the Scheme during its immediate previous

financial year; and

(b) annual audited financial statements in

accordance with International Accounting Standards, and the

provisions of the Companies Act, where relevant.

(3) The Management Committee shall publish in at least

two daily newspapers, one of which shall be in the Maltese language,

its annual report and audited financial statements within four months

from the financial year end of the Scheme.

(4) The Management Committee shall prepare a half

yearly report to the competent authority giving details of the exercise

of its powers of management, together with a report on the financial

situation of the Scheme but which need not be accompanied by an

auditors’ report.

(5) The books of account shall be kept at the offices of

the Scheme or at such other place or places as the Management

Committee thinks fit, and shall be made available to participants and to

the public on request.

(1) The meetings of the Management Committee shall

be held as often as may be required but not less frequently than once

every three calendar months.

(2) Meetings of the Management Committee shall be

convened by the chairperson either on his own initiative or at the written

request of any two members of the Management Committee.

(3) The Management Committee shall only conduct

business if at least three members (which shall include the chairperson

or, in his absence, the member nominated by the competent authority)

are present.

(4) For the purpose of decisions of the Management

Committee, each member shall have one vote. Voting shall be by simple

majority of the members present, save that in the case of sub-regulation

(3) of regulation 6 and sub-regulation (1) of regulation 8, where a

majority vote shall be equivalent to at least two-thirds of the votes of

those present. In the event of an equality of votes, the chairperson shall

have a second or casting vote.

(5) Subject to the foregoing provisions of this regulation,

the Management Committee shall have power to regulate its own

proceedings and may also establish such procedures or make such rules

as it may deem appropriate for the better fulfilment of its purposes.

(6) The Management Committee may invite any person

who in its opinion possesses specialised knowledge or expertise on a

particular subject, to attend any meeting and take part in the discussions.

(1) In terms of regulation 4 of these regulations, the Source and

Scheme shall establish and maintain a fund or a number of funds out of Application

funds.

which payments shall be made in accordance with these regulations.

(2)

The sources of funding shall include

(a) contributions levied from participants of the

Scheme by the Management Committee;

(b) money paid as administrative fees by all

participants, as may be prescribed;

(c) money received as income from the investment of

the assets of the fund;

(d) money borrowed by the Management Committee

for the purposes of the Scheme;

(e) money received by the Management Committee on

any insurance policy it takes out; and

(f) any other money required to be paid in to the fund

or funds, received or recovered by the Management

Committee for the purposes of the Scheme.

(3)

There shall be paid out of the funds

(a) money determined by the Management Committee

as compensation for depositors;

(b) money required for the repayment of (or interest

on or charges in connection with) any money borrowed or

for the payment of premia on any insurance policies taken

out, for the purposes of the Scheme;

(c) the costs incurred in administering and managing

the Scheme; and

(d) any other money paid out by the Management

Committee for the purposes of the Scheme.

(4) The Management Committee shall hold, manage and

apply the fund or funds in accordance with these regulations.

(1) Every credit institution which is licensed in Malta

under the Act shall participate in and contribute to the Scheme, including

a branch of a credit institution operating in another country.

(2) In the case of a participant whose head office is

situated in a country outside Malta, as well as branches of a credit

institution having their head office in Malta but operating outside Malta,

and where there is supplementary cover by a corresponding scheme in

that other country, the Management Committee shall enter into a bilateral

agreement with the authority responsible for the management and

administration of the scheme in that other country stipulating, inter alia,

the rules and procedures to be followed for the payment of compensation

to depositors.

(3)

Participation in the Scheme does not exclude the

possibility that particular credit institutions may have to participate also

in another compensation or similar schemes set up under a different

law and governed by another competent authority or other body, in Malta

or abroad.

(4)

When a credit institution becomes a member of the

Scheme after the coming into force of these regulations, the Management

Committee shall determine all the relative obligations and conditions

of the new participant as set out in the Third Schedule to these

regulations.

(1) Participants shall pay such contributions to the

Contributions to the

Scheme as prescribed in the Second Schedule to these regulations, as

the same may be amended or varied from time to time by the competent

authority, in consultation with the Management Committee.

(2) The Management Committee may specify different

rates or amounts of contributions or different bases for the calculation

of contributions for different classes or categories of credit institutions.

(3) Without prejudice to the generality of sub-regulation

(2) of this regulation, the Management Committee, when specifying

different rates or amounts of contributions or bases for the calculation

of contributions for different classes or categories of credit institutions

or for different credit institutions within the same class or category,

may take into account any money or deposits in accounts entrusted to

such a credit institution and any financial or accounting records as may

be specified from time to time, before or after the coming into force of

these regulations.

(1) The competent authority shall make a determination Determination.

within 21 days of the occurrence of the following circumstances,

whichever is the earlier>

(a) where it appears to the competent authority that a

participant is unable, for the time being, for reasons which

are directly related to its financial circumstances to meet its

obligations arising from claims by its depositors and to have

no early or foreseeable prospect of being able to do so, or has

otherwise suspended payment; or

(b) in respect of a credit institution which has its head

office in Malta and, in respect of which an order has been

made by the Courts of Malta for its winding-up or liquidation

under the laws of Malta.

(2) The competent authority may, by way of guidelines,

establish those circumstances or criteria which it may consider in arriving

at a decision as to whether it will make a determination in terms of sub-

regulation (1) of this regulation.

(3) On the day the determination is made, the competent

authority shall inform the Management Committee in writing of its

determination. The Management Committee may take additional

measures it deems necessary or appropriate within its powers under

these regulations.

(4) The competent authority shall immediately inform any

other compensation scheme relating to financial services activities, as

may be established under any other law and regulated by other competent

authority or other body, which it believes may be effected by such

determination.

(5) In making a determination in accordance with sub-

regulation (1) of this regulation, the competent authority shall have

regard to any report of officers or agents authorised by it on the state of

affairs of the credit institution, and any other information in its

possession.

(1) On being informed by the competent authority that a Application for

Compensation.

determination has been made under sub-regulation (1) of regulation 13

the Management Committee shall publish a notice in at least two local

newspapers, informing depositors of the credit institution concerned of

such determination and of the manner in which claims supported by

documentary evidence are to be submitted.

(2) The right of a depositor for compensation shall not

be forfeited if the depositor has been unable to assert his right to

compensation within any prescribed time-limits as may be announced.

(3) The Management Committee may, following an

application for compensation being made to it by a depositor, accept or

refuse to provide compensation in accordance with these regulations.

(4) The Management Committee shall proceed to pay

compensation for verified claims within three months of the date of the

determination given in terms of sub-regulation (1) of regulation 13

Provided that the Management Committee may, in

exceptional circumstances, apply to the competent authority for an

extension of this period by a further period of up to three months, and

up to two further periods of up to three months each thereafter.

(1) The Management Committee shall make its own

administrative arrangements for verifying claims. These arrangements

shall include>

(a)

providing a clearly understandable application

form for claimants (in English and Maltese in Malta, and in

the official language or languages of a third country where a

branch of a credit institution is established);

(b)

providing for the exercise of the Management

Committee’s right of subrogation under regulation 22 of these

regulations; and

(c)

requiring claimants to give

(i) their identity and address;

(ii) the capacity in which they claim;

(iii) evidence of the eligible deposits as defined in

regulation 18 of these regulations; and

(iv) any other information reasonable required by

the Management Committee.

(2) The Management Committee may refuse to make a

payment for compensation in respect of an eligible deposit until the

person claiming to be entitled to the deposit informs the Management

Committee as to the capacity in which he is the beneficial owner of the

deposit and provides satisfactory documentary evidence and information

to allow the Management Committee to determine the amount of

compensation payable.

(3) The Management Committee may decide to delay payment

to a claimant until determination of any criminal charge brought against

the claimant, depositor, or any person entitled to or interested in respect

of an eligible deposit under the provisions of the Prevention of Money

Laundering Act or a corresponding law of a country outside Malta.

Whenever it appears to the Management Committee that the When funds appear

funds for the time being held by the Scheme are inadequate for the to be inadequate.

Management Committee to exercise its functions, the Management

Committee may require a special contribution to be made to the Scheme

by participants in accordance with the Second Schedule to these

regulations. Such special contribution shall be provided to the Scheme

within 30 calendar days of their being requested.

The total amount of compensation that may be paid out to Limit of

Compensation.

any depositor shall be the lesser of ninety per cent (90%) in respect of

that depositor’s eligible deposits, or up to the Maltese liri equivalent of

20,000 Euros converted on the basis of the official closing middle rate

issued by the Central Bank of Malta prevailing on the date of settlement

of the claim.

For the purposes of these regulations, “eligible deposits”, Eligible Deposits.

in relation to every depositor with a credit institution, means the total

liability of the credit institution remaining due to every such depositor,

including any interest or premium accrued thereon, up to the date of the

notice of determination under regulation 13 of these regulations, in an

account denominated in Maltese Lira held in Malta (or in a branch of a

licensed credit institution other than in Malta) which is>-

(a)

not an “interbank deposit”, that is a deposit with a

credit institution by other credit institutions on its own behalf and

on its own account;

(b)

not part of the participant’s own funds within the

meaning of any directive issued by the competent authority to

regulate own funds;

(c)

not a deposit arising out of transactions in connection

with which a criminal conviction has been obtained for money

laundering in terms of the Prevention of Money Laundering Act; Cap. 373

(d)

not a deposit for which the depositor has, on an

individual basis, obtained from the same credit institution rates

and financial concessions which have helped to aggravate its

financial situation; and

(e)

a deposit made by a person or persons excluded under

the First Schedule to these regulations.

(1) In calculating the amount of eligible deposit, the

Management Committee shall take account of any legal and contractual

conditions attached to the respective deposits and shall deduct from the

total liability of the credit institution>-

(a)

any payments made to the depositor from a deposit

guarantee scheme elsewhere in respect of such liability;

(b)

any payments made to the depositor under a policy of

professional indemnity insurance held by the credit institution in

respect of such liability;

(c)

the amount of any liability of the depositor to that

credit institution in respect of which a right of set-off against the

said deposit existed immediately before the notice of determination

issued in terms of regulation 13 of these regulations or in respect

of which such a right would have existed had the said deposit been

repayable on demand and such liability fallen due immediately

before the issue of such a notice of determination; or

(d)

any payments made under any other law, whether in

Malta or abroad, in respect of such liability.

(2)

Without prejudice to the aforesaid

(a)

any right of set-off shall only be possible where claims

are properly documented, can be settled easily, are not subject to

dispute and were established well before the notice of determination

issued in terms of regulation 13 of these regulations.

(b)

any compensation in respect of an eligible deposit

shall only be payable as and when the deposit becomes due.

(1) Depositors may make a claim against the Scheme in

terms of these regulations. Depositors listed in the First Schedule to

these regulations are excluded from submitting claims to the Scheme.

(2) Cover shall be provided for claims arising out of a

participant’s inability to repay money owed to or belonging to depositors

and held on their behalf in connection with banking business.

(3) Claimants will not be able to claim against more than

one scheme in respect of a single claim. Where a claim has been made

under two or more compensation schemes, the Management Committee

shall conclusively determine under which scheme the claimant is eligible

for compensation.

(4) Claims shall be made in such form, and shall be

accompanied by such documentation or information, as the Management

Committee may determine and make public from time to time.

(1) Where the Management Committee is of the opinion Claims.

that either a depositor is not eligible for compensation in whole or in

part because such depositor falls within the list of exclusions in the

First Schedule to these regulations or such deposit is not an eligible

deposit in terms of regulation 18 of these regulations, the Management

Committee shall give notice in writing to such depositor of that opinion

and the reasons therefor and the steps that may be taken by the depositor

under sub-regulation (2) of this regulation.

(2) A depositor to whom a notice under sub-regulation

(1) of this regulation has been given in accordance with this regulation

may, within 21 calendar days of being so given, apply to the Financial

Services Tribunal to have the relevant exclusion or deduction to which

the notice relates revoked or amended.

(1)

Where the Scheme has made a payment to an eligible Subrogation.

depositor, the Scheme shall be subrogated to the rights and remedies of

that eligible depositor against the credit institution.

(2)

Prior to or simultaneously with payment, depositors

shall confirm in writing to the Management Committee that

(a)

they have not received any payment from any other

scheme or from the credit institution concerned in respect of the

same loss;

(b)

they will provide any assistance the Management

Committee may ask to enable the Management Committee to

exercise its rights and remedies against the credit institution; and

(c)

their rights and remedies against the credit institution

in respect of the claims paid are subrogated in favour of the

Management Committee.

(1) Where two or more persons are jointly entitled to an Joint ownership.

eligible deposit, each of these persons shall be treated as having a

separate deposit of an amount produced by dividing the amount of the

deposit to which such persons are jointly entitled by the number of

persons so entitled, unless there exists specific evidence or special

contractual provisions determining the particular entitlements of such

persons in which case such evidence shall be taken into account in

determining their entitlements.

(2) Where a person is acting as trustee or nominee for

one or more persons under a deed of trust or other similar agreement,

the eligible deposit comprising the claim shall be deemed to belong to

the beneficial owners equally, unless there exists specific evidence or

special contractual provisions determining the beneficial interests of

such persons in which case such evidence shall be taken into account in

determining their entitlements, and provided in any event that ownership

is proved to the entire satisfaction of the Management Committee.

The Management Committee shall ensure that the general

public is fully informed about the operation of the Scheme arrangements

and that such information is imparted to the public as widely and

effectively as possible and as determined by the Management

Committee.

(1) Credit institutions shall make available to current and

prospective depositors adequate and clear information concerning the

applicability of the Scheme together with such other particulars as may

from time to time be specified by the competent authority in a manner

and form specified by the competent authority>

Provided that a credit institution shall not advertise or cause

to be advertised the fact that deposits placed with a credit institution are

protected by or through the Scheme except with the prior written consent

of the competent authority.

(2) The competent authority may from time to time,

specify the information that credit institutions are to provide to depositors

regarding the Scheme and its operations, as well as the manner and

form in which such information should be provided.

(1) The Management Committee shall have the right to

request participants, either directly or through the competent authority,

Committee to obtain

to submit such data and information in the form it requests relevant for

the proper administration of the Scheme, within such time as the

Management Committee may require. The duty of co-operation extends

to any successor of the participant, including any person or persons

who have continuing responsibility for the affairs of the participant.

(2) Without prejudice to any other regulation contained

in these regulations, participants who fail to comply with the

Management Committee’s request for information or data within 15

calendar days shall be liable to an administrative penalty not exceeding

Lm1,000 as may be imposed by the competent authority.

(1) Members of the Management Committee and persons

appointed under sub-regulation (1) of regulation 6 shall be subject to

the provisions of the Professional Secrecy Act and shall keep confidential

any information obtained by them in the course of performing their

duties under these regulations, and shall not reveal any information to

any person, credit institution, association or entity except as may be

allowed by these regulations or any other law or by Court order.

(2)

The duty of confidentiality shall not be contravened

in the case of

(a)

exchange of information between the

Management Committee and competent authorities in other

countries, or the competent authorities for the management

and administration of corresponding schemes in other

countries, provided that the relevant information is necessary

for the discharge of their duties under these regulations; and

(b)

any use or disclosure as is otherwise reasonably

needed to enable the Management Committee and its officers

or agents to perform their duties under and carry out the

functions contemplated by these regulations.

(1) The Management Committee shall notify the competent Failure to comply

with obligations.

authority where a credit institution fails to comply with the obligations

imposed on it by and under these regulations and in co-operation with

the competent authority shall take all measures appropriate, including

the imposition of penalties to ensure that the credit institution meets its

obligations.

(2) If these measures fail to secure compliance on the

part of the credit institution, the Management Committee shall with the

express consent of the competent authority, give not less than twelve

months’ notice of the competent authority’s intention to restrict or

withdraw the credit institution’s licence under the Act. The Scheme

shall continue to provide cover during such period.

(3) After the restriction or withdrawal of a licence, cover

shall continue to be provided in respect of eligible deposits effected up

to the date of restriction or withdrawal.

The Management Committee shall establish and maintain Procedures to

investigate

adequate internal procedures to investigate complaints against it by credit complaints.

institutions and by depositors.

(1) The competent authority may issue directives and Power to issue

directives and

guidelines to credit institutions for the purposes of these regulations. guidelines.

(2) Such directives and guidelines may contain such

incidental, supplementary and consequential provisions as appear to

the competent authority to be expedient for any purpose of these

regulations.

The Management Committee and officers or agents of the

Scheme shall not be liable in damages for anything done or omitted in

the discharge of functions under these regulations unless it is shown

that the act or omission was in bad faith.

The financial year end of the Scheme shall be an accounting

period of twelve months ending on the thirty-first day of December of

each year.

The accounts of the Scheme shall be audited by auditors

appointed by the Management Committee from among persons who

are qualified to be appointed as auditors of a company under the law for

the time being in force in Malta, as if the Scheme were such a company.

The competent authority and the Management Committee

shall consult the relevant competent authorities and the persons responsible

for compensation schemes in other countries outside Malta and seek to

reach agreement with those authorities and persons about>-

(a)

the procedures to be followed if a participant defaults;

(b) the amounts of compensation payable, after

deductions if any, under each scheme; and

(c) any other aspect which is deemed appropriate for the

proper management and administration of the schemes.

First Schedule

List of Exclusions

referred to in regulation 20(1) of these regulations

The following shall be excluded from claiming against the Scheme

(a) Professional and institutional depositors, consisting of

(i)

Credit Institutions carrying on the business of banking under

the Banking Act;

(ii)

Financial Institutions as defined in article 2 of the Financial

Institutions Act;

(iii)

Persons holding an investment services licence under article 6

of the Investment Services Act;

(iv)

Insurance undertakings licensed to carry on the business of

insurance under the Insurance Business Act;

(v)

Collective investment schemes as defined in article 2 of the

Investment Services Act;

(vi)

Pension and retirement funds as defined in the Special Funds

Act; and

(vii)

Other categories of local and/or foreign professional and

institutional depositors, whether resident or non-resident in Malta, as may

be determined by the competent authority from time to time;

(b) National and international institutions, governments and administrative

authorities;

(c) Local and municipal councils or authorities;

(d) Directors and managers of the relevant credit institution and members of

the credit institution with personal liability, persons holding 5% or more of the

capital of such credit institution, the auditors of the credit institution and persons

of the same description with respect to a company forming part of the same group

of companies as the credit institution;

(e) Close relatives, that is, ascendants or descendants or spouse and third

parties acting on behalf of the depositors referred to in paragraph (d) of this

Schedule;

(f) Other companies in the same group of companies as the credit institution;

(g) Debt securities issued by the same institution and liabilities arising out of

own acceptances and promissory notes; and

(h) Depositors who, in the view of the Management Committee, have any

responsibility for or have taken advantage of certain facts relating to a credit

institution which gave rise to the credit institution’s financial difficulties or

contributed to the deterioration of its financial situation.

Second Schedule

Contributions

in terms of regulation 12 of these regulations

All credit institutions participating in the Scheme shall make contributions to the

Scheme as follows

(a) Initial Contribution;

(b) Supplementary Contributions;

(c) Special Contributions.

The minimum amount held by the Scheme and which should be available for

compensation shall be Lm1 million, established over a period of time not exceeding

five years from the coming into force of these regulations.

Initial Contributions

An Initial Contribution shall be paid by participants within 30 calendar days from

the coming into force of these regulations.

The minimum amount of the Initial Contribution shall be of Lm10,000 per

participant.

The Management Committee may, in consultation with the competent authority,

waive or postpone part or all of the payment of this Initial Contribution.

Supplementary Contribution

The level of Supplementary Contributions for each participant shall be calculated

by applying the percentage determined by the Management Committee on the eligible

deposits held by the participant as at its most recent financial year end.

The minimum amount of Lm1 million shall be contributed proportionately in

accordance with the participants’ share of total eligible deposits over a period of five

years, commencing from the date on which these regulations will come into force.

The formula applicable for participants for the yearly contribution for the first

five years to attain the minimum amount of the Scheme shall be as shown hereunder.

For the sake of clarification, Year 1 shall be deemed to be the year in which these

regulations come into force.

Year

Formula

0.1% of Eligible Deposits (as at the most recent financial year end)

(0.1% of Eligible Deposits as at financial year end of Year 1) less

(Year 1 contribution)

(0.1% of Eligible Deposits as at financial year end of Year 2)

less (Year 1 + Year 2 contributions)

(0.1% of Eligible Deposits as at financial year end of Year 3)

less (Year 1 + Year 2 + Year 3 contributions)

As from Year 5 onwards, participants would need to ensure that their aggregate

proportional contribution would amount to 0.1% of their respective eligible deposits

as at the previous financial year end.

If the amount contributed in any subsequent year (i.e. from Year 5 onwards) is

less than 0.1% minimum, the participant shall be required to make an additional

supplementary contribution.

A participant would not be eligible for a refund if the 0.1% of eligible deposits for

a particular year represent an amount which is less than the aggregate amount

contributed.

Payment of supplementary contributions shall be within 21 calendar days from

service to each participant, of a written notice, specifying the amount due.

Special Contributions

The Management Committee may, at any time during the financial year of the

Scheme, levy Special Contributions from participant in order to meet commitments of

the Scheme.

The Management Committee may, at the end of its financial year and during

which special contributions have been levied, refund part or all of such Special

Contributions not utilised, or not expected to be utilised for the following 12 months,

to participants pro rata and according to the amounts of special contributions made.

No interest shall be payable on Special Contributions refunded to participants.

Payment of special contributions shall be within 30 calendar days from service to

each participant, of a written notice, specifying the amount due.

Maximum limit for contributions

When the amount held by the Scheme (and which is available for compensation)

is about to reach, or has reached, Lm3 million, the Management Committee shall, with

the approval of the competent authority, consider whether current and future

circumstances merit a revision of the supplementary contributions made by participants

and whether participants are to cease further cash payments of supplementary

contributions to the Scheme.

Participants shall not be required to make any supplementary or special

contributions, if the total of its contributions to date (Initial, Supplementary and Special),

after deducting any refund of Special Contributions, exceeds 0.3% of the total eligible

deposit liabilities.

After Year 5, the difference between the “capped” level of 0.3% and the amount

paid in supplementary contributions (as at the date from which participants have ceased

payment of supplementary contributions on a decision of the Management Committee),

shall be considered by the Management Committee to be funds “on call” and shall

either be held as a capital reserve by the participant or as a contingent liability.

In this respect and upon further consultation with participants, the competent

authority shall issue guidelines to participants determining how such funds “on call”

should be treated.

In any case, participants shall ensure that such funds are made available to the

Scheme within 30 calendar days from the time when a call is made on such funds.

Other conditions

A credit institution which has ceased to be a participant of the Scheme shall not

be entitled to a refund of any contributions made from the date it became a participant

of the Scheme except where otherwise stated in this schedule.

Third Schedule

New members

(regulation 11(4))

When a credit institution becomes a participant of the Scheme after the coming

into force of these regulations, the Management Committee shall levy as soon as possible

an Initial Contribution of an amount to be determined as follows

When the new participant does not have a deposit base at the time it joins the

Scheme, the Initial Contribution shall be the minimum amount specified in the Second

Schedule to these regulations.

Where a credit institution which becomes a participant has a deposit base, the

amount of the Initial Contribution shall be calculated on the total Eligible Deposit

liabilities at the time it becomes a participant with such a percentage as the Management

Committee considers appropriate in order for the participant to reach the levels of

compensation with the other participants, taking into account any Initial and

Supplementary Contributions up to the date when the credit institution becomes a

participant.

The Management Committee shall determine a time schedule for the payment of

the Initial Contribution taking into consideration the particular circumstances of the

new participant.

Without prejudice to the aforesaid, the Management Committee may, in

consultation with the competent authority, waive or postpone part or all of the payment

of this Initial Contribution.

Mitbug[ fl-Istamperija tal-Gvern – Printed at the Government Printing Press