Depositor Compensation Scheme

L.N. 35 of 2006

BANKING ACT

(CAP. 371)

Depositor Compensation Scheme

(Amendment) Regulations, 2006

IN exercise of the powers conferred by article 3 and article 28A.

of the Banking Act, the Prime Minister and Minister of Finance, acting

on the advice of the Malta Financial Services Authority, has made the

following regulations> -

The title of these regulations is the Depositor Compensation Citation.

Scheme (Amendment) Regulations, 2006, and they shall be read and

construed as one with the Depositor Compensation Scheme Regulations, L.N. 369 of 2003.

2003, hereinafter referred to as “the principal regulations”.

Immediately after regulation 1 of the principal regulations, Adds new

regulation 1A to the

there shall be added the following new regulation>

principal

regulations.

1A. The objective of these regulations is to implement

the relevant provisions of Directive 94#19#EC of the European

Parliament and of the Council of 30 th May 1994 on deposit

guarantee schemes, and these regulations shall be interpreted

and applied accordingly.”.

Regulation 2 of the principal regulations shall be amended as Amends regulation

2 of the principal

regulations.

(a) for the definition “depositor”, there shall be substituted

the following definition>

“ “depositor” means any person who has entrusted a

deposit to a credit institution, to the exclusion of persons listed

in the First Schedule to these regulations<”< and

(b) immediately after the new definition “depositor”, there

shall be inserted the following new definition>

“ “designated currency” means the currency of any EEA

State<”< and

(c) immediately after the definition “designated currency”,

there shall be inserted the following new definition>

“ “EEA state” means a State which is a contracting party

to the agreement on the European Economic Area signed at

Oporto on the 2 nd May 1992, as amended by the protocol

signed at Brussels on 17 th March 1993, and as amended from

time to time<”.

Immediately after sub-regulation (4) of regulation 3 of the

principal regulations, there shall be inserted the following new sub-

regulation>

“(5) For the purpose of enabling the Scheme and the

competent authority to carry out their respective functions, the

Scheme and the competent authority may share and exchange

information, and shall otherwise consult and collaborate with one

another.”.

In sub-regulation (2) of regulation 4 of the principal

regulations, for words “protection for private depositors”, there shall

be substituted the words “protection for depositors”.

In sub-regulation (3) of regulation 8 of the principal

regulations, for the words “on the website of the competent authority.”

there shall be substituted the words “on the websites of the competent

authority and the Scheme.”.

Sub-regulations (1) and (2) of regulation 11 of the principal

regulations shall be substituted by the following new sub-regulations>

“(1) Every credit institution which is licensed in Malta under

the Act to accept deposits from depositors held in any designated

currency shall participate in and contribute to the Scheme, including

a branch of a credit institution operating in another state>

Provided that a branch of a credit institution operating in Malta

which is licensed in a non-EEA state shall participate in and

contribute to the Scheme, unless the Scheme has in force an

agreement with the authority responsible for the management and

administration of the scheme in that other state stipulating, inter

alia, that the level or scope of cover provided for depositors in that

state is equal or exceeds the level or scope of cover in Malta>

Provided further that a branch of a credit institution operating

in Malta which is licensed in an EEA state may, at its own option,

participate in and contribute to the Scheme only where the level or

scope of the Scheme in Malta exceeds the level or scope of cover

provided in the EEA state in which it is licensed.

(2) The Scheme may enter into a bilateral agreement with

any authority responsible for the management and administration

of a scheme set up in any other country stipulating, inter alia, the

level or scope of cover as well as the rules and procedures to be

followed for the payment of compensation to depositors, and in

any such case, the guiding principles set out in Annex II of Directive

94#19#EC of the European Parliament and of the Council of 30 th

May 1994 on deposit guarantee schemes shall, where appropriate,

apply.”.

In sub-regulation (1) of regulation 12 of the principal Amends regulation

12 of the principal

regulations, for the words “the Second Schedule to these regulations.” regulations.

there shall be substituted the words “the Second Schedule to these

regulations, and these contributions shall not be refundable.”.

Regulation 17 of the principal regulations shall be amended Amends regulation

17 of the principal

as follows>

regulations.

(a) the present provision shall be renumbered as sub-

regulation (1) thereof and the proviso thereto shall be deleted<

(b) in sub-regulation (1) thereof as renumbered, for the

words “the official closing middle rate”, there shall be substituted

the words “the official opening middle rate”< and

(c) immediately after sub-regulation (1) thereof as

renumbered, there shall be added the following new sub-regulation>

“(2) In calculating the amount of compensation to be

paid out in terms of sub-regulation (1), all computations shall

be made in the currency of the depositor’s eligible deposit

and all payments of compensation shall be made in the same

currency as the depositor’s eligible deposit.”.

Regulation 18 of the principal regulations shall be amended Amends regulation

18 of the principal

as follows>

regulations.

(a) in sub-regulation (1) thereof, for the words “in an account

or accounts denominated in Maltese lira held in Malta” there shall

be substituted the words “in an account or accounts held in Malta

in any designated currency”<

(b) paragraph (c) of sub-regulation (2) thereof shall be

substituted by the following new paragraph>

“(c) deposits made by the categories of persons

indicated in List A of the First Schedule to these regulations.”<

(c) immediately after sub-regulation (2) thereof, there shall

be inserted the following new sub-regulation>

“(3) In this regulation and in regulation 19, the term

“depositor” shall not include the categories of persons

indicated in list B of the First Schedule to these regulations.”.

Regulation 20 of the principal regulations shall be amended

as follows>

(a) in sub-regulation (1) thereof, for the words “Only persons

being individuals falling within the definition of “depositor” in

regulation 2 of these regulations” there shall be substituted the

words “Only persons falling within the definition of “depositor”

in regulation 2”<

(b) sub-regulation (2) thereof shall be deleted and sub-

regulations (3), (4), (5) and (6) shall be renumbered as sub-

regulations (2), (3), (4) and (5) respectively< and

(c) in sub-regulation (2) thereof as renumbered, for the

words “are also excluded from claiming under the Scheme.”, there

shall be substituted the words “are excluded from claiming under

the Scheme.”.

For the First Schedule to the principal regulations there shall

be substituted the following>

“First Schedule

Exclusions

(Regulations 2, 18, 20)

List A

The following are excluded from claiming under the Scheme>

1. Persons carrying on investment services within the meaning

of the Investment Services Act, or equivalent or similar foreign

legislation<

2. Credit institutions carrying on the business of banking within

the meaning of the Act, or equivalent or similar foreign legislation<

3. Financial institutions within the meaning of the Financial

Institutions Act, or equivalent or similar foreign legislation<

4. Insurance undertakings carrying on the business of insurance

within the meaning of the Insurance Business Act and the Insurance Cap. 403 and

Cap 404.

Brokers and Other Intermediaries Act, or under equivalent or similar

foreign legislation<

5. Collective investment schemes<

6. Pension and retirement funds<

7. Companies which are of such a size that they are not permitted

to draw up abridged balance sheets pursuant to the Companies Act, or Cap. 386.

under equivalent or similar foreign legislation<

8. Governments and administrative authorities, national and

international institutions<

9. Local and municipal councils or authorities<

10. Debt securities issued by the same institution and liabilities

arising out of own acceptances and promissory notes<

11. Persons holding accounts which do not disclose the

depositor’s identity<

12. Companies and commercial partnerships in the same group

as the relevant credit institution<

Nominees, trustees or other third parties acting on behalf or

in the interest of the persons referred to in this Schedule to the extent of

the funds held in such capacity.

List B

The following are depositors who cannot make a claim under the

Scheme>

1. Directors and managers of the relevant credit institution and

members of the credit institution with personal liability, persons holding

five percent 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<

2. Close relatives, that is, ascendants, descendants or the spouse

of the persons referred to in paragraph 1<

3. Depositors who 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<

4. Depositors in respect of transactions in connection with which

a criminal conviction has been obtained for money laundering in terms

of the Prevention of Money Laundering Act, or under equivalent or

similar foreign legislation.

13. Immediately after the proviso to paragraph (g) of item 2 of

the Second Schedule to the principal regulations, there shall be inserted

the following new paragraph (h)>

“(h) In the case of eligible deposits held in a designated

currency other than in Maltese lira, the Supplementary Contribution

shall be calculated on the Maltese lira equivalent of such eligible

deposits and in all cases shall be paid in Maltese lira.” .

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