Investment Services (Tied Agents) Regulations, 2007

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 18,141, 30 ta’ Ottubru, 2007

L.N. 327 of 2007

INVESTMENT SERVICES ACT

(CAP. 370)

Investment Services (Tied Agents) Regulations, 2007

IN exercise of the powers conferred by article 12 of the Investment

Services Act, the Prime Minister and Minister of Finance, acting on the

advice of the Malta Financial Services Authority as the competent

authority for the purposes of the Act, has made the following regulations>

(1) The title of these regulations is the Investment Services Title,

commencement and

(Tied Agents) Regulations, 2007.

objective.

(2) These regulations shall come into force on the 1 st

November, 2007.

(3) The objective of these regulations is to implement Article

23 of the Directive, as herein defined, and they shall be interpreted and

applied accordingly.

(1)

In these regulations, unless the context otherwise Interpretation.

requires>-

“the Act” means the Investment Services Act<

“ancillary services” shall have the same meaning as that

assigned to it by the Investment Services Rules<

“the competent authority” means the Malta Financial Services

Authority appointed under article 2 of the Act<

“the Directive” means Directive 2004#39#EC of the European

Parliament and of the Council of 21 April 2004 on markets in

financial instruments amending Council Directives 85#611#EEC

and 93#6#EEC and Directive 2000#12#EC of the European

Parliament and of the Council and repealing Council Directive

93#22#EEC, as amended from time to time, and includes any

implementing measures that have been or may be issued thereunder<

“European investment firm” means an investment firm as

defined in Article 4(1) of the Directive authorised by its European

regulatory authority within the meaning of Article 5 of the Directive

or authorised by a European regulatory authority in an EEA State<

“investment services licence holder” means a person who

holds an investment services licence granted by the competent

authority in terms of article 6 of the Act<

“tied agent” means a natural or legal person, who under the

full and unconditional responsibility of only one investment

services licence holder or European investment firm and on whose

behalf it acts, promotes investment and, or ancillary services to

clients or prospective clients, receives and transmits instructions

or orders from the client in respect of investment services or

instruments, places instruments and, or provides investment advice

to clients or prospective clients in respect of those instruments or

services.

(2) Words and expressions which are also used in the Act shall

have the same meaning as in the Act.

(1) Investment services licence holders and European

Appointment of tied

investment firms may appoint tied agents for the purposes of promoting

their services, soliciting business or receiving orders from clients or

potential clients and transmitting them, placing instruments and

providing investment advice in respect of such instruments and services

offered by the investment services licence holder.

(2) Tied agents may, subject to these regulations, be

established in Malta or in a Member State or EEA State.

(1) Tied agents established in Malta shall be subject to

Appointment of tied

registration by the competent authority in terms of regulation 9 of these

regulations and shall be exempt from the provisions of article 3 of the

Act.

(2) An investment services licence holder or a European

investment firm wishing to appoint a tied agent established in Malta to

carry out business in Malta or elsewhere shall apply to the competent

authority for the registration of such tied agent.

(3) An investment services licence holder or a European

investment firm may appoint a tied agent established in Malta in terms

of sub-regulation (2) of this regulation only if such tied agent has been

registered by the competent authority in the public register kept in terms

of regulation 9 hereof.

Appointment of tied

(1) Investment services licence holders may appoint tied

agents established in a Member State or EEA State for the purposes of

promoting their services, soliciting business or receiving orders from

clients or potential clients and transmitting them, placing instruments

and providing investment advice in respect of such instruments and

services offered by the investment services licence holder.

(2) An investment services licence holder may appoint a

tied agent in terms of sub-regulation (1) of this regulation only if such

tied agents are registered in the public register which the Member State

or EEA State concerned has established for this purpose.

(1) Where the investment services licence holder appoints a Appointment of tied

tied agent established in a Member State or EEA State which, in terms agents

State or EEA State

of Article 23 of the Directive, does not provide for the appointment of not allowing the

tied agents, such licence holder shall be obliged to apply to the competent appointment

agents.

authority for the registration of the said tied agent.

(2) The provisions of regulation 4 shall apply mutatis

mutandis to investment services licence holders and tied agents falling

within the scope of sub-regulation (1).

(1) Tied agents may not hold or control clients’ money and Obligations of tied

agents.

or assets.

(2) Tied agents shall only act for one licence holder at any

one time.

(1) Where an investment services licence holder decides to Responsibility of

appoint a tied agent, it remains fully and unconditionally responsible the

services licence

for any act or omission on the part of the tied agent when the latter is holder appointing

tied agents.

acting on behalf of the investment services licence holder.

(2) The investment services licence holder shall ensure that

its tied agent discloses the capacity in which such tied agent is acting

and the name of the investment services licence holder which such tied

agent is representing when contacting or before dealing with any client

or potential client.

(3) The investment services licence holder that appoints tied

agents shall monitor the activities of its tied agents so as to ensure that

they continue to comply with the requirements of these regulations and

the Investment Services Rules that may be issued by the competent

authority in terms of article 6 of the Act, when acting through tied agents.

(4) The investment services licence holder that appoints tied

agents shall take adequate measures in order to avoid any negative impact

that the activities of the tied agents, which are not covered by the scope

of the Directive, could have on the activities carried out by the tied

agents on behalf of the investment services licence holder.

(1) The competent authority shall keep a register of all tied Registration of tied

agents.

agents which are>

(a) established in Malta and appointed by an investment

services licence holder or by a European investment firm< or

(b) established in a Member State or EEA State which, in

terms of Article 23 of the Directive, does not provide for the

appointment of tied agents and such tied agent is appointed by an

investment services licence holder.

Such register shall be updated on a regular basis and shall be

accessible to the public.

(2) The competent authority shall only admit a tied agent

to the register established in sub-regulation (1) of this regulation if the

investment services licence holder or the European investment firm

appointing the tied agent has established and has confirmed to the

competent authority that the tied agent is of sufficiently good repute

and possesses appropriate general, commercial and professional

knowledge so as to be able to communicate accurately all relevant

information regarding the proposed service to the potential clients>

Provided that where the tied agent will provide investment

advice, the competent authority shall itself establish whether the tied

agent possesses the level of competence required by the competent

authority for this purpose.

(3) The competent authority shall not register, or shall

withdraw registration of a tied agent where>

(a) the activities actually carried on clearly indicate that a

tied agent has opted for registration in Malta for the purpose of

evading the stricter standards in force in another Member State or

EEA State within the territory of which it intends to carry out or

carries out the greater part of its activities< or

(b) it is no longer satisfied that the tied agent fulfils the

requirements of this sub-regulation.

For the better carrying out of the requirements set out in these

regulations the competent authority may from time to time, issue and

publish Investment Services Rules in terms of article 6 of the Act,

applicable to investment services licence holders appointing tied agents.

Where the competent authority has refused to register a tied

agent or has withdrawn a registration issued to a tied agent in terms of

sub-regulation (3) of regulation 9 of these regulations, it shall notify

the person to whom such registration was refused or the tied agent whose

registration was withdrawn of its decision, in writing and such person,

shall have a right of appeal from such decision of the competent authority

to the Financial Services Tribunal and the provisions of article 19 of

the Act shall apply mutatis mutandis.

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

Lm0.08 (€0.19)