Investment Services Act

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 18,711, 22 ta’ Frar, 2011

Taqsima B

L.N. 63 of 2011

INVESTMENT SERVIVES ACT

(CAP. 370)

Investment Services Act

(Financial Capital Adequacy Consolidation) Regulations, 2011

IN exercise of the powers conferred by article 12 of the

Investment Services Act, the Minister of Finance, the Economy and

Investment, after consultation with the Malta Financial Services

Authority, has made the following regulations

(1)

The title of these regulations is the Investment Title and scope.

Services Act (Financial Capital Adequacy Consolidation)

Regulations, 2011.

(2) The purpose of these regulations is to partly implement

Articles 3, 37 and 38 of Directive 2006/49/EC of the European

Parliament and of the Council of 14 June 2006, as supplemented by

Articles 125, 126, 131, 136, 139, 140, 141 and 143 of the Directive

and Articles 42a, 129, 130, 131a and 132 of the Directive, as amended

by the Second Capital Requirements Directive, as herein defined and

these regulations 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 undertaking" means an undertaking the

principal activity of which consists in owning or managing property,

managing data-processing services, or any other similar activity

which is ancillary to the principal activity of one or more credit

institutions or investment firms;

"the competent authority" means the Malta Financial Services

Authority established by the Malta Financial Services Authority Act; Cap. 330.

"consolidating supervisor" means the competent authority or the

European regulatory authority responsible for the exercise of

supervision on a consolidated basis of EU parent investment firms

and investment firms controlled by EU parent financial holding

companies;

"credit institution" shall have the same meaning as that assigned Cap. 371.

to the term under the Banking Act;

"the Directive" means Council Directive 2006/48/EC of 14 June

2006, relating to the taking up and pursuit of the business of credit

institutions (recast), as may be amended or updated from time to time,

and includes any implementing measures that have been issued or

may be issued thereunder;

"EU parent financial holding company" means a parent financial

holding company in a Member State which is not a subsidiary of a

credit institution or an investment firm authorised in any Member

State or of another financial holding company set up in any Member

State;

"EU parent investment firm" means a parent investment firm in

a Member State which is not a subsidiary of a credit institution or an

investment firm authorised in any Member State or of a financial

holding company set up in any Member State;

"European regulatory authority" means an authority which, in a

country or territory outside Malta that is a Member State, is

empowered by law or regulation to supervise investment firms or

credit institutions;

"financial holding company" means a financial institution the

subsidiary undertakings of which are either exclusively or mainly

investment firms or other financial institutions, at least one of such

subsidiaries being an investment firm, and which is not a mixed

financial holding company within the meaning of regulation 2 of the

Financial Conglomerates Regulations;

"financial institution" shall have the same meaning as that

assigned to the term under the Financial Institutions Act;

"going concern" means a scenario where the undertaking might

continue in operation in the foreseeable future;

"host country" means the Member State, other than where its

head office is situated, in which an investment firm has a branch or in

which it provides services under the freedom to provide services;

"investment firm" means an investment firm, as defined in

regulation 2 of the European Passport Rights for Investment Firms

Regulations, which is subject to the requirements of Directive 2004/

39/EC, excluding

(a)

credit institutions;

(b)

local firms as defined in Article 3(1)(p) of

Directive 2006/49/EC; and

(c)

investment firms which are only authorised to

provide the service of investment advice and, or receive and

transmit orders from investors without holding money or

securities belonging to their client and which for that reason

may not at any time place themselves in debt with those clients.

For the purposes of supervision on a consolidated basis,

"investment firm" shall include third-country investment firms that

meet the following conditions

(a)

firms which, if they were established within the

Community, would fall under the definition of investment firm;

(b)

firms which are authorised in a third country; and

(c)

firms which are subject to and comply with

prudential rules considered by the competent authority to be

equivalent to those laid down by Directive 2006/49/EC;

"Investment Services Rules" mean the Rules for Investment

Services Providers issued by the competent authority in terms of the

Act;

"limited licence investment firm" means an investment firm that

is not authorised in terms of article 6 of the Act to deal on its own

account or provide the investment service of underwriting of financial

instruments and, or placing of financial instruments on a firm

commitment basis and which is subject to the fixed overheads

requirement in terms of the Investment Services Rules;

"Member State" includes an EEA State;

"mixed-activity holding company" means a parent undertaking,

other than a financial holding company or a credit institution or a

mixed financial holding company within the meaning of regulation 2

of the Financial Conglomerates Regulations, the subsidiaries of S.L. 330.06

which include at least one credit institution. Where the parent

investment firm or the EU parent investment firm or the financial

holding company does not include a credit institution, mixed-activity

holding company means a parent undertaking other than a financial

holding company or an investment firm or a mixed financial holding

company within the meaning of regulation 2 of the Financial

Conglomerates Regulations, the subsidiaries of which include at least

one investment firm;

"overseas regulatory authority" means an authority which, in a

country or territory outside Malta that is not a Member State, is

empowered by law or regulation to supervise investment firms or

credit institutions;

"parent financial holding company" means a financial holding

company in a Member State which is not itself a subsidiary of a credit

institution or an investment firm authorised in the same Member State

or of a financial holding company set up in the same Member State;

"parent investment firm" means an investment firm in a Member

State which has a credit institution, an investment firm or a financial

institution as subsidiary or which holds a participation in a credit

institution, an investment firm or a financial institution, and which is

not itself a subsidiary of another credit institution or an investment

firm authorised in the same Member State or of a financial holding

company set up in the same Member State;

"parent undertaking" means a parent company as defined in

article 2(2)(a) of the Companies Act and includes an undertaking

which, in the opinion of the competent authority, effectively exercises

a dominant influence over another undertaking;

"participation" means rights in the capital of other undertakings,

whether or not represented by certificates, which by creating a

durable link, with those undertakings, are intended to contribute to

the company’s activities or the ownership, direct or indirect, of

twenty per cent or more of the voting rights or capital of an

undertaking;

"Second Capital Requirements Directive" means Directive

2009/111/EC of the European Parliament and of the Council of 16

September 2009 amending Directives 2006/48/EC, 2006/49/EC and

2007/64/EC as regards banks affiliated to central institutions, certain

own funds items, large exposures, supervisory arrangements, and

crisis management;

"subsidiary" means a subsidiary undertaking as defined in

article 2(2)(c) of the Companies Act, and includes an undertaking

over which, in the opinion of the competent authority, a parent

undertaking effectively exercises a dominant influence. All

subsidiaries of subsidiary undertakings shall also be considered

subsidiaries of the undertaking that is their original parent; and

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

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

have the same meaning as in the Act.

(1)

The competent authority shall exercise supervision Responsibility

of the

on a consolidated basis

competent

authority for

consolidated

(a)

where the parent undertaking is a parent investment

supervision.

firm or an EU parent investment firm, authorised in Malta;

(b)

where the investment firm which is authorised in

Malta has as its parent undertaking a parent financial holding

company or an EU parent financial holding company;

(c)

where the parent financial holding company or the

EU parent financial holding company which is set up in Malta

has, as subsidiaries, investment firms authorised in two or more

Member States, one of which is Malta;

(d)

where the investment firms authorised in two or

more Member States, one of which is Malta, have as their parent

more than one financial holding company with head offices in

different Member States, one of which is Malta and there is an

investment firm in each of these States and the investment firm

which is authorised in Malta has the largest balance sheet total;

and

(e)

where the financial holding company is set up in a

Member State other than Malta and it has more than one

investment firm authorised in the Community other than the

Member State where the financial holding company is set up,

one of which is authorised in Malta, and the investment firm

authorised in Malta has the largest balance sheet total. For the

purposes of these regulations, the investment firm is considered

as if it is controlled by an EU parent financial holding company.

(2) In the cases referred to in sub-regulation (1)(c), (d) and (e),

the competent authority may by common agreement appoint a

European regulatory authority or an overseas regulatory authority to

exercise supervision on a consolidated basis if its application would

be inappropriate, taking into account the investment firms and the

relative importance of their activities in different countries. In these

cases, before taking its decision, the competent authority shall give

the EU parent investment firm or EU parent financial holding

company or the investment firm with the largest balance sheet total,

as appropriate, an opportunity to state its opinion on that decision.

The competent authority shall notify the Commission of any such

agreements.

Where the competent authority is responsible for the

exercise of supervision on a consolidated basis of EU parent

investment firms and investment firms controlled by EU parent

financial holding companies in terms of regulation 3, it shall carry out

the following functions

(a)

co-ordination of the gathering and dissemination of

relevant or essential information in going concern and

emergency situations; and

(b)

planning and co-ordination of supervisory

activities in going concern situations, including the activities

relating to the internal capital adequacy assessment process, the

supervisory review and evaluation process, the regulatory

disclosure and the measures referred to in the Schedule, in co-

operation with the European regulatory authorities and overseas

regulatory authorities involved; and

(c)

planning and co-ordination of supervisory

activities in co-operation with the European regulatory

authorities and overseas regulatory authorities involved, and if

necessary with central banks, in preparation for and during

emergency situations, including adverse developments in

investment firms or in financial markets using, where possible,

existing defined channels of communication for facilitating

crisis management. These include exceptional measures

referred to in regulation 8(2)(e), the preparation of joint

assessments, the implementation of contingency plans and

communication to the public.

(1)

Where an emergency situation, including adverse

developments in financial markets, arises which potentially

jeopardises the market liquidity and the stability of the financial

system in any of the Member States where entities of a group have

been authorised or where significant branches as referred to in

regulation 14 are established and where the competent authority is

responsible for the exercise of supervision on a consolidated basis, it

shall alert as soon as is practicable the Central Bank of Malta and

other central banks of the European system of the central banks when

this information is relevant for the exercise of their statutory tasks,

including the conduct of monetary policy and related liquidity

provision, the oversight of payments, clearing and settlement

systems, and safeguarding the stability of the financial system, and it

shall communicate all information that is essential for the pursuance

of their tasks

Provided that where the competent authority is responsible

for supervision other than on a consolidated basis, it shall alert as

soon as is practicable the Central Bank of Malta with such

information available to it which may be required for the discharge of

its duties under the Central Bank of Malta Act or any other Act.

(2) Where the Central Bank of Malta becomes aware of a

situation referred to in sub-regulation (1), it shall alert the competent

authority as soon as is practicable.

(3) To the extent possible, the competent authority and the

Central Bank of Malta shall use existing defined channels of

communication.

(4) Where the competent authority is responsible for

supervision on a consolidated basis, it shall, when it needs

information which has already been given to a European regulatory

authority or an overseas regulatory authority, contact these

authorities, whenever possible, in order to prevent duplication of

reporting to the various authorities involved in supervision.

(1)

Where the competent authority is responsible for Written co-

supervision on a consolidated basis in terms of regulation 3, it shall ordination

co-operation

have written co-ordination and co-operation arrangements in place agreements

European

with European regulatory authorities and overseas regulatory regulatory

authorities, responsible for supervising the other members of the authorities

overseas

group.

regulatory

authorities.

(2) Under the arrangements made pursuant to sub-regulation

(1), additional tasks may be entrusted to the competent authority and

procedures for the decision-making process and for co-operation with

other European regulatory authorities and overseas regulatory

authorities may be specified.

(3) Where appropriate, the competent authority may, by

bilateral agreement, delegate its responsibility for supervision of an

investment firm, which is a subsidiary of a parent undertaking that is

an investment firm authorised and supervised by a European

regulatory authority, to this European regulatory authority in order to

assume responsibility for supervising the subsidiary in accordance

with the Directive. The competent authority shall forward the content

of such agreements to the Commission.

(1)

Where the competent authority is the consolidating Establishment

supervisor, it shall establish colleges of supervisors to facilitate the of

of supervisors

exercise of the following tasks and, subject to the confidentiality by

consolidating

requirements of sub-regulations (4) to (8) and compatibility with supervisor.

Community law, ensure appropriate co-ordination and co-operation

with relevant overseas regulatory authorities with respect to

(a)

the tasks referred to in regulations 4 and 5(1), (2)

and (3);

(b)

the granting of permissions to an EU parent

investment firm and its subsidiaries or to an EU parent financial

holding company and its subsidiaries to use the internal ratings

based approach to measure credit risk, the advanced

measurement approach to operational risk and the permissions

relating to the measurement of counterparty credit risk;

(c)

the application of the internal capital adequacy

assessment process and the supervisory review and evaluation

process to an EU parent investment firm and its subsidiaries and

to an EU parent financial holding company and its subsidiaries;

and

(d)

the imposition of an additional capital charge to

each entity within a group that includes at least one credit

institution and on a consolidated basis in terms of the Schedule.

(2) The following tasks shall be undertaken by the college of

supervisors established by the competent authority

(a)

exchanging information;

(b)

agreeing on voluntary entrustment of tasks and

voluntary delegation of responsibilities where appropriate;

(c)

determining supervisory examination programmes

based on the risk assessment of the group in accordance with the

competent authority’s supervisory review and evaluation;

(d)

increasing the efficiency of supervision by

removing unnecessary duplication of supervisory requirements,

including the information requests referred to in regulations

5(4) and 8(4);

(e)

consistently applying the prudential requirements

under the Directive across all entities within a group which

includes at least one credit institution, without prejudice to the

options and discretions available in Community legislation; and

(f)

applying the provisions of regulation 4(c) taking

into account the work of other forums that may be established in

this area.

(3) Where the competent authority is participating in the

colleges of supervisors, it shall co-operate closely with other

European regulatory authorities and overseas regulatory authorities.

The establishment and functioning of colleges of supervisors shall not

affect the rights and responsibilities of the competent authority under

the Directive.

(4) Where the competent authority is the consolidating

supervisor, it shall establish and manage the colleges of supervisors

based on written arrangements referred to in regulation 6, determined

after consultation with European regulatory authorities or overseas

regulatory authorities concerned.

(5) Where the competent authority is the consolidating

supervisor, it may request the following competent authorities to

participate in colleges of supervisors

(a)

European regulatory authorities that are

responsible for the supervision of subsidiaries of an EU parent

investment firm or an EU parent financial holding company;

(b)

European regulatory authorities of a host Member

State where significant branches, as referred to in regulation 14,

are established;

(c)

central banks as appropriate; and

(d)

overseas regulatory authorities, where appropriate.

(6) Where the competent authority is the consolidating

supervisor, it shall chair the meetings of the college and shall decide

which European regulatory authorities and overseas regulatory

authorities participate in a meeting or in an activity of the college.

The decision shall take account of the relevance of the supervisory

activity to be planned or co-ordinated for the European regulatory

authorities and overseas regulatory authorities, in particular the

potential impact on the stability of the financial system in the

Member States concerned and, in particular, in emergency situations,

based on the information available at the relevant time and the

obligations referred to in regulation 14(6) and (7).

(7) The competent authority shall keep all members of the

college fully informed, in advance, of the organisation of the

meetings of the college, about the main issues to be discussed and the

activities to be considered. The competent authority shall also keep

all the members of the college fully informed, in a timely manner, of

the actions taken in those meetings or the measures carried out.

(8) The competent authority shall inform the Committee of

European Banking Supervisors of the activities of the college of

supervisors, including in emergency situations, and communicate to

that Committee all information that is of particular relevance for the

purposes of supervisory convergence.

(1)

The competent authority shall co-operate closely

with European regulatory authorities and overseas regulatory

authorities in all matters relating to supervision on a consolidated

basis. Such co-operation shall include the provision to European

regulatory authorities and overseas regulatory authorities of any

information which is essential or relevant for the exercise of the

European regulatory authorities’ and overseas regulatory authorities’

supervisory tasks under the Directive. In this regard, the competent

authority shall communicate on request all relevant information and

shall communicate on its own initiative all essential information.

(2) For the purpose of sub-regulation (1), information shall be

regarded as essential if it could materially influence the assessment of

the financial soundness of an investment firm, credit institution or a

financial institution in another Member State and shall include, in

particular, the following items

(a)

identification of the group structure of all major

investment firms in a group;

(b)

identification of the European regulatory

authorities and overseas regulatory authorities of the investment

firms in the group, as the case may be;

(c)

procedures for the collection of information from

the investment firms in a group and the verification of that

information;

(d)

adverse developments in investment firms or in

other entities of a group, which could seriously affect the

investment firms; and

(e)

major sanctions and exceptional measures taken by

the competent authority in accordance with the Directive,

including the imposition of an additional capital charge under

point (a) of the Schedule and the imposition of any limitation on

the use of advanced measurement approach for the calculation

of the operational risk component in terms of the Investment

Services Rules.

(3) Where the competent authority is responsible for

consolidated supervision of EU parent investment firms and

investment firms controlled by EU parent financial holding

companies, it shall provide European regulatory authorities who

supervise subsidiaries of these parents with all relevant information.

In determining the extent of relevant information, the importance of

these subsidiaries within the financial system in those Member States

shall be taken into account.

(4) Where the competent authority is responsible for the

supervision of an investment firm controlled by an EU parent

investment firm, it shall whenever possible contact the consolidating

supervisor when it needs information regarding the implementation of

approaches and methodologies set out in the Directive that may

already be available to that consolidating supervisor.

(5) The competent authority shall consult with European

regulatory authorities and overseas regulatory authorities, where its

decisions are of importance for the supervisory tasks of these

authorities

(a)

changes in the shareholder, organisational or

management structure of investment firms in a group, which

require the approval or authorisation of European regulatory

authorities or overseas regulatory authorities; and

(b)

major sanctions or exceptional measures referred to

in sub-regulation (2)(e)

Provided that the competent authority may decide not to

consult in cases of urgency or where such consultation may

jeopardise the effectiveness of its decisions. In this case, the

competent authority shall, without delay, inform the European

regulatory authorities and overseas regulatory authorities, as

applicable.

(1)

Undertakings included within the scope of Exchange of

supervision on a consolidated basis, mixed-activity holding information.

companies and their subsidiaries, or subsidiaries of an investment

firm or a financial holding company, which are not included within

the scope of supervision on a consolidated basis shall exchange any

information which would be relevant for the purposes of supervision

in accordance with Articles 124 to 139 of the Directive.

(2) Where a parent undertaking is situated in Malta and the

competent authority does not itself exercise supervision on a

consolidated basis, it shall, upon request by the European regulatory

authority or overseas regulatory authority responsible for exercising

such supervision, require the parent undertaking to provide any

information relevant for the purposes of supervision on a

consolidated basis and the competent authority shall transmit such

information to the European regulatory authority or overseas

regulatory authority making the request.

(3) The competent authority shall exchange the information

relating to investment firms subsidiaries of a mixed-activity holding

company as referred to in the Investment Services Rules for

Investment Services Providers, on the understanding that the

collection or possession of information does not in any way imply

that the competent authority plays a supervisory role in relation to the

mixed-activity holding company and those of its subsidiaries which

are not investment firms or to the subsidiaries of an investment firm

or a financial holding company which are not included within the

scope of supervision on a consolidated basis.

(1)

The competent authority shall co-operate closely

with European regulatory authorities and overseas regulatory

authorities where the investment firm, financial holding company or

mixed-activity holding company which is situated in Malta controls

one or more subsidiaries authorised in a country outside Malta which

are insurance companies or other undertakings providing investment

services. Without prejudice to its respective responsibilities, the

competent authority shall provide European regulatory authorities

and overseas regulatory authorities with any information likely to

simplify their task and to allow supervision of the activity and overall

financial situation of the undertakings they supervise.

(2) Where the competent authority is responsible for

supervision on a consolidated basis, it shall establish lists of the

financial holding companies included in the supervision on a

consolidated basis and communicate these lists to the European

regulatory authorities, overseas regulatory authorities and to the

Commission.

The competent authority may request a European

regulatory authority to verify information concerning an investment

firm, a credit institution, a financial holding company, a financial

institution, an ancillary services undertaking, a mixed-activity

holding company or its subsidiaries, or subsidiaries of an investment

firm or a financial holding company which are not included within the

scope of supervision on a consolidated basis.

Where the competent authority receives a request from a

European regulatory authority to verify information, it may act upon

the request by either allowing the European regulatory authority

making the request to carry out such verification or by carrying out

the verification itself or by appointing an auditor or expert to carry

out such verification. The European regulatory authority making the

request may, if it so wishes, participate in the verification when it

does not carry out the verification itself.

(1)

Where an investment firm, the parent undertaking Third country

of which is an investment firm or a financial holding company consolidated

supervision.

authorised in a third country, is not subject to consolidated

supervision, the competent authority shall verify whether the

investment firm is subject to consolidated supervision by an overseas

regulatory authority, which is equivalent to that governed by the

principles laid down in the Directive.

(2) The competent authority shall carry out the verification at

the request of the parent undertaking or of any of the regulated

entities authorised in the Community or on its own initiative. The

competent authority shall consult the other European regulatory

authorities and overseas regulatory authorities involved.

(3) The competent authority shall take into account any

guidance issued by the European Banking Committee as to whether

the consolidated supervision arrangements of overseas regulatory

authorities are likely to achieve the objectives of consolidated

supervision as defined in the Directive, in relation to investment

firms, the parent undertaking of which is an investment firm

authorised in a third country. For this purpose, the competent

authority shall consult the European Banking Committee before

making a decision.

(4) In the absence of such equivalent supervision, the

competent authority shall deem what are the appropriate supervisory

techniques which achieve the objectives of supervision on

consolidated basis of investment firms. Such supervisory techniques

shall be agreed upon by the competent authority, after consultation

with other European regulatory authorities and overseas regulatory

authorities involved. The supervisory techniques shall be designed to

achieve the objectives of consolidated supervision as defined in the

Directive and shall be notified to other European regulatory

authorities, overseas regulatory authorities and the Commission.

(5) The competent authority may in particular require the

establishment of a financial holding company which is authorised in

the Community, and apply the provisions on consolidated supervision

to that financial holding company.

(1)

The competent authority may be requested by the Establishment

European regulatory authority for a branch of an investment firm of

branches.

situated in Malta, which does not fulfil the criteria set out in article

20(3) or article 46(1) of Directive 2006/49/EC or does not qualify as a

limited licence investment firm, to be considered as significant. This

request may also be made where regulation 4 applies.

(2) The request by the European regulatory authority shall

provide reasons for considering the branch to be significant with

particular regard to the following

(a)

the likely impact of a suspension or closure of the

operations of the investment firm on market liquidity and the

payment and clearing and settlement systems in the Member

State where the branch of an investment firm is situated; and

(b)

the size and the importance of the branch in terms

of number of clients within the context of the banking or

financial system of the Member State where the branch is

situated.

(3) The competent authority shall do everything within its

power to reach a joint decision with European regulatory authorities

on the designation of a branch as being significant. The competent

authority shall transmit its decision to the European regulatory

authorities concerned

Provided that where no joint decision is reached within

two months of receipt of the request, the European regulatory

authority shall take its own decision within a further period of two

months on whether the branch is significant. In taking its decision, the

European regulatory authority shall take into account any views and

reservations of the competent authority. The European regulatory

authority shall transmit its decision to the competent authority.

(4) The decision referred to in sub-regulation (3) shall be set

out in a document containing the fully reasoned decision and shall be

recognised as determinative and applied by the competent authority

and the European regulatory authority in the Member State

concerned.

(5) The designation of a branch as being significant shall not

affect the rights and responsibilities of the competent authority under

the Directive.

(6) Where a significant branch is established, the competent

authority shall communicate to the European regulatory authority the

information referred to in regulation 8(2)(d) and (e) and carry out the

tasks referred to in regulation 4(c) in co-operation with the European

regulatory authority.

(7) Where a significant branch is established and the

competent authority becomes aware of an emergency situation within

an investment firm authorised in Malta, it shall alert as soon as is

practicable the Central Bank of Malta and other central banks of the

European system of the central banks when this information is

relevant for the exercise of their statutory tasks, including the conduct

of monetary policy and related liquidity provision, the oversight of

payments, clearing and settlement systems, and safeguarding the

stability of the financial system.

(8) Where the competent authority is not the consolidating

supervisor and it is supervising an investment firm with significant

branches in other Member States, it shall establish and chair a college

of supervisors to facilitate the co-operation under sub-regulations (6)

and (7). The establishment and functioning of the college shall be

based on written arrangements determined by the competent authority

after consultation with European regulatory authorities. In such case

(a)

the competent authority shall decide which

European regulatory authorities participate in a meeting or in an

activity of the college. The decision of the competent authority

shall take account of the relevance of the supervisory activity to

be planned or co-ordinated for these European regulatory

authorities, in particular the potential impact on the stability of

the financial system in the Member States concerned and in

emergency situations and the obligations referred to in sub-

regulations (6) and (7); and

(b)

the competent authority shall keep all members of

the college fully informed, in advance, of the organisation of

such meetings, the main issues to be discussed and the activities

to be considered. The competent authority shall also keep all the

members of the college fully informed, in a timely manner, of

the actions taken in those meetings or the measures carried out.

Without prejudice to any of the provisions of these Powers of the

regulations, the competent authority may, for the better competent

authority.

implementation of these regulations, use any of its powers under the

Act and may exercise any of the rights and powers assigned to the

Malta Financial Services Authority under the Malta Financial Cap. 330.

Services Authority Act.

Schedule

Regulations 4(b), 7(1)(d) and 8(2)(e)

Where investment firms do not meet the requirements of the

Directive, the competent authority shall have the power to

(a)

oblige investment firms to hold an amount of

capital which exceeds the minimum financial resources

requirement in terms of the Investment Services Rules;

(b)

require investment firms to reinforce the

arrangements, processes, mechanisms and strategies

implemented with respect to the internal capital adequacy

assessment process;

(c)

require investment firms to apply a specific

provisioning policy or treatment of assets with respect to the

minimum financial resources requirement in terms of the

Investment Services Rules;

(d)

restrict or limit the business, operations or network

of investment firms; and

(e)

require the reduction of the risk inherent in the

activities, products and systems of investment firms.