Consolidation) (Amendment) Regulations, 2012

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 18,920, 25 ta’ Mejju, 2012 B 1435

Taqsima B

L.N. 172 of 2012

INVESTMENT SERVICES ACT

(CAP. 370)

Investment Services Act (Financial Capital Adequacy)

Consolidation) (Amendment) Regulations, 2012

IN exercise of the powers conferred by article 12 of the

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

Investment, acting on the advice of the Malta Financial Services

Authority, has made the following regulations:-

(1) The title of these regulations is the Investment Citation and

Services Act (Financial Capital Adequacy Consolidation) commencement.

(Amendment) Regulations, 2012 and these regulations shall be read

and construed as one with the Investment Services Act (Financial S.L. 370.17

Capital Adequacy Consolidation) Regulations, hereinafter referred to

as "the principal regulations".

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

10 of Article 1 of Directive 2010/76/EU of the European Parliament

and of the Council of 24 November 2010 amending Directives 2006/

48/EC and 2006/49/EC as regards capital requirements for the trading

book and for re-securitisations, and the supervisory review of

remuneration policies.

In sub-regulation (2) of regulation 1 of the principal Amends

regulations, for the words "the Directive", there shall be substituted regulation

the principal

the words "the Capital Requirements Directive".

regulations.

Sub-regulation (1) of regulation 2 of the principal Amends

regulation 2 of

regulations shall be amended as follows

the principal

regulations.

(a)

immediately after the definition "ancillary services

undertaking" there shall be added the following new definition

" "Capital Requirements 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;"; and

(b)

the definition "the Directive" shall be deleted.

The Schedule to the principal regulations shall be amended

as follows

(a) in paragraph (a) thereof, for the words "in terms of

the Investment Services Rules", there shall be substituted the

words "in terms of the Investment Services Rules. For the

purposes of determining the appropriate level of own funds on

the basis of the supervisory review and evaluation process

carried out by the competent authority in terms of the relative

Investment Services Rules, the competent authority shall assess

whether any imposition of a specific own funds requirement in

excess of the minimum level is required to capture risks to

which investment firms are or might be exposed, taking into

account the following

(i) the quantitative and qualitative aspects of the

investment firms’ assessment process with respect to their

internal capital adequacy assessment process;

(ii) the

investment

firms’

governance

arrangements, processes and mechanisms as referred to in

the relative Investment Services Rules; and

(iii) the outcome of the review and evaluation

carried out in accordance with the supervisory review and

evaluation process referred to in the relative Investment

Services Rules";

(b) in paragraph (d) thereof, for the words "investment

firms; and", there shall be substituted the words "investment

firms;";

(c)

in paragraph (e) thereof, for the words "products and

systems of investment firms.", there shall be substituted the

words "products and systems of investment firms;"; and

(d) immediately after paragraph (e) thereof, there shall

be added the following new paragraphs

"(f) require investment firms to limit variable

remuneration as a percentage of total net revenues when it

is inconsistent with the maintenance of a sound capital

base; and

(g) require investment firms to use net profits to

strengthen the capital base.".

€0.09