Regulations, 2013

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 19, 140, 20 ta’ Settembru, 2013

L.N. 283 of 2013

SET-OFF AND NETTING ON INSOLVENCY ACT

(CAP. 459)

Financial Collateral Arrangements (Amendment)

Regulations, 2013

IN exercise of the powers conferred by article 7 of the Set-Off

and Netting on Insolvency Act, the Minister for Finance has made the

following regulations:-

The title of these regulations is the Financial Collateral Citation.

Arrangements (Amendment) Regulations, 2013 and these regulations

shall be read and construed as one with the Financial Collateral S.L. 459.01.

Arrangements Regulations, hereinafter referred to as "the principal

regulations".

Regulation 2 of the principal regulations shall be amended Amends

regulation 2 of

as follows

the principal

regulations.

(a)

sub-regulation (1) thereof shall be amended as

follows

(i) the definition "credit claims" shall be

substituted by the following

" "credit claims" means

(a) pecuniary claims arising out of an

agreement whereby a bank or credit institution

within the meaning of regulation 4(1) grants

credit in the form of a loan; or

(b) pecuniary claims due to a non-

natural person, provided that the debtor of the

claims granted as collateral is also a non-

natural person;";

(ii) the definition

"instrument"

shall

be

substituted by the following

" "instrument" means

(a) shares in companies and

other securities or participation

interests or rights equivalent to shares

in companies, partnerships and other

entities;

(b) bonds and other securities

giving rise to or acknowledging

indebtedness;

(c) any other securities which

give the right to acquire any such shares,

bonds, or other securities or participation

interests or rights by subscription,

purchase or exchange or which give rise

to a cash settlement (excluding

instruments of payment), including units

in collective investment schemes and

money market instruments;

(d) to the extent not already

mentioned above, any instrument as

defined in article 2 of the Investment

Services Act; and

(e) claims relating to, or rights in,

or in respect of, any of the securities,

participation interests or rights and

instruments in terms of paragraphs (a),

(b), (c) or (d) hereof;";

(iii) immediately after the definition "the

Minister", there shall be added the following new

definitions

" "non-natural person" means any legal

person, unincorporated firm or body of persons or

partnership not being an individual;

"OECD country" means any country that is a

member of the Organisation for Economic Co-

operation and Development established in 1961;";

(iv) the definition "recognised jurisdiction" shall

be substituted by the following

" "recognised jurisdiction" means

(a) an EU Member State or an

EEA State;

(b) any country that is a

member of the Organisation for

Economic

Co-operation

and

Development (OECD);

(c) a country that is a signatory of

the IOSCO Multilateral Memorandum of

Understanding; or

(d) any other jurisdiction with

whom the Authority established in terms

of the Malta Financial Services Authority

Act

has

a

Memorandum

of

Understanding covering securities;"; and

(b)

sub-regulation (2) thereof shall be amended as

follows

(a) in the first proviso thereof, for the words

"Provided that", there shall be substituted the words

"Provided further that"; and

(b) immediately after the words "acting on the

collateral taker’s behalf:", there shall be added the

following new proviso

" "Provided that a collateral taker shall also be

deemed to have control over financial collateral

when this is held by a third party, non-natural

person, who acts on the instructions of the collateral

taker or of a person acting on his behalf, whether

throughout the duration of the financial collateral

arrangement or upon the occurrence of an event of

default under the financial collateral arrangement:".

In sub-regulation (3) of regulation 3A of the principal Amends

regulations, for the words "the Companies Act or any other law is regulation

the principal

incompatible with", there shall be substituted the words "the regulations.

Companies Act, the Companies Act (Investment Companies with

Variable Share Capital) Regulations or any other law is in conflict

with".

In regulation 3B of the principal regulations, for the words Amends

"The obligations arising out of article 122(10) of the Companies Act regulation

the principal

do not apply to", there shall be substituted the words "The obligations regulations.

arising out of article 122(10) and (11) of the Companies Act as well

as any obligation to offer shares on a pre-emptive basis to other

shareholders in terms of the Companies Act (Investment Companies

with Variable Share Capital) Regulations do not apply to".

Sub-regulation (1) of regulation 4 of the principal Amends

regulation 4 of

regulations shall be amended as follows

the principal

regulations.

(a)

paragraphs (a) to (i) thereof shall be renumbered (b)

to (j) respectively;

(b) paragraphs (j) and (k) thereof shall be renumbered

(l) and (n) respectively;

(c)

immediately after the words "For the purposes of

these regulations, both the collateral taker and the collateral

provider shall be:", there shall be added the following new

paragraph

"(a) a corporation or other legal person, in either

case established by law;";

(d) in paragraph (j) thereof, as renumbered, for the

words "any other collective investment scheme and

management company of such scheme which are licensed",

there shall be substituted the words "any other collective

investment scheme or management company of such scheme

which is licensed";

(e)

immediately after paragraph (j) thereof, as

renumbered, there shall be added the following new paragraph

"(k)

a securitisation vehicle as defined in

article 2 of the Securitisation Act;";

(f)

paragraph (l) thereof, as renumbered, shall be

substituted by the following

"(l) a central counterparty, settlement agent or

clearing house;";

(g) immediately after paragraph (l) thereof, as

renumbered, there shall be added the following new paragraph

"(m) a non-natural person who acts in a trust or

representative capacity on behalf of any one or more

persons that includes any bondholders or holders of other

forms of securitised debt or on behalf of any entity as

defined in paragraphs (a) to (l); or"; and

(h)

in paragraph (n) thereof, as renumbered, for the

words "a person other than a natural person, including

unincorporated firms and partnerships,", there shall be

substituted the words "a non-natural person other than the

entities mentioned in paragraph (a),", and for the words

"paragraphs (a) to (j)", there shall be substituted the words

"paragraphs (a) to (m)".

Regulation 5 of the principal regulations shall be amended Amends

regulation 5 of

as follows

the principal

regulations.

(a)

sub-regulation (4) thereof shall be amended as

follows

(i) for the words "Notice for the purposes of this

regulation shall be made by:", there shall be substituted the

words "When credit claims are provided as financial

collateral, for the purposes of this regulation the debtor

shall be deemed to be notified of the financial collateral

arrangement upon any one of the following events taking

place at the option of the collateral taker or the collateral

provider:";

(ii) in paragraph (a) thereof, for the words "in

writing; and", there shall be substituted the words "in

writing; or";

(iii) paragraph (c) thereof shall be renumbered

sub-paragraph (iii) of paragraph (b) thereof, and for the

word "circulation:", there shall be substituted the word

"circulation."; and

(iv) the proviso thereof shall be numbered sub-

regulation (5);

(b) sub-regulations (5) and (6) thereof shall be

renumbered (6) and (7) respectively; and

(c)

in the new sub-regulation (5)

(i) for the words "Provided that such notification

shall be effective for all the purposes", there shall be

substituted the words "Such notification shall be effective

for all purposes";

(ii) in sub-paragraph (i) thereof, for the words

"such date of service;", there shall be substituted the words

"such date of service; or";

(iii) in sub-paragraph (ii) thereof, for the words

"last known address;", there shall be substituted the words

"last known address; or"; and

(iv) in sub-paragraph (iii) thereof, for the words

"notice in the newspaper, and", there shall be substituted

the words "notice in the newspaper; or".

Regulation 6 of the principal regulations shall be amended

as follows

(a)

sub-regulation (1) thereof shall be amended as

follows

(i) in paragraph (b) thereof, for the words

"financial obligations; or", there shall be substituted the

words "financial obligations;";

(ii) paragraph (c) thereof shall be renumbered

paragraph (d); and

(iii) immediately after paragraph (b) thereof there

shall be added the following new paragraph

"(c)

in relation to instruments

consisting of securities of a SICAV, the

financial collateral may also be realised

in the manner and in accordance with the

value as contemplated in regulation

14(6)(iii) of the Companies Act

(Investment Companies with Variable

Share Capital) Regulations; or";

(b) in sub-regulation (2) thereof, for the words "agreed

on the valuation", there shall be substituted the words "agreed,

in writing, on the manner of or mechanism for the valuation";

and

(c)

in sub-regulation (5) thereof, for the words "the

Companies Act or any other law.", there shall be substituted the

words "the Companies Act, the Companies Act (Investment

Companies with Variable Share Capital) Regulations, or any

other law.".

In sub-regulation (1) of regulation 9 of the principal

regulations, immediately after the words "Companies Act shall not

apply.", there shall be added the words "To the extent that they

conflict with these regulations, the provisions of regulation 14(6) and

(7) of the Companies Act (Investment Companies with Variable Share

Capital) Regulations shall not apply.".

€0.27