and Trade Repositories) Regulations, 2013

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 19,040, 1 ta’ Marzu, 2013

L.N. 81 of 2013

FINANCIAL MARKETS ACT

(CAP. 345)

Financial Markets Act (OTC Derivatives, Central Counterparties

and Trade Repositories) Regulations, 2013

IN exercise of the powers conferred by article 49 of the

Financial Markets Act, the Minister of 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 Financial Citation, scope

Markets Act (OTC Derivatives, Central Counterparties and Trade and

commencement.

Repositories) Regulations, 2013.

(2) The purpose of these regulations is to create a registration

framework for OTC Derivatives, central counterparties and trade

repositories and, in part, to implement the relevant provisions of the

EMIR Regulation on OTC derivatives, central counterparties and

trade repositories as herein defined, and they shall be interpreted and

applied accordingly.

(3) Regulations 3 to 9 shall come into force on such date as the

Minister may establish by order in the Gazette.

(1)

In these regulations, unless the context otherwise Definitions.

requires

"the Act" means the Financial Markets Act;

"central counterparty" means a legal person that interposes itself

between the counterparties to the contracts traded on one or more

financial markets, becoming the buyer to every seller and the seller to

every buyer;

"EMIR Regulation" means Regulation (EU) No 648/2012 of the

European Parliament and of the Council of the 4th July, 2012 on OTC

derivatives, central counterparties and trade repositories as amended

from time to time;

"Financial Services Tribunal" means the tribunal established in

terms of article 21 of the Malta Financial Services Authority Act;

"OTC derivative" means a derivative contract the execution of

which does not take place on a regulated market or on a third country

market considered as equivalent to a regulated market in accordance

with article 19(6) of Directive 2004/39/EC on markets in financial

instruments, as amended;

"proposed acquirer" means any natural or legal person or

persons acting in concert, who have taken a decision either to acquire,

directly or indirectly, a qualifying holding in a central counterparty or

to further increase, directly or indirectly, such a qualifying holding in

a central counterparty as a result of which the proportion of the voting

rights or of the capital held would reach or exceed 10%, 20%, 30% or

50% or so that the central counterparty would become its subsidiary;

"trade repository" means a legal person that centrally collects

and maintains the records of derivatives.

(2) Words and expressions used in the Act shall, in these

regulations, have the same meaning as is assigned to them in the Act

The Malta Financial Services Authority established by the

Malta Financial Services Authority Act shall be the designated

competent authority in Malta for the purposes of implementing the

relevant provisions of the EMIR Regulation, and any reference in

these regulations to the competent authority shall be read and

construed accordingly.

(1) The competent authority shall exercise all the

functions, obligations and powers and shall satisfy all the

requirements imposed on competent authorities by the EMIR

Regulation.

(2) Without prejudice to sub-regulation (1), the competent

authority may, for the better implementation of the EMIR Regulation,

exercise any of the powers assigned to it under the Act in relation to

persons acting as central counterparties or trade repositories and, or

who are responsible for clearing and bilateral risk-management

requirements for OTC derivatives and, or who are responsible for

reporting requirements for derivative contracts.

(1) No person shall operate a central counterparty in or

from Malta, or shall provide, or hold itself out to be or provide the

services of a central counterparty in Malta unless such person has

been granted a registration for this purpose issued by the competent

authority in terms of this regulation.

(2) An application for registration to operate a central

counterparty in terms of sub-regulation (1) shall be made to the

competent authority in writing and shall be accompanied by such

documents as the competent authority may specify.

(3) The competent authority shall not grant registration to

operate a central counterparty in terms of sub-regulation (1) unless it

is satisfied that the applicant or applicants are fit and proper persons

and are in a position to comply with any conditions which the

competent authority may deem fit to impose.

The competent authority shall not register, and it shall Withdrawal of

withdraw a registration issued under regulation 5, as the case may be, registration.

where

(a) the holder thereof is not fit and proper to act as a

central counterparty;

(b) the holder thereof does not fulfil the requirements of

registration, or has contravened any of the conditions of

registration;

(c)

the holder thereof, or a person acting on its behalf,

has furnished the competent authority with information which is

false, inaccurate or misleading;

(d) registration has been obtained through false

statements or by other irregular means; or

(e)

at the request of the holder thereof.

Nothing in these regulations shall be construed as enabling Authorization in

or empowering a central counterparty to perform a function or terms

Central Bank of

activity which requires an approval or authorisation in terms of the Malta

any other law.

Central Bank of Malta Act.

For the better carrying out of the provisions of the EMIR Financial

Regulation and of these regulations, the competent authority may, Market Rules.

from time to time, issue and publish Financial Market Rules which

shall be binding on all persons acting as central counterparties or

trade repositories and, or who are responsible for clearing and

bilateral risk-management requirements for OTC derivatives and, or

who are responsible for reporting requirements for derivative

contracts. Such rules may lay down additional requirements and

conditions in relation to these matters as the competent authority may

consider appropriate including

(a)

the operation of the EMIR Regulation or of these

regulations;

(b) any matter relating to the functions, obligations and

powers of the competent authority under the EMIR Regulation;

and

(c)

any other matter arising in connection with the

EMIR Regulation or these regulations.

The provisions of the EMIR Regulation shall apply to

persons acting as central counterparties or trade repositories and, or

who are responsible for clearing and bilateral risk-management

requirements for OTC derivatives and, or who are responsible for

reporting requirements for derivative contracts in or from Malta and

such persons shall exercise all the obligations and satisfy all the

requirements imposed on such persons by the said EMIR Regulation.

For the purposes of article 31(5) of the EMIR Regulation,

the competent authority may, whether or not at the request of the

proposed acquirer in a central counterparty, issue a public statement

indicating the reasons as to why it has refused the proposed

acquisition of the central counter party requested by the proposed

acquirer.

Where a person acting as a central counterparty or trade

repository and, or who is responsible for clearing and bilateral risk-

management requirements for OTC derivatives and, or who is

responsible for reporting requirements for derivative contracts

contravenes or fails to comply with any provisions of the EMIR

Regulation, these regulations and any Financial Markets Rules issued

thereunder, the competent authority may, by notice in writing and

without recourse to a court hearing, impose on such person an

administrative penalty not exceeding one hundred and fifty thousand

euro (€150,000).

A right of appeal to the Financial Services Tribunal shall

lie from a decision of the competent authority to impose a penalty

under regulation 11.

Upon the coming into force of Title III of the EMIR

Regulation, these regulations shall be construed and applied in

accordance therewith and, insofar as the provisions of these

regulations are inconsistent with the provisions of the said EMIR

Regulation, the provisions of the EMIR Regulation shall prevail and

the provisions of these regulations shall not apply to the extent of the

inconsistency.

€0.18