Regulations, 2014

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 19,245, 2 ta’ Mejju, 2014

L.N. 146 of 2014

INVESTMENT SERVICES ACT

(CAP. 370)

Investment Services Act (Access to Emissions Allowance Auction)

Regulations, 2014

IN exercise of the powers conferred by article 12(1)(n) of the

Investment Services Act, the Minister for Finance, 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 (Access to Emissions Allowance Auction) Regulations, scope.

2014. (2) The purpose of these regulations is to implement Articles

18(2), 18(3) and 59 of Commission Regulation (EU) No 1031/2010 of

12 November 2010 on the timing, administration and other aspects of

auctioning of greenhouse gas emission allowances pursuant to

Directive 2003/87/EC of the European Parliament and of the Council

establishing a scheme for greenhouse gas emission allowances

trading within the Community, as may be amended from time to time.

(1)

In these regulations, unless the context otherwise Interpretation.

requires -

"the Act" means the Investment Services Act;

"Auctioning Regulation" means Commission Regulation (EU)

No 1031/2010 of 12 November 2010 on the timing, administration

and other aspects of auctioning of greenhouse gas emission

allowances pursuant to Directive 2003/87/EC of the European

Parliament and of the Council establishing a scheme for greenhouse

gas emission allowances trading within the Community, as may be

amended from time to time;

"auctions" means the auctioning of emission allowances held in

accordance with the Auctioning Regulation;

"exempt person" means a person dealing on own account in

financial instruments in terms of paragraph 3 of the First Schedule to

the Act or providing investment services in the commodity

derivatives or derivative contracts included in Schedule 2 of the Act

to the clients of its main business, where such activity is ancillary to

its main business, when considered on a group basis; and

(a)

that main business is not the provision of investment

services within the meaning of the Act or the provision of

banking services under the Banking Act, and

(b) the person is exempt from the requirement of an

investment services licence in terms of the Investment Services

Act (Exemption) Regulations.

(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 Auctioning 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 Auctioning

Regulation.

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

authority may, for the better implementation of the Auctioning

Regulation, exercise any of the powers assigned to it under the Act in

relation to persons engaged in bidding in emission allowance

auctions.

For the better carrying out of the provisions of the

Auctioning Regulation and of these regulations, the competent

authority may, from time to time, issue and publish Investment

Services Rules which shall be binding on all holders of an investment

services licence and exempt persons authorised pursuant to these

regulations, which are engaged in bidding in auctions. Such rules may

lay down additional requirements and conditions, and any other

matters as the competent authority may consider appropriate

including

(a)

the operation of the Auctioning Regulation or of

these regulations;

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

powers of the competent authority under the Auctioning

Regulation; and

(c)

any other matter arising in connection with the

Auctioning Regulation or these regulations.

A holder of an investment services licence shall be eligible Admission to

to apply for admission to bid directly in emission allowance auctions bid

investment

on behalf of its clients when such bidding is for products that are not services

holders for

financial instruments, on the condition that it is authorised by the products that are

not financial

competent authority in terms of these regulations.

instruments.

An exempt person shall be eligible to apply for admission Admission to

to bid directly in emission allowance auctions either on its own bid

persons for

account or on behalf of clients when such bidding is both for products products

financial

that are financial instruments within the meaning of the Second instruments and

Schedule to the Act and for products that are not financial products

not financial

instruments, on the condition that it is authorised by the competent instruments.

authority.

An application for authorisation in terms of regulations 6 Application for

and 7 shall be made to the competent authority in writing and shall be authorisation.

accompanied by such documents as the competent authority may

specify.

The competent authority shall not grant authorisation in Conditions of

authorisation.

terms of these regulations unless the applicant

(a)

is of sufficient good repute and sufficiently

experienced as to ensure proper respect of the conduct rules

provided for in the Investment Services Rules issued by the

competent authority for this purpose;

(b) has in place the necessary processes and checks to

manage conflicts of interest and serve the best interests of its

clients;

(c)

complies with the requirements of the Prevention of S.L. 373.01

Money Laundering and Funding of Terrorism Regulations, and

any regulations and guidance notes issued thereunder; and

(d) complies with any other measures deemed

necessary, having regard to the nature of the bidding services

being offered and the level of sophistication of the clients in

terms of its investor or trading profile as well as any risk-based

assessment of the likelihood of money laundering, terrorist

financing or criminal activity.

The competent authority may withdraw an authorisation Withdrawal of

authorisation.

granted in terms of these regulations where

(a)

the holder thereof no longer fulfils the conditions of

authorisation or has contravened any of the conditions of

authorisation;

(b) the holder thereof, or a person acting on its behalf,

has furnished the competent authority with information which is

false, inaccurate or misleading;

(c)

authorisation has been obtained through false

statements or by other irregular means; or

(d) the holder thereof has seriously and systematically

infringed any Investment Services Rules issued in terms of

regulation 5.

Where a person contravenes any of the provisions of these

regulations, 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

(a)

reject an application for authorisation made in terms

of these regulations;

(b)

withdraw an authorisation in terms of regulation 10;

or

(c)

impose a penalty in terms of regulation 11.

€0.18