Regulations, 2015

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 19,475, 18 ta’ Settembru, 2015

L.N. 300 of 2015

INVESTMENT SERVICES ACT

(CAP. 370)

Investment Firms (Reorganisation and Winding-up)

Regulations, 2015

IN exercise of the powers conferred by article 12 of the

Investment Services Act, the Minister for Finance, acting on the

advice of the Malta Financial Services Authority as the competent

authority for the purposes of the Act, has made the following

regulations:-

The title of these regulations is the Investment Firms Citation.

(Reorganisation and Winding-up) Regulations, 2015.

(1) The purpose of these regulations is to implement the Purpose.

provisions of Directive 2001⁄24⁄EC of the European Parliament and of

the Council of 4th April, 2001 on the reorganisation and winding-up

of investment firms, as rendered applicable to investment firms by

Article 117 of Directive 2014/59/EU of the European Parliament and

of the Council of 15th May 2014, establishing a framework for the

recovery and resolution of credit institutions and investment firms,

and shall be interpreted and applied accordingly.

(2) In the event that there is a conflict between any of these

regulations and the provisions of the Directives mentioned in sub-

regulation (1), the provisions of the Directives shall prevail.

(1) These regulations apply to Maltese investment firms Scope.

holding an investment services licence issued by the competent

authority under the Investment Services Act, which are subject to the Cap. 370.

requirements of the CRD and the CRR and to their branches located

in other Member States or EEA States; and Part IV of these

regulations applies to branches present in Malta of investment firms

authorized in another Member State or EEA State which are subject

to the requirements of the said CRD and CRR. These regulations shall

not apply to those branches of investment firms that are situated in a

Member State or an EEA State in which they have their head offices.

(2) The provisions of these regulations shall also apply to the

financial institutions, firms and parent undertakings falling within the

scope of Directive 2014/59/EU in the event of application of the

resolution tools and exercise of the resolution powers provided for in

Directive 2014/59/EU of the European Parliament and of the Council.

(3) The provisions of these regulations relating specifically to

the branches of an investment firm not having a head office within a

Member State or an EEA State apply only where such investment

firm has branches in at least two States being either a Member State

or an EEA State.

(4) These regulations shall only apply to reorganisation

measures or winding-up proceedings adopted immediately after the

date of coming into force of these regulations.

PRELIMINARY

(1)

In these regulations, unless the context otherwise

requires -

''the Act'' means the Investment Services Act;

''administrative or judicial authorities'' mean such administrative

or judicial authorities of Malta that are competent for the purposes of

reorganisation measures or winding-up proceedings;

''administrator'' means a special controller appointed under the

Companies Act; or a controller appointed under the Controlled

Companies (Procedure for Liquidation) Act; or a competent person

appointed under article 15A(1)(c) of the Act; or any other person or

body appointed by the competent authority or the foreign judicial or

administrative authority for the purpose of administering

reorganisational measures;

''branch'' means a place of business which forms a legally

dependent part of an investment firm and which carries out directly

all or some of the transactions inherent in the business of investment

firms, as defined in point (17) of Article 4(1) of the CRR;

''the BRRD'' means Directive 2014/59/EU of the European

Parliament and of the Council of 15 May 2014 establishing a

framework for the recovery and resolution of credit institutions and

investment firms and amending Council Directive 82/891/EEC, and

Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/

36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations

(EU) No 1093/2010 and (EU) No 648/2012, of the European

Parliament and of the Council, as amended from time to time, and

includes any implementing measures, implementing technical

standards, regulatory technical standards, guidelines and similar

measures that have been or may be issued thereunder;

''competent authority'' means the Malta Financial Services

Authority established by the Malta Financial Services Authority Act,

or, as the case may be, the Resolution Committee established by the

Malta Financial Services Authority Act with respect to reorganization

measures taken pursuant to the BRRD and to the said Act;

''the Court'' means the Civil Court in its contentious jurisdiction

in its role as the judicial authority competent for the purposes of

reorganisation measures or winding-up proceedings in terms of Parts

V and VI of the Companies Act;

"the CRD" means Directive 2013/36/EU of the European

Parliament and of the Council of 26 June 2013 on access to the

activity of credit institutions and the prudential supervision of credit

institutions and investment firms, amending Directive 2002/87/EC

and repealing Directives 2006/48/EC and 2006/49/EC, as amended

from time to time, and includes any implementing measures that have

been or may be issued thereunder;

''the CRR'' means Regulation (EU) No 575/2013 of the

European Parliament and of the Council of 26 June 2013 on

prudential requirements for credit institutions and investment firms

and amending Regulation (EU) No 648/2012, as amended from time

to time, and includes any implementing measures that have been or

may be issued thereunder;

''EEA State'' means a State which is a contracting party to the

agreement on the European Economic Area signed at Oporto on 2nd

May, 1992 as amended by the Protocol signed at Brussels on the 17th

March, 1993 and as amended by any subsequent acts;

''European investment firm'' means an investment firm having

its head office in a Member State or an EEA State, other than Malta;

''financial institution'' shall have the same meaning as that

assigned to it in point (26) of Article 4(1) of the CRR;

''foreign authority'' means the body or bodies empowered to

supervise investment firms by any Member State or EEA State other

than Malta;

''head office'' means the office that serves as the administrative

centre of an investment firm responsible for the activities of overall

management of the investment firm including its branches;

''home Member State'' means the Member State or EEA State in

which an investment firm has been granted authorisation, as defined

in point (43) of Article 4(1) of the CRR;

''host Member State'' means the Member State or EEA State in

which an investment firm has a branch or in which it provides

services, as defined in point (44) of Article 4(1) of the CRR;

''instrument'' means any instrument, contract or right falling

within the Second Schedule to the Act and whether or not issued in

Malta;

''investment firm'' means a person as defined in point (1) of

Article 4(1) of Directive 2004/39/EC, which is subject to the

requirements imposed by that Directive, the CRD and the CRR,

excluding the following

(a)

credit institutions;

(b)

local firms;

(c)

firms which are not authorised to provide the

ancillary service referred to in point (1) of Section B of Annex I

to Directive 2004/39/EC, which provide only one or more of the

investment services and activities listed in points 1, 2, 4 and 5 of

Section A of Annex I to that Directive, and which are not

permitted to hold money or securities belonging to their clients

and which for that reason may not at any time place themselves

in debt with those clients;

''known creditors'' means creditors where the administrator or

liquidator is aware of, or should reasonably be aware of

(a)

the creditor’s identity;

(b)

the creditor’s claim or potential claim, and

(c)

a recent address where the creditor is likely to

receive a communication;

''liquidator'' means -

(a)

in Malta, an individual liquidator or liquidation

committee appointed under the provisions of the Companies Act

to administer the winding-up of a Maltese investment firm or its

branches and includes the official receiver as defined in the

Companies Act when acting in the capacity of liquidator and the

controller as defined in the Controlled Companies (Procedure

for Liquidation) Act when acting in the capacity of liquidator;

and

(b) in another Member State or EEA State, any person

or body duly appointed in accordance with the legislation and

procedures of that State, for the purposes of administering

winding-up proceedings of a European investment firm or its

branches;

''Maltese investment firm” means an investment firm whose

home Member State is Malta;

''Member State'' means a member of the European Union;

''parent undertaking'' shall have the same meaning as that

assigned to it in point (15)(a) of Article 4(1) of the CRR;

''the Registrar'' means the person appointed to act as the

Registrar of Companies by the Minister responsible for the

registration of companies and other commercial partnerships pursuant

to article 400 of the Companies Act;

''regulated market'' means a regulated market as defined in

article 2 (1) of the Financial Markets Act;

''reorganisation measures'' means measures which are intended

to preserve or restore the financial situation of an investment firm and

which could affect third parties’ pre-existing rights, including

measures involving the possibility of a suspension of payments,

suspension of enforcement measures or reduction of claims; those

measures include the application of the resolution tools and the

exercise of resolution powers provided for in the Recovery and L.N. xxxxx of

2015. Resolution Regulations, 2015;

''winding-up proceedings'' means collective proceedings opened

and monitored by the administrative or judicial authorities of Malta

with the aim of realising assets under the supervision of those

authorities, including where the proceedings are terminated by a

composition or other, similar measure.

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

the same meaning as in the Act.

PART I

REORGANISATION MEASURES

(1) The Court shall, upon receipt of an application made Adoption of

in terms of the Companies Act, and the Act, decide on the reorganisation

measures in

implementation of reorganisation measures with respect to a Maltese Malta.

investment firm including its branches established in host States.

(2) Reorganisation measures adopted by the Court in respect

of a Maltese investment firm including its branches in any other host

State shall, unless expressly provided otherwise in these regulations,

be applied in terms of the Companies Act and the Act as appropriate.

(3) Upon reorganisation measures taken pursuant to these

regulations becoming effective in Malta they shall be immediately

fully effective in any other Member State or EEA State without any

further formalities, including formalities as against third parties in

any Member State or EEA State, even if the legislation of such host

State applicable to such third parties, does not provide for such

reorganisation measures, or alternatively makes their implementation

subject to conditions which are not fulfilled.

(4) Nothing in these regulations shall prejudice the powers of

the competent authority in relation to reorganisation measures with

respect to a Maltese investment firm, including its branches

established in host States where provided for in article 15A of the

Act.

(1) The Court shall, upon receipt of an application for

any reorganisation measure, inform the competent authority regarding

this request in order to obtain its views on the adoption of such

measure and the practical effects which it may have

Provided that where the reorganisation measure involves a

company recovery order in terms of the Companies Act, the

provisions of article 329B(3)(d) of the Companies Act shall apply.

(2) Where the court makes a decision, order or appointment of

any of the following kinds -

(a)

any compromise or arrangement in terms of article

327 of the Companies Act; or

(b) a company recovery order and appoints a special

controller in accordance with article 329B of the Companies

Act,

it must immediately inform the competent authority, or cause the

competent authority to be informed without delay, of the decision,

order or appointment which has been made.

(3) Where the competent authority is informed of a decision,

order or appointment in accordance with this regulation it shall, in

turn without delay and by any means available, inform the foreign

authority, if any, of the decision to adopt reorganisation measures

including the practical effects which such a measure may have, if

possible before it is adopted or otherwise immediately thereafter

Provided that this sub-regulation shall not apply where

regulation 83 of the Recovery and Resolution Regulations, 2015 L.N. xxxxx of

2015. applies, and accordingly the foreign authority shall be informed by

the Resolution Committee in terms of such Regulations.

(4) The duties provided for in this regulation are supplemental

to and without prejudice to the duties of the Registrar of Courts in

article 329B(13)(a) to (c) of the Companies Act.

(1) Where, upon receipt of an application, the Court Information for

deems it necessary to implement one or more reorganisation measures the

authorities and

on a branch of a Maltese investment firm situated in another Member the

authority of the

State or an EEA State, the Court shall inform the competent authority home State.

regarding this request in order to obtain its views on the adoption of

such measure and the practical effects which it may have

Provided that where the reorganisation measure involves a

company recovery order in terms of the Companies Act, the Cap. 386.

provisions of article 329B(3)(d) of the Companies Act shall apply.

(2) Where the Court makes a decision, order or appointment of

any of the following kinds -

(a)

any compromise or arrangement in terms of article

327 of the Companies Act; or

(b) a company recovery order and appoints a special

controller in accordance with article 329B of the Companies Cap. 386.

Act,

it must immediately inform the competent authority, or cause the

competent authority to be informed without delay, of the decision,

order or appointment which has been made.

(3) Where the competent authority is informed of a decision,

order or appointment in accordance with this regulation it shall, in

turn without delay and by any means available, inform the foreign

authority of the decision to adopt reorganisation measures including

the possible practical effects of such measures.

(4) The duties provided for in sub-regulations (1) and (2) are

supplemental to and without prejudice to the duties of the Registrar of

Courts in article 329B(13)(a) to (c) of the Companies Act.

(1) Where a decision on reorganisation measures

adopted by the Court is subject to a right of redress and its

implementation is likely to affect the rights of third parties, upon the

Court’s taking such decision, the administrator or any other person

appointed by the Court in relation to such measure, shall at the

earliest opportunity publish an extract from the Court’s decision in -

(a)

the Malta Government Gazette;

(b) any two Maltese newspapers, provided that one

extract is published in the English language and the other is

published in the Maltese language;

(c)

the Official Journal of the European Union,

provided that third party rights in any host State are capable of

being affected by the reorganisation measures; and

(d) two national newspapers in each host State,

provided that third party rights in the host State are capable of

being affected by the reorganisation measures.

(2) The publication made pursuant to sub-regulation (1) shall

at least specify -

(a)

the purpose and legal basis of the Court’s decision

taken;

(b)

the time limits for lodging requests for redress to the

Court;

(c)

a clearly understandable indication of the date of

expiry of the time limit for lodging requests for redress to the

Court; and

(d) the details of the Court and that it is competent to

hear the grievances of persons stipulated under the Companies

Act or any other applicable law.

(3) The information set out in sub-regulation (1) shall be

published in English or in both English and Maltese as well as, where

applicable, in an official language of the host State in which the

information is published.

(4) The reorganisation measures apply regardless of the

provisions concerning publication set out in sub-regulations (1) and

(2) and are fully effective against creditors, unless otherwise provided

by law or by the administrative or judicial authorities.

(5) The obligation of publication provided for in this

regulation is without prejudice to the duties of the special controller

as stipulated in article 329B(7)(c) of the Companies Act.

(1) Where the Companies Act provides that creditors Information to

are to be informed of their rights to lodge a claim or to submit known

to enable them

observations at a creditors meeting, the administrator shall without to

or submit

delay inform in writing all known creditors, including creditors who observations.

have their normal place of residence, domicile or head office in Cap. 386.

another Member State or EEA State, about any Court decision, order

or appointment in terms of articles 327 or 329B of the Companies Act

regarding the commencement of reorganisation procedures as well as

details regarding the information requested in this regulation

Provided that this sub-regulation shall not apply where

regulation 83 of the Recovery and Resolution Regulations, 2015 L.N. xxx of

2015. applies and accordingly the foreign authority shall be informed by the

Resolution Committee in terms of such Regulations.

(2) The information given to creditors shall include at least the

following

(a)

that reorganisation measures have commenced in

relation to a Maltese investment firm;

(b) the applicable time limits for the reorganisation

measures, if any;

(c)

the penalties laid down in regards to any time limits,

if any;

(d) the body or authority empowered to accept claims or

observations in relation to the measures; and

(e)

as to whether creditors whose claims are preferential

or secured in rem need to lodge their claims.

(3) In the case of company recovery proceedings the

information provided for above shall be supplemental to and without

prejudice to the duties of the special controller in article 329B(7) of

the Companies Act. Where the special controller is obliged to advise Cap. 386.

creditors as to the date and venue of any creditors’ meeting to which

they may be entitled to attend, sufficient notice shall be given in terms

of article 329B(7)(b) of the Companies Act.

(4) The information set out in sub-regulation (2) shall be

issued in English or in both English and Maltese.

(5) A form shall also be used bearing, in all the official

languages of the European Union, the heading ''Invitation to lodge a

claim. Time limits to be observed.''.

(6) (a)

Creditors who have their normal place of residence,

domicile or head office in another Member State or EEA State shall

have the same right to lodge claims or submit observations in terms of

Part VI of the Companies Act as creditors with their normal place of

residence, domicile or head office in the home State in accordance

with the procedures laid down in regulation 19.

(b) A creditor shall send copies of supporting

documents, if any, and shall indicate -

(a)

the nature of the claim;

(b)

the date on which it arose;

(c)

the amount of the claim;

(d) whether the creditor alleges any preference, security

in rem or reservation of title in respect of the claim; and

(e)

the assets that are covered by the creditor’s security.

(1) Where, upon receipt of an application to adopt a

decision on a reorganisation measure in relation to a branch present in

Malta of an investment firm having its head office outside a Member

State or EEA State, the Court shall inform the competent authority

regarding this request in order to obtain its views on the adoption of

such measure and the practical effects which it may have

Provided that where the reorganisation measure involves a

company recovery order in terms of the Companies Act, the

provisions of article 329B(3)(d) of the Companies Act shall apply.

(2) Where the Court makes a decision, order or appointment of

any of the following kinds -

(a)

any compromise or arrangement in terms of article

327 of the Companies Act; or

(b) a company recovery order and appoints a special

controller in accordance with article 329B of the Companies

Act,

it must immediately inform the competent authority, or cause the

competent authority to be informed without delay, of the decision,

order or appointment which has been made.

(3) Where the competent authority is informed of a decision,

order or appointment in accordance with this regulation, it shall, in

turn without delay and by any means available, communicate the

information outlined above to the foreign authorities of any other host

State in which the investment firm has set up branches which are

included on the list referred to in Article 5 of Directive 2014⁄65⁄EU.

(4) The administrative or judicial authorities referred to in this

regulation shall endeavour to coordinate their actions.

(5) The duties provided for in this regulation are supplemental

to and without prejudice to the duties of the Registrar of Courts as

stipulated in article 329B(13)(a) to (c) of the Companies Act.

PART II

WINDING-UP PROCEEDINGS

(1) The Court shall, upon receipt of an application in Adoption of

terms of the Companies Act and the Act, decide on opening of winding-up

proceedings in

winding-up proceedings in respect of a Maltese investment firm, Malta.

including its branches established in any Member State or EEA State. Cap. 370.

(2) The Court’s decision concerning the dissolution and

winding-up of a Maltese investment firm including its branches in

any host State shall be recognised within the territory of any other

Member State or EEA State without any further formalities and shall

be effective there as soon as the Court’s decision is effective in Malta.

(3) (a)

The Court shall, upon receipt of an application for

any winding-up proceedings, inform the competent authority

regarding this request in order to obtain its views on the adoption of

such measures and the practical effects which they may have.

(b) Where the court makes a decision, order or

appointment of any of the following kinds -

(i) a winding-up order under article 219 of the

Companies Act; or

(ii) the

appointment

of

a

provisional

administrator under article 228 of the Companies Act,

it must immediately inform the competent authority, or cause the

competent authority to be informed without delay of the decision,

order or appointment which has been made.

(4) Where the competent authority is informed of a decision,

order or appointment in accordance with this regulation, the

competent authority shall in turn, without delay and by any means

available, inform the foreign authority in all Member States or EEA

States that the decision, order or appointment has been made and the

possible effects that of a decision, order or appointment of that kind

may have.

(5) Where an arrangement has been concluded pursuant to

article 291 of the Companies Act, any person appointed by the

Maltese investment firm or creditors shall inform the competent

authority of the arrangement which has been approved.

(6) Where a liquidator is appointed as mentioned in article 230

of the Companies Act the liquidator must inform the competent

authority of his appointment.

(7) In the case of a member’s voluntary winding-up, the

liquidator shall in terms of article 272 of the Companies Act inform

the competent authority if he is of the opinion that the Maltese

investment firm will not be able to pay its debts within the period

stated in the declaration of solvency.

(8) The duties provided for in this regulation are supplemental

to and without prejudice to the duties of the Registrar of Courts in

articles 224 and 264 of the Companies Act.

(9) Nothing in these regulations shall prejudice the duties and

powers of the competent authority in relation to winding-up

proceedings with respect to a Maltese investment firm including its

branches established in host States, where provided for in the Act.

(1) Subject to the exceptions expressly provided for in

these regulations, the decision to dissolve and wind up a Maltese

investment firm as well as its method of winding-up and dissolution,

shall be made in accordance with the general provisions of Part V of

the Companies Act.

(2) In relation to a Maltese investment firm, the law of Malta

shall be the applicable law and shall determine in particular

(a)

the assets subject to administration and the treatment

of assets acquired by the investment firm after the opening of

winding-up proceedings;

(b) the respective powers of the Maltese investment

firm and the liquidator;

(c)

the conditions under which set-off may be invoked;

(d)

the effects of the winding-up proceedings on current

contracts to which the Maltese investment firm is party;

(e)

the effects of the winding-up proceedings brought

by individual creditors, with the exception of lawsuits pending

as provided for in regulation 34;

(f)

the claims which are to be lodged against the

Maltese investment firm and the treatment of claims arising

after the opening of winding-up proceedings;

(g) the rules governing the lodging, verification and

admission of claims;

(h) the rules governing the distribution of proceeds from

the realisation of assets, the ranking of claims, the rights of

creditors who have obtained partial satisfaction after the

opening of the winding-up order by virtue of a right in rem or

through set-off;

(i)

the conditions for and the effects of the closure of

winding-up proceedings, in particular by composition;

(j)

the rights of creditors after the closure of the

winding up proceedings;

(k) who is to bear the cost and expenses incurred in the

winding-up proceedings; and

(l)

the rules relating to the voidness, voidability or

unenforceability of legal acts detrimental to all the creditors.

(1) Before any voluntary winding-up decision is taken Consultation

by the board of directors or other governing bodies of an investment with

authority before

firm these said governing bodies shall consult the competent voluntary

winding-up.

authority in the most appropriate form.

(2) The commencement of the voluntary winding-up of an

investment firm shall not preclude the adoption of reorganisation

measures or the opening of winding-up proceedings by the Court.

(1) Where the Court decides upon the opening of Withdrawal of

winding-up proceedings either in the absence of reorganisation an

firm’s

measures or in terms of article 329B(12) of the Companies Act authorisation.

following the failure of reorganisation measures, the authorisation of

the investment firm shall be withdrawn by the competent authority in

terms of the provisions of article 7 of the Act.

(2) The withdrawal of authorisation provided for in this

regulation shall not prevent the person or persons entrusted with the

winding-up from carrying on some of the investment firm’s activities

insofar as that is necessary or appropriate for the purposes of

winding-up

Provided that, such activities shall be carried under the

supervision of the competent authority.

(1) The liquidator or any other person appointed for this

purpose by the Court shall at the earliest opportunity make their

decision to open winding-up proceedings public by publishing an

extract from the decision ordering the winding-up proceedings in

(a)

the Malta Government Gazette;

(b) any two Maltese newspapers, provided that one

extract is published in the English language and the other is

published in the Maltese language;

(c)

the Official Journal of the European Union,

provided that third party rights in any host State are capable of

being affected by the winding-up proceedings; and

(d) two national newspapers in each host State,

provided that third party rights in the host State are capable of

being affected by the winding-up proceedings.

(2) The publication made pursuant to sub-regulation (1)(a) to

(d) shall at least specify

(a)

that winding-up proceedings have commenced in

relation to a Maltese investment firm;

(b) the applicable time limits for the winding-up

proceedings, if any;

(c)

the penalties laid down in regards to any time limits,

if any;

(d) the full address of the body or authority empowered

to accept claims or observations relating to claims and the other

measures laid down; and

(e)

as to whether creditors whose claims are preferential

or secured in rem need lodge their claims.

(3) The information set out in sub-regulation (1) shall be

published in English or in both English and Maltese.

(4) A form shall also be used bearing, in all the official

languages of the European Union, the heading ''Invitation to lodge a

claim. Time limits to be observed.''.

(5) The duties provided for in this regulation are without

prejudice to the duties of the Registrar of Courts in article 401 of the

Companies Act.

(1) When winding-up proceedings have commenced, Information to

the liquidator shall without delay individually inform all known known

creditors.

creditors wheresoever resident or domiciled, in writing

(a)

that winding-up proceedings have commenced in

relation to a Maltese investment firm;

(b) of the applicable time limits for the winding-up

proceedings, if any;

(c)

of the penalties laid down in regards to any time

limits, if any;

(d) of the body or authority empowered to accept claims

or observations relating to claims and the other measures laid

down; and

(e)

as to whether creditors whose claims are preferential

or secured in rem need lodge their claims.

(2) Where the liquidator shall in terms of the Companies Act Cap. 386.

advise creditors as to inter alia the date and venue of any creditors

meeting to which the addressee may be entitled to attend such notice

in sub-regulation (1) shall be given without prejudice the provisions

of article 296 of the Companies Act.

(3) The information set out in sub-regulation (1) shall be

issued in English or in both English and Maltese.

(4) A form shall also be used bearing, in all the official

languages of the European Union, the heading ''Invitation to lodge a

claim. Time limits to be observed.''.

(1) A liquidator shall send a written report setting out Reports to

the position in particular as regards the progress of the winding-up creditors.

once every twelve months, beginning from the date when the

liquidator’s appointment has effect, to every known creditor

wheresoever resident or domiciled.

(2) Where the official receiver is acting as a liquidator the first

such report to creditors is to contain the information required in terms

of article 227 of the Companies Act.

(3) The requirement in sub-regulation (1) does not apply

where a liquidator is required by order of the Court to send reports to

creditors at intervals which are more frequent than those required by

this regulation.

(4) The duties provided for in this regulation are without

prejudice to article 234 of the Companies Act.

(1) Where an obligation has been honoured for the

benefit of an investment firm which is not a legal person and which is

the subject of winding-up proceedings opened in another Member

State or EEA State when it should have been honoured for the benefit

of the liquidator in those proceedings, the person honouring the

obligation shall be deemed to have discharged it if he was unaware of

the opening of proceedings.

(2) Where such an obligation is honoured before the

publication provided for in regulation 15 has been effected, the

person honouring the obligation shall be presumed, in the absence of

proof to the contrary, to have been unaware of the opening of

winding-up proceedings.

(3) Where the obligation is honoured after the publication

provided for in regulation 15 has been effected, the person honouring

the obligation shall be presumed, in the absence of proof to the

contrary, to have been aware of the opening of proceedings.

(1) Any creditor, including the public authorities of a

Member State or a EEA State, being domiciled in or having a normal

place of residence or head-office in a Member State or EEA State

other than Malta, shall have all the rights provided to creditors in Part

V of the Companies Act to lodge claims or to submit written

observations relating to claims in relation to a Maltese investment

firm being wound up.

(2) The claims of any creditor who is domiciled in or having a

normal place of residence or head office in any Member State or EEA

State other than Malta, shall be treated in the same way as any

creditor resident or domiciled or having a head office in Malta and

accorded the same ranking as claims of an equivalent nature which

may be lodged by creditors having their domiciles, normal places of

residence, or head offices in Malta.

(3) When lodging a claim a creditor shall send copies of

supporting documents, if any, and shall indicate

(a)

the nature of the claim;

(b)

the date on which it arose and its amount;

(c)

whether the creditor alleges preference;

(d) security in rem or reservation of title in respect of

the claim; and

(e)

what assets are covered by the creditor’s security.

(4) Any creditor who is domiciled or having a normal place of

residence or head office in a Member State or EEA State other than

Malta, may lodge claims or submit observations relating to such

claim in the official language or one of the official languages of that

other Member State or EEA State. In that event, the lodgement of the

creditor’s claim or the submission of observations on such claim shall

bear the heading ''Lodgement of claim'' or ''Submission of

observations relating to claims'' in English or Maltese. In addition, the

creditor may be required to provide a translation into English or

Maltese of the lodgement of claim or submission of observations

relating to claims or of any of the documentation and, or information

required in sub-regulation (3).

(5) The provisions of this regulation are without prejudice to

the provisions of article 232 of the Companies Act.

(1) Where, upon receipt of an application to adopt a Investment

decision or order to commence winding-up procedures of a branch firms

offices of which

present in Malta of an investment firm having its head office situated are

Community.

outside a Member State or EEA State, the Court shall inform the

competent authority regarding this request in order to obtain its views

on the adoption of such measure and the practical effects which it

may have.

(2) Where the Court makes a decision, order or appointment of

any of the following kinds -

(a)

a winding-up order under article 219 of the

Companies Act; or

(b) the appointment of a provisional administrator under

article 228 of the Companies Act,

it must immediately inform the competent authority, or cause the

competent authority to be informed without delay of the decision,

order or appointment which has been made.

(3) Where the competent authority is informed of a decision,

order or appointment in accordance with this regulation, the

competent authority shall in turn, without delay and by any means

available communicate such information to the foreign authorities of

any other host State in which the investment firm has set up branches

which are included on the list referred to in Article 5 of Directive

2014⁄65⁄EU, and shall inform the foreign authority of the decision to

open winding-up procedures and the practical effects of such. The

competent authority shall also advise the foreign authority of any

other host States that the authorisation of the branch has been

withdrawn.

PART III

PROVISIONS COMMON TO REORGANISATION AND

WINDING-UP PROCEEDINGS

The effects of a reorganisation measure or winding-up

proceedings of an investment firm on employment contracts and

employment relationships are determined in accordance with the laws

of the Member State or EEA State to which that contract or

relationship is subject.

The effects of a reorganisation measure or winding-up

proceedings of an investment firm on a contract conferring the right

to make use of or acquire immovable property situated within the

territory of a Member State or EEA State are to be governed in

accordance with the law of that Member State or EEA State.

Rights of an investment firm in respect of immovable

property, a ship or an aircraft subject to registration in a public

register shall be governed solely by the law of the Member State or

EEA State under the authority of which the register is kept.

(1) The adoption of reorganisation measures or the

opening of winding-up proceedings of a Maltese investment firm

shall not affect the rights in rem of creditors or third parties in respect

of tangible or intangible, movable or immovable assets including both

specific assets and collections of indefinite assets as a whole which

change from time to time belonging to the investment firm concerned

which are situated within the territory of a Member State or EEA

State at the time of the opening of such measures or proceedings.

(2) The rights in rem referred to in sub-regulation (1) shall in

particular mean -

(a)

the right to transfer assets or have them transferred

and to obtain satisfaction from the proceeds of or the income

from those assets, in particular by virtue of a lien, mortgage or

hypothec;

(b) the exclusive right to have a claim met, in particular

a right guaranteed by a lien in respect of the claim or by

assignment of the claim by way of a guarantee;

(c)

the right to demand the assets from, and, or to

require restitution, by anyone having possession or use of them

contrary to the wishes of the party so entitled;

(d)

a right in rem to the beneficial use of assets.

(3) A right, recorded in a public register and enforceable

against third parties, under which a right in rem within the meaning of

sub-regulation (1) may be obtained, is also to be treated as a right in

rem for the purposes of this regulation.

(4) Sub-regulation (1) does not preclude actions for voidness,

voidability or unenforceability of legal acts detrimental to creditors

referred to in regulation 12(2)(l).

(1) The commencement of reorganisation measures or Reservation of

winding-up proceedings in relation to a Maltese investment firm title agreement.

purchasing an asset shall not affect the seller’s rights based on a

reservation of title where at the time of the commencement of such

measures or proceedings the asset is situated within the territory of

another Member State or EEA State.

(2) The commencement of reorganisation or winding-up

proceedings against a Maltese investment firm selling an asset, after

delivery of the asset, shall not constitute grounds for rescinding or

terminating the sale and shall not prevent the purchaser from

acquiring title where at the time of the opening of such measure or

proceedings the asset sold is situated within the territory of a Member

State or EEA State in which such measures or proceedings were

commenced.

(3) Sub-regulations (1) and (2) do not preclude actions for

voidness, voidability or unenforceability of legal acts detrimental to

creditors referred to in regulation 12(2)(l).

(1) The adoption of reorganisation measures or the Creditor’s rights

opening of winding-up proceedings shall not affect the rights of to set off.

creditors to demand the set-off of their claims against the claims of

the Maltese investment firm where such a set-off is permitted by the

law of the Member State or EEA State which is applicable to the

claim of the Maltese investment firm.

(2) This regulation does not preclude actions for voidness,

voidability or unenforceability of legal acts detrimental to creditors

referred to in regulation 12(2)(l).

The enforcement of proprietary rights in instruments or

other rights in such instruments the existence or transfer of which

presupposes their recording in a register, an account or a centralised

deposit system held or located in a Member State or EEA State shall

be governed by the law of the Member State or EEA State where the

register, account, or centralised deposit system in which those rights

are recorded is held or located.

Pursuant to the provisions of the Set-Off and Netting on

Insolvency Act, and without prejudice to regulations 68 and 71 of the

Recovery and Resolution Regulations, 2015, netting agreements shall

2015. be governed by the law of the contract which governs such

agreements.

Without prejudice to regulations 68 and 71 of the Recovery

and Resolution Regulations, 2015 and to regulation 27 of these

Regulations, repurchase agreements shall be governed solely by the

2015. law of the contract which governs such agreements.

Without prejudice to regulation 27, transactions carried out

in the context of a regulated market are to be governed solely in

accordance with the law of the contract which governs such

transactions.

(1) The administrator or liquidator’s appointment shall

be evidenced by a certified copy of the original decision appointing

him or her or by any other certificate issued by the administrative or

judicial authority of the home State attesting to the due appointment

of the administrator or liquidator.

(2) A translation into the official language or one of the

official languages of the Member State or EEA State within the

territory of which the administrator or liquidator wishes to act may be

required. No legalisation or other similar formality shall be required.

(3) Administrators and liquidators shall be entitled to exercise

within the territory of any Member State or EEA State all the powers

which they are entitled to exercise within the territory of the home

State. They may also appoint persons to assist or, where appropriate,

represent them in the course of the reorganisation measure or

winding-up proceedings, in particular in host States and, specifically

in order to help overcome any difficulties encountered by creditors in

the host State.

(4) In exercising their powers, administrators and liquidators

shall comply with the law of the Member State or EEA State within

the territory of which they wish to take action, in particular with

regard to procedures for the realisation of assets and the provision of

information to employees. Those powers may not include the use of

force or the right to rule on legal proceedings or disputes.

(1) Regulation 12 shall not apply as regards the rules Detrimental

relating to the voidness, voidability or unenforceability of legal acts acts.

detrimental to the creditors as a whole, where the beneficiary of these

acts provides proof that

(a)

the act detrimental to the creditors as a whole is

subject to the law of a Member State or EEA State other than the

home State, and

(b) that law does not allow any means of challenging

that act in the case in point.

(2) Where a reorganisation measure decided on by a judicial

authority provides for rules relating to the voidness, voidability or

unenforceability of legal acts detrimental to the creditors as a whole

performed before adoption of the measure, regulation 5(2) shall not

apply in the cases provided for in this regulation.

Where, by an act concluded after the adoption of a Protection of

reorganisation measure or the opening of winding-up proceedings, an third

purchasers.

investment firm disposes, for consideration, of -

(a)

an immovable asset situated within the territory of a

Member State or EEA State;

(b) a ship or an aircraft subject to registration in a public

register kept under the authority of a Member State or EEA

State; or

(c)

instruments or rights in such instruments the

existence or transfer of which presupposes their being recorded

in a register, an account or a centralised deposit system held or

located in a Member State or EEA State,

the validity of that act shall be governed by the law of the Member

State or EEA State within whose territory the immovable asset is

situated or under whose authority the register, account or system is

kept, as the case may be.

The effects of reorganisation measures or winding-up Pending

proceedings on a pending lawsuit concerning an asset or a right of lawsuits.

which the Maltese investment firm has been divested shall be

governed solely in accordance with the law of the Member State or

EEA State in which the lawsuit is pending.

(1) In order to secure the rights of interested third

parties, an administrator or liquidator may request that a

reorganisation measure or the decision to open winding-up

proceedings be registered in the registry of companies and any other

public register by whatever name kept in Malta or any other Member

State or EEA State.

(2) The costs of registration are to be regarded as costs and

expenses incurred in the winding-up proceedings or reorganisation

measure.

All persons required to receive or divulge information in

connection with the information or consultation procedures laid down

in these regulations shall be bound by professional secrecy, in

accordance with the rules and conditions laid down in the Investment

Services Act, the Malta Financial Services Authority Act and the

Investment Services Act (Supervisory Review) Regulations, with the

exception of any judicial authorities to which existing national

provisions apply

Provided that this regulation shall not apply where

regulation 84 of the Recovery and Resolution Regulations, 2015

2015. applies, and accordingly the confidentiality provisions of such

Regulations shall apply.

PART IV

REORGANISATION MEASURES AND WINDING-UP

PROCEEDINGS IN RESPECT OF EUROPEAN INVESTMENT

FIRMS EFFECTIVE IN MALTA

(1) The commencement of a reorganisation measure or

winding-up proceedings of a European investment firm has effect in

Malta as if it were part of the Companies Act, when such is in relation

to

(a)

a branch in Malta of a European investment firm;

(b) any property or other assets in Malta of the

European investment firm; or

(c)

any debt or liability of such European investment

firm.

(2) Subject to sub-regulation (4), the administrator or

liquidator or persons appointed to assist, or where appropriate,

represent the administrators and liquidators may exercise in Malta, in

relation to a European investment firm which is subject to a

reorganisation measure or winding-up proceedings, any function

which, pursuant to that measure or order, he is entitled to exercise in

relation to a European investment firm.

(3) The appointment of the administrator and liquidator shall

be evidenced -

(a)

by a certified copy of the order or decision by a

judicial or administrative authority competent in the home State

for reorganisation or winding-up proceedings by or under which

the administrator or liquidator was appointed; or

(b) by any other certificate issued by the judicial or

administrative authority which has jurisdiction in relation to a

reorganisation measure or winding-up proceedings, and, where

necessary accompanied by a certified translation of that order,

decision or certificate, as the case may be.

(4) In exercising the functions of the kind mentioned in sub-

regulation (2), the administrator or the liquidator -

(a)

may not take any action which would constitute an

unlawful use of force in Malta;

(b) may not rule on any dispute arising from a matter

falling within Parts I, II and III of these regulations; and

(c)

notwithstanding the way in which functions may be

exercised in the home State of the European investment firm,

shall act in accordance with the laws or rules as to procedure

which are effective in Malta.

(1) From the date of coming into force of these European

regulations, the Court may not, in relation to a Maltese investment investment

firms with

firm or any branch of a Maltese investment firm located in another branches

Malta.

Member State or EEA State -

(a)

make a winding-up order pursuant to article 224 of

the Companies Act; or

(b) adopt reorganisation measures or perform any act

ancillary to the adoption of such measures in terms of Part VI of

the Companies Act.

(2) Sub-regulation (1)(a) does not prevent -

(a)

the Court from making a winding-up order after the

coming into force of these regulations in relation to a Maltese

investment firm or any branch of a Maltese investment firm

located in another Member State or EEA State if -

(i) a provisional administrator was appointed in

relation to the Maltese investment firm or a branch of a

Maltese investment firm located in another Member State

or EEA State before the coming into force of these

regulations, and

(ii) the appointment continues in force until

immediately before that winding-up order is made;

(b) the winding-up of a Maltese investment firm or a

branch of a Maltese investment firm located in another Member

State or EEA State after the coming into force of these

regulations pursuant to a winding-up order which was made,

and has not been discharged, before that date.

(3) Sub-regulation (1)(b) does not prevent a provisional

administrator of a Maltese investment firm or a branch of a Maltese

investment firm located in another Member State or EEA State

appointed before the coming into force of these regulations from

acting in relation to such institution after that date.

(4) Nothing in these regulations shall affect any proceedings

commenced in any Court concerning the reorganisation or winding-

up of an investment firm where such proceedings were commenced

before the coming into force of these regulations.

€1.08