Reporting of Infringements Regulations, 2016

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 19,690, 2 ta’ Diċembru, 2016

L.N. 405 of 2016

PREVENTION OF FINANCIAL MARKETS ABUSE ACT

(CAP. 476)

Reporting of Infringements Regulations, 2016

IN exercise of the powers conferred by articles 25 and 27 of the

Prevention of Financial Markets Abuse 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 Reporting of Citation and

scope.

Infringements Regulations, 2016.

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

32(1) of the Market Abuse Regulation and the Commission

Implementing Directive on the reporting to competent authorities of

actual or potential infringements, and they shall be interpreted and

applied accordingly.

(3) These regulations specify the procedures set out in Article

32(1) of the Market Abuse Regulation, including arrangements for

reporting and for following-up reports, and measures for the

protection of persons working under a contract of employment and

measures for the protection of personal data.

(1)

In these regulations unless the context otherwise Interpretation.

requires

"the Act" means the Prevention of Financial Markets Abuse Cap. 476.

Act;

"Commission Implementing Directive" means Commission

Implementing Directive (EU) 2015/2392 of 17 December 2015 on

Regulation (EU) No 596/2014 of the European Parliament and of the

Council as regards reporting to competent authorities of actual or

potential infringements of that Regulation;

"Market Abuse Regulation" means Regulation (EU) No 596/

2014 of the European Parliament and of the Council of the 16 April

2014 on market abuse (market abuse regulation) and repealing

Directive 2003/6/EC of the European Parliament and of the Council

and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/

EC;

"report of infringement" means a report submitted by the

reporting person to the competent authority regarding an actual or

potential infringement of the Market Abuse Regulation;

"reported person" means a person who is accused of having

committed, or intending to commit, an infringement of the Market

Abuse Regulation by the reporting person;

"reporting person" means a person reporting an actual or

potential infringement of the Market Abuse Regulation to the

competent authority.

(2) Words and expressions used in these regulations shall have

the same meaning as is assigned to them in the Market Abuse

Regulation and the Commission Implementing Directive unless

otherwise defined herein.

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

Article 32(1) of the Market Abuse Regulation and the relevant

provisions of the Commission Implementing Directive, and any

reference therein to the competent authority shall be deemed and

construed accordingly.

The competent authority shall exercise all the functions,

obligations and powers that are established in the Commission

Implementing Directive and shall satisfy all the requirements

imposed on competent authorities by the Commission Implementing

Directive.

For the better carrying out of Article 32(1) of the Market

Abuse Regulation and the provisions of the Commission

Implementing Directive or these regulations, the competent authority

may, from time to time, issue and publish Prevention of Financial

Markets Abuse Rules which shall be binding on all persons that may

be specified therein and as the competent authority may consider

appropriate.

(1) The competent authority shall ensure that dedicated

staff members are appointed who can handle reports of infringements.

Dedicated staff members shall be trained for the purposes of handling

reports of infringements.

(2) Dedicated staff members shall exercise the following

functions

(a)

providing any interested person with information on

the procedures for reporting infringements;

(b)

receiving and following-up reports of infringements;

(c)

maintaining contact with the reporting person where

the latter has identified itself.

(1) The competent authority shall publish on its website Information

in a separate, easily identifiable and accessible section the regarding

receipt of

information regarding the receipt of reports of infringements set out reports

infringements

in sub-regulation (2).

and their

follow-up.

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

include all of the following

(a)

the communication channels for receiving and

following-up the reporting of infringements and for contacting

the dedicated staff members in accordance with regulation 9(1),

including

(i) the phone numbers, indicating whether

conversations are recorded or unrecorded when using those

phone lines;

(ii) dedicated electronic and postal addresses,

which are secure and ensure confidentiality, to contact the

dedicated staff members;

(b) the procedures applicable

to

reports

of

infringements referred to in regulation 8;

(c)

the confidentiality regime applicable to reports of

infringements in accordance with the procedures applicable to

reports of infringements referred to in regulation 8;

(d) the procedures for the protection of persons working

under a contract of employment;

(e)

a statement clearly explaining that persons making

information available to the competent authority in accordance

with the Market Abuse Regulation are not considered to be

infringing any restriction on disclosure of information imposed

by contract or by any legislative, regulatory or administrative

provision, and are not to be involved in liability of any kind

related to such disclosure.

(3) The competent authority may publish on its website more

information regarding the receipt and the follow-up of infringements

set out in sub-regulation (2).

(1) The procedures applicable to reports of

infringements referred to in regulation 7(2)(b) shall clearly indicate

all of the following information

(a)

that reports of infringements can also be submitted

anonymously;

(b) the manner in which the competent authority may

require the reporting person to clarify the information reported

or to provide additional information that is available to the

reporting person;

(c)

the type, content and time-frame of the feed-back

about the outcome of the report of infringement that the

reporting person can expect after the reporting;

(d) the confidentiality regime applicable to reports of

infringements, including a detailed description of the

circumstances under which the confidential data of a reporting

person may be disclosed in accordance with Articles 27, 28 and

29 of the Market Abuse Regulation.

(2) The detailed description referred to in sub-regulation

(1)(d) shall ensure awareness of the reporting person concerning the

exceptional cases in which confidentiality of data may not be ensured,

including where the disclosure of data is a necessary and

proportionate obligation required under European Union law or

Maltese law in the context of investigations or subsequent judicial

proceedings or to safeguard the freedoms of others including the right

of defence of the reported person, and in each case subject to

appropriate safeguards under such laws.

(1) The competent authority shall establish independent

and autonomous communication channels, hereinafter referred to as

"dedicated communication channels", which are both secure and

ensure confidentiality, for receiving and following-up the reporting of

infringements.

(2) Dedicated communication channels shall be considered

independent and autonomous, provided that they meet all of the

following criteria

(a) they are separated from general communication

channels of the competent authority, including those through

which the competent authority communicates internally and

with third parties in its ordinary course of business;

(b)

they are designed, set up and operated in a manner

that ensures the completeness, integrity and confidentiality of

the information and prevents access to non-authorised staff

members of the competent authority;

(c)

they enable the storage of durable information in

accordance with regulation 10 to allow for further

investigations.

(3) The dedicated communication channels shall allow for

reporting of actual or potential infringements in at least all of the

following ways

(a)

written report of infringements in electronic or paper

format;

(b) oral report of infringements through telephone lines,

whether recorded or unrecorded;

(c)

physical meeting with dedicated staff members of

the competent authority.

(4) The competent authority shall provide the information

referred to in regulation 7(2) to the reporting person before receiving

the report of infringement, or at the moment of receiving it at the

latest.

(5) The competent authority shall ensure that a report of

infringement received by means other than dedicated communication

channels referred to in this regulation is promptly forwarded without

modification to the dedicated staff members of the competent

authority by using dedicated communication channels.

(1) The competent authority shall keep records of every Record-keeping

of reports

report of infringement received.

received.

(2) The competent authority shall promptly acknowledge the

receipt of written reports of infringements to the postal or electronic

address indicated by the reporting person, unless the reporting person

explicitly requested otherwise or the competent authority reasonably

believes that acknowledging receipt of a written report would

jeopardise the protection of the reporting person’s identity.

(3) Where a recorded telephone line is used for reporting of

infringements, the competent authority shall have the right to

document the oral reporting in the form of

(a)

an audio recording of the conversation in a durable

and retrievable form; or

(b) a complete and accurate transcript of the

conversation prepared by the dedicated staff members of the

competent authority. In cases where the reporting person has

disclosed its identity, the competent authority shall offer the

possibility to the reporting person to check, rectify and agree

with the transcript of the call by signing it.

(4) Where an unrecorded telephone line is used for reporting

of infringements, the competent authority shall have the right to

document the oral reporting in the form of accurate minutes of the

conversation prepared by the dedicated staff members of the

competent authority. In cases where the reporting person has

disclosed its identity, the competent authority shall offer the

possibility to the reporting person to check, rectify and agree with the

minutes of the call by signing them.

(5) Where a person requests a physical meeting with the

dedicated staff members of the competent authority for reporting an

infringement according to regulation 9(3)(c), the competent authority

shall ensure that complete and accurate records of the meeting are

kept in a durable and retrievable form. The competent authority shall

have the right to document the records of the physical meeting in the

form of

(a)

an audio recording of the conversation in a durable

and retrievable form; or

(b) accurate minutes of the meeting prepared by the

dedicated staff members of the competent authority. In cases

where the reporting person has disclosed its identity, the

competent authority shall offer the possibility to the reporting

person to check, rectify and agree with the minutes of the

meeting by signing them.

(1) The competent authority shall put in place

procedures ensuring effective exchange of information and

cooperation with other European regulatory authorities and any other

relevant authority involved in the protection of persons working

under a contract of employment who report infringements of the

Market Abuse Regulation to the competent authority or are accused

of such infringements, against retaliation, discrimination or other

types of unfair treatment, arising due to or in connection with

reporting of infringements of the Market Abuse Regulation.

(2) The competent authority shall ensure that

(a)

reporting persons have access to comprehensive

information and advice on the remedies and procedures

available under Maltese law to protect them against unfair

treatment, including on the procedures for claiming pecuniary

compensation;

(b) reporting persons have access to effective assistance

from the competent authority before any relevant authority

involved in their protection against unfair treatment, including

by certifying the condition of whistle-blower of the reporting

person in employment disputes.

(1) The competent authority shall ensure that the Protection

records of every report of infringement received are stored in a procedures

personal data

confidential and secure system and access to the data stored in such and

received.

system shall be available only to staff members of the competent

authority for whom access to that data is necessary to perform their

professional duties.

(2) The competent authority shall not disclose to any person,

either directly or indirectly, the identity of the reporting person or

reported person or any other references to circumstances that would

allow the identity of the reporting person or reported person to be

deduced, unless such transmission is in accordance with the

confidentiality regime referred to in regulation 8(1)(d).

(3) The competent authority shall put in place adequate

procedures for the transmission of data of the reporting person and

reported person inside and outside of the competent authority.

(1) Where the identity of reported persons is not known Protection of

to the public, the competent authority shall ensure that their identity is identity

reported persons

protected at least in the same manner as for persons that are under not

the public.

investigation by the competent authority.

(2) The procedures set out in regulation 12(1) shall also apply

for the protection of the identity of the reported persons.

The competent authority shall review the procedure for Review of the

receiving reports of infringements as established in these regulations procedure

out in these

and their follow-up once every two years. In reviewing such regulations.

procedures the competent authority shall take account of its

experience and that of other European regulatory authorities and

adapt its procedures accordingly and in line with market and

technological developments.

B

€0.36