Financial Markets Act (SME Growth Markets) Regulations, 2017

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 19,925, 22 ta’ Diċembru, 2017

Taqsima B

L.N. 390 of 2017

FINANCIAL MARKETS ACT

(CAP. 345)

Financial Markets Act (SME Growth Markets) Regulations, 2017

IN EXERCISE of the powers conferred by article 49 of the

Financial Markets Act, the Minister responsible for the regulation of

financial services, acting on the advice of the Malta Financial

Services Authority, has made the following regulations:-

(1)

The title of these regulations is the Financial Title, scope and

commencement.

Markets Act (SME Growth Markets) Regulations, 2017.

(2) The purpose of these regulations is to transpose and

implement Article 4(1) paragraphs (12), (13) and (22), and Article

33(1) to (7) of MIFID as herein defined, and they shall be interpreted

and applied accordingly.

(3) These regulations shall come into force on the 3rd January

2018.

(1)

In these regulations unless the context otherwise Definitions.

requires

"the Act" means the Financial Markets Act;

"competent authority" means the Malta Financial Services

Authority established by the Malta Financial Services Authority

Act;

"Directive 2003/71/EC" means Directive 2003/71/EC of

the European Parliament and of the Council of 4 November

2003 on the prospectus to be published when securities are

offered to the public or admitted to trading and amending

Directive 2001/34/EC, as amended from time to time, and

includes any implementing measures that have been or may be

issued thereunder;

"Financial Services Tribunal" means the tribunal

established in terms of article 21 of the Malta Financial Services Cap. 330.

Authority Act;

"investment firm" means any legal person, other than

persons to whom MiFID does not apply in terms of Article 2 of

the said Directive, whose regular occupation or business is the

provision of any one or more investment services to third parties

on a professional basis;

"Maltese investment firm" means a person licensed in

terms of the Investment Services Act, whose head office is in

Malta and who is entitled to carry on an activity in a Member

State or EEA State other than Malta in exercise of a European

Right;

"MiFID" means Directive 2014/65/EU of the European

Parliament and of the Council of 15 May 2014 on markets in

financial instruments and amending Directive 2002/92/EC and

Directive 2011/61/EU, as amended from time to time, and

includes any implementing measures that have been or may be

issued thereunder;

"MTF" means a multilateral system, operated by an

investment firm or a market operator, which brings together

multiple third-party buying and selling interests in financial

instruments – in the system and in accordance with non-

discretionary rules – in a way that results in a contract in

accordance with Title II of MiFID;

"Regulation 596/2014/EU" means Regulation (EU) No

596/2014 of the European Parliament and of the Council of 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, as amended from time to time;

"SME growth market" means a MTF that is registered as

an SME growth market in accordance with these regulations;

"SMEs " for the purposes of these regulations, means small

and medium-sized companies that had an average market

capitalisation of less than EUR 200,000,000 on the basis of end-

year quotes for the previous three calendar years.

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

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

(1)

The operator of a MTF may apply to the competent

authority to have the MTF registered as an SME growth market.

(2) The competent authority may register the MTF as an SME

growth market if it receives an application to that effect pursuant to

sub-regulation (1) and is satisfied that the requirements prescribed in

regulation 4 are complied with in relation to the MTF.

(3) Within six months from the date of the submission of a

properly completed application form together with the requisite

documentation, the competent authority shall inform an applicant of

its decision whether or not to register the MTF as an SME growth

market.

(1)

MTFs

shall

comply

with

the

following Requirements

for registration

requirements

as an SME

growth market.

(a)

at least 50% of the issuers whose financial

instruments are admitted to trading on the MTF are SMEs at the

time when the MTF is registered as an SME growth market and

in any calendar year thereafter;

(b)

appropriate criteria are set for initial and ongoing

admission to trading of financial instruments of issuers on the

market;

(c)

on initial admission to trading of financial

instruments on the market there is sufficient information

published to enable investors to make an informed judgment

about whether or not to invest in the financial instruments,

either an appropriate admission document or a prospectus if the

requirements laid down in Directive 2003/71/EC are applicable

in respect of a public offer being made in conjunction with the

initial admission to trading of the financial instrument on the

MTF;

(d)

there is appropriate ongoing periodic financial

reporting by or on behalf of an issuer on the market, for example

audited annual reports;

(e)

issuers on the market as defined in point (21) of

Article 3(1) of Regulation (EU) No 596/2014, persons

discharging managerial responsibilities as defined in point (25)

of Article 3(1) of Regulation (EU) No 596/2014 and persons

closely associated with them as defined in point (26) of Article

3(1) of Regulation (EU) No 596/2014 comply with relevant

requirements applicable to them under Regulation (EU) No 596/

2014;

(f)

regulatory information concerning the issuers on

the market is stored and disseminated to the public;

(g)

there are effective systems and controls aiming to

prevent and detect market abuse on that market as required

under the Regulation (EU) No 596/2014.

(2) Without prejudice to the criteria prescribed in sub-

regulation (1) above, the operator of the MTF shall also be bound by

compliance with other obligations under MiFID relevant to the

operation of MTFs. In addition, Maltese investment firms or market

operators operating a MTF shall not be precluded from imposing

additional requirements to those specified in sub-regulation (1).

The competent authority may deregister a MTF as an SME

growth market in any of the following cases

(a)

the Maltese investment firm or market operator

operating the market applies for its deregistration;

(b)

the requirements prescribed in sub-regulation 4(1)

are no longer complied with in relation to the MTF.

Where the competent authority registers or deregisters a

MTF as an SME growth market pursuant to these regulations, it shall

as soon as possible notify ESMA of that registration or deregistration.

Where a financial instrument of an issuer is admitted to

trading on one SME growth market, the financial instrument may also

be traded on another SME growth market only where the issuer has

been informed and has not objected. In such a case however, the

issuer shall not be subject to any obligation relating to corporate

governance or initial, ongoing or ad hoc disclosure with regard to the

latter SME growth market.

(1)

Where a person falling within the scope of these

regulations fails to comply with any provisions of such regulations or

any rules issued thereunder further implementing such regulations,

the competent authority may, by notice in writing and without

recourse to a court hearing, impose on such person an administrative

penalty and other administrative measures in accordance with the

provisions of the Financial Markets Act (MiFID and MiFIR

Administrative Penalties, Measures and Investigatory Powers)

Regulations, 2017.

(2) A right of appeal to the Financial Services Tribunal shall

lie from the decisions which the competent authority shall take under

these regulations and the provisions of Part VI of the Act shall apply

mutatis mutandis.

€0.18