Investment Services Act (Tied Agents) Regulations, 2017

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

Taqsima B

L.N. 403 of 2017

INVESTMENT SERVICES ACT

(CAP. 370)

Investment Services Act (Tied Agents) Regulations, 2017

IN EXERCISE of the powers conferred by article 12 of the

Investment Services 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 Investment Citation, scope

and

Services Act (Tied Agents) Regulations, 2017.

commencement.

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

29 of MiFID, as herein defined, and they shall be interpreted and

applied accordingly.

(3)

These regulations shall come into force on 3rd January

2018.

(1)

In these regulations, unless the context otherwise Interpretation.

requires

"Act" means the Investment Services Act;

"ancillary services" means any of the services listed within

the Third Schedule to the Act;

"the competent authority" means the Malta Financial

Services Authority defined under article 2 of the Act;

"European investment firm" means an investment firm as

defined in Article 4(1) of MIFID authorised by its European

regulatory authority within the meaning of Article 5 of MIFID or

authorised by a European regulatory authority in an EEA State;

"European right" means the entitlement of a person to

establish a branch, or provide services in a Member State or EEA

State other than that in which it has its head office -

(a) in accordance with the Treaty as applied in the

Member States or EEA States; and

(b) subject to the requirements of MIFID and

subject to any regulations made under the Act and, or

Investment Services Rules and,or Conduct of Business

Rules issued by the competent authority in terms of article

6 of the Act, implementing such requirements as may be

applicable;

"Maltese investment firm" means a person licensed in

terms of the 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;

"tied agent" means a natural or legal person, who under the

full and unconditional responsibility of only one Maltese

investment firm or European investment firm and on whose

behalf it acts, promotes investment and, or ancillary services to

clients or prospective clients, receives and transmits instructions

or orders from the client in respect of investment services or

instruments, places instruments and, or provides investment

advice to clients or prospective clients in respect of those

instruments or services.

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

have the same meaning as in the Act.

(1) Maltese investment firms and European investment

firms exercising a European right may appoint tied agents for the

purposes of promoting their services, soliciting business or receiving

orders from clients or potential clients and transmitting them, placing

instruments and providing investment advice in respect of such

instruments and services offered by the Maltese investment firm or the

European investment firm.

(2) Tied agents may, subject to these regulations and the

European Passport Rights for Investment Firms Regulations, where

applicable, be established in Malta or in a Member State or EEA State.

(1) A Maltese investment firm or a European investment

firm exercising a European right, wishing to appoint a tied agent

established in Malta to carry out business in Malta or elsewhere shall

apply to the competent authority for the registration of such tied agent.

(2) A Maltese investment firm or a European investment firm,

exercising a European right, may appoint a tied agent established in

Malta in terms of sub-regulation (1) only if such tied agent has been

registered by the competent authority in the public register kept in

terms of regulation 8.

(3) Tied agents established in Malta and registered in terms of

regulation 8 shall be exempt from the provisions of article 3 of the Act.

A Maltese investment firm exercising a European right may Appointment of

appoint a tied agent in a Member State or EEA State only if such tied tied

established in a

agent is registered in the public register which the Member or EEA Member

EEA State.

State concerned has established for this purpose.

(1)

Tied agents shall not hold or control clients’ money Obligations of

tied agents.

and, or assets.

(2) Tied agents shall only act for a Maltese investment firm or

a European Investment Firm, exercising a European right in Malta, at

any one time.

(1) Where a Maltese investment firm decides to appoint a Responsibility

tied agent, it remains fully and unconditionally responsible for any act of

investment firm

or omission on the part of the tied agent when the latter is acting on appointing

agents.

behalf of the Maltese investment firm.

(2) The Maltese investment firm shall ensure that its tied agent

discloses the capacity in which such tied agent is acting and the name

of the Maltese investment firm which such tied agent is representing

when contacting or before dealing with any client or potential client.

(3) The Maltese investment firm that appoints tied agents shall

monitor the activities of its tied agents so as to ensure that they

continue to comply with the requirements of these regulations, the

Investment Services Rules and, or Conduct of Business Rules that may

be issued by the competent authority in terms of article 6 of the Act,

when acting through tied agents.

(4) The Maltese investment firm that appoints tied agents shall

take adequate measures in order to avoid any negative impact that the

activities of the tied agents, which are not covered by the scope of

MiFID, could have on the activities carried out by the tied agents on

behalf of the Maltese investment firm.

(1) The competent authority shall keep a register of all Registration of

tied agents which are established in Malta and appointed by a Maltese tied agents.

investment firm or by a European investment firm exercising a

European Right in Malta. Such register shall be updated on a regular

basis and shall be accessible to the public.

(2) The competent authority shall only admit a tied agent to the

register established in sub-regulation (1) if the Maltese investment

firm or the European investment firm exercising a European Right,

appointing the tied agent has established and has confirmed to the

competent authority that the tied agent is of sufficiently good repute

and possesses appropriate general, commercial and professional

knowledge and competence so as to be able to deliver the investment

service or ancillary service and to communicate accurately all relevant

information regarding the proposed service to the potential clients

Provided that where the tied agent will provide investment

advice, the competent authority shall itself establish whether the tied

agent possesses the level of competence required by the competent

authority for this purpose.

(3) The competent authority shall not register, or shall

withdraw registration of a tied agent where

(a) the activities actually carried on clearly indicate that a

tied agent has opted for registration in Malta for the purpose of

evading the stricter standards in force in another Member State

or EEA State within the territory of which it intends to carry out

or carries out the greater part of its activities; or

(b) it is no longer satisfied that the tied agent fulfils the

requirements of this sub-regulation.

For the better carrying out of the requirements set out in

these regulations the competent authority may from time to time, issue

and publish Investment Services Rules and, or Conduct of Business

Rules in terms of article 6 of the Act, applicable to Maltese investment

firms appointing tied agents.

Where the competent authority has refused to register a tied

agent or has withdrawn a registration issued to a tied agent in terms of

regulation 8(3), it shall notify the person to whom such registration

was refused or the tied agent whose registration was withdrawn of its

decision, in writing and such person or tied agent, shall have a right of

appeal from such decision of the competent authority to the Financial

Services Tribunal and the provisions of article 19 of the Act shall

apply mutatis mutandis.

The provisions of these regulations shall apply mutatis

mutandis to a European credit institution as defined in regulation 2 of

the European Passport Rights for Credit Institutions Regulations,

authorised under MiFID to provide investment services and seeking to

appoint a tied agent in terms of MiFID. Reference to the term

"European investment firm" shall be deemed to be a reference to the

term "European credit institution".

(1) Where a person falling within the scope of these Administrative

regulations fails to comply with any provisions of such regulations or penalties,

administrative

any rules issued thereunder further implementing such regulations, the measures

appeals.

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

Investment Services Act and Banking Act (MiFID and MiFIR L.N. 401.

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 article 19 of the Act shall apply

mutatis mutandis.

The provisions of the Investment Services Act (Tied Repeal of the

Investment

Agents) Regulations are hereby being repealed.

Services Act

(Tied Agents)

Regulations.

€0.27