funds) (Amendment) Regulations, 2018

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 20,007, 12 ta’ Ġunju, 2018

L.N. 185 of 2018

MALTA FINANCIAL SERVICES AUTHORITY ACT

(CAP. 330)

Malta Financial Services Authority Act

(Indices used as benchmarks in financial instruments and

financial contracts or to measure the performance of investment

funds) (Amendment) Regulations, 2018

IN EXERCISE of the powers conferred by article 20E of the

Malta Financial Services Authority 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:-

The title of these regulations is the Malta Financial Title.

Services Authority Act (Indices used as benchmarks in financial

instruments and financial contracts or to measure the performance of

investment funds) (Amendment) Regulations, 2018 and these

regulations shall be read and construed as one with the Malta Financial S.L. 330.10.

Services Authority Act (Indices used as benchmarks in financial

instruments and financial contracts or to measure the performance of

investment funds) Regulations, hereinafter referred to as the "principal

regulations".

Sub-regulation (1) of regulation 2 of the principal Amends

regulation 2 of

regulations shall be amended as follows

the principal

regulations.

(a) immediately after the definition "Benchmarks

Regulation", thereof, there shall be inserted the following new

definitions

" "Council Directive 86/635/EEC" means Council

Directive of 8 December 1986 on the annual accounts and

consolidated accounts of banks and other financial

institutions as may be 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;

"Council Directive 91/674/EEC" means Council

Directive of 19 December 1991 on the annual accounts and

consolidated accounts of insurance undertakings as may be

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;

"Directive 2013/34/EU" means Directive 2013/34/EU

of the European Parliament and of the Council of 26 June

2013 on the annual financial statements, consolidated

financial statements and related reports of certain types of

undertakings, amending Directive 2006/43/EC of the

European Parliament and of the Council and repealing

Council Directives 78/660/EEC and 83/349/EEC as may be

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;"; and

(b) immediately after the definition "provision of a

benchmark", thereof, there shall be inserted the following new

definition

" "Regulation (EU) No 596/2014" 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

may be 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;".

Immediately after regulation 4 of the principal regulations

there shall be added the following new regulations

Without prejudice to any other regulatory

" Powers of the

and investigatory powers of the competent authority,

in order to fulfil its duties under the Benchmarks

Regulation, the competent authority shall have the

following supervisory and investigatory powers

(a) access to any document and other data

in any form, and to receive or take a copy thereof;

(b) require or demand information from

any person involved in the provision of, and

contribution to, a benchmark, including any

service provider to which functions, services or

activities in the provision of a benchmark have

been outsourced as provided for in Article 10 of

the Benchmarks Regulation, as well as their

principals, and if necessary, summon and question

any such person with a view to obtaining

information;

(c) request, in relation to commodity

benchmarks, information from contributors on

related spot markets according, where applicable,

to standardised formats and reports on

transactions, and direct access to traders' systems;

(d) carry out on-site inspections or

investigations, at sites other than the private

residences of natural persons;

(e) enter premises of legal persons,

without prejudice to Regulation (EU) No 596/

2014, in order to seize documents and other data

in any form, where a reasonable suspicion exists

that documents and other data related to the

subject-matter of the inspection or investigation

may be relevant to prove a breach of the

Benchmarks Regulation;

(f) require

existing

recordings

of

telephone

conversations,

electronic

communications or other data traffic records held

by supervised entities;

(g) request the freezing or sequestration of

assets or both;

(h) require temporary cessation of any

practice that the competent authority considers

contrary to the Benchmarks Regulation;

(i) impose a temporary prohibition on the

exercise of professional activity;

(j) take all necessary measures to ensure

that the public is correctly informed about the

provision of a benchmark, including by requiring

the relevant administrator or a person that has

published or disseminated the benchmark or both

to publish a corrective statement about past

contributions to or figures of the benchmark.

Without prejudice to the supervisory and

investigatory powers of the competent authority in

accordance with regulation 5, where a person

contravenes or fails to comply with the requirements

contained in Articles 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14,

15, 16, 21, 23, 24, 25, 26, 27, 28, 29 and 34 of the

Benchmarks Regulation, where they apply; and, or

fails to cooperate or comply with an investigation or

with an inspection or request covered by Article 41 of

the Benchmarks Regulation, the competent authority

shall impose the following administrative penalties

and administrative measures

(a) an order requiring the administrator or

supervised entity responsible for the infringement

to cease the conduct and to desist from repeating

that conduct;

(b) the disgorgement of the profits gained

or losses avoided because of the infringement

where those can be determined;

(c) a public warning which indicates the

administrator or supervised entity responsible and

the nature of the infringement;

(d) withdrawal or suspension of the

authorisation or the registration of an

administrator;

(e) a temporary ban prohibiting any

natural person, who is held responsible for such

infringement, from exercising management

functions in administrators or supervised

contributors;

(f) the

imposition

of

maximum

administrative penalty of at least three times the

amount of the profits gained or losses avoided

because of the infringement where those can be

determined;

(g) in respect of a natural person,

maximum administrative penalty of

(i) for

infringements

of

the

following Articles of the Benchmarks

Regulation:- Articles 4, 5, 6, 7, 8, 9, 10,

points (a), (b), (c) and (e) of Article 11(1),

Article 11(2) and Article 11 (3), and Articles

12, 13,14, 15, 16, 21, 23, 24, 25, 26, 27, 28,

29 and 34, euro (€500 000); or

(ii) for infringements of point (d) of

Article 11(1) or of Article 11(4) of the

Benchmarks Regulation, euro (€100 000);

(h) in respect of a legal person, maximum

administrative penalty of

(i) for

infringements

of

the

following Articles of the Benchmarks

regulation:- Articles 4, 5, 6, 7, 8, 9, 10,

points (a), (b), (c) and (e) of Article 11(1),

Article 11(2) and (3), and Articles 12, 13,14,

15, 16, 21, 23, 24, 25, 26, 27, 28, 29 and 34,

either euro (€1,000,000) or, 10% of its total

annual turnover according to the last

available accounts approved by the

management body, whichever is the higher;

or

(ii) for infringements of point (d) of

Article 11(1) or of Article 11(4) of the

Benchmarks Regulation, either euro

(€250,000) or, 2% of its total annual

turnover according to the last available

accounts approved by the management

body, whichever is the higher.

For the purposes of regulation 6(h) (i) and

(ii), where the legal person is a parent undertaking or a

subsidiary of a parent undertaking which has to

prepare consolidated financial accounts in accordance

with Directive 2013/34/EU of the European

Parliament and of the Council, the relevant total

annual turnover shall be the total annual turnover or

the corresponding type of income in accordance with

Council Directive 86/635/EEC for banks and Council

Directive 91/674/EEC for insurance companies

according to the last available consolidated accounts

approved by the management body of the ultimate

parent undertaking or if the person is an association,

10% of the aggregate turnovers of its members.

When determining the type and level of

administrative penalty and other administrative

measures, the competent authority shall take into

account all relevant circumstances, including where

appropriate

(a) the gravity and duration of the

infringement;

(b) the criticality of the benchmark to

financial stability and the real economy;

(c) the degree of responsibility of the

responsible person;

(d) the financial strength of the

responsible person, as indicated, in particular, by

the total annual turnover of the responsible legal

person or the annual income of the responsible

natural person;

(e) the level of profits gained or losses

avoided by the responsible person, insofar as they

can be determined;

(f) the level of cooperation of the

responsible person with the competent authority,

without prejudice to the need to ensure

disgorgement of profits or losses avoided by that

person;

(g) previous infringements by the person

concerned;

(h) measures

taken,

after

the

infringement, by a responsible person to prevent

the repetition of the infringement.

(1) The competent authority shall

publish any decision imposing an administrative

penalty or other administrative measure in relation to

infringements of the Benchmarks Regulation on its

official website immediately after the person subject to

that decision has been informed of that decision. Such

publication shall include at least information on the

type and nature of the infringement and the identity of

the persons subject to the decision.

The foregoing does not apply to decisions

imposing measures that are of an investigatory nature.

(2) Where the competent authority considers

that the publication of the identity of the legal person

or of the personal data of a natural person, would be

disproportionate following a case-by-case assessment

conducted on the proportionality of the publication of

such data, or where such publication would jeopardise

the stability of financial markets or an on-going

investigation, it shall do any of the following

(a) defer the publication of the decision

until such time as the reasons for that deferral

cease to exist;

(b) publish the decision on an anonymous

basis in accordance with national law where such

anonymous publication ensures an effective

protection of the personal data concerned;

(c) not publish the decision at all in the

event that the competent authority is of the

opinion that publication in accordance with sub-

regulation (2)(a) or (b) will be insufficient to

ensure

(i) that the stability of financial

markets is not jeopardised; or

(ii) the proportionality of the

publication of such decisions with regard to

measures which are deemed to be of a minor

nature.

Where the competent authority decides to

publish a decision on an anonymous basis as referred

to in regulation 8(2)(b), it may postpone the

publication of the relevant data for a reasonable period

of time where it is foreseeable that the reasons for

anonymous publication shall cease to exist during that

period.

(3) Where the decision is subject to an appeal

in terms of regulation 9, the competent authority shall

also publish, immediately, on its official website such

information and any subsequent information on the

outcome of such appeal. Any decision annulling a

previous decision to impose an administrative penalty

or a measure shall also be published.

(4) Any decision that is published by the

competent authority in accordance with this regulation

shall remain accessible on the official website of the

competent authority for a period of at least five years

after its publication. Personal data contained in the

publication shall only be kept on the official website of

the competent authority for the period which is

necessary in accordance with the applicable data

protection rules.

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 21 of the Act shall apply

mutatis mutandis.".

€0.36