Trading Licences (Amendment) Regulations, 2018

L.N. 213 of 2018

TRADING LICENCES ACT

(CAP. 441)

Trading Licences (Amendment) Regulations, 2018

IN EXERCISE of the powers conferred by article 17 of the

Trading Licences Act, the Minister for the Economy, Investment and

Small Businesses, has made the following regulations:-

The title of these regulations is the Trading Licences

(Amendment) Regulations, 2018 and these regulations shall be read

and construed as one with the Trading Licences Regulations,

hereinafter referred to as "the principal regulations".

In regulation 2 of the principal regulations, there shall be

added the following new definitions

(a) immediately after the definition of the term

"alcoholic beverage" thereof there shall be added the following

new definitions

"the Bank" means the Central Bank of Malta

established by article 3 of the Central Bank of Malta Act;

"branch" means premises of a credit reference

agency, other than its head office, from which all or some

of the business of a credit reference agency is undertaken;

(b) immediately after the definition of the term "bread"

thereof there shall be added the following new definition

"business model" means a step-by-step plan of action

on how revenues and profits will be generated by a credit

reference agency, as well as the services it plans to offer,

including the expenses it will incur;

(c) immediately after the definition of the term "the

busker" thereof there shall be added the following new

definitions

"CBM Directive No 15" means the Central Bank of

Malta Directive No 15 entitled ‘Supervision of Credit

Reference Agencies’;

"Central Credit Register" means the Register

established under article 24 of the Central Bank of Malta Cap. 204.

Act;

"company" has the same meaning assigned to it by

article 2 of the Companies Act;

"credit information" means a collection of public and

non-public information and other related information,

including Central Credit Register data, which when

assessed, assembled and evaluated indicates the

creditworthiness of a legal or natural person;

"credit reference agency" means any undertaking

licenced by the Trade Licensing Unit in terms of regulation

47A, the main business of which is to prepare, assemble

and evaluate credit information and related credit and risk

management services on legal and natural persons for the

purpose of issuing credit scores to be furnished to third

parties, provided that a credit reference agency is not

precluded from carrying out other related tasks;

"credit score" means a measure of creditworthiness

derived from credit information and which must under pain

of nullity include data derived from the Central Credit

Register;

"critical operations" means any operations relating to

the credit scoring and credit information granting services

that, if interrupted, can put the business of a credit

reference agency at risk, including, but not limited to

financial loss, damage, interruption or a breach of security;

(d) immediately after the definition of the term "form"

thereof, there shall be added the following new definitions

"indemnity policy" means an insurance policy issued

according to documented terms and conditions, provided

by a reputable insurance company;

"legal entity identifier" means a unique identifier

consisting of a 20-character alpha-numeric code, which

allows for the identification of legally independent entities

in global financial markets;

"legal organisation" has the same meaning assigned

to it by article 1 of the Second Schedule of the Civil Code; Cap. 16.

(e) immediately after the definition of the term "open-air

market" thereof, there shall be added the following new

definition

"operational policies" means any framework policies

and practices of the credit reference agency;

(f) immediately after the definition of the term "person

of the legal profession" thereof, there shall be added the

following new definition

"personal data" has the same meaning assigned to it

by article 4 of Regulation (EU) 2016/679 of the European

Parliament and of the Council of 27 April 2016 on the

protection of natural persons with regard to the processing

of personal data and on the free movement of such data,

and repealing Directive 95/46/EC;

(g) immediately after the definition of the term "street"

thereof, there shall be added the following new definition

"supervisory authority" means the Bank.

Immediately after Part VII of the principal Regulations

there shall be added the following new Part and regulations

"PART VIIA

Credit Reference Agencies

47A. (1) Without prejudice to regulation 9 and

Licensing of credit

reference agency.

to any other license or authorization needed under any

other law, an application for a trading license in order to

carry out the business of a credit reference agency shall

be made in duplicate to the Trade Licensing Unit on the

appropriate form which shall inter alia include the

following information

(a) the applicant’s legal status;

(b) the address of the applicant’s head

office and the principal place of business if

applicable;

(c) the names of the persons who

effectively direct the business and the operations

of the credit reference agency.

(2) The application shall be accompanied by a

non-refundable fee of five hundred euro (€500) and the

following documents submitted in duplicate

(a) a declaration of business activities

disclosing the programme of operations, setting

out in particular the type of activities undertaken

by the applicant;

(b) a copy of the Memorandum and

Articles of Association in case the applicant is a

company or a copy of the Statute in case the

applicant is a legal organisation, clearly

specifying the operation of a credit reference

agency as one of the main objectives;

(c) a description of the structure of the

organisation, governance arrangements, and the

operational policies covering the critical

operations including, where applicable, a

description of the intended use of branches;

(d) a document disclosing that the credit

reference agency has an active legal entity

identifier;

(e) a

document

describing

the

technological infrastructure and capacity in place

including the type of scoring methodology used

for the issuance of credit scoring;

(f) a statement in writing confirming that

central credit register data will be used for the

issuance of credit scores;

(g) a document disclosing the statutory

auditors or audit firms responsible to carry out the

audit of the credit reference agency;

(h) if the credit reference agency is a

company, a copy of the business model and a

copy of the audit financial statements or

consolidated financial statements of the last three

(3) years, if applicable;

(i) if the credit reference agency is a legal

organisation, a copy of the business model and a

copy of the management accounts; and

(j) a copy of the financial statements

showing that the credit reference agency has

capital and reserves of not less than one hundred

thousand euro (€100,000).

(3) The Trade Licensing Unit shall within five

(5) working days from the date of receipt of two (2)

copies of the application form and the accompanying

documents in duplicate submit a copy of each to the

Bank for assessment and opinion.

(4) Without prejudice to sub-regulation (1) of

regulation 47A the Trade Licensing Unit of its own

accord or at the recommendation of the Bank may

require the applicant to submit further documentation

and information for the issuance of a license.

(5) The Trade Licensing Unit in consultation

with the Bank shall assess and determine the

application.

(6) In the case of an application made in terms

of this regulation an application can only be submitted

by a company or a legal organization

Provided that as from 1 st January 2020, an

application for a trading licence in order to carry out the

business of a credit reference agency can only be

submitted by a company.

47B. (1) The Trade Licensing Unit shall,

agency application. without delay, acknowledge receipt of an application

and receipt of the applicable licence fee in writing to

the applicant and shall specify the procedure under

which a refusal by the Trade Licensing Unit to grant a

licence may be appealed in terms of the Act and Part VI

of these regulations

Provided that an application form shall not

be deemed to be complete unless the Trade Licensing

Unit is in receipt of all the documentation required to be

submitted together with the application form.

(2) The Bank shall within ten (10) working days

of being informed by the Trade Licensing Unit about

the receipt of an application

(a) report to the Trade Licensing Unit

whether the Bank is satisfied that the information

and documentation submitted is complete; or

(b) in the case of incomplete information

and, or documentation, indicate to the Trade

Licensing Unit the additional information and, or

documentation needed, in accordance with sub-

regulation 3 of regulation 47A.

(3) The Bank shall give its recommendation for

the issuance of a license or otherwise, to the Trade

Licensing Unit within three (3) months from the date of

receipt of a complete application

Provided, that during the three (3) month

period, the Bank may require further clarifications,

additional information and documentation

Provided further, that the three (3) month

period may at the discretion of the Bank be extended

for one period of not more than three (3) months. Such

extension and the reasons therefore shall be notified to

the Trade Licensing Unit who shall inform the applicant

of the extension.

(4) An application for a licence is deemed to be

determined by the Trade Licensing Unit in consultation

with the Bank when

(a) the Trade Licensing Unit in

consultation with the Bank has decided to issue a

licence without condition; or

(b) the Trade Licensing Unit in

consultation with the Bank has decided to issue a

licence subject to conditions it may deem

appropriate

Provided that, all such conditions shall

be specified in writing.

(5) If a licence is issued, it is to be issued in the

name of the credit reference agency, and by reference to

the applicable code issued by the Trade Licensing Unit

Provided that the licence so issued is non

transferable

Provided further the conditions contained in

the Second Schedule shall not apply in the case of

credit reference agencies.

47C. (1) The Trade Licensing Unit shall refuse

the application on the recommendation of the Bank if it

is not satisfied that

(a) all qualifying shareholders and all

persons who will effectively direct the operation

of the credit reference agency are suitable persons

to ensure prudent management;

(b) the credit reference agency has a

sound and prudent management, and has a robust

governance arrangement, including a clear

organisational structure;

(c) there is in place an effective procedure

to identify, handle and manage operational or

security incidents to which the credit reference

agency might be exposed to;

(d) there is in place an effective

complaints procedure to investigate complaints

from consumers arising out, or in connection

with, any alleged infringement by the credit

reference agency;

(e) there is in place a disposal procedure

for the deletion of credit score, Central Credit

Register data and credit information established

to be inaccurate or ineligible;

(f) there is in place a indemnity insurance

against any liability which the credit reference

agency may incur for compensation in respect of

any loss or damage which any person may suffer

as a result of any negligent act, error or omission

committed by the applicant in the carrying out of

its business in a policy year in which that person

is covered; or

(g) other

requirements

considered

necessary in the particular circumstances, were

not met.

(2) Without prejudice to sub-regulation (1) and

regulation 47A, the Trade Licensing Unit, on the

recommendation of the Bank, may refuse to issue the

license if it deems fit.

(3) A decision to refuse the issuance of a license

shall be accompanied with the reasons for such refusal.

(4) Any applicant who feels aggrieved by a

decision of the Trade Licensing Unit may file an appeal

to the Licensing Appeals Board in accordance with the

Act and Part VI.

47D. Without prejudice to sub-regulation (6) of

regulation 9, a license to carry out the business of a

credit reference agency shall be deemed null ab initio if

the pre-requisites of regulations 47A and 47C were not

met by the applicant.

47E. (1) A license may be cancelled by the

Trade Licensing Unit

(a) where it becomes aware of proof of

dissolution of said credit reference agency; or

(b) at the request of the credit reference

agency or at the request of a person authorised to

so act on its behalf. Such request shall be made on

the appropriate form.

(2) The effective date of cancellation in the case

of dissolution shall be the day following the date of

dissolution of the credit reference agency.

(3) Without prejudice to sub-regulation (1) a

licence to carry out the business as a credit reference

agency can be suspended or cancelled by the Trade

Licensing Unit on the recommendation of the Bank

(a) when the credit refence agency does

not commence the operation pursuant to the

licence within twelve (12) months of its issue, or

has ceased its operations for more than six (6)

months; or

(b) when the credit refence agency no

longer fulfils the conditions for the granting of a

licence; or

(c) if it is considered that, by reason of the

manner in which the credit reference agency is

conducting its affairs, would constitute a breach

of personal data pertaining to data subjects or a

breach in operations as stipulated in the CBM

Directive No 15; or

(d) if it is considered that, the credit

reference agency has failed to satisfy any of its

obligations or any of the provisions arising under

these regulations, the CBM Directive No 15 or

under the provisions of any other law; or

(e) if the board of directors, any of the

ultimate shareholders, or any of the

administrators have been found guilty of

negligence, irregularity or misconduct; or

(f) when the credit reference agency does

not abide with the requirements and obligations

issued by the Bank, as the supervisory authority,

from time to time; or

(g) if the capital and reserves is less than

hundred thousand euro (€100,000); or

(h) if the credit reference agency conducts

any other business which could give rise to a

conflict of interest with the task of the issuance of

a credit score;

(i) if the Central Credit Register data is

being used for any purpose other than for the

issuance of a credit score;

Provided that in the case of suspension

or cancellation of the license, no refund of fees

will be affected by Trade Licensing Unit.

(5) The Trade Licensing Unit, on the

recommendation of the Bank, may

(a) require the removal of any director,

manager, administrator, trustee or principal

officer;

(b) impose other restrictions as the Bank,

as the supervisory authority, may stipulate form

time to time.

(6) A company or legal organisation which has

its licence suspended or cancelled shall cease to act as a

licensed credit reference agency from the date on which

the suspension or cancellation takes effect

Provided that the suspension shall cease to

take effect when the Bank informs the Trading

Licensing Unit that the credit reference agency has

abided with the requirements issued by the Bank.

(7) The Trade Licensing Unit and the Bank shall

publish a notice of suspension or cancellation of a

licence on its website.

47F. A licence to carry out the business of a

Validity of licence.

credit reference agency shall be renewable every five

(5) years upon a submission by the credit reference

agency for a renewal. A charge for renewal of the

licence will be issued by the Trade Licensing Unit,

following the recommendation of the Bank

Provided that, the fee of five hundred euro

(€500) shall be paid within thirty (30) working days of

the charge being issued.

47G. (1) A license holder shall provide the

Trade Licensing Unit, and the Bank and any other

person authorised in that behalf, all information and

documentation as may be appropriately required in

relation to the commercial activity licensed under these

regulations.

(2) The Trade Licensing Unit, and any other

person so authorised as aforesaid shall have the right to

enter, with the assistance of the Police, and inspect any

premises related to a commercial activity, and require

additional documentation

Provided that, the Bank, as a supervisory

authority, has the right to enter the premises and inspect

any information or documentation as may be necessary

related to the commercial activity of a credit reference

agency, without the assistance of the Police.

47H. A company or a legal organisation operating

as a credit reference agency shall ensure conformity

with the requirements within six (6) months from the

day of the coming into force of these regulations. If a

company or a legal organisation does not comply with

the requirements of these regulations, it shall be

prohibited from carrying out the business of a credit

reference agency.".

Immediately after Type Code 74.872 and the Commercial Amends Part II

Activity Auctioneer in Part II of the First Schedule to the principal of

Schedule to the

regulations, there shall be added the following new type and principal

regulations.

commercial activity

"82.91 Commercial activity of a Credit Reference Agency".

€0.99