Investment Services Act (Money Market Funds) Regulations, 2019 (moneymarketfunds)

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 20,135, 12 ta’ Frar, 2019

Taqsima B

L.N. 25 of 2019

INVESTMENT SERVICES ACT

(CAP. 370)

Investment Services Act (Money Market Funds) Regulations, 2019

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 and

Scope.

Services Act (Money Market Funds) Regulations, 2019.

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

relevant provisions of the MMF Regulation as herein defined.

(1)

In these regulations, unless the context otherwise Interpretation.

requires

"Act" means Investment Services Act;

"the AIFM Directive" means Directive 2011/61/EU of the

European Parliament and of the Council of 8 June 2011 on

Alternative Investment Fund Managers and amending Directives

2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/

2009 and (EU) No 1095/2010 as amended from time to time, and

includes any implementing measures that may be issued

thereunder;

"Alternative Investment Fund or AIF" means a collective

investment scheme, including sub-funds thereof, which raises

capital from a number of investors, with a view to investing it in

accordance with a defined investment policy for the benefit of

those investors, and which does not qualify as a UCITS Scheme

in terms of the UCITS Directive;

"manager of an MMF" means, in the case of an MMF that

is a UCITS, the UCITS management company, or the UCITS

investment company in the case of a self-managed UCITS, and,

in the case of an MMF that is an AIF, an AIFM or an internally-

managed AIF;

"MMF" means a money market fund;

"MMF Regulation" means Regulation (EU) 2017/1131 of

the European Parliament and of the Council of 14 June 2017 on

money market funds 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;

"UCITS" means undertakings for collective investment in

transferable securities which are harmonized in accordance with

the UCITS Directive, or a sub-fund of such undertaking, and

includes an open ended investment company or a unit trust to

which the UCITS Directive applies;

"UCITS Directive" means Directive 2009/65/EC of the

European Parliament and of the Council of 13 July 2009 on the

coordination of laws, regulations and administrative provisions

relating to undertakings for collective investment in transferable

securities (UCITS) (recast), as amended from time to time, and

includes any implementing measures that have been or may be

issued thereunder.

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

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

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 the

relevant provisions of the MMF Regulation and these regulations, and

any reference in these regulations to the competent authority shall be

read and construed accordingly.

(1) The competent authority shall exercise and fulfil all

the functions, obligations and powers which are required or may be

imposed on competent authorities in accordance with the MMF

Regulation and it shall satisfy all the obligations and requirements

imposed on competent authorities by the MMF Regulation.

(2) Without prejudice to sub-regulation 4(1), the competent

authority may, for the better implementation of the MMF Regulation,

exercise any of the powers assigned to it under the Act in relation to

investment services licence holders in possession of a licence in terms

of article 3 of the Act and collective investment schemes in possession

of a licence in terms of article 4 of the Act or in relation to any other

person falling under its regulatory or supervisory functions in terms of

the Act.

No collective investment undertaking shall be established,

marketed or managed in Malta as an MMF unless it is in possession of

a collective investment scheme licence in terms of article 4 of the Act

and authorised as an MMF in accordance with the MMF Regulation.

Without prejudice to any other regulatory and investigatory Powers of the

powers of the competent authority, in order to fulfil its duties under the competent

authority.

MMF Regulation, the competent authority shall have the following

supervisory and investigatory powers

(a) request access to any document in any form, and to

receive or take a copy thereof;

(b) require an MMF or the manager of an MMF to

provide information without delay;

(c) require information from any person related to the

activities of an MMF or the manager of an MMF;

(d) carry out on-site inspections with or without prior

announcement;

(e) take appropriate measures to ensure that an MMF or

the manager of an MMF continues to comply with the MMF

Regulation;

(f) issue an order to ensure that an MMF or the manager

of an MMF complies with the MMF Regulation and desists from

a repetition of any conduct that could infringe the MMF

Regulation.

(1) Without prejudice to any other regulatory and Administrative

investigatory powers of the competent authority, the competent Penalties

other specific

authority shall, by notice in writing and without recourse to a court administrative

measures.

hearing, exercise its supervisory powers and its powers to impose

maximum administrative penalties as follows

(a) in the case of a legal person, the administrative

pecuniary sanction of up to a maximum of five million euro

(€5,000,000) or 10% of the total annual turnover of the legal

person according to the last available accounts approved by the

management body

Provided that where the legal person is a parent

undertaking or a subsidiary of the 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 the relevant Union law in the area of accounting

according to the last available consolidated accounts approved

by the management body of the ultimate parent undertaking;

(b) in the case of a natural person, the administrative

pecuniary sanction of up to a maximum of five million euro

(€5,000,000);

(c) as an alternative to paragraphs (a) and (b), the

maximum administrative pecuniary sanctions shall be equivalent

to at least twice the amount of the benefit derived from the

infringement where that benefit can be determined, even if it

exceeds the maximum amount of five million euro (€5,000,000).

(2) Without prejudice to powers vested in the competent

authority in accordance with Directive 2009/65/EC or 2011/61/EU, as

applicable, the competent authority, while respecting the principle of

proportionality, shall impose an administrative penalty in terms of sub-

regulation (1) and take the appropriate administrative measures

referred to in sub-regulation (3) where an MMF or the manager of an

MMF

(a) fails to comply with any of the requirements, in

infringement of Articles 9 to 16 and 17 to 21, 23 to 26 or 29 to 34

of the MMF Regulation or any other provision of the MMF

Regulation;

(b) fails to comply with any provisions of the Act, and, or

regulations and, or Rules made thereunder implementing the

provisions of the MMF Regulation;

(c) has obtained authorisation through false statements or

any other irregular means, in infringement of Article 4 or 5 of the

MMF Regulation;

(d) uses the designation 'money market fund', 'MMF' or

of another designation that suggests that a UCITS or AIF is an

MMF, in infringement of Article 6 of the MMF Regulation.

(3) In the cases referred to in sub-regulation (2), the competent

authority of the MMF shall, as appropriate

(a) take administrative measures in terms of the Act and,

or any regulations made thereunder and in terms of these

regulations to ensure that the MMF or the manager of an MMF

concerned complies with the relevant provisions;

(b) withdraw an authorisation granted in accordance with

Article 4 or 5 of the MMF Regulation.

(1) The competent authority shall publish any decision Publication of

imposing an administrative sanction or measure for infringements of the

the competent

the provisions of the Act, the regulations or Rules issued thereunder, authority.

on its website without undue delay after the person on whom the

sanction or measure was imposed has been informed of that decision.

The publication referred to in this sub-regulation shall include at least

information on the type and nature of the infringement and the identity

of the persons responsible

Provided that this obligation does not apply to decisions

imposing measures that are of an investigatory nature.

(2) Where the publication of the identity of the legal persons or

of the personal data of the natural persons is considered by the

competent authority to be disproportionate following a case-by-case

assessment conducted on the proportionality of the publication of such

data, or where the publication jeopardises the stability of the financial

markets or an ongoing investigation, the competent authority shall

(a) defer the publication of the decision to impose the

sanction or measure until the reasons for non-publication cease

to exist;

(b) publish the decision to impose the sanction or

measure on an anonymous basis in a manner which complies

with Maltese law, if such anonymous publication ensures

effective protection of the personal data concerned;

(c) not publish the decision to impose a sanction or

measure in the event that the options laid down in paragraphs (a)

and (b) are considered to be insufficient to ensure

(i) that the stability of the financial markets would

not be put in jeopardy;

(ii) the proportionality of the publication of such

decisions with regard to measures which are deemed to be

of a minor nature.

(3) In the case of a decision to publish a sanction or measure on

an anonymous basis, the publication of the relevant data may be

postponed for a reasonable period of time if it is envisaged that within

that period the reasons for anonymous publication shall cease to exist.

(4) Where the decision to impose a sanction or measure is

subject to appeal before the relevant judicial or other authorities, the

competent authority shall also publish immediately on its website such

information and any subsequent information on the outcome of such

an appeal. Any decision annulling a previous decision to impose a

sanction or a measure shall also be published.

(5) The competent authority shall ensure that any publication

in accordance with this regulation shall remain on its official website

for a period of at least five years from its publication

Personal data contained in the publication shall be kept on

the website of the competent authority only for the period which is

necessary in accordance with the applicable data protection

legislation.

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.

(1) By 21 January 2019, an existing UCITS or AIF that

invests in short-term assets and has as distinct or cumulative objectives

offering returns in line with money market rates or preserving the

value of the investment shall submit an application to the competent

authority together with all documents and evidence necessary to

demonstrate the compliance with the MMF Regulation.

(2) No later than 2 months after receiving the complete

application, the competent authority shall assess whether the UCITS or

AIF is compliant with the MMF Regulation in accordance with

Articles 4 and 5. The competent authority of the MMF shall issue a

decision and notify it immediately to the UCITS or AIF.

In the case of a collective investment scheme authorised as

an MMF in accordance with the MMF Regulation, insofar as the

provisions of the MMF Regulation are inconsistent with the provisions

of the AIFM Directive, the UCITS Directive, the Act, or the

regulations and Rules issued thereunder, the provisions of the MMF

Regulation shall prevail.

The objective of these regulations is to implement the

relevant provisions of the MMF Regulation and they shall be

interpreted and applied accordingly.

€0.27