MALTA FINANCIAL SERVICES AUTHORITY ACT (PAN-EUROPEAN PERSONAL PENSION PRODUCT (PEPP)) REGULATIONS (pepp)

EUROPEAN PERSONAL PENSION PRODUCT (PEPP))

SUBSIDIARY LEGISLATION 330.16

MALTA FINANCIAL SERVICES AUTHORITY ACT

(PAN-EUROPEAN PERSONAL PENSION PRODUCT

(PEPP)) REGULATIONS

1st July, 2022 *

LEGAL NOTICE 133 of 2022.

(1)

The title of these regulations is the Malta

Financial Services Authority Act (Pan-European Personal Pension

Product (PEPP)) Regulations.

(2)

The purpose of these regulations is to implement the

relevant provisions of the Regulation (EU) 2019/1238 of the European

Parliament and of the Council of 20 June 2019 on a pan-European

Personal Pension Product (PEPP).

(3)

These regulations shall enter into force on such date as

the Minister may establish by notice in the Gazette.

(1)

In these regulations, unless the context otherwise

requires

"the Act" means the Malta Financial Services Authority

Act;

''competent authority'' means the Malta Financial

Services Authority established by article 3 of the Act;

"European regulatory authority" means the supervisory

authority or supervisory authorities as defined in Article 2 of

PEPP Regulation, designated by a Member State or an EEA

State, other than Malta, empowered by law or regulation to

supervise a PEPP provider;

"Financial Services Tribunal" means the tribunal

established in terms of article 21 of the Act;

"Member State" means a Member State of the European

Union;

"PEPP" means a pan-European Personal Pension

Productor "PEPP" as defined in Article 2(2) of the PEPP

Regulation;

"PEPP distributor" means a financial undertaking as

referred to in Article 6(1) of the PEPP Regulation authorised to

*These Regulations came into force by Legal Notice 197 of 2022.

EUROPEAN PERSONAL PENSION PRODUCT (PEPP))

distribute PEPPs not manufactured by it, an investment firm

providing investment advice, or an insurance intermediary as

defined in point (3) of Article 2(1) of Directive (EU) 2016/97 of

the European Parliament and of the Council;

"PEPP provider" means a financial undertaking as

referred to in Article 6(1) of the PEPP Regulation, authorised to

manufacture a PEPP and to distribute that PEPP;

"PEPP Regulation" means the Regulation (EU) 2019/

1238 of the European Parliament and of the Council of 20 June

2019 on a pan-European Personal Pension Product (PEPP);

"PEPP saver" means a natural person who has concluded

a PEPP contract with a PEPP provider.

(2)

Words and expressions used in these regulations and

which are also used in the Act, shall have, unless the context otherwise

requires, the same meaning assigned to them in the Act.

(3)

In the event that there is any conflict between these

regulations and the provisions of the PEPP Regulation, the provisions

of the PEPP Regulation shall prevail.

(1) The Malta Financial Services Authority,

established by the Act, shall be the designated competent authority in

Malta for the purposes of implementing the relevant provisions of the

PEPP Regulation, and any reference in these regulations to the

competent authority shall be read and construed accordingly.

(2)

The competent authority shall supervise the compliance

of PEPP providers and PEPP distributors with the PEPP Regulation on

an ongoing basis.

(3)

The competent authority shall also be responsible to

supervise compliance with the obligations set out in the rules or

instruments of incorporation of the PEPP provider, and the adequacy of

its arrangements and organization with regards to the tasks to be

fulfilled when providing a PEPP.

(4)

The competent authority shall monitor personal pension

products provided in order to verify that such products are designated

as PEPP or it is suggested that such products are PEPPs only when they

are registered under the PEPP Regulation.

(1)

The competent authority shall exercise all

functions, obligations, supervisory and investigatory powers that are

necessary to satisfy all the requirements imposed on competent

authorities in accordance with the PEPP Regulation.

(2)

Without prejudice to the provisions of sub-regulation (1),

EUROPEAN PERSONAL PENSION PRODUCT (PEPP))

the competent authority may, for the better implementation of the

PEPP Regulation, exercise any of the powers assigned to it under the

Act.

The Authority may issue Rules in terms of article

16(2)(a) and article 20A(3) of the Act for the better carrying out of

these regulations and the PEPP Regulation.

(1) The competent authority may prohibit or restrict the

marketing or distribution of a PEPP in Malta under the following

conditions

(a)

the competent authority is satisfied that there are

reasonable grounds to believe that the PEPP gives rise to

significant or reiterated saver’s protection concerns or poses a

risk to the orderly functioning and integrity of financial markets

or the stability of whole or part of the financial system within at

least one (1) Member State;

(b)

the action is proportionate taking into account the

nature of the risks identified, the level of sophistication of

PEPP savers concerned and the likely effect of the action on

PEPP savers who have concluded a PEPP contract;

(c)

the competent authority has properly consulted

European regulatory authorities in other Member States that

may be significantly affected by the action; and,

(d)

the action does not have a discriminatory effect on

services or activities provided from another Member State.

(2)

Where the conditions set out in the sub-regulation (1) are

fulfilled, the competent authority may impose the prohibition or

restriction on a precautionary basis before a PEPP has been marketed

or distributed to PEPP savers where the conditions set out in the sub-

regulation (1) are fulfilled. The prohibition or restriction may apply in

circumstances, or be subject to exceptions, specified by the competent

authority.

(3)

The competent authority shall not impose a prohibition

or restriction under the PEPP Regulation unless it has notified all other

European regulatory authorities involved and EIOPA in writing or

through any other medium agreed to between the European regulatory

authorities, at least one (1) month before the measure is intended to

take effect, of the details of

(a)

the PEPP to which the proposed action relates;

(b)

the precise nature of the proposed prohibition or

restriction and when it is intended to take effect; and,

EUROPEAN PERSONAL PENSION PRODUCT (PEPP))

(c)

the evidence upon which they have based their

decision and upon which they have reasonable grounds to

believe that each of the conditions in sub-regulation (1) are met.

(4)

In exceptional cases, where the competent authority

deems it necessary to take urgent action under this regulation in order

to prevent detriment arising from the PEPP, the competent authority

may take action on a provisional basis, by written notice to all other

European regulatory authorities and EIOPA, at least twenty-four (24)

hours before the measure is intended to take effect to all other

European regulatory authorities and EIOPA, provided that all the

conditions set out in this regulation are met. In addition, the competent

authority shall clearly state the reasons why a one (1) month

notification period would not have adequately addressed the specific

concern or threat

Provided that the competent authority shall not take

action on a provisional basis for a period exceeding three (3) months.

(5)

The competent authority shall publish on its website a

notice of any decision to impose any prohibition or restriction referred

to in sub-regulation (1);

Provided that the prohibition or restriction shall only

apply in relation to action taken after the publication of such notice.

(6)

The notice referred to in sub-regulations (1) and (5) shall

specify

(a)

details of the prohibition or restriction;

(b)

a time after the publication of the notice from

which the measures will take effect; and,

(c)

the evidence upon which it is satisfied each of the

conditions in sub-regulation (1) are met.

(7)

The competent authority shall revoke a prohibition or

restriction if the conditions in sub-regulation (1) no longer apply.

(1)

The competent authority shall exercise its

supervisory powers and its powers to impose administrative penalties

and other measures, in such a way as to ensure the full and complete

adherence to the requirements and obligations arising out of the Act,

any regulations issued thereunder, any Rules issued by the competent

authority and the PEPP Regulation, whether directly, in collaboration

with other European regulatory authorities or by application to the

competent judicial authorities, in terms of the law as warranted by the

relevant circumstances.

(2)

The competent authority shall take all the necessary

EUROPEAN PERSONAL PENSION PRODUCT (PEPP))

measures so as to ensure that administrative penalties and other

measures imposed are effectively implemented.

(3)

The administrative penalties and other measures imposed

shall be effective, proportionate and dissuasive.

(4)

When determining the type and level of an administrative

penalty or other administrative measures to be imposed under sub-

regulation 9(2), the competent authority shall take into account all the

relevant circumstances, including where appropriate

(a)

the materiality, gravity and the duration of the

breach;

(b)

the degree of responsibility of the natural or legal

person responsible for the breach;

(c)

the financial strength of the natural or legal person

responsible for the breach, in particular by the total turnover of

the responsible legal person or the annual income and net assets

of the responsible natural person;

(d)

the importance of profits gained or loses avoided

by the natural or legal person responsible for the breach insofar

as they can be determined;

(e)

the losses for third parties caused by the breach

insofar as they can be determined;

(f)

the level of cooperation of the natural or legal

person responsible for the breach with the competent authority;

and,

(g)

previous breaches by the natural or legal person

responsible for the breach.

Without prejudice to the powers of the competent

authority under the Act or any other law, the competent authority shall

impose administrative penalties and other administrative measures for

breaches of the Act, any regulations issued thereunder, any Rules

issued by the competent authority and the PEPP Regulation.

(1)

Without prejudice to the generality of regulation

10, the supervisory powers of the competent authority, the competent

authority shall impose administrative penalties and other measures for

the following breaches

(a)

a financial undertaking as referred to in Article

6(1) of the PEPP Regulation has obtained a registration of a

PEPP through false or misleading statements or any other

irregular means in infringement of Articles 6 and 7 of the PEPP

EUROPEAN PERSONAL PENSION PRODUCT (PEPP))

Regulation;

(b)

a financial undertaking as referred to in Article

6(1) of the PEPP Regulation provides, respectively distributes,

products bearing the designation "pan-European Personal

Pension Product" or "PEPP" without the required registration;

(c)

a PEPP provider has not provided the portability

service in infringement of Article 18 or 19 of the PEPP

Regulation or the information about that service required under

Articles 20 and 21 of the PEPP Regulation, or has failed to meet

the requirements and obligations set out in Chapter IV, Chapter

V, Articles 48 and 50, and Chapter VII of the PEPP Regulation;

(d)

a depositary has failed to fulfil its oversight duties

under Article 48 of the PEPP Regulation.

(2)

Without prejudice to the generality of regulation 9, the

competent authority shall have the power to impose the following

administrative penalties and other measures for the breaches referred to

in sub-regulation (1)

(a)

a public statement, which indicates the identity of

the natural or legal person and the nature of the infringement in

accordance with Article 69 of the PEPP Regulation;

(b)

an order requiring the natural or legal person to

cease the conduct and to desist from a repetition of that conduct;

(c)

a temporary ban on any member of the financial

undertaking’s management, supervisory or administrative body

or any other natural person, who is held responsible, from

exercising management functions in such undertakings;

(d)

in the case of a natural person, administrative

penalties of up to seven hundred thousand euro (EUR700,000);

(e)

in case of a legal person, an administrative penalty

of up to five million euro (EUR5,000,000) or up to 10% of the

total annual turnover according to the latest available accounts

approved by the management, supervisory or administrative

body; 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 accounting legislative acts according to the latest

available consolidated accounts approved by the management,

supervisory or administrative body of the ultimate parent

EUROPEAN PERSONAL PENSION PRODUCT (PEPP))

undertaking;

(f)

administrative penalties of at least twice the

amount of the benefit derived from the infringement where that

benefit can be determined, even if that exceeds the maximum

amounts in point (d) or (e), respectively.

(3)

The competent authority shall cooperate closely with

other European regulatory authorities to ensure that the administrative

penalties and other measures produce the results pursued by the PEPP

Regulation. The competent authority shall also coordinate its actions

with other European competent authorities to avoid possible

duplication and overlap when applying administrative penalties and

other measures to cross-border cases.

(1)

The competent authority shall publish any

decision imposing an administrative penalty or other measure for

breaches of the provisions of the Act, any regulations issued

thereunder, any Rules issued by the competent authority and the PEPP

Regulation on its website, without undue delay after the person on

whom the penalty or measure was imposed was informed of that

decision. The publication referred to in this sub-regulation shall

include information on the type and nature of the breach and the

identity of the persons responsible and the administrative penalties or

other measures imposed.

(2)

Where the publication of the identity of the legal persons,

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

authority to be disproportionate following a case-by-case assessment,

or where the competent authority considers that the publication

jeopardises the stability of financial markets or an on-going

investigation, the competent authority shall either

(a)

defer the publication of the decision imposing the

administrative penalty or other measure until the reasons for

non-publication cease to exist;

(b)

publish the decision to impose the administrative

penalty or other measure, omitting for a reasonable period of

time the identity and personal data of the addressee, if it is

envisaged that within that period the reasons for anonymous

publication shall cease to exist and provided that such

anonymous publication ensures an effective protection of the

personal data concerned; or

(c)

not publish at all the decision to impose the

administrative penalty or other measure in the event that the

options set out in points (a) and (b) are considered to be

insufficient to ensure

(i)

that the stability of financial markets would

not be put in jeopardy; or

EUROPEAN PERSONAL PENSION PRODUCT (PEPP))

(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 an administrative

penalty or other measure on an anonymous basis as referred to in sub-

regulation (2)(b), the publication of the relevant data may be

postponed.

(4)

Where a decision imposing an administrative penalty or

other measure is subject to an appeal before the relevant judicial

authorities, the competent authority shall also publish immediately on

its website such information and any subsequent information on the

outcome of such appeal. Any judicial decision annulling a decision

imposing an administrative penalty or other 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 at least five (5) years after its publication

Provided that personal data contained in the publication

shall be kept on the official 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 21 of the Act shall

mutatis mutandis apply.