FINANCIAL MARKETS ACT (SME GROWTH MARKETS) REGULATIONS (smegrowthmarkets)

SUBSIDIARY LEGISLATION 345.20

FINANCIAL MARKETS ACT

(SME GROWTH MARKETS) REGULATIONS

3rd January, 2018

LEGAL NOTICE 390 of 2017.

(1)

The title of these regulations is the Financial

Markets Act (SME Growth Markets) Regulations.

(2) The purpose of these regulations is to transpose and

implement Article 4(1) paragraphs (12), (13) and (22), and Article

33(1) to (7) of MIFID as herein defined, and they shall be interpreted

and applied accordingly.

(1)

In

these

regulations

unless

the

context

otherwise requires

"the Act" means the Financial Markets Act;

"competent authority" means the Malta Financial

Services Authority established by the Malta Financial Services

Authority Act;

"Directive 2003/71/EC" means Directive 2003/71/EC of

the European Parliament and of the Council of 4 November

2003 on the prospectus to be published when securities are

offered to the public or admitted to trading and amending

Directive 2001/34/EC, as amended from time to time, and

includes any implementing measures that have been or may be

issued thereunder;

"Financial Services Tribunal" means the tribunal

established in terms of article 21 of the Malta Financial

Services Authority Act;

"investment firm" means any legal person, other than

persons to whom MiFID does not apply in terms of Article 2 of

the said Directive, whose regular occupation or business is the

provision of any one or more investment services to third

parties on a professional basis;

"Maltese investment firm" means a person licensed in

terms of the Investment Services 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

FINANCIAL MARKETS ACT

(SME GROWTH MARKETS)

issued thereunder;

"MTF" means a multilateral system, operated by an

investment firm or a market operator, which brings together

multiple third-party buying and selling interests in financial

instruments – in the system and in accordance with non-

discretionary rules – in a way that results in a contract in

accordance with Title II of MiFID;

"Regulation 596/2014/EU" 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 amended from time to time;

"SME growth market" means a MTF that is registered as

an SME growth market in accordance with these regulations;

"SMEs " for the purposes of these regulations, means

small and medium-sized companies that had an average

market capitalisation of less than EUR 200,000,000 on the

basis of end-year quotes for the previous three calendar years.

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

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

(1)

The operator of a MTF may apply to the

competent authority to have the MTF registered as an SME growth

market.

(2) The competent authority may register the MTF as an

SME growth market if it receives an application to that effect

pursuant to sub-regulation (1) and is satisfied that the requirements

prescribed in regulation 4 are complied with in relation to the MTF.

(3) Within six months from the date of the submission of a

properly completed application form together with the requisite

documentation, the competent authority shall inform an applicant of

its decision whether or not to register the MTF as an SME growth

market.

(1)

MTFs shall comply with the

following

requirements

(a)

at least 50% of the issuers whose financial

instruments are admitted to trading on the MTF are SMEs at

the time when the MTF is registered as an SME growth market

and in any calendar year thereafter;

(b)

appropriate criteria are set for initial and

ongoing admission to trading of financial instruments of

issuers on the market;

(c)

on initial admission to trading of financial

instruments on the market there is sufficient information

published to enable investors to make an informed judgment

about whether or not to invest in the financial instruments,

either an appropriate admission document or a prospectus if

the requirements laid down in Directive 2003/71/EC are

applicable in respect of a public offer being made in

conjunction with the initial admission to trading of the

financial instrument on the MTF;

(d)

there is appropriate ongoing periodic financial

reporting by or on behalf of an issuer on the market, for

example audited annual reports;

(e)

issuers on the market as defined in point (21) of

Article 3(1) of Regulation (EU) No 596/2014, persons

discharging managerial responsibilities as defined in point (25)

of Article 3(1) of Regulation (EU) No 596/2014 and persons

closely associated with them as defined in point (26) of Article

3(1) of Regulation (EU) No 596/2014 comply with relevant

requirements applicable to them under Regulation (EU) No

596/2014;

(f)

regulatory information concerning the issuers

on the market is stored and disseminated to the public;

(g)

there are effective systems and controls aiming

to prevent and detect market abuse on that market as required

under the Regulation (EU) No 596/2014.

(2) Without prejudice to the criteria prescribed in sub-

regulation (1) above, the operator of the MTF shall also be bound by

compliance with other obligations under MiFID relevant to the

operation of MTFs. In addition, Maltese investment firms or market

operators operating a MTF shall not be precluded from imposing

additional requirements to those specified in sub-regulation (1).

The competent authority may deregister a MTF as an

SME growth market in any of the following cases

(a)

the Maltese investment firm or market operator

operating the market applies for its deregistration;

(b)

the requirements prescribed in sub-regulation

4(1) are no longer complied with in relation to the MTF.

Where the competent authority registers or deregisters a

MTF as an SME growth market pursuant to these regulations, it shall

as soon as possible notify ESMA of that registration or deregistration.

Where a financial instrument of an issuer is admitted to

trading on one SME growth market, the financial instrument may

also be traded on another SME growth market only where the issuer

has been informed and has not objected. In such a case however, the

issuer shall not be subject to any obligation relating to corporate

governance or initial, ongoing or ad hoc disclosure with regard to the

latter SME growth market.

(1)

Where a person falling within the scope of

these regulations fails to comply with any provisions of such

regulations or any rules issued thereunder further implementing such

regulations, the 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 Financial Markets Act (MiFID

and MiFIR 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 Part VI of the Act shall apply

mutatis mutandis.