FINANCIAL MARKETS ACT (MIFID AND MIFIR ADMINISTRATIVE PENALTIES, MEASURES AND INVESTIGATORY POWERS) REGULATIONS

INVESTIGATORY POWERS)

SUBSIDIARY LEGISLATION 345.22

FINANCIAL MARKETS ACT (MIFID AND MIFIR

ADMINISTRATIVE PENALTIES, MEASURES AND

INVESTIGATORY POWERS) REGULATIONS

3rd January, 2018

LEGAL NOTICE 392 of 2017, as amended by Legal Notices 137 of 2022 and

215 of 2025.

(1)

The title of these regulations is the Financial

Markets Act (MiFID and MiFIR Administrative Penalties, Measures

and Investigatory Powers) Regulations.

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

implement Article 70(1), Article 70(3) to (6) and Article 71(1) to (5) of

MiFID, as herein defined and shall be interpreted and applied

accordingly.

(1)

In these regulations, unless the context

otherwise requires –

"the Acts" means the Financial Markets Act and the

Malta Financial Services Authority Act;

"approved publication arrangement" or "APA" means a

person authorised under MiFIR to provide the service of

publishing trade reports on behalf of investment firms

pursuant to Articles 20 and 21 of MiFIR;

"approved reporting mechanism" or "ARM" means a

person authorised under MiFIR to provide the service of

reporting details of transactions to competent authorities or to

ESMA on behalf of investment firms;

"competent authority" means the Malta Financial

Services Authority established by the Malta Financial Services

Authority Act;

"consolidated tape provider" or "CTP" means a person

authorised under MiFIR to provide the service of collecting

trade reports for financial instruments listed in Articles 6, 7,

10, 12 and 13, 20 and 21 of MiFIR from regulated markets,

MTFs, OTFs and APAs and consolidating them into a

continuous electronic live data stream providing price and

volume data per financial instrument;

"ETF" means an ‘exchange-traded fund’ being a fund of

which at least one unit or share class is traded throughout the

day on at least one trading venue and with at least one market

maker which takes action to ensure that the price of its units or

INVESTIGATORY POWERS)

shares on the trading venue does not vary significantly from its

net asset value and, where applicable, from its indicative net

asset value;

"investment firm" means any 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 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, as amended from time to time, and

includes any implementing measures that have been or may be

issued thereunder;

"MiFIR" means Regulation (EU) No 600/2014 of the

European Parliament and of the Council of 15 May, 2014 on

markets in financial instruments and amending Regulation

(EU) No 648/2012, 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;

"multilateral trading facility" or "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;

"organised trading facility" or "OTF" means a

multilateral system which is not a regulated market or an MTF

and in which multiple third-party buying and selling interests

in bonds, structured finance products, emission allowances or

derivatives are able to interact in the system in a way that

results in a contract in accordance with Title II of MiFID.

(2) Words and expressions which are also used in the Acts

shall have the same meaning as in the Acts.

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The competent authority shall exercise its supervisory Supervisory

powers and its powers to impose administrative penalties and other powers

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

adherence to the requirements and obligations arising out of the Acts penalties

and any regulations and Financial Market Rules issued thereunder measures.

and MiFIR, either directly or in collaboration with European

regulatory authorities and with overseas regulatory authorities, in

terms of law as warranted by the relevant circumstances and shall

take all measures necessary to ensure that such administrative

penalties and administrative measures are implemented.

(1)

Without prejudice to article 39A of the

Financial Markets Act, to any regulations made under the Financial

Markets Act and to the supervisory powers of the competent

authority referred in regulation 3, the competent authority shall

impose administrative penalties and other administrative measures in

respect of breaches of

(a)

the provisions of the Financial Markets Act

and, or of regulations and, or Financial Market Rules issued

thereunder transposing the provisions of MiFID; and

(b)

the provisions of MiFIR.

(2) The administrative penalties and other measures taken

pursuant to sub-regulation (1) shall be effective, proportionate and

dissuasive.

(1)

The competent authority shall exercise its

supervisory powers and its powers to the following administrative

penalties and measures

(a)

a public statement which indicates the natural

or legal person and the nature of the infringement;

(b)

an order requiring the natural or legal person to

cease the conduct and to desist from a repetition of that

conduct;

(c)

in the case of a market operator authorised to

operate an MTF or OTF, or a regulated market, withdrawal or

suspension of the authorisation of the institution in accordance

with the provisions of the Financial Markets Act and any

regulations issued thereunder;

(d)

a temporary ban on any Maltese investment

firm being a member of or participant in regulated markets or

MTFs or any client of OTFs;

(e)

in the case of a legal person, maximum

administrative fines of up to 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

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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;

(f)

in the case of a natural person, maximum

administrative fines of up to five million euro (€5,000,000);

(g)

maximum administrative fines of up to twice

the amount of the benefit derived from the infringement where

that benefit can be determined, even if that exceeds the

maximum amounts specified in paragraphs (e) and (f) above.

(h)

in the case of an APA or ARM which has a

derogation in accordance with Article 2(3) of MiFIR,

withdrawal and suspension of the authorisation in accordance

with Article 27e of MiFIR.

(1)

The competent authority shall publish any

decision imposing an administrative penalty or measure which it shall

take under these regulations on its official website, without undue

delay after the person on whom the penalty or measure was imposed

has been informed of that decision. The publication shall include at

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

identity of the persons responsible

Provided that this obligation shall not apply to decisions

imposing measures that are of an investigatory nature.

(2)

Notwithstanding sub-regulation (1), 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

publication jeopardises the stability of financial markets or an on-

going investigation, the competent authority shall either

(a)

defer the publication of the decision to impose

the administrative penalty or measure until the moment where

the reasons for non- publication cease to exist;

INVESTIGATORY POWERS)

(b)

publish the decision to impose the

administrative penalty or measure on an anonymous basis in a

manner which complies with Maltese law, if such anonymous

publication ensures an effective protection of the personal data

concerned; or

(c)

not publish the decision to impose an

administrative penalty or measure at all 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;

(ii) the proportionality of the publication of

such decisions with regard to administrative penalties or

measures which are deemed to be of a minor nature.

(3) In the case of a decision to publish an administrative

penalty or measure on an anonymous basis in accordance with sub-

regulation (2), 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 an administrative penalty

or measure is subject to appeal in terms of regulation 8, the

competent authority shall also publish, immediately, on its official

website such information and any subsequent information on the

outcome of such appeal. Moreover, any decision annulling a previous

decision to impose an administrative penalty 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 after its publication

Provided that 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 laws.

(6) This regulation shall be without prejudice to article

16(8) of the Malta Financial Services Authority Act.

(7) The competent authority shall inform ESMA of all

administrative penalties imposed but not published in accordance

with point (c) of sub-regulation (2) including any appeal in relation

thereto and the outcome thereof.

(8) The competent authority shall provide ESMA annually

with aggregated information regarding all sanctions and measures

imposed in accordance with sub-regulations (1) to (4)

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Provided that this obligation does not apply to measures

of an investigatory nature.

(9) Where the competent authority has disclosed an

administrative measure, penalty or criminal sanction to the public, it

shall, at the same time, report that fact to ESMA.

(1)

These regulations shall apply at least in the

case of breach of any of the following

(a)

the provisions of regulations 3 to 8 of the

Algorithmic Trading Regulations, 2017;

(b)

the provisions of regulations 3(1) to (6), 4, 5,

and 6(1) to (3) and (5) of the Multilateral Trading Facilities and

Organised Trading Facilities Regulations;

(c)

the provisions of Articles 4(1) and (2), 4B(1)

and (4), 4C(1), (2)and (3), 4E, 4F, 4G(1), 7, 8(2)(d), 10B(2),

17(1)(b), (d), (e) and (g) of the FMA;

(d)

the provisions of regulation 4(1) of the

Financial Markets Act (SME Growth Market) Regulations,

2017;

(e)

the provisions of regulation 5(1) and 8 of the

Financial Markets Act (Membership and Access) Regulations;

(f)

the provisions of regulation 3(1), (2) and (4) of

the Central Counterparties Access Regulations, 2017;

(g)

the provisions of regulations 3, 8 and

paragraphs 2, 3, 4, 5 of the Schedule of the Regulated Markets

(Authorisation Requirements) Regulations;

(h)

the provisions of regulations 3(3) and 4(3) of

the European Rights for Regulated Markets Regulations;

(i)

the provisions of regulations 3(1) to (3), (5),

(15), (17) and (19) and regulation 4(1) to (7) of the Position

Limits and Position Management Controls in Commodity

Derivatives and Reporting Regulations, 2017.

(j)

the provisions of regulations 7(1) to (5), 8, 9,

and 10 of the Data Reporting Services Regulations, 2017.

(2) These regulations shall apply at least in the case of a breach of

any of the following provisions of MiFIR

(a) Articles 3(1) and (3) relating to pre-trade transparency

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requirements for trading venues in respect of shares,

depositary receipts, ETFs, certificates and other

similar financial instruments;

(b) the first sub-paragraph of Article 4(3) relating to

waivers for equity instruments;

(c) Article 5 relating to volume cap;

(d) Article 6 relating to post-trade transparency

requirements for trading venues in respect of shares,

depositary receipts, ETFs, certificates and other

similar financial instruments;

(e) the first sentence of the third sub-paragraph of Article

7(1) relating to authorisation of deferred publication;

(f)

Article 8(1) relating to pre-trade transparency

requirements for trading venues in respect of bonds,

structured finance products and emission allowances;

(g) Article 8a(1) and (2) relating to pre-trade transparency

requirements for trading venues in respect of

derivatives;

(h) Article 8b relating to pre-trade transparency

requirements for trading venues in respect of package

orders;

(i)

Article 10 relating to post-trade transparency

requirements for trading venues in respect of bonds,

structured finance products, emission allowances and

derivatives;

(j)

the first sentence of the second sub-paragraph of

Article 11(1), the second sub-paragraph of Article

11(1a), Article 11(1b) and the fourth sub-paragraph of

Article 11(3) relating to deferred publication in respect

of bonds, structured finance products or emission

allowances;

(k) the first sentence of the second sub-paragraph and the

fourth sub-paragraph of Article 11a(1) relating to

deferred publication in respect of derivatives;

(l)

Article 12(1) relating to the obligation to make pre-

trade and post-trade data available separately;

(m) Article 13(1) and (2) relating to the obligation to make

pre-trade and post-trade data available on a reasonable

commercial basis;

(n) Article 14(1), (2) and (3) relating to the obligation for

systematic internalisers to make public firm quotes in

respect of shares, depositary receipts, ETFs,

certificates and other similar financial instruments;

(o) Article 15(1) and (2) and the second sentence of

Article 15(4) relating to the execution of client orders;

(p) the second sentence of article 17(1) relating to access

to quotes;

(q) Article 20(1), Article 20(1a) and the first sentence of

Article 20(2) relating to post-trade disclosure by

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investment firms, including systematic internalisers, in

respect of shares, depositary receipts, ETFs,

certificates and other similar financial instruments;

(r)

Article 21(1), (2) and (3) relating to post-trade

disclosure by investment firms in respect of bonds,

structured finance products, emission allowances and

derivatives;

(s) Article 22(2) relating to the provision of information

for the purposes of transparency and other

calculations;

(t)

Article 22a(1) and (5) to (8) relating to the

transmission of data to the CTP;

(u) Article 22b(1) relating to data quality;

(v) Article 22c(1) relating to the synchronisation of

business clocks;

(w) Article 23(1) and (2) relating to the trading obligation

for investment firms;

(x) Article 25(1) and (2) relating to the obligation to

maintain records;

(y) the first sub-paragraph of Article 26(1), Article 26(2)

to (5), the first sub-paragraph of Article 26(6) and the

first to fifth and eighth sub-paragraph of Article 26(7)

relating to the obligation to report transactions;

(z) Article 27(1) relating to the obligation to supply

financial instrument reference data;

(aa) Article 27f(1), (2) and (3) relating to the requirements

for the management body of a data reporting services

provider;

(ab) Article 27g(1) to (5) relating to the organisational

requirements for APAs;

(ac) Article 27i(1) to (4) relating to the organisational

requirements for ARMs;

(ad) Article 28(1) relating to the obligation to trade on

regulated markets, MTFs or OTFs;

(ae) Article 29(1) and (2) relating to the clearing obligation

for derivatives traded on regulated markets and timing

of acceptance for clearing;

(af) Article

30(1)

relating

to

indirect

clearing

arrangements;

(ag) Article 31(3) relating to post-trade risk reductions

services;

(ah) Article 35(1), (2) and (3) relating to non-

discriminatory access to a CCP as defined in Article 2(1)

of Regulation (EU) No 648/2012 of the European

Parliament and of the Council of 4 July 2012 on OTC

derivatives, central counterparties and trade repositories;

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(ai) Article 36(1), (2) and (3) relating

to

non-

discriminatory access to a trading venue;

(aj) Article 37(1) and (3) relating to non-discriminatory

access to and the obligation to licence benchmarks;

(ak) Article 39a relating to the prohibition of receiving

payment for order flow;

(al) Article 40 relating to ESMA temporary intervention

powers;

(am) Article 41 relating to EBA temporary intervention

powers; and

(an) Article 42 relating to product intervention by the

competent authority.

(3)

Deleted by Legal Notice 215 of 2025.

(4) The provision of investment services without the

required authorisation or approval in accordance with

(a)

the provisions of the Financial Markets Act;

(b)

the provisions of the Regulated Markets

(Authorisation Requirements) Regulations;

(c)

Deleted by Legal Notice 137 of 2022.

shall also be considered as an infringement of MiFID and of

the Financial Markets Act and thereafter subject to the applicability

of these regulations.

(5) The provision of investment services without the

required authorisation or approval contrary to the requirements

prescribed in

(a)

the provisions of Article 7(1) on the

requirement of market operators and investment firms

operating a trading venue to obtain the competent authority’s

prior approval of the proposed arrangement for deferred trade

publication and to disclose these arrangements to the market

participants and to the public; and

(b)

the provisions of Article 11(1) on the

requirement applicable to market operators and investment

firms operating a trading venue to obtain authorisation from

the competent authority for deferred publication of the details

of transactions based on the size and type of the transaction;

(c)

the provisions of Article 27b of MiFIR on the

requirements for authorisation to operate an APA or ARM,

where an APA or ARM has a derogation in accordance with

Article 2(3) of MiFIR;

shall also be considered as an infringement of MiFIR and

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thereafter subject to the applicability of these regulations.

(6) Failure to cooperate or comply in an investigation or

with an inspection or request covered by Article 69 of MiFID shall

also be considered an infringement and subject to the applicability of

these regulations.

Subject to the provisions of the Acts, any person in

respect of whom a decision is taken by the competent authority under

these regulations may appeal to the Financial Services Tribunal in

terms of article 21 of the Malta Financial Services Act and article 42

of the Financial Markets Act and Part VI of the Financial Markets

Act shall apply mutatis mutandis to appeals that may be brought

before the Tribunal under this regulation.