EUROPEAN PASSPORT RIGHTS FOR INVESTMENT FIRMS REGULATIONS

SUBSIDIARY LEGISLATION 370.10

EUROPEAN PASSPORT RIGHTS FOR

INVESTMENT FIRMS REGULATIONS

1st November, 2007

LEGAL NOTICE 325 of 2007, as amended by Legal Notices 251 of 2008,

174 of 2012,397 of 2017, 243 of 2019 and 145 of 2023.

(1) The title of these regulations is the European Passport

Rights for Investment Firms Regulations.

(2) The objective of these regulations is to implement Article

4(1) paragraph (30), Articles 34(1)–(5), 35(1)-(10), 85 and 86(1), (2)

and (4) of MiFID, as herein defined, and they shall be interpreted

and applied accordingly. The purpose of the amendments introduced

by Legal Notice 174 of 2002 is to transpose Article 6(27)(a) and (b) of

Directive 2010/78/EU of the European Parliament and of the Council

of 24 November 2010 amending Directives 98/26/EC, 2002/87/EC,

2003/6/EC, 2003/41/EC, 2003/71/EC, 2004/39/EC, 2004/109/EC,

2005/60/EC, 2006/48/EC, 2006/49/EC and 2009/65/EC in respect of

the powers of the European Supervisory Authority (European Banking

Authority), the European Supervisory Authority (European Insurance

and Occupational Pensions Authority) and the European Supervisory

Authority (European Securities and Markets Authority).

Amended by

(Regulation 2)

L.N. 397 of 2017.

ANNEX I

LIST OF SERVICES AND ACTIVITIES AND FINANCIAL INSTRUMENTS

Section A

Core services

(1) Reception and transmission of orders in relation to one or more financial

instruments;

(2)

Execution of orders on behalf of clients;

(3)

Dealing on own account;

(4)

Portfolio management;

(5)

Investment advice;

(6) Underwriting of financial instruments and, or placing of financial

instruments on a firm commitment basis;

(7)

Placing of financial instruments without a firm commitment basis.

Section B

Ancillary services

(1) Safekeeping and administration of financial instruments for the account of

clients, including custodianship and related services such as cash/collateral

management and excluding maintaining securities accounts at the top tier level;

(2) Granting credits or loans to an investor to allow him to carry out a

transaction in one or more financial instruments, where the firm granting the credit

or loan is involved in the transaction;

(3) Advice to undertakings on capital structure, industrial strategy and related

m a t t e r s a n d a d v i c e a n d s e r v i c e s r e l a t i n g t o m e rg e r s a n d t h e p u r c h a s e o f

undertakings;

(4) Foreign exchange services where these are connected to the provision of

investment services;

(5) Investment research and financial analysis or other forms of general

recommendation relating to transactions financial instruments;

(6)

Services related to underwriting;

(7) Investment services and activities as well as ancillary services of the type

included under Section A or B of Annex 1 related to the underlying of the

derivatives included under Section C (5), (6), (7) and (10) - where these are

connected to the provision of investment or ancillary services.

Section C

Financial Instruments

(1)

Transferable securities;

(2)

Money-market instruments;

(3)

Units in collective investment undertakings;

EUROPEAN PASSPORT RIGHTS FOR INVESTMENT FIRMS

(4) Options, futures, swaps, forward rate agreements and any other derivative

contracts relating to securities, currencies, emission allowances, or other derivatives

instruments, financial indices or financial measures which may be settled physically

or in cash;

(5) Options, futures, swaps, forwards and any other derivative contracts relating

to commodities that must be settled in cash or may be settled in cash at the option of

one of the parties (otherwise than by reason a default or other termination event);

(6) Options, futures, swaps, and any other derivative contract relating to

commodities that can be physically settled provided that they are traded on a

regulated market an MTF, or an OTF except for wholesale energy products traded on an

OTF that must be physically settled;

(7) Options, futures, swaps, forwards and any other derivative contracts relating

to commodities, that can be physically settled not otherwise mentioned in Section C

(6) and not being for commercial purposes, which have the characteristics of other

derivative financial instruments;

(8)

Derivative instruments for the transfer of credit risk;

(9)

Financial contracts for differences;

(10) Options, futures, swaps, forward rate agreements and any other derivative

contracts relating to climatic variables, freight rates, inflation rates or other official

economic statistics that must be settled in cash or may be settled in cash at the option

of one of the parties (otherwise than by reason of a default or other termination

event), as well as any other derivative contracts relating to assets, rights, obligations,

indices and measures not otherwise mentioned in this Section, which have the

characteristics of other derivative financial instruments, having regard to whether,

inter alia, they are traded on a regulated market or on an OTF or an MTF.

In these regulations, unless the context otherwise requires -

"the Act" means the Investment Services Act;

""ancillary service" means any of the services listed within the

Third Schedule to the Act;

"branch" means a place of business, other than the head office,

which is a part of the investment firm, and which has no legal

personality and which provides investment services and which may

also perform ancillary services for which the investment firm has been

authorised; all the places of business set up in the same Member

State or EEA State by an investment firm with headquarters in

another Member State or EEA State shall be regarded as a single

branch;

"the competent authority" means the Malta Financial Services

Authority established by the Malta Financial Services Authority Act;

"Conduct of Business Rules" refers to Rules issued by the

competent authority under various articles of the Act;

"core investment service" means a service listed in Section A of

the Annex to "MiFID", incorporated in Schedule 1 to these

regulations;

"ESMA" means the European Securities and Markets Authority;

"European credit institution" shall have the same meaning

assigned to it by regulation 2 of the European Passport Rights for

Credit Institutions Regulations;

"ESMA" means the European Securities and Markets Authority

established by Regulation (EU) No 1095/2010 of the European

Parliament and of the Council of 24 November 2010;

"European investment firm" means an investment firm as defined

in article 4(1) of MiFID authorised by its European regulatory

authority within the meaning of article 5 of MiFID or authorised by

a European regulatory authority in an EEA State;

"European right" means the entitlement of a person to establish a

branch, or provide services, in a Member State or EEA State other

than that in which it has its head office -

(a) in accordance with the Treaty as applied in the

Member State or EEA State; and

(b) subject to the requirements of MIFID and subject to any

regulations made under the Act and, or Investment

Services Rules and, or Conduct of Business Rules issued

by the competent authority in terms of article 6 of the

Act, implementing such requirements as may be

applicable.

"home Member State or EEA State" means

(a) where the European investment firm is a natural

person, the Member State or EEA State in which the

head office of that person is situated; or

(b) where the European investment firm is a legal person,

the Member State or EEA State in which its registered

office is situated or, if under its national law it has no

registered office, the Member State or EEA State in

which its head office is situated;

"host Member State or EEA State" means the Member State or

EEA State where a Maltese investment firm exercises or proposes

to exercise European rights;

"investment firm" means any person, other than persons to whom

MiFID does not apply in terms of Article 2 of the said MiFID listed

in Schedule 2 to these regulations, whose regular occupation or

business is the provision of any one or more core investment

services to third parties on a professional basis;

"Investment Services Rules" means the rules issued by the

competent authority in terms of article 6 of the Act;

"Maltese investment firm" means a person licensed in terms of

the 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 issued

thereunder;

"Regulation (EU) No 600/2014" 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 amended from time to time;

"Regulation (EU) No 1095/2010" means Regulation (EU) No 1095/

2010 of the European Parliament and of the Council of 24 November

2010 establishing a European Supervisory Authority (European

Securities and Markets Authority), amending Decision No 716/2009/

EC and repealing Commission Decision 2009/77/EC, as amended from

time to time;

"MiFID Directive" means Directive 2004/39/EC of the European

Parliament and of the Council of 21 April 2004 on markets in

financial instruments amending Council Directives 85/611/EEC

and 93/6/EEC and Directive 2000/12/EC of the European

Parliament and of the Council and repealing Council Directive 93/

22/EEC, as amended from time to time, and includes any

implementing measures that have been or may be issued

thereunder;

"tied agent" shall have the same meaning as that assigned to it in

regulation 2 of the Investment Services (Tied Agents) Regulations;

"the Treaty" means Treaty of Rome signed in 1957, establishing

the European Economic Community as subsequently amended.

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

have the same meaning as in the Act.

Part I - Exercise of Passport Rights by European investment

firms

Amended by

L.N. 174 of 2012;

(Regulation 2)

L.N. 397 of 2017.

Exemptions

1. MiFID shall not apply to

(a) insurance undertaking or undertakings carrying out the reinsurance and

retrocession activities referred to in Directive 2009/138/EC when carrying

out the activities referred to in this Directive 2009/138/EC;

(b) Persons which provide investment services exclusively for their parent

undertakings, for their subsidiaries or for other subsidiaries of their

parent undertakings;

(c) persons providing an investment service where that service is provided

in an incidental manner in the course of a professional activity and that

activity is regulated by legal or regulatory provisions or a code of ethics

governing the profession which do not exclude the provision of that

service;

(d)persons dealing on own account in financial instruments other than

commodity derivatives or emission allowances or derivatives thereof and

not providing any other investment services or performing any other

investment activities in financial instruments other than commodity

derivatives or emission allowances or derivatives thereof unless such

persons

(i) are market makers;

(ii) are members of or participants in a regulated market or an MTF or have

direct electronic access to a trading venue;

(iii) apply a high-frequency algorithmic trading technique; or

(iv) deal on own account when executing client orders:"

Persons exempt under paragraphs (a), (i) or (j) are not required to meet the

conditions laid down in this paragraph in order to be exempt.

(e) operators with compliance obligations under Directive 2003/87/EC who,

when dealing in emission allowances, do not execute client orders and who

do not provide any investment services or perform any investment activities

other than dealing on own account, provided that those persons do not

apply a high-frequency algorithmic trading technique;

(f)

Persons which provide investment services consisting exclusively in the

administration of employee participation schemes;

(g) Persons which provide investment services which only involve both

administration of employee participation schemes and the provision of

investment services exclusively for their parent undertakings, for their

subsidiaries or for other subsidiaries of their parent undertakings;

(h) the members of the ESCB and other national bodies performing similar

functions in the Union, other public bodies charged with or intervening in

the management of the public debt in the Union and international financial

institutions established by two or more Member State which have the

purpose of mobilizing funding and providing financial assistance to the

benefit of their members that are experiencing or threatened by severe

financing problems;

(i)

Collective investment undertakings and pension funds whether

coordinated at Union level or not and the depositaries and managers of

such undertakings;

(j)

persons

(i) dealing on own account, including market makers, in commodity

derivatives or emission allowances or derivatives thereof, excluding

persons who deal on own account when executing client orders; or

(ii) providing investment services, other than dealing on own account, in

commodity derivatives or emission allowances or derivatives thereof to

the customers or suppliers of their main business;

provided that

-

for each of those cases individually and on an aggregate basis this

is an ancillary activity to their main business, when considered on a

group basis, and that main business is not the provision of

EUROPEAN PASSPORT RIGHTS FOR INVESTMENT FIRMS

investment services within the meaning of MiFID or banking

activities under Directive 2013/36/EU, or acting as a market-maker

in relation to commodity derivatives,

-

those persons do not apply a high-frequency algorithmic trading

technique; and

-

those persons notify annually the relevant competent authority that

they make use of this exemption and upon request report to the

competent authority the basis on which they consider that their

activity under points (i) and (ii) is ancillary to their main business;

(k) Persons providing investment advice in the course of providing another

professional activity not covered by the MiFID provided that the

provision of such advice is not specifically remunerated;

(l)

associations set up by Danish and Finnish pension funds with the sole aim

of managing the assets of pension funds that are members of those

associations;

(m) ‘agenti di cambio’ whose activities and functions are governed by Article

201 of Italian Legislative Decree No 58 of 24 February 1998;

(n) transmission system operators as defined in Article 2(4) of Directive

2009/72/EC or Article 2(4) of Directive 2009/73/EC when carrying out

their tasks under these Directives, under Regulation (EC) No 714/2009,

under Regulation (EC) No 715/2009 or under network codes or

guidelines adopted pursuant to those Regulations, any persons acting as

service providers on their behalf to carry out their task under those

legislative acts or under network codes or guidelines adopted pursuant

to those Regulations, and any operator or administrator of an energy

balancing mechanism, pipeline network or system to keep in balance the

supplies and uses of energy when carrying out such tasks.

That exemption shall apply to persons engaged in the activities set out

in this point only where they perform investment activities or provide

investment services relating to commodity derivatives in order to carry

out those activities. That exemption shall not apply with regard to the

operation of a secondary market, including a platform for secondary

trading in financial transmission rights;

(o) CSDs that are regulated as such under Union law to the extent that they are

regulated under that Union law.

(1)A European investment firm which is seeking to provide

investment services and, or activities as well as ancillary services

in Malta, either through the establishment of a branch in Malta in

exercise of its European right or by the use of a tied agent

established in Malta, shall satisfy the conditions prescribed in sub-

regulation (2) and shall thereafter be exempt from the requirements

prescribed in article 3 of the Act

Provided that the European investment firm shall be exempt

from the provisions of article 3 of the Act if those investment

services are covered by the authorisation granted to the investment

firm in the home Member State or EEA State;

Provided further that ancillary services may only be

provided together with an investment service.

(2) The establishment conditions for the purposes of this

regulation are that -

(a) the European investment firm has communicated its

European regulatory authority

(i)

the fact that it intends to establish a branch in

Malta or that it has not established a branch in

Malta but plans to use tied agents established in

Malta;

(ii) a programme of operations setting out inter alia

the investment services as well as the ancillary

services to be offered;

(iii) where established the organizational structure of

the branch and indicating whether the branch

intends to use tied agents and the identity of those

tied agents;

(iv)

where tied agents are to be used and the investment

firm has not established a branch in Malta, a

description of the intended use of the tied agents

and an organisational structure including reporting

lines, indicating how the agents fit into the

corporate structure of the investment firm;

(v)

the address in Malta from where documents may

be obtained;

(vi)

the names of those responsible for the

management of the branch or of the tied agent;

(b) the competent authority has received, from the

European regulatory authority of the European

investment firm

(i)

the information which the European investment

firm had provided to it in terms of paragraph (a);

(ii) details of the accredited compensation scheme

of which the European investment firm is a

member in accordance with Directive 97/9/EC

Provided that in the event of change in the

particulars, the competent authority shall receive

notification thereof from the European regulatory

authority of the European investment firm.

(3) A branch of a European investment firm shall not

commence business unless -

(a) it has been informed by the competent authority that it

may commence business; or

(b) two months have elapsed from the date of transmission

by the European regulatory authority of the

information it received from the European investment

firm in terms of subregulation (2).

(4) Where the European investment firm appoints tied agents

established in Malta, such tied agents shall be assimilated to the

branch which the European investment firm establishes in Malta

and shall be subject to the Investment Services Rules, Conduct of

Business Rules and regulations relating to branches.

(5) The provisions of this regulation shall also apply, mutatis

mutandis, to credit institutions authorised in another Member State or

EEA State wishing to provide investment services as well as ancillary

services through tied agents in accordance with Article 35(7) of

MiFID, and accordingly references in this regulation to a "European

investment firm" shall be deemed to include references to a "European

credit institution"

(1) A European investment firm which is seeking to

provide services and, or perform investment services as well as

ancillary services in Malta in exercise of a European right shall

satisfy the service conditions specified in subregulation (2) and

shall be exempt from the provisions of article 3 of the Act

Provided that ancillary services may only be provided together

with an investment service.

(2) The service conditions for the purposes of this regulation

are that

(a) the European investment firm has communicated to its

European regulatory authority

(i)

its intention to provide services in Malta;

(ii) a programme of operations stating in particular the

investment services as well as ancillary services

which it intends to provide in Malta and whether it

intends to do so through the use of tied agents,

established in its home Member State or EEA

State. Where the European investment firm intends

to use tied agents, it shall communicate the identity

of those tied agents;

(b) the competent authority has received the information

in paragraph (a) from the European regulatory

authority of the European investment firm

Provided that where the European investment firm intends

to use tied agents in Malta, the competent authority shall, within one

month of receipt of all information, receive from the European

regulatory authority of the home Member State the identity of the tied

agents which the European investment firm intends to use in Malta.

the competent authority shall publish such information.

(3) Upon receipt of the information referred to in sub-

regulation (2) by the competent authority, the European investment

firm may start to provide the investment services concerned in

Malta.

(4) The provisions of this regulation shall also apply, mutatis

mutandis, to credit institutions authorised in another Member State

or EEA State wishing to provide investment services as well as

ancillary services through tied agents in accordance with Article

34(1) of MiFID, and accordingly references in this regulation to a

"European investment firm" shall be deemed to include reference to

a "European credit institution.".

(5) The procedure outlined in this regulation shall also be

applicable where a European investment firm wishes to change the

range of services so provided in the exercise of a European right.

(1) The competent authority may, for statistical purposes,

require a European investment firm which has established a branch

in Malta in terms of these regulations, to report periodically on the

activities of the branch in Malta.

(2) In discharging its responsibilities under MiFID, the

competent authority may require branches of European investment

firms to provide the information necessary for the monitoring of

their compliance with Investment Services Rules and, or Conduct of

Business Rules applicable to them

Provided that these requirements may not be more stringent

than those imposed on licence holders, within the meaning of the

Act, for the purposes of monitoring their own compliance with the

said Investment Services Rules and, or Conduct of Business Rules.

(1)The competent authority shall assume responsibility for

ensuring that in providing investment or ancillary services in

Malta, the branch of a European investment firm complies with the

obligations laid down in Articles 24, 25, 27 and 28 of MiFID as

transposed in t he Condu ct of Busi ness Ru les i ssued b y the

competent authority and Articles 14 to 26 of Regulations (EU) No

600/2014 and the measures adopted pursuant thereto by the

competent authority where allowed in accordance with Article

24(12) of MiFID

Provided that the competent authority shall not impose any

additional requirements save those allowed under sub-regulation

(1) on the organisation and operation of the branch of the European

investment f irm in respect o f the matters covered by these

regulations.

(2) The competent authority shall have the right to examine

branch arrangements of the European investment firm and to

request such changes as are strictly needed to enable it to enforce

the obligations laid down in Articles 24, 25, 27 and 28 of MiFID as

transposed in t he Condu ct of Busi ness Ru les i ssued b y the

competent authority and Article 14 to 26 of Regulations (EU) No

600/2014 and the measures adopted pursuant thereto by the

competent authority with respect to the services provided by the

branch in Malta.

(3) Without prejudice to the possibility of the European

Regulatory Authority of the European investment firm establishing

a branch in Malta in exercise of a European right to have direct

access to records it is required to hold in terms of Article 6 and 7 of

MIFID, the competent authority shall enforce the obligations laid

down in the said Articles of MiFID with regard to transaction taken

by such branch.

The European regulatory authority, in exercising its

responsibilities and after informing the competent authority may

carry on-site inspections at a branch which a European investment

firm has established in Malta, in exercise of a European right.

Part II - Exercise of Passport Rights by Maltese investment

firms

(1) A Maltese investment firm may provide investment

se r v i c e s a s w e l l a s a n c i l l a r y s e r v i c e s w h e t h e r t h r o u g h t h e

establishment of a branch in exercise of a European right, or by the use

of a tied agent established in a Member State or EEA State other than

Malta in which it has not established a branch, if it satisfies the

requirements prescribed in this regulation.

(2) The Maltese investment firm shall give the competent

authority a notice of its intention to establish a branch or use tied

agents established in a Member State or EEA State other than Malta in

which it has not established a branch, which notice shall contain -

(a) the Member State or EEA State within the territory of

which the investment firm plans to establish a branch or

the Member State or EEA State in which it has not

established a branch but plans to use tied agents

established there;

(b) a programme of operations identifying the activities

which it seeks to carry on through through the branch as

well as the ancillary services to be offered;

(c) the address in the host Member State or EEA State from

where documents may be obtained;

(d) where established, the organisational structure of the

branch and indicating whether the branch intends to use

tied agents and the identity of those tied agents;

(e) where tied agents are to be used in the host Member

State or EEA State in which the Maltese investment

firm has not established a branch, a description of the

intended use of the tied agents and an organisational

structure, including reporting lines, indicating how the

agents fit into the corporate structure of the Maltese

investment firm;

(f)

the names of those responsible for the management of

the branch or of the tied agent;

(g) such other clarifications as may be requested by the

competent authority.

(3) Unless it has reason to doubt the adequacy of the

administrative structure or the financial situation of tthe Maltese

investment firm and shall inform the Maltese investment firm

concerned accordingly, taking into account the activities envisaged,

the competent authority shall communicate the information referred

to in subregulation (2) to the European regulatory authority within

three months of receiving all the said information from the Maltese

investment firm.

(4) In addition to the information referred to in sub-regulation (2),

the competent authority shall communicate, to the Eu rop ean

regulatory authority the details of the accredited compensation

scheme of which the Maltese investment firm is a member.

(5)

The competent authority shall inform the European

regulatory authority of any change in the details of a compensation

scheme referred to in subregulation (4).

(6) If the competent authority decides to refuse to communicate

to the European regulatory authority the information it received

from the Maltese investment firm in terms of subregulation (2)

(a) it shall, within three months from the date when it

receives all the said information, give the Maltese

investment firm which gave that information the

reasons for its decision in writing; and

(b) that Maltese investment firm may appeal to the

Tribunal and the provisions of article 19 of the Act

shall apply mutatis mutandis.

(7) A branch of the Maltese investment firm shall not

commence business unless -

(a) the European regulatory authority notifies the Maltese

investment firm that its branch may commence

business in its territory; or

(b) two months have elapsed from the date of transmission

of the information required in terms of subregulation

(2) by the competent authority to the European

regulatory authority.

(8) In the event of change in any of the particulars

communicated in accordance with subregulation (2), the Maltese

investment firm shall give written notice of that change to the

competent authority at least one month before implementing the

change. The competent authority shall also inform the European

regulatory authority of this change.

(9) The prudential supervision of a Maltese investment firm

shall be the responsibility of the competent authority whether the

said Maltese investment firm establishes a branch or provides

services in another Member State or EEA State or not, without

prejudice to those provisions of MiFID which give responsibility to

the European regulatory authority.

(10) Where a Maltese investment firm uses tied agents

established in a Member State other than Malta or in an EEA State,

such tied agent shall be assimilated to the branch wherever this is

established and shall be subject to the provisions of MiFID relating

to branches.

(11) The provisions of this regulation shall also apply, mutatis

mutandis, to credit institutions authorised in Malta wishing to provide

investment services as well as ancillary services through tied agents, in

accordance with Article 35(7) of MiFID, and accordingly references in

this regulation to a "Maltese investment firm" shall be deemed to

include reference to a "Maltese credit institution.".

In exercise of its responsibilities and after informing the

relevant European regulatory authority, the competent authority

may carry out on-site inspections in the branch of the Maltese

investment firm situated in a Member State or EEA State.

(1) A Maltese investment firm may not exercise a

European right to provide investment services including ancillary

services u n l e s s t h e M a l t e s e i n v e s t m e n t f i r m h a s g i v e n t h e

competent authority, notice of its intention to provide services as

specified in subregulation (2).

(2) For the purposes of this regulation, the Maltese investment

firm shall notify the competent authorities of

(a) a programme of operations stating in particular the

investment services as well as ancillary services which it

intends to provide in the territory of that Member State or

EEA State and whether it intends to do so through the use

of tied agents established in Malta. Where the Maltese

investment firm intends to use tied agents it shall

communicate to the competent authority the identity of

those agents

Provided that the information referred to in sub-

regulation (2) shall also be provided where the Maltese

investment firm wishes to change the range of service

already provided

(b) the Member State or EEA State in which it intends to

operate;

(3) The competent authority shall, within one month of receiving

the information in accordance with subregulation (2), send a copy

of it to the European regulatory authority.

(4) When the competent authority sends the information, in

terms of subregulation (3), the Maltese investment firm may start to

provide the service or services in question in the host Member State

or EEA State.

(5) In the event of a change in any of the particulars provided

by the Maltese investment firm in accordance with subregulation

(2), the Maltese investment firm shall give written notice of that

change to the competent authority at least one month before

implementing the change. The competent authority shall inform the

European regulatory authority of those changes.

(6) Where the Maltese investment firm intends to use in which

it intends to provide services, the competent authority shall, within

one month from receipt of all information communicate to the

European regulatory authority the identity of the tied agents that the

Maltese investment firm intends to use in the host Member State or

EEA State. The host Member State or EEA State shall make public

such information.

(7) The provisions of this regulation shall also apply, mutatis

mutandis, to credit institutions authorised in Malta wishing to provide

investment services as well as ancillary services through tied agents, in

accordance with Article 34 (1) of MiFID, and accordingly references

in this regulation to a "Maltese investment firm" shall be deemed to

include reference to a "Maltese credit institution".

A European right shall entitle a Maltese investment firm to

provide one or more core investment services

Provided that a European right may additionally entitle a

Maltese investment firm to provide one or more ancillary service,

but it shall in no case be exercised solely in relation to ancillary

services.

Part III - Contraventions by European investment firms

Where the competent authority has clear and demonstrable

grounds for believing

(a) that a European investment firm providing services in

Malta, in exercise of a European right, infringes the

obligations arising from the provisions of the Act or

any regulations issued thereunder or of any Investment

Services Rules or Conduct of Business Rules issued by

the competent authority, transposing the requirements

of MIFID; or

(b)

that a European investment firm that has established a

branch in Malta, in exercise of a European right,

infringes the obligations arising from the provisions of

the Act or regulations issued thereunder or of any

Investment Services Rules or Conduct of Business

Rules issued by the competent authority transposing

the requirements of MIFID which do not confer

powers on the competent authority, it shall refer those

findings to the European regulatory authority.

(2) If, despite the measures taken by the European regulatory

authority or because such measures prove inadequate, the European

investment firm persists in acting in a manner that is clearly

prejudicial to the interests of Maltese investors or the orderly

functioning of the markets, the following shall apply

(a) after informing the European regulatory authority, the

competent authority shall take all the appropriate

measures needed in order to protect investors and the

proper functioning of the markets, which shall include

the possibility of preventing offending European

investment firms from initiating any further

transactions in Malta. The competent authority shall

also inform the European Commission and ESMA of

such measures without undue delay; and

(b) the competent authority may refer the matter to ESMA

which may act in accordance with the powers

conferred on it under Article 19 of the Regulation

(EU) No. 1095/2010.

(3) Where the competent authority ascertains that a European

investment firm that has a branch in Malta infringes the provisions

of the Act or regulations issued thereunder or of any Investment

Services Rules or Conduct of Business Rules issued by the

competent authority and which confer powers on the competent

authority, it shall require the European investment firm concerned

to put an end to its irregular situation.

(4) If the European investment firm concerned fails to take the

necessary steps, the competent authority shall take all appropriate

measures to ensure that the European investment firm concerned

puts an end to its irregular situation. The nature of those measures

shall be communicated to the European regulatory authority.

(5) Where, despite the measures taken by the competent

authority, the European investment firm persists in breaching the

provisions of the Act or regulations issued thereunder or any of

Investment Services Rules or Conduct of Business Rules issued by

the competent authority, the competent authority shall, after

informing the European regulatory authority take all the

appropriate measures needed to protect investors and the proper

functioning of the markets. The competent authority shall inform

the European Commission and ESMA of such measures without

undue delay. In addition, the competent authority may refer the

matter to ESMA, which may act in accordance with the powers

conferred on it under Article 19 of the Regulation (EU) No 1095/

2010. (6) Any measure adopted pursuant to this regulation shall be

communicated to the European investment firm concerned in

writing, together with reasons justifying such measures and shall be

subject to a right of appeal to the Tribunal and the provisions of

article 19 of the Act shall apply mutatis mutandis.

Part IV - Advertising by European investment firms

(1) A European investment firm providing services in

Malta in exercise of a European right in terms of regulation 4, is

not prohibited from issuing or causing to be issued an investment

advertisement through any available means of communication in or

from Malta provided that it complies with any applicable laws and

rules in its home Member State or EEA State and the provisions of

regulation 4 of the Investment Services Act (Investment

Advertisements and Prospectus Exemption) Regulations, shall

apply to such a European investment firm.

(2) An investment advertisement issued or caused to be issued

in Malta by a European investment firm establishing a branch in

Malta, in exercise of a European right in terms of regulation 3 shall

comply in every respect with the applicable requirements under the

Act and other applicable laws and rules in Malta.

Part V

Administrative Penalties, other administrative measures

and Appeals

(1)Where a person falling within the scope of these

regulations fails to comply with any provisions of such regulations

or of any Investment Services Rules or Conduct of Business Rules

issued by the competent authority 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 any administrative measure in

accordance with the provisions of the Investment Services Act and

B a n k i n g A c t ( M i F I D an d M i F I R A d m i n i s t r a ti v e P e n a l t i e s ,

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 article 19 of the Act shall

apply mutatis mutandis.

Repealed by Legal Notice 145 of 2023.

EUROPEAN PASSPORT RIGHTS FOR INVESTMENT FIRMS

EUROPEAN PASSPORT RIGHTS FOR INVESTMENT FIRMS