INVESTMENT FIRMS (REORGANISATION AND WINDING-UP) REGULATIONS

SUBSIDIARY LEGISLATION 370.30

INVESTMENT FIRMS (REORGANISATION

AND WINDING-UP) REGULATIONS

18th September, 2015

LEGAL NOTICE 300 of 2015, as amended by Legal Notice 150 of 2016.

The title of these regulations is the Investment Firms

(Reorganisation and Winding-up) Regulations.

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

provisions of Directive 2001⁄24⁄EC of the European Parliament and

of the Council of 4th April, 2001 on the reorganisation and

wi n d in g - u p o f i nv e s t m e n t fi r m s , a s r e n d e r e d a p pl i c a b le to

investment firms by Article 117 of Directive 2014/59/EU of the

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

establishing a framework for the recovery and resolution of credit

institutions and investment firms, and shall be interpreted and

applied accordingly.

(2) In the event that there is a conflict between any of these

regulations and the provisions of the Directives mentioned in sub-

regulation (1), the provisions of the Directives shall prevail.

(1) These regulations apply to Maltese investment firms

holding an investment services licence issued by the competent

authority under the Investment Services Act, which are subject to

the requirements of the CRD and the CRR and to their branches

located in other Member States or EEA States; and Part IV of these

regulations applies to branches present in Malta of investment

firms authorized in another Member State or EEA State which are

subject to the requirements of the said CRD and CRR. These

regulations shall not apply to those branches of investment firms

that are situated in a Member State or an EEA State in which they

have their head offices.

(2) The provisions of these regulations shall also apply to the

financial institutions, firms and parent undertakings falling within

the scope of Directive 2014/59/EU in the event of application of the

resolution tools and exercise of the resolution powers provided for

in Directive 2014/59/EU of the European Parliament and of the

Council.

(3) The provisions of these regulations relating specifically to

the branches of an investment firm not having a head office within

a Member State or an EEA State apply only where such investment

firm has branches in at least two States being either a Member State

or an EEA State.

(4) Where an investment firm is either under resolution or

where the conditions for resolution have been determined by the

Resolution Committee to be met, normal insolvency proceedings

shall not be commenced except at the initiative of the Resolution

Committee, and a decision placing an investment firm into normal

insolvency proceedings shall be taken only with the consent of the

Resolution Committee as provided for in regulation 86 of the

Recovery and Resolution Regulations made under the Malta

Financial Services Authority Act.

(5) These regulations shall only apply to reorganisation

measures or winding-up proceedings adopted immediately after the

date of coming into force of these regulations.

PRELIMINARY

(1)

In these regulations, unless the context otherwise

requires -

''the Act'' means the Investment Services Act;

''administrative or judicial authorities'' mean such administrative

or judicial authorities of Malta that are competent for the purposes

of reorganisation measures or winding-up proceedings;

''administrator'' means a special controller appointed under the

Companies Act; or a controller appointed under the Controlled

Companies (Procedure for Liquidation) Act; or a competent person

appointed under article 15A(1)(c) of the Act; or any other person or

body appointed by the competent authority or the foreign judicial

or administrative authority for the purpose of administering

reorganisational measures;

''branch'' means a place of business which forms a legally

dependent part of an investment firm and which carries out directly

a l l o r so m e o f t h e t r a n s a c t i o n s i n h e r e n t i n t h e b u s i n e s s o f

investment firms, as defined in point (17) of Article 4(1) of the

CRR;

''the BRRD'' means Directive 2014/59/EU of the European

Parliament and of the Council of 15 May 2014 establishing a

framework for the recovery and resolution of credit institutions and

investment firms and amending Council Directive 82/891/EEC, and

Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC,

2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and

Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the

European Parliament and of the Council, as 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;

''competent authority'' means the Malta Financial Services

Authority established by the Malta Financial Services Authority

Act, or, as the case may be, the Resolution Committee established

by the Malta Financial Services Authority Act with respect to

reorganization measures taken pursuant to the BRRD and to the

said Act;

''the Court'' means the Civil Court in its contentious jurisdiction

in its role as the judicial authority competent for the purposes of

reorganisation measures or winding-up proceedings in terms of

Parts V and VI of the Companies Act;

"the CRD" means Directive 2013/36/EU of the European

Parliament and of the Council of 26 June 2013 on access to the

activity of credit institutions and the prudential supervision of

credit institutions and investment firms, amending Directive 2002/

87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as

amended from time to time, and includes any implementing

measures that have been or may be issued thereunder;

''the CRR'' means Regulation (EU) No 575/2013 of the European

Parliament and of the Council of 26 June 2013 on prudential

requirements for credit institutions and investment firms and

amending Regulation (EU) No 648/2012, as amended from time to

time, and includes any implementing measures that have been or

may be issued thereunder;

''EEA State'' means a State which is a contracting party to the

agreement on the European Economic Area signed at Oporto on

2nd May, 1992 as amended by the Protocol signed at Brussels on

the 17th March, 1993 and as amended by any subsequent acts;

''European investment firm'' means an investment firm having its

head office in a Member State or an EEA State, other than Malta;

''financial institution'' shall have the same meaning as that

assigned to it in point (26) of Article 4(1) of the CRR;

''foreign authority'' means the body or bodies empowered to

supervise investment firms by any Member State or EEA State

other than Malta;

''head office'' means the office that serves as the administrative

centre of an investment firm responsible for the activities of overall

management of the investment firm including its branches;

''home Member State'' means the Member State or EEA State in

which an investment firm has been granted authorisation, as

defined in point (43) of Article 4(1) of the CRR;

''host Member State'' means the Member State or EEA State in

which an investment firm has a branch or in which it provides

services, as defined in point (44) of Article 4(1) of the CRR;

''instrument'' means any instrument, contract or right falling

within the Second Schedule to the Act and whether or not issued in

Malta;

''investment firm'' means a person as defined in point (1) of

Article 4(1) of Directive 2004/39/EC, which is subject to the

requirements imposed by that Directive, the CRD and the CRR,

excluding the following

(a) credit institutions;

(b) local firms;

(c) firms which are not authorised to provide the ancillary

service referred to in point (1) of Section B of Annex I

to Directive 2004/39/EC, which provide only one or

more of the investment services and activities listed in

points 1, 2, 4 and 5 of Section A of Annex I to that

Directive, and which are not permitted to hold money

or securities belonging to their clients and which for

that reason may not at any time place themselves in

debt with those clients;

''known creditors'' means creditors where the administrator or

liquidator is aware of, or should reasonably be aware of

(a) the creditor’s identity;

(b) the creditor’s claim or potential claim, and

(c) a recent address where the creditor is likely to receive

a communication;

''liquidator'' means -

(a) in Malta, an individual liquidator or liquidation

committee appointed under the provisions of the

Companies Act to administer the winding-up of a

Maltese investment firm or its branches and includes

the official receiver as defined in the Companies Act

when acting in the capacity of liquidator and the

controller as defined in the Controlled Companies

(Procedure for Liquidation) Act when acting in the

capacity of liquidator; and

(b) in another Member State or EEA State, any person or

body duly appointed in accordance with the legislation

and procedures of that State, for the purposes of

administering winding-up proceedings of a European

investment firm or its branches;

''Maltese investment firm” means an investment firm whose

home Member State is Malta;

''Member State'' means a member of the European Union;

"normal insolvency proceedings" means collective insolvency

proceedings which entail the partial or total divestment of a debtor

and the appointment of a liquidator or an administrator normally

applicable to investment firms under Maltese law and either

specific to those investment firms or generally applicable to any

natural or legal person;

''parent undertaking'' shall have the same meaning as that

assigned to it in point (15)(a) of Article 4(1) of the CRR;

''the Registrar'' means th e person appointed to act as the

Registrar of Companies by the Minister responsible for the

registration of companies and other commercial partnerships

pursuant to article 400 of the Companies Act;

''regulated market'' means a regulated market as defined in article

2 (1) of the Financial Markets Act;

''reorganisation measures'' means measures which are intended to

preserve or restore the financial situation of an investment firm and

which could affect third parties’ pre-existing rights, including

measures involving the possibility of a suspension of payments,

suspension of enforcement measures or reduction of claims; those

measures include the application of the resolution tools and the

exercise of resolution powers provided for in the Recovery and

Resolution Regulations;

"Resolution Committee" means the committee appointed under

article 7B of the Malta Financial Services Authority Act;

''winding-up proceedings'' means collective proceedings opened

and monitored by the administrative or judicial authorities of Malta

with the aim of realising assets under the supervision of those

authorities, including where the proceedings are terminated by a

composition or other, similar measure.

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

the same meaning as in the Act.

PART I

REORGANISATION MEASURES

(1) The Court shall, upon receipt of an application made in

terms of the Companies Act, and the Act, decide on the

implementation of reorganisation measures with respect to a

Maltese investment firm including its branches established in host

States.

(2) Reorganisation measures adopted by the Court in respect of

a Maltese investment firm including its branches in any other host

St a t e s h a l l , u n l e s s e x p r e s s l y p r o v i d e d o t h e r w i s e i n t h e s e

regulations, be applied in terms of the Companies Act and the Act

as appropriate.

(3) Upon reorganisation measures taken pursuant to these

regulations becoming effective in Malta they shall be immediately

fully effective in any other Member State or EEA State without any

further formalities, including formalities as against third parties in

any Member State or EEA State, even if the legislation of such host

State applicable to such third parties, does not provide for such

reorganisation measures, or alternatively makes their

implementation subject to conditions which are not fulfilled.

(4) Nothing in these regulations shall prejudice the powers of

the competent authority in relation to reorganisation measures with

respect to a Maltese investment firm, including its branches

established in host States where provided for in article 15A of the

Act.

(1) The Court shall, upon receipt of an application for any

reorganisation measure, inform the competent authority regarding

this request in order to obtain its views on the adoption of such

measure and the practical effects which it may have

Provided that where the reorganisation measure involves a

company recovery order in terms of the Companies Act, the

provisions of article 329B(3)(d) of the Companies Act shall apply.

(2) Where the court makes a decision, order or appointment of

any of the following kinds -

(a) any compromise or arrangement in terms of article 327

of the Companies Act; or

(b) a company recovery order and appoints a special

controller in accordance with article 329B of the

Companies Act,

it must immediately inform the competent authority, or cause the

competent authority to be informed without delay, of the decision,

order or appointment which has been made.

(3) Where the competent authority is informed of a decision,

order or appointment in accordance with this regulation it shall, in

turn without delay and by any means available, inform the foreign

authority, if any, of the decision to adopt reorganisation measures

including the practical effects which such a measure may have, if

possible before it is adopted or otherwise immediately thereafter

Provided that this sub-regulation shall not apply where

regulation 83 of the Recovery and Resolution Regulations applies,

and accordingly the foreign authority shall be informed by the

Resolution Committee in terms of such Regulations.

(4) The duties provided for in this regulation are supplemental

to and without prejudice to the duties of the Registrar of Courts in

article 329B(13)(a) to (c) of the Companies Act.

(1) Where, upon receipt of an application, the Court deems

it necessary to implement one or more reorganisation measures on a

branch of a Maltese investment firm situated in another Member

State or an EEA State, the Court shall inform the competent

authority regarding this request in order to obtain its views on the

adoption of such measure and the practical effects which it may

have

Provided that where the reorganisation measure involves a

company recovery order in terms of the Companies Act, the

provisions of article 329B(3)(d) of the Companies Act shall apply.

(2) Where the Court makes a decision, order or appointment of

any of the following kinds -

(a) any compromise or arrangement in terms of article 327

of the Companies Act; or

(b) a company recovery order and appoints a special

controller in accordance with article 329B of the

Companies Act,

it must immediately inform the competent authority, or cause the

competent authority to be informed without delay, of the decision,

order or appointment which has been made.

(3) Where the competent authority is informed of a decision,

order or appointment in accordance with this regulation it shall, in

turn without delay and by any means available, inform the foreign

au th orit y of t he dec isio n to a dopt reorg anisation measure s

including the possible practical effects of such measures.

(4) The duties provided for in sub-regulations (1) and (2) are

supplemental to and without prejudice to the duties of the Registrar

of Courts in article 329B(13)(a) to (c) of the Companies Act.

(1) Where a decision on reorganisation measures adopted

by the Court is subject to a right of redress and its implementation

is likely to affect the rights of third parties, upon the Court’s taking

such decision, the administrator or any other person appointed by

th e C o u r t i n r e l a t i on t o su c h m ea s u r e , sh a l l a t t h e ea r l ie s t

opportunity publish an extract from the Court’s decision in -

(a) the Malta Government Gazette;

(b) any two Maltese newspapers, provided that one extract

is published in the English language and the other is

published in the Maltese language;

(c) the Official Journal of the European Union, provided

that third party rights in any host State are capable of

being affected by the reorganisation measures; and

(d) two national newspapers in each host State, provided

that third party rights in the host State are capable of

being affected by the reorganisation measures.

(2) The publication made pursuant to sub-regulation (1) shall at

least specify -

(a) the purpose and legal basis of the Court’s decision

taken;

(b) the time limits for lodging requests for redress to the

Court;

(c) a clearly understandable indication of the date of

expiry of the time limit for lodging requests for redress

to the Court; and

(d) the details of the Court and that it is competent to hear

the grievances of persons stipulated under the

Companies Act or any other applicable law.

(3) The information set out in sub-regulation (1) shall be

published in English or in both English and Maltese as well as,

where applicable, in an official language of the host State in which

the information is published.

(4) The reorganisation measures apply regardless of the

provisions concerning publication set out in sub-regulations (1) and

(2) and are fully effective against creditors, unless otherwise

provided by law or by the administrative or judicial authorities.

(5) The obligation of publication provided for in this regulation

is without prejudice to the duties of the special controller as

stipulated in article 329B(7)(c) of the Companies Act.

(1) Where the Companies Act provides that creditors are to

be informed of their rights to lodge a claim or to submit

observations at a creditors meeting, the administrator shall without

delay inform in writing all known creditors, including creditors

who have their normal place of residence, domicile or head office

in another Member State or EEA State, about any Court decision,

order or appointment in terms of articles 327 or 329B of the

Companies Act regarding the commencement of reorganisation

procedures as well as details regarding the information requested in

this regulation

Provided that this sub-regulation shall not apply where

regulation 83 of the Recovery and Resolution Regulations applies

and accordingly the foreign authority shall be informed by the

Resolution Committee in terms of such Regulations.

(2) The information given to creditors shall include at least the

following

(a) that reorganisation measures have commenced in

relation to a Maltese investment firm;

(b) the applicable time limits for the reorganisation

measures, if any;

(c) the penalties laid down in regards to any time limits, if

any;

(d) the body or authority empowered to accept claims or

observations in relation to the measures; and

(e) as to whether creditors whose claims are preferential

or secured in rem need to lodge their claims.

(3) In the case of company recovery proceedings the

information provided for above shall be supplemental to and

without prejudice to the duties of the special controller in article

329B(7) of the Companies Act. Where the special controller is

obliged to advise creditors as to the date and venue of any

creditors’ meeting to which they may be entitled to attend,

sufficient notice shall be given in terms of article 329B(7)(b) of the

Companies Act.

(4) The information set out in sub-regulation (2) shall be issued

in English or in both English and Maltese.

(5) A form shall also be used bearing, in all the official

languages of the European Union, the heading ''Invitation to lodge

a claim. Time limits to be observed.''.

(6) (a) Creditors who have their normal place of residence,

domicile or head office in another Member State or

EEA State shall have the same right to lodge claims or

submit observations in terms of Part VI of the

Companies Act as creditors with their normal place of

residence, domicile or head office in the home State in

accordance with the procedures laid down in regulation

(b) A creditor shall send copies of supporting documents,

if any, and shall indicate -

(a)

the nature of the claim;

(b)

the date on which it arose;

(c)

the amount of the claim;

(d)

whether the creditor alleges any preference,

security in rem or reservation of title in respect

of the claim; and

(e) the assets that are covered by the creditor’s

security.

10. (1) Where, upon receipt of an application to adopt a

decision on a reorganisation measure in relation to a branch present

in Malta of an investment firm having its head office outside a

Member State or EEA State, the Court shall inform the competent

authority regarding this request in order to obtain its views on the

adoption of such measure and the practical effects which it may

have

Provided that where the reorganisation measure involves a

company recovery order in terms of the Companies Act, the

provisions of article 329B(3)(d) of the Companies Act shall apply.

(2) Where the Court makes a decision, order or appointment of

any of the following kinds -

(a) any compromise or arrangement in terms of article 327

of the Companies Act; or

(b) a company recovery order and appoints a special

controller in accordance with article 329B of the

Companies Act,

it must immediately inform the competent authority, or cause the

competent authority to be informed without delay, of the decision,

order or appointment which has been made.

(3) Where the competent authority is informed of a decision,

order or appointment in accordance with this regulation, it shall, in

turn without delay and by any means available, communicate the

information outlined above to the foreign authorities of any other

host State in which the investment firm has set up branches which

are included on the list referred to in Article 5 of Directive

2014⁄65⁄EU.

(4) The administrative or judicial authorities referred to in this

regulation shall endeavour to coordinate their actions.

(5) The duties provided for in this regulation are supplemental

to and without prejudice to the duties of the Registrar of Courts as

stipulated in article 329B(13)(a) to (c) of the Companies Act.

PART II

WINDING-UP PROCEEDINGS

11. (1) The Court shall, upon receipt of an application in

terms of the Companies Act and the Act, decide on opening of

winding-up proceedings in respect of a Maltese investment firm,

including its branches established in any Member State or EEA

State.

(2) The Court’s decision concerning the dissolution and

winding-up of a Maltese investment firm including its branches in

any host State shall be recognised within the territory of any other

Member State or EEA State without any further formalities and

shall be effective there as soon as the Court’s decision is effective

in Malta.

(3)

(a) The Court shall, upon receipt of an application for any

winding-up proceedings, inform the competent

authority regarding this request in order to obtain its

vi ew s o n the adopt ion of such measures and the

practical effects which they may have.

(b) Where the court makes a decision, order or

appointment of any of the following kinds -

(i) a winding-up order under article 219 of the

Companies Act; or

(ii) the appointment of a provisional administrator

under article 228 of the Companies Act,

it must immediately inform the competent authority, or cause the

competent authority to be informed without delay of the decision,

order or appointment which has been made.

(4) Where the competent authority is informed of a decision,

order or appointment in accordance with this regulation, the

competent authority shall in turn, without delay and by any means

available, inform the foreign authority in all Member States or EEA

States that the decision, order or appointment has been made and

the possible effects that of a decision, order or appointment of that

kind may have.

(5) Where an arrangement has been concluded pursuant to

article 291 of the Companies Act, any person appointed by the

Maltese investment firm or creditors shall inform the competent

authority of the arrangement which has been approved.

(6) Where a liquidator is appointed as mentioned in article 230

of the Companies Act the liquidator must inform the competent

authority of his appointment.

(7) In the case of a member’s voluntary winding-up, the

liquidator shall in terms of article 272 of the Companies Act inform

the competent authority if he is of the opinion that the Maltese

investment firm will not be able to pay its debts within the period

stated in the declaration of solvency.

(8) The duties provided for in this regulation are supplemental

to and without prejudice to the duties of the Registrar of Courts in

articles 224 and 264 of the Companies Act.

(9) Nothing in these regulations shall prejudice the duties and

powers of the competent authority in relation to winding-up

proceedings with respect to a Maltese investment firm including its

branches established in host States, where provided for in the Act.

12. (1) Subject to the exceptions expressly provided for in

these regulations, the decision to dissolve and wind up a Maltese

investment firm as well as its method of winding-up and

dissolution, shall be made in accordance with the general

provisions of Part V of the Companies Act.

(2) In relation to a Maltese investment firm, the law of Malta

shall be the applicable law and shall determine in particular

(a) the assets subject to administration and the treatment

of assets acquired by the investment firm after the

opening of winding-up proceedings;

(b) the respective powers of the Maltese investment firm

and the liquidator;

(c) the conditions under which set-off may be invoked;

(d) the effects of the winding-up proceedings on current

contracts to which the Maltese investment firm is

party;

(e) the effects of the winding-up proceedings brought by

individual creditors, with the exception of lawsuits

pending as provided for in regulation 34;

(f)

the claims which are to be lodged against the Maltese

investment firm and the treatment of claims arising

after the opening of winding-up proceedings;

(g) the rules governing the lodging, verification and

admission of claims;

(h) the rules governing the distribution of proceeds from

the realisation of assets, the ranking of claims, the

rights of creditors who have obtained partial

satisfaction after the opening of the winding-up order

by virtue of a right in rem or through set-off;

(i)

the conditions for and the effects of the closure of

winding-up proceedings, in particular by composition;

(j)

the rights of creditors after the closure of the winding

up proceedings;

(k) who is to bear the cost and expenses incurred in the

winding-up proceedings; and

(l)

the rules relating to the voidness, voidability or

unenforceability of legal acts detrimental to all the

creditors.

13. (1) Before any voluntary winding-up decision is taken by

the board of directors or other governing bodies of an investment

firm these said governing bodies shall consult the competent

authority in the most appropriate form.

(2) The commencement of the voluntary winding-up of an

investment firm shall not preclude the adoption of reorganisation

measures or the opening of winding-up proceedings by the Court.

14. (1) Where the Court decides upon the opening of winding-

up proceedings either in the absence of reorganisation measures or

in terms of article 329B(12) of the Companies Act following the

failure of reorganisation measures, the authorisation of the

investment firm shall be withdrawn by the competent authority in

terms of the provisions of article 7 of the Act.

(2) The withdrawal of authorisation provided for in this

regulation shall not prevent the person or persons entrusted with

the winding-up from carrying on some of the investment firm’s

activities insofar as that is necessary or appropriate for the

purposes of winding-up

INVESTMENT FIRMS

(REORGANISATION AND WINDING-UP)

Provided that, such activities shall be carried under the

supervision of the competent authority.

15. (1) The liquidator or any other person appointed for this

purpose by the Court shall at the earliest opportunity make their

decision to open winding-up proceedings public by publishing an

extract from the decision ordering the winding-up proceedings in

(a) the Malta Government Gazette;

(b) any two Maltese newspapers, provided that one extract

is published in the English language and the other is

published in the Maltese language;

(c) the Official Journal of the European Union, provided

that third party rights in any host State are capable of

being affected by the winding-up proceedings; and

(d) two national newspapers in each host State, provided

that third party rights in the host State are capable of

being affected by the winding-up proceedings.

(2) The publication made pursuant to sub-regulation (1)(a) to

(d) shall at least specify

(a) that winding-up proceedings have commenced in

relation to a Maltese investment firm;

(b) the applicable time

limits

for

the

winding-up

proceedings, if any;

(c) the penalties laid down in regards to any time limits, if

any;

(d) the full address of the body or authority empowered to

accept claims or observations relating to claims and

the other measures laid down; and

(e) as to whether creditors whose claims are preferential

or secured in rem need lodge their claims.

(3) The information set out in sub-regulation (1) shall be

published in English or in both English and Maltese.

(4) A form shall also be used bearing, in all the official

languages of the European Union, the heading ''Invitation to lodge

a claim. Time limits to be observed.''.

(5) The duties provided for in this regulation are without

prejudice to the duties of the Registrar of Courts in article 401 of

the Companies Act.

16. (1) When winding-up proceedings have commenced, the

liquidator shall without delay individually inform all known

creditors wheresoever resident or domiciled, in writing

(a) that winding-up proceedings have commenced in

relation to a Maltese investment firm;

(b) of the applicable time limits for the winding-up

proceedings, if any;

(c) of the penalties laid down in regards to any time limits,

if any;

(d) of the body or authority empowered to accept claims

or observations relating to claims and the other

measures laid down; and

(e) as to whether creditors whose claims are preferential

or secured in rem need lodge their claims.

(2) Where the liquidator shall in terms of the Companies Act

advise creditors as to inter alia the date and venue of any creditors

meeting to which the addressee may be entitled to attend such

notice in sub-regulation (1) shall be given without prejudice the

provisions of article 296 of the Companies Act.

(3) The information set out in sub-regulation (1) shall be issued

in English or in both English and Maltese.

(4) A form shall also be used bearing, in all the official

languages of the European Union, the heading ''Invitation to lodge

a claim. Time limits to be observed.''.

17. (1) A liquidator shall send a written report setting out the

position in particular as regards the progress of the winding-up

once every twelve months, beginning from the date when the

liquidator ’s appointment has effect, to every known creditor

wheresoever resident or domiciled.

(2) Where the official receiver is acting as a liquidator the first

such report to creditors is to contain the information required in

terms of article 227 of the Companies Act.

(3) The requirement in sub-regulation (1) does not apply where

a liquidator is required by order of the Court to send reports to

creditors at intervals which are more frequent than those required

by this regulation.

(4) The duties provided for in this regulation are without

prejudice to article 234 of the Companies Act.

18. (1) Where an obligation has been honoured for the benefit

of an investment firm which is not a legal person and which is the

subject of winding-up proceedings opened in another Member State

or EEA State when it should have been honoured for the benefit of

the liquidator in those proceedings, the person honouring the

obligation shall be deemed to have discharged it if he was unaware

of the opening of proceedings.

(2) Where such an obligation is honoured before the

publication provided for in regulation 15 has been effected, the

person honouring the obligation shall be presumed, in the absence

of proof to the contrary, to have been unaware of the opening of

winding-up proceedings.

(3) Where the obligation is honoured after the publication

provided for in regulation 15 has been effected, the person

honouring the obligation shall be presumed, in the absence of proof

to the contrary, to have been aware of the opening of proceedings.

19. (1) Any creditor, including the public authorities of a

Member State or a EEA State, being domiciled in or having a

normal place of residence or head-office in a Member State or EEA

State other than Malta, shall have all the rights provided to

creditors in Part V of the Companies Act to lodge claims or to

submit written observations relating to claims in relation to a

Maltese investment firm being wound up.

(2) The claims of any creditor who is domiciled in or having a

normal place of residence or head office in any Member State or

EEA State other than Malta, shall be treated in the same way as any

creditor resident or domiciled or having a head office in Malta and

accorded the same ranking as claims of an equivalent nature which

may be lodged by creditors having their domiciles, normal places

of residence, or head offices in Malta.

(3) When lodging a claim a creditor shall send copies of

supporting documents, if any, and shall indicate

(a) the nature of the claim;

(b) the date on which it arose and its amount;

(c) whether the creditor alleges preference;

(d) security in rem or reservation of title in respect of the

claim; and

(e) what assets are covered by the creditor’s security.

(4) Any creditor who is domiciled or having a normal place of

residence or head office in a Member State or EEA State other than

Malta, may lodge claims or submit observations relating to such

claim in the official language or one of the official languages of

that other Member State or EEA State. In that event, the lodgement

of the creditor’s claim or the submission of observations on such

claim shall bear the heading ''Lodgement of claim'' or ''Submission

of observations relating to claims'' in English or Maltese. In

addition, the creditor may be required to provide a translation into

English or Maltese of the lodgement of claim or submission of

observations relating to claims or of any of the documentation and,

or information required in sub-regulation (3).

(5) The provisions of this regulation are without prejudice to

the provisions of article 232 of the Companies Act.

(1) Where, upon receipt of an application to adopt a

decision or order to commence winding-up procedures of a branch

present in Malta of an investment firm having its head office

situated outside a Member State or EEA State, the Court shall

inform the competent authority regarding this request in order to

obtain its views on the adoption of such measure and the practical

effects which it may have.

(2) Where the Court makes a decision, order or appointment of

any of the following kinds -

(a) a winding-up order under article 219 of the Companies

Act; or

(b) the appointment of a provisional administrator under

article 228 of the Companies Act,

it must immediately inform the competent authority, or cause the

competent authority to be informed without delay of the decision,

order or appointment which has been made.

(3) Where the competent authority is informed of a decision,

order or appointment in accordance with this regulation, the

competent authority shall in turn, without delay and by any means

available communicate such information to the foreign authorities

of any other host State in which the investment firm has set up

branches which are included on the list referred to in Article 5 of

Directive 2014⁄65⁄EU, and shall inform the foreign authority of the

decision to open winding-up procedures and the practical effects of

such. The competent authority shall also advise the foreign

authority of any other host States that the authorisation of the

branch has been withdrawn.

PART III

PROVISIONS COMMON TO REORGANISATION AND

WINDING-UP PROCEEDINGS

The effects of a reorganisation measure or winding-up

proceedings of an investment firm on employment contracts and

employment relationships are determined in accordance with the

laws of the Member State or EEA State to which that contract or

relationship is subject.

The effects of a reorganisation measure or winding-up

proceedings of an investment firm on a contract conferring the right

to make use of or acquire immovable property situated within the

territory of a Member State or EEA State are to be governed in

accordance with the law of that Member State or EEA State.

Rights of an investment firm in respect of immovable

property, a ship or an aircraft subject to registration in a public

register shall be governed solely by the law of the Member State or

EEA State under the authority of which the register is kept.

(1) The adoption of reorganisation measures or the

opening of winding-up proceedings of a Maltese investment firm

shall not affect the rights in rem of creditors or third parties in

respect of tangible or intangible, movable or immovable assets

including both specific assets and collections of indefinite assets as

a whole which change from time to time belonging to the

investment firm concerned which are situated within the territory of

a Member State or EEA State at the time of the opening of such

measures or proceedings.

(2) The rights in rem referred to in sub-regulation (1) shall in

particular mean -

(a) the right to transfer assets or have them transferred and

to obtain satisfaction from the proceeds of or the

income from those assets, in particular by virtue of a

lien, mortgage or hypothec;

(b) the exclusive right to have a claim met, in particular a

right guaranteed by a lien in respect of the claim or by

assignment of the claim by way of a guarantee;

(c) the right to demand the assets from, and, or to require

restitution, by anyone having possession or use of

them contrary to the wishes of the party so entitled;

(d) a right in rem to the beneficial use of assets.

(3) A right, recorded in a public register and enforceable

against third parties, under which a right in rem within the meaning

of sub-regulation (1) may be obtained, is also to be treated as a

right in rem for the purposes of this regulation.

(4) Sub-regulation (1) does not preclude actions for voidness,

voidability or unenforceability of legal acts detrimental to creditors

referred to in regulation 12(2)(l).

(1) The commencement of reorganisation measures or

winding-up proceedings in relation to a Maltese investment firm

purchasing an asset shall not affect the seller’s rights based on a

reservation of title where at the time of the commencement of such

measures or proceedings the asset is situated within the territory of

another Member State or EEA State.

(2) The commencement of reorganisation or winding-up

proceedings against a Maltese investment firm selling an asset,

after delivery of the asset, shall not constitute grounds for

rescinding or terminating the sale and shall not prevent the

purchaser from acquiring title where at the time of the opening of

such measure or proceedings the asset sold is situated within the

territory of a Member State or EEA State in which such measures

or proceedings were commenced.

(3) Sub-regulations (1) and (2) do not preclude actions for

voidness, voidability or unenforceability of legal acts detrimental

to creditors referred to in regulation 12(2)(l).

(1) The adoption of reorganisation measures or the

opening of winding-up proceedings shall not affect the rights of

creditors to demand the set-off of their claims against the claims of

the Maltese investment firm where such a set-off is permitted by

the law of the Member State or EEA State which is applicable to

the claim of the Maltese investment firm.

(2) This regulation does not preclude actions for voidness,

voidability or unenforceability of legal acts detrimental to creditors

referred to in regulation 12(2)(l).

The enforcement of proprietary rights in instruments or

other rights in such instruments the existence or transfer of which

p r e s u p p o s e s t h e i r r e c o r d i n g i n a r e g i s t e r, a n a c c o u n t o r a

centralised deposit system held or located in a Member State or

EEA State shall be governed by the law of the Member State or

EEA State where the register, account, or centralised deposit

system in which those rights are recorded is held or located.

Pursuant to the provisions of the Set-Off and Netting on

Insolvency Act, and without prejudice to regulations 68 and 71 of

the Recovery and Resolution Regulations, netting agreements shall

be governed by the law of the contract which governs such

agreements.

Without prejudice to regulations 68 and 71 of the Recovery

and Resolution Regulations and to regulation 27 of these

Regulations, repurchase agreements shall be governed solely by the

law of the contract which governs such agreements.

Without prejudice to regulation 27, transactions carried out

in the context of a regulated market are to be governed solely in

accordance with the law of the contract which governs such

transactions.

(1) The administrator or liquidator’s appointment shall be

evidenced by a certified copy of the original decision appointing

him or her or by any other certificate issued by the administrative

or judicial authority of the home State attesting t o the due

appointment of the administrator or liquidator.

(2) A translation into the official language or one of the official

languages of the Member State or EEA State within the territory of

which the administrator or liquidator wishes to act may be required.

No legalisation or other similar formality shall be required.

(3) Administrators and liquidators shall be entitled to exercise

within the territory of any Member State or EEA State all the

powers which they are entitled to exercise within the territory of

the home State. They may also appoint persons to assist or, where

appropriate, represent them in the course of the reorganisation

measure or winding-up proceedings, in particular in host States

and, specifically in order to help overcome any difficulties

encountered by creditors in the host State.

(4) In exercising their powers, administrators and liquidators

shall comply with the law of the Member State or EEA State within

the territory of which they wish to take action, in particular with

regard to procedures for the realisation of assets and the provision

of information to employees. Those powers may not include the use

of force or the right to rule on legal proceedings or disputes.

(1) Regulation 12 shall not apply as regards the rules

relating to the voidness, voidability or unenforceability of legal

acts detrimental to the creditors as a whole, where the beneficiary

of these acts provides proof that

(a) the act detrimental to the creditors as a whole is

subject to the law of a Member State or EEA State

other than the home State, and

(b) that law does not allow any means of challenging that

act in the case in point.

(2) Where a reorganisation measure decided on by a judicial

authority provides for rules relating to the voidness, voidability or

unenforceability of legal acts detrimental to the creditors as a

whole performed before adoption of the measure, regulation 5(2)

shall not apply in the cases provided for in this regulation.

Where, by an act concluded after the adoption of a

reorganisation measure or the opening of winding-up proceedings,

an investment firm disposes, for consideration, of -

(a) an immovable asset situated within the territory of a

Member State or EEA State;

(b) a ship or an aircraft subject to registration in a public

register kept under the authority of a Member State or

EEA State; or

(c) instruments or rights in such instruments the existence

or transfer of which presupposes their being recorded

in a register, an account or a centralised deposit system

held or located in a Member State or EEA State,

the validity of that act shall be governed by the law of the Member

State or EEA State within whose territory the immovable asset is

situated or under whose authority the register, account or system is

kept, as the case may be.

The effects of reorganisation measures or winding-up

proceedings on a pending lawsuit concerning an asset or a right of

which the Maltese investment firm has been divested shall be

governed solely in accordance with the law of the Member State or

EEA State in which the lawsuit is pending.

(1) In order to secure the rights of interested third parties,

an administrator or liquidator may request that a reorganisation

measure or the decision to open winding-up proceedings be

registered in the registry of companies and any other public register

by whatever name kept in Malta or any other Member State or EEA

State.

(2) The costs of registration are to be regarded as costs and

expenses incurred in the winding-up proceedings or reorganisation

measure.

All persons required to receive or divulge information in

connection with the information or consultation procedures laid

down in these regulations shall be bound by professional secrecy,

in accordance with the rules and conditions laid down in the

Investment Services Act, the Malta Financial Services Authority

Act and the Investment Services Act (Supervisory Review)

Regulations, with the exception of any judicial authorities to which

existing national provisions apply

Provided that this regulation shall not apply where

regulation 84 of the Recovery and Resolution Regulations applies,

and accordingly the confidentiality provisions of such Regulations

shall apply.

PART IV

REORGANISATION MEASURES AND WINDING-UP

PROCEEDINGS IN RESPECT OF EUROPEAN INVESTMENT

FIRMS EFFECTIVE IN MALTA

(1) The commencement of a reorganisation measure or

winding-up proceedings of a European investment firm has effect

in Malta as if it were part of the Companies Act, when such is in

relation to

(a) a branch in Malta of a European investment firm;

(b) any property or other assets in Malta of the European

investment firm; or

(c) any debt or liability of such European investment firm.

(2) Subject to sub-regulation (4), the administrator or

liquidator or persons appointed to assist, or where appropriate,

represent the administrators and liquidators may exercise in Malta,

in relation to a European investment firm which is subject to a

reorganisation measure or winding-up proceedings, any function

which, pursuant to that measure or order, he is entitled to exercise

in relation to a European investment firm.

(3) The appointment of the administrator and liquidator shall

be evidenced -

(a) by a certified copy of the order or decision by a

judicial or administrative authority competent in the

home State for reorganisation or winding-up

proceedings by or under which the administrator or

liquidator was appointed; or

(b) by any other certificate issued by the judicial or

administrative authority which has jurisdiction in

relation to a reorganisation measure or winding-up

proceedings, and, where necessary accompanied by a

certified translation of that order, decision or

certificate, as the case may be.

(4) In exercising the functions of the kind mentioned in sub-

regulation (2), the administrator or the liquidator -

(a) may not take any action which would constitute an

unlawful use of force in Malta;

(b) may not rule on any dispute arising from a matter

falling within Parts I, II and III of these regulations;

and

(c) notwithstanding the way in which functions may be

exercised in the home State of the European

investment firm, shall act in accordance with the laws

or rules as to procedure which are effective in Malta.

(1) From the date of coming into force of these

r e g u la t i o n s * , t h e C o u r t m a y n o t , i n r e l a ti o n t o a E u r o p e a n

investment firm or any branch of a European investment firm -

(a) make a winding-up order pursuant to article 224 of the

Companies Act; or

(b) adopt reorganisation measures or perform any act

ancillary to the adoption of such measures in terms of

Part VI of the Companies Act.

(2)

Sub-regulation (1)(a) does not prevent -

(a) the Court from making a winding-up order after the

coming into force of these regulations in relation to a

European investment firm or any branch of a European

investment firm if -

(i)

a provisional administrator was appointed in

relation to the European investment firm before

the coming into force of these regulations, and

(ii) the appointment continues in force until

immediately before that winding-up order is

made;

(b) the winding-up of a European investment firm or any

branch of a European investment firm after the coming

into force of these regulations pursuant to a winding-

up order which was made, and has not been

discharged, before that date.

(3) Sub-regulation (1)(b) does not prevent a provisional

administrator of a European investment firm or any branch of a

European investment firm appointed before the coming into force

of these regulations, from acting in relation to such institution after

that date.

*refers to the coming into force of Legal Notice 150 of 2016 - 6th May, 2016.