EUROPEAN PASSPORT RIGHTS FOR CREDIT INSTITUTIONS REGULATIONS

SUBSIDIARY LEGISLATION 371.11

EUROPEAN PASSPORT RIGHTS FOR CREDIT

INSTITUTIONS REGULATIONS

10th April, 2015

LEGAL NOTICE 129 of 2015, as amended by Legal Notices 492 of 2021

and 365 of 2024.

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

Rights for Credit Institutions Regulations.

(2) The purpose of these regulations is to implement Articles 3

(in part), 33 to 46, 49, 50, 52, 151 to 157 and 159 of the CRD.

(3) In the event that any of the provisions of these regulations

conflict with the provisions of the CRD, the latter shall prevail.

Amended by

L.N. 492 of 2021.

Annex I to the CRD

LIST OF ACTIVITIES SUBJECT TO MUTUAL RECOGNITION

1. Taking deposits and other repayable funds;

2. Lending including, inter alia: consumer credit, credit agreements relating to

immovable property, factoring, with or without recourse, financing of commercial

transactions (including forfeiting);

3. Financial Leasing;

4. Payment services as defined in Article 4(3) of Directive (EU) 2015/2366;

5. Issuing and administering other means of payment (e.g. travellers cheques

and bankers’ drafts) in so far as this activity is not covered by activity 4 above;

6. Guarantees and commitments;

7. Trading for own account or for account of customers in

(a) money market instruments (cheques, bills, certificates of deposit, etc.);

(b) foreign exchange;

(c) financial futures and options;

(d) exchange and interest-rate instruments;

(e) transferable securities;

8. Participation in securities issues and the provision of services related to such

issues;

9. Advice to undertakings on capital structure, industrial strategy and related

questions and advice as well as services relating to mergers and the purchase of

undertakings;

10. Money broking;

11. Portfolio management and advice;

12. Safekeeping and administration of securities;

13. Credit reference services;

14. Safe custody services;

15. Issuing of electronic money.

The services and activities provided for in Section A and Section B of Schedule I

to the European Passport Rights for Investment Firms Regulations when referring to

the instruments provided for in Section C of the said Schedule are subject to mutual

recognition.

(1) In these regulations, unless the context otherwise

requires -

"the Act" means the Banking Act;

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

point (17) of Article 4(1) of the CRR;

"competent authority" means the Malta Financial Services

Authority established by the Malta Financial Services Authority

Act;

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

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

activity of credit institutions and the prudential supervision of credit

institutions, amen din g D irect ive 200 2/8 7/E C and repeal ing

Directives 2006/48/EC and 2006/49/EC, as amended from time to

time, and includes any binding legal instruments, guidelines and other

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 amending Regulation (EU)

No 648/2012, as amended from time to time, and includes any

binding legal instruments, guidelines and other measures;

"European credit institution" means a credit institution as

defined in point (1) of Article 4(1) of the CRR, which is authorised

by a European regulatory authority;

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

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

than that in which it has its head office -

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

Member State; and

(b) subject to the requirements of the CRD and the CRR,

and subject to any rules, regulations or Banking Rules

made under the Act implementing such requirements;

"European regulatory authority" means a body which is in a

country or territory outside Malta that is a Member State and is

empowered by law or regulation to supervise credit institutions;

"home Member State" shall have the meaning as that assigned to

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

"host Member State" shall have the same meaning as that

assigned to it in point (44) of Article 4(1) of the CRR;

"Maltese credit institution" means a credit institution as defined

in point (1) of Article 4(1) of the CRR, which is 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 other than Malta in exercise

of a European passport right;

"systemic risk" means a risk of disruption in the financial system

with the potential to have serious negative consequences for the

financial system and the real economy;

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

the European Economic Community, as subsequently amended;

"Tribunal" means the Financial Services Tribunal established

under the Malta Financial Services Authority Act.

(2) Words and expressions used in these regulations which are

also used in the Act but which are not defined herein, shall have the

same meaning as in the Act

Provided that, in accordance with article 2(1A) of the Act, for

the purposes of applying the requirements and supervisory powers

laid down in these regulations on a consolidated or sub-consolidated

basis in accordance with the Act and any regulations and Banking

Rules made or issued thereunder transposing the CRD, with any

binding legal instruments issued under the CRD and with the CRR,

the term "parent undertaking" shall also include the entities listed in

paragraphs (a), (b) and (c) of article 2(1A) of the Act

Provided further that, for the purposes of applying the

requirements and supervisory powers laid down in regulations 3(6),

4(5), 8(1), (2) and (3), 10(9), 11(6), 12(1) and (3), 16(1) and (2)(a) on

a consolidated or sub-consolidated basis in accordance with the Act

and any regulations and Banking Rules made or issued thereunder

transposing the CRD, with any binding legal instruments issued

under the CRD and with the CRR, the term "credit institution" shall

also include the entities listed in paragraphs (a), (b) and (c) of article

2(1B) of the Act.

(3) Where there are any number of places of business set up in

the same Member State by a credit institution having its

headquarters in another Member State, they shall be regarded as a

single branch.

Part I - Exercise of European passport rights by

European credit institutions

(1) A European credit institution which is seeking to

establish a branch in Malta in exercise of a European passport right

shall be exempt from the provisions of article 5(1) of the Act. The

activities that may be carried out in Malta by such a European

credit institution in exercise of a European passport right shall be

limited to the activities it is authorised to undertake in the home

Member State.

(2) A European credit institution may exercise a European

passport right to establish a branch in Malta in accordance with

sub-regulation (1) provided -

(a) the European credit institution has given the European

regulatory authority of the home Member State a

branch passport notification to establish a branch in

Malta in accordance with Article 35(1) and (2) of the

CRD;

(b) the competent authority has received a notice from the

European regulatory authority of the home Member

State, which shall -

(i) be given in accordance with the CRD;

(ii) certify that the European credit institution is

authorised to act as a credit institution by the

European regulatory authority;

(iii) identify which of the activities listed in Annex I

to the CRD it intends to carry out;

(iv) contain the information stated in the branch

passport notification referred to in paragraph

(a);

(v) indicate the amount and composition of own

funds and the sum of the own funds

requirements under Article 92 of the CRR of the

European credit institution; and

(vi) contain details of any deposit guarantee scheme

which is intended to protect the branch’s clients.

(3) The competent authority shall, within two months of

receiving the notice referred to in sub-regulation (2)(b), prepare for

the supervision of the European credit institution and, if necessary,

indicate the conditions under which, in the interests of the general

good, those activities shall be carried out in Malta.

(4) A branch of a European credit institution shall not be

established and commence its activities in Malta unless -

(a) the European credit institution has received a

communication from the competent authority

acknowledging its establishment in Malta and, if

necessary, indicating any applicable conditions in the

interests of the general good; or

(b) two months have elapsed from the date of receipt by

the competent authority of the notice referred to in

sub-regulation (2)(b), in the event that no

communication has been received from the competent

authority.

(5) In the event of a change in branch particulars notified to the

European regulatory authority in accordance with sub-regulation

(2)(a), the European credit institution shall give both the competent

authority and the European regulatory authority a change of branch

particulars notification in accordance with Article 36(3) of the

CRD, at least one month before implementing any such change to

enable the competent authority to take a decision setting out the

conditions for the change in accordance with sub-regulation (3).

(6) Any measures taken by the competent authority with

respect to a branch shall not allow discriminatory or restrictive

treatment on the basis that the credit institution to which the branch

belongs is authorised in another Member State.

(1) A European credit institution which is seeking to

provide services by carrying out its activities in Malta in exercise

of a European passport right shall be exempt from the provisions of

article 5(1) of the Act. The activities that may be carried out in

Malta by such a European credit institution in exercise of a

European passport right shall be limited to the activities it is

authorised to undertake in the home Member State.

(2) A European credit institution may exercise a European

passport right to provide services by carrying out its activities in

Malta in accordance with sub-regulation (1) provided -

(a) the European credit institution has given the European

regulatory authority of the home Member State a

services passport notification to provide services in

Malta in accordance with Article 39(1) of the CRD;

and

(b) the competent authority has received such notification

from the European regulatory authority of the home

Member State.

(3) When the competent authority receives the services

passport notification referred to in sub-regulation (2)(b), the

competent authority shall, where appropriate, notify the European

credit institution of any applicable conditions.

(4) In the event of a change in any of the particulars

communicated to the European regulatory authority in the services

passport notification referred to in sub-regulation (2), the European

credit institution shall give written notice of that change to the

competent authority before implementing any such change.

(5) Any measures taken by the competent authority in relation

to a European credit institution exercising the freedom to provide

services, shall not allow discriminatory or restrictive treatment on

the basis that such credit institution is authorised in another

Member State.

A European credit institution which is seeking to appoint tied

agents in Malta in exercise of a European passport right and in terms

of the MiFID, shall be subject to the requirements of the Investment

Services Act (Tied Agents) Regulations.

(1) The competent authority may, for information or

statistical purposes, for the determination of a significant branch in

terms of Article 51(1) of the CRD, or for supervisory purposes in

terms of Chapter 4 of the CRD, in accordance with the powers

entrusted to the competent authority as host Member State, require

a European credit institution which has established a branch in

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

activities in Malta. Such reports shall be subject to professional

secrecy requirements.

(2) The competent authority may require a European credit

institution having a branch in Malta to provide information in order

to allow the competent authority to assess whether the branch is a

significant branch in terms of Article 51(1) of the CRD.

A European credit institution shall not be prohibited from

advertising its services through any available means of

communication in Malta, subject to any rules governing the form

and the content of such advertising adopted in the interests of the

general good.

(1) Where a European credit institution carries out its

activities in Malta through a branch in exercise of a European

passport right, the European regulatory authority of the home

Member State may, after notifying the competent authority, carry

out, itself or through the intermediary of persons appointed for that

purpose, on-the-spot checks of the information referred to in

regulation 16 and inspections of such branches.

(2) Where it considers it relevant for reasons of stability of the

financial system in Malta, the competent authority may also carry

out, on a case-by-case basis, on-the-spot checks and inspections of

the activities carried out by branches of European credit institutions

authorised in other Member States, which are established in Malta,

and require information from a branch about its activities and for

supervisory purposes. Before c arrying out such checks and

inspections, the competent authority shall consult the European

regulatory authority of the home Member State concerned.

(3) After such checks and inspections, the competent authority

shall communicate to the European regulatory authority of the

home Member State, the information obtained and findings that are

relevant for the risk assessment of the European credit institution or

the stability of the financial system in Malta.

(4) On-the-spot checks and inspections of branches carried out

in Malta shall be conducted in accordance with Maltese law.

(5) Information received or obtained by means of an on-the-

spot check or inspection referred to in this regulation, shall not be

disclosed under article 25(9) and (10) of the Act, except with the

express consent of the European regulatory authority which

disclosed the information.

Deleted by Legal Notice 365 of 2024.

Part II - Exercise of European passport rights by

Maltese credit institutions

(1) A Maltese credit institution may exercise a European

passport right to establish a branch in another Member State

provided the requirements set out in this regulation are satisfied.

The activities that may be carried out in the host Member State by

such a Maltese credit institution in exercise of a European passport

right shall be limited to the activities it is authorised to undertake in

Malta.

(2) The Maltese credit institution wishing to exercise a

European passport right to establish a branch in another Member

State shall provide the competent authority with a branch passport

notification to establish a branch in another Member State, which

shall contain -

(a) the Member State within the territory of which the

Maltese credit institution plans to establish a branch;

(b) a programme of operations identifying, inter alia, the

activities which it seeks to carry out through the

branch;

(c) the address of the proposed branch from where

documents may be obtained; and

(d) the proposed organisational structure of the branch and

the names of the proposed managers.

(3) Without prejudice to sub-regulations (5) and (6), the

competent authority shall, within three months of receiving a

branch passport notification referred to in sub-regulation (2), give a

notice to the European regulatory authority of the host Member

State, which shall -

(a) be given in accordance with the CRD;

(b) certify that the Maltese credit institution is authorised

to act as a credit institution by the competent

authority;

(c) identify which of the activities listed in Annex I to the

CRD it intends to carry out;

(d) contain the information stated in the branch passport

notification referred to in sub-regulation (2);

(e) indicate the amount and composition of own funds and

the sum of the own funds requirements under Article

92 of the CRR of the Maltese credit institution; and

(f)

contain details of any deposit guarantee scheme which

is intended to protect the branch’s clients.

(4) The competent authority shall notify the European

regulatory authority of any change in the details of a deposit

guarantee scheme referred to in sub-regulation (3)(f).

(5) Where the requirements specified in sub-regulation (2) are

satisfied, the notice referred to in sub-regulation (3) shall only be

sent to the European regulatory authority if, taking into account the

activities which the Maltese credit institution seeks to carry out

through the branch, the competent authority has no reason to doubt

the adequacy of the administrative structure or the financial

situation of the Maltese credit institution

Provided that in the event of any changes in any of the

particulars referred to in this sub-regulation, the competent

authority shall notify the European regulatory authority

accordingly.

(6) Where the competent authority refuses to give the European

regulatory authority of the host Member State the notice referred to

in sub-regulation (3), it shall, within three months from the date of

receipt of the branch passport notification referred to in sub-

regulation (2), give the Maltese credit institution the reasons for its

decision in writing. The Maltese credit institution may appeal to the

Tribunal and the provisions of article 10 of the Act shall apply

mutatis mutandis.

(7) A branch of a Maltese credit institution shall not be

established and commence its activities in the host Member State

unless -

(a) the Maltese credit institution has received a

communication from the European regulatory

authority acknowledging its establishment in the host

Member State and, if necessary, indicating any

applicable conditions in the interests of the general

good; or

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

the notice referred to in sub-regulation (3), and no

communication has been received from the European

regulatory authority.

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

communicated in the branch passport notification referred to in

sub-regulation (2), the Maltese credit institution shall give the

European regulatory authority and the competent authority a

change of branch particulars notification in accordance with Article

36(3) of the CRD at least one month before implementing the

change in order to enable the competent authority to take a decision

following the notification under this regulation.

(9) The prudential supervision of a Maltese credit institution

shall be the responsibility of the competent authority whether the

credit institution establishes a branch in another Member State or

not, without prejudice to those provisions of the CRD which give

responsibility to the European regulatory authority of the host

Member State.

(10) Sub-regulation (9) shall not prevent the supervision on a

consolidated basis in terms of regulation 3 of the Supervisory

Consolidation Regulations.

(11) The competent authority shall notify the European

Commission and the EBA of the number and type of cases in which

there have been refusals in terms of sub-regulations (6) and (8).

(1) A Maltese credit institution may exercise a European

passport right to provide services within the territory of another

Member State provided the requirements set out in this regulation

are satisfied. The activities that may be carried out in the host

Member State by such a Maltese credit institution in exercise of a

European passport right shall be limited to the activities it is

authorised to undertake in Malta.

(2) The Maltese credit institution wishing to exercise a

European passport right to provide services in another Member

State shall provide the competent authority with a services passport

notification in accordance with Article 39(1) of the CRD, to

provide services in another Member State, which shall -

(a) identify which of the services listed in the Schedule it

intends to provide; and

(b) indicate the Member State in which it intends to

operate.

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

receiving a services passport notification referred to in sub-

regulation (2), give such notification to the European regulatory

authority of the host Member State.

(4) A Maltese credit institution may exercise a European

passport right in accordance with sub-regulation (1) provided -

(a) it has given the competent authority a notification in

terms of sub-regulation (2); and

(b) the competent authority has notified the European

regulatory authority of the host Member State in

accordance with sub-regulation (3)

Provided that the competent authority shall give written

notice to the Maltese credit institution that the notification in terms

of sub-regulation (3) has taken place

Provided further that, where appropriate, the European

regulatory authority of the host Member State may, on receipt of

the information from the competent authority, indicate to the

Maltese credit institution any applicable conditions in the interests

of the general good.

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

by the Maltese credit institution in the services passport

notification referred to in sub-regulation (2), the Maltese credit

institution shall give written notice of such change to the competent

authority in order to enable it to take a decision in terms of this

regulation, and to the European regulatory authority of the host

Member State at least one month before implementing any such

change.

(6) The prudential supervision of a Maltese credit institution

shall be the responsibility of the competent authority, whether the

credit institution provides services in another Member State or not,

without prejudice to those provisions of the CRD which give

responsibility to the European regulatory authority of the host

Member State.

(7) Sub-regulation (6) shall not prevent supervision on a

consolidated basis in terms of regulation 3 of the Supervisory

Consolidation Regulations.

(1) Where a Maltese credit institution exercises a

European passport right to establish a branch, the competent

authority may, after notifying the European regulatory authority of

the host Member State, carry out, itself or through the intermediary

of persons appointed for that purpose by the competent authority,

on-the-spot checks of the information referred to in Article 50 of

the CRD and inspections of such branches.

(2) The competent authority may also, for the purposes of the

inspection of branches, have recourse to one of the other

procedures set out in regulation 12 of the Supervisory

Consolidation Regulations.

(3) Where Malta is the home Member State, the competent

authority shall duly take into account the information and findings

obtained by the European regulatory authority of the host Member

State that are relevant for the risk assessment of the credit

institution or the stability of the financial system in the relevant

host Member State in accordance with Article 52(3) of the CRD in

determining the supervisory examination programme referred to in

regulation 5 of the Banking Act (Supervisory Review) Regulations

and shall also have regard to the stability of the financial system in

the host Member State concerned.

(4) On-the-spot checks and inspections of branches shall be

conducted in accordance with the law of the Member State where

the check or inspection is carried out.

(5) Information received under Article 52(3) of the CRD and

in f o r m a t io n o bt a i ne d by m e a n s o f an o n - th e - s p o t c h e c k o r

inspection referred to in this regulation, shall not be disclosed

under article 25(9) and (10) of the Act, except with the express

consent of the European regulatory authority which disclosed the

information or of the European regulatory authority of the Member

State in which such an on-the-spot check or inspection was carried

out.

A European passport right shall entitle a Maltese credit

institution to provide one or more services.

Part III - Contraventions by European credit institutions

and Maltese credit institutions

(1) Where Malta is the host Member State and the

competent authority, on the basis of the information received from

the European regulatory authority of the home Member State in

accordance with Article 50 of the CRD, ascertains that a European

credit institution which has a branch or provides services in Malta

in exercise of a European passport right fulfils one of the following

conditions in relation to the activities carried out in Malta, it shall

notify the European regulatory authority -

(a) the credit institution does not comply with the

provisions of the Act or any regulations made or

Banking Rules issued thereunder which transpose the

requirements of the CRD, with any binding legal

instruments issued under the CRD, or with the CRR;

(b) there is a material risk that the credit institution will

not comply with the provisions of the Act or any

regulations made or Banking Rules issued thereunder

transposing the requirements of the CRD, with any

binding legal instruments issued under the CRD, or with

the CRR.

(2) Where the competent authority considers that the European

regulatory authority of the home Member State, after having been

notified in terms of sub-regulation (1), has not fulfilled its

obligations or will not fulfil its obligations to take appropriate

measures to ensure that the credit institution concerned remedies its

non-compliance or takes measures to avert the risk of non-

compliance, it may refer the matter to EBA and request its

assistance in accordance with Article 19 of Regulation (EU) No

1093/2010.

(3) Before following the procedures set out in sub-regulations

(1) and (2), where Malta is the host Member State, the competent

authority may, in emergency situations, pending measures by the

European regulatory authority of the home Member State or

reorganisation measures referred to in Article 3 of Directive 2001/

24/EC on the reorganisation and winding up of credit institutions,

take any precautionary measures necessary to protect against

financial instability that would seriously threaten the collective

interests of depositors, investors and clients in Malta.

(4) Any precautionary measures under sub-regulation (3) shall

be proportionate to their purpose to protect against financial

instability that would seriously threaten collective interests of

depositors, investors and clients in Malta as the host Member State.

S u c h p r e c a u t i o n a r y m e a s u r e s m a y i nc l u d e a s u s p e n s i o n o f

payment. They shall not result in a preference for the creditors of

the European credit institution in Malta over creditors in other

Member States.

(5) Any precautionary measure under sub-regulation (3) shall

cease to have effect when the administrative or judicial authorities

of the home Member State take reorganisation measures under

Article 3 of Directive 2001/24/EC on the reorganisation and

winding up of credit institutions.

(6) Where Malta is the host Member State, the competent

authority shall terminate precautionary measures taken in

accordance with sub-regulations (3) to (5) where it considers those

measures to have become obsolete under sub-regulations (1) and

(2), unless they cease to have effect in accordance with sub-

regulation (5).

(7) The competent authority shall, without undue delay, notify

the European Commission, the EBA and the European regulatory

authorities concerned of precautionary measures taken under sub-

regulation (3).

(8) Where Malta is the host Member State, the competent

authority may, notwithstanding regulation 6 and sub-regulations (1)

and (2) of this regulation, exercise the powers conferred upon it

under the CRD to take appropriate measures to prevent or to punish

breaches committed in Malta of the provisions of the Act or any

regulations made or Banking Rules issued thereunder transposing

the requirements of the CRD or of any binding legal instruments

issued under the CRD or in the interests of the general good. This

shall include the possibility of preventing credit institutions who

have so acted in breach, from initiating further transactions in

Malta.

(9) Any measures taken in accordance with sub-regulations (3)

to (7) or sub-regulation (8) involving penalties or restrictions on

the exercise of the freedom to provide services or the freedom of

establishment shall be properly reasoned and communicated to the

credit institution concerned.

(10) Where Malta is the host Member State and a European

credit institution carrying out its activities in Malta in exercise of a

European passport right has had its authorisation withdrawn by the

European regulatory authority of the home Member State, the

competent authority shall take appropriate measures to prevent the

European credit institution concerned from initiating further

transactions in Malta and to safeguard the interests of depositors.

(11) Where Malta, neither being the home Member State nor the

host Member State, is affected by the precautionary measures taken

by the European regulatory authority of any host Member State in

terms of Article 43 of the CRD, the competent authority may

(a) object to such precautionary measures;

(b) refer the matter to the EBA; and

(c) request the EBA’s assistance in accordance with

Article 19 of Regulation (EU) No 1093/2010.

(1) Where Malta is the home Member State and the

competent authority is notified by a European regulatory authority

that a Maltese credit institution carrying out its activities in the

relevant host Member State through a branch or by providing

services, fulfils any one of the following conditions, it shall,

without delay, take all appropriate measures to ensure that the

Maltese credit institution concerned remedies its non-compliance

or takes measures to avert the risk of non-compliance

(a) if the credit institution does not comply with the

national provisions of the host Member State

transposing the CRD, with any binding legal

instruments issued under the CRD or with the CRR;

(b) if there is a material risk that the credit institution will

not comply with the national provisions of the host

Member State transposing the CRD, with any binding

legal instruments issued under the CRD or with the

CRR.

(2) The competent authority shall communicate such measures

taken in accordance with sub-regulation (1) to the European

regulatory authority of the host Member State without delay.

(3) Where Malta is the home Member State and the European

regulatory authority of the host Member State takes precautionary

measures in terms of Article 43 of the CRD, the competent

authority may

(a) object to such precautionary measures;

(b) refer the matter to the EBA; and

(c) request the EBA’s assistance in accordance with

Article 19 of Regulation (EU) No 1093/2010.

(4) Any measures taken in accordance with sub-regulation (1)

or sub-regulation (3) involving penalties or restrictions on the

exercise of the freedom to provide services or the freedom of

establishment shall be properly reasoned and communicated to the

credit institution concerned.

(5) In the event of withdrawal of a licence by the competent

authority of a Maltese credit institution, the competent authority

shall notify the European regulatory authorities of the host Member

State without delay.

Part IV - Collaboration between Regulatory Authorities

(1) The competent authority shall collaborate closely with

relevant European regulatory authorities in order to supervise the

activities of credit institutions operating, in particular, through a

branch, in one or more Member States other than that in which their

head offices are situated. The competent authority shall supply the

European regulatory authority in the Member States concerned with

all information concerning the management and ownership of

credit institutions, that is likely to facilitate their supervision and

the examination of the conditions for their licensing, and all

information likely to facilitate the monitoring of credit institutions,

in particular with regard to liquidity, solvency, deposit guarantee,

the limiting of large exposures, other factors that may influence the

systemic risk posed by the credit institution, administrative and

accounting procedures and internal control mechanisms.

(2) Where Malta is the home Member State, the competent

authority shall

(a) immediately provide the European regulatory

authorities of the host Member States with any

information and findings pertaining to liquidity

supervision in accordance with Part Six of the CRR

and with the Supervisory Consolidation Regulations,

of the activities performed by a credit institution

through its branches, to the extent that such

information and findings are relevant to the protection

of depositors or investors in the host Member State;

(b) immediately notify the European regulatory authorities

of all host Member States where liquidity stress occurs

or can reasonably be expected to occur. That

information shall also include details about the

planning and implementation of a recovery plan and

about any prudential supervisory measures taken in

that context;

(c) communicate and explain upon request to the

European regulatory authorities of the host Member

State how information and findings provided by the

latter have been taken into account

Provided that where the competent authority disagrees with

the measures to be taken by the European regulatory authority of

the host Member State, to prevent further breaches in order to

protect the interests of depositors, investors and others to whom

services are provided or to protect the stability of the financial

system in accordance with Article 50(4) of the CRD, the competent

authority may refer the matter to EBA and request its assistance in

accordance with Article 19 of Regulation (EU) No 1093/2010.

(3) Where Malta is the host Member State, the competent

authority may request from the European regulatory authority of

the home Member State an explanation on the manner in which

information and findings provided by the competent authority have

been taken into account. Where upon the provision of such

information the competent authority maintains that no appropriate

measures have been taken by the said European r eg ulatory

au thority, the com petent au thori ty m ay, after n otify ing t he

European regulatory authorities concerned and EBA, take

appropriate measures to prevent further breaches in order to protect

the interests of depositors, investors and others to whom services

are provided or to protect the stability of the financial system.

(4) The competent authority may refer to EBA situations where

a request for collaboration to a European regulatory authority, in

particular to exchange information, has been rejected or has not

been acted upon within a reasonable time.

Part V - Companies other than credit institutions

(1) A company may exercise a European passport right in

accordance with Articles 35, with the exclusion of the second

paragraph of sub-article (3) thereof, 36(1), (2) and (3), 39(1) and (2)

and 40 to 46 of the CRD provided the following conditions are

fulfilled

(a) the company is a subsidiary of a credit institution or

the jointly-owned subsidiary of two or more credit

institutions;

(b) the memorandum and articles of association of the

company permit the carrying on of those activities;

(c) the parent undertaking or undertakings of the company

are authorised as credit institutions in the Member

State by the law of which the company is governed;

(d) the activities in question are actually carried out within

the territory of the same Member State;

(e) the parent undertaking or undertakings of the company

hold 90 per cent or more of the voting rights attaching

to shares in the capital of the company;

(f)

the parent undertaking or undertakings of the company

satisfy the European regulatory authority of the host

Member State or, where Malta is the host Member

State, the competent authority, regarding the prudent

management of the company and have declared, with

the consent of the relevant European regulatory

authority of the home Member State, or, where Malta

is the home Member State, with the consent of the

competent authority, that they jointly and severally

guarantee the commitments entered into by the

company;

(g) the company is effectively included, for the activities

in question in particular, in the consolidated

supervision of the parent undertaking, or of each of the

parent undertakings, in accordance with Title VII,

Chapter 3 of the CRD and Part One, Title II, Chapter 2

of the CRR, in particular for the purposes of the own

funds requirements set out in Article 92 of the CRR,

for the control of large exposures provided for in Part

Four of the CRR and for the purposes of the limitation

of holdings provided for in Articles 89 and 90 of the

said CRR.

(2) Where Malta is the home Member State, the competent

authority shall check compliance with the conditions referred to in

sub-regulation (1), and shall supply the company with a certificate

of compliance which shall form part of the notification referred to

in Articles 35 and 39 of the CRD.

(3) This regulation shall apply accordingly to subsidiaries of a

company referred to in sub-regulation (1).

(4) By way of derogation from the second sub-paragraph of

Article 35(3) of the CRD, for the purpose of this regulation, where

Malta is the home Member State, the competent authority shall

communicate to the European regulatory authority of the host

Member State the amount and composition of own funds of the

company and the total risk exposure am ounts calculated in

accordance with Article 92(3) and (4) of the CRR of the credit

institution which is its parent undertaking.

(5) Where Malta is the home Member State, the competent

authority shall notify the European regulatory authority of the host

Member State where a company referred to in this regulation ceases

to fulfil any of the conditions imposed and the activities carried out

by such company in the host Member State shall become subject to

the law of the host Member State.

(6) Where Malta is the host Member State, and the competent

authority is notified by the European regulatory authority of the

home Member State that the company referred to in this regulation

ceases to fulfil any of the conditions imposed, the activities carried

out by that company in Malta shall become subject to Maltese law.

(7) The entities referred to in points (3) to (24) of Article 2(5) of

the CRD, shall be treated as companies for the purpose of this

regulation.

(8) This regulation shall also apply to financial holding

companies, mixed financial holding companies and mixed-activity

holding companies which have their head offices in the European

Union.

(9) For the purposes of this regulation, the term "company"

shall mean an undertaking other than an institution and other than a

pure industrial holding company, the principal activity of which is

to acquire holdings or to pursue one or more of the activities listed

in points 2 to 12 and point 15 of Annex I to the CRD, including a

financial holding company, a mixed financial holding company, a

payment institution and an asset management company, but

excluding insurance holding companies and mixed-activity

insurance holding companies as defined in points (f) and (g) of

Article 212(1) of Directive 2009/138/EC.

Part VI - Applicability provisions

(1) A legal person who, on the date of the coming into

force of these regulations, was in possession of a licence issued by

the competent authority which covers the provision of point 1 of

Annex I to the CRD, incorpor ated in the Schedule to these

regulations, and any other additional activities included in such

Annex, shall be deemed to be a Maltese credit institution for the

purposes of these regulations

Provided that such legal person conforms with all

applicable Banking Rules issued by the said competent authority.

(2) Every licence issued after the coming into force of these

regulations shall indicate whether the licence holder is a credit

institution in terms of these regulations.

Part VII - Interpretation

These regulations shall apply mutatis mutandis to

companies other than credit institutions, fulfilling the conditions

laid down in regulation 17, being companies authorised either by

the European regulatory authority or by the competent authority;

and accordingly the words "European credit institution" shall be

read as if they were a reference to a company or other body

corporate authorised by the European regulatory authority, and the

words "Maltese credit institution" shall be read as if they were a

reference to companies authorised by the competent authority.

Every authorisation, licence, approval or order taken,

granted or commenced under the European Passport Rights for

Credit Institutions Regulations, 2004 * and under the European

Passport Rights for Credit Institutions Regulations 2011 † , shall

continue to be valid and in force, as if such authorisation, licence,

approval or order were taken, granted or commenced under these

regulations.

In terms of article 29B of the Act, these regulations are

being published in the English language only.

Part VIII - Transitional Provisions

The provisions of regulations 3(6), 4(5), 6, 8, 12, 14, 15

and 16 shall not apply until the date on which the liquidity

coverage requirement becomes applicable in accordance with a

delegated act adopted by the European Commission in accordance

with Article 460 of the CRR in terms of Article 151 of the CRD

Provided that, until the date referred to in this regulation

(a) regulation 6 of these regulations shall be replaced by

the following

" Reporting to

6. (1) The competent authority may, for statistical

the competent

purposes, require a European credit institution which

authority.

has established a branch in Malta in terms of these

regulations, to report periodically on its activities in

Malta to the competent authority.

(2) In discharging its responsibilities within the

meaning of regulation 23, the competent authority

m a y r e q u i r e s uc h br a n c h e s o f E u r op e a n cr e d it

in s t i t ut i o ns t o pr o v id e t h e sa m e p a r t ic u la r s a s

Maltese credit institutions for that purpose.";

(b) regulation 8 of these regulations shall be replaced by

the following

" On-the-spot

8. (1) Where a European credit institution carries

checks of

out its activi ties in Mal ta through a bran ch in

branches

exercise of a European passport right, the European

established in

regulatory authority of the home Member State may,

Malta.

after notifying the competent authority, carry out,

itself or through an intermediary, on-the-spot checks

of the information referred to in regulation 16 of

these regulations.

(2) This regulation and the right of European

regulatory authorities of the home Member State to

have recourse to one of the other procedures set out

in Article 118 of the CRD for the purposes of such

on-the-spot checking of branches, shall not affect the

right of the competent authority, in discharging its

responsibilities under the CRD, to carry out on-the-

spot checks of branches established in Malta.";

(c) regulation 12 of these regulations shall be replaced by

* Revoked by European Passport Rights for Credit Institutions Regulations, 2011.

† Revoked by these Regulations.

the following

" On-the-spot

12. (1) Where a Maltese credit institution carries

checks of

out its activities in another Member State through a

branches

branch in exercise of a European passport right, the

established in a

c o m p e t e n t a u t h o r i t y m a y, a f t e r n o t i f y i n g t h e

Member State

other than

European regulatory authority of the host Member

Malta.

State, carry out, itself or through an intermediary,

on-the-spot checks of the information referred to in

regulation 16 and may also, for the purposes of such

on-the-spot checking of branches, have recourse to

one of the other procedures set out in regulation 12

of the Supervisory Consolidation Regulations.

(2) This regulation shall not affect the right of

the European regulatory authority of the host

Member State, in discharging its responsibilities

under the CRD, to carry out on-the-spot checks of

branches established in the host Member State.";

(d) regulation 14 of these regulations shall be replaced by

the following

" Contraventions

14. (1) Where Malta is the host Member State

by European

a nd th e c o m pe te nt a u th o ri t y as c e r t a i ns t ha t a

credit institutions.

European credit institution which has a branch or

provides services in Malta in exercise of a European

passport right is not complying with the provisions

of the Act or any regulations made or Banking

Rules issued thereunder transposing the

requirements of the CRD relating to the powers of

the competent authority, the competent authority

shall require the European credit institution to

remedy its non-compliance.

(2) If the European credit institution concerned

fails to take the necessary steps to remedy and

rectify its position, the competent authority shall

notify the European regulatory authority of such

failure accordingly.

(3) Where Malta is the host Member State, if,

despite the measures taken by the European

regulatory authority of the home Member State to

ensure that the European credit institution

concerned remedies its non-compliance, or because

such measures prove inadequate or are not provided

for in the Member State in question, the European

credit institution persists in violating the legal rules

referred to in sub-regulation (1), the competent

a u t h o r i t y m a y, a f t e r n o t i f y i n g t h e E u r o p e a n

regulatory authority, take appropriate measures to

prevent or to punish further breaches and, in so far

a s n e c e s s a r y, t o p r e v e n t t h e E u r o p e a n c r e d i t

institution from initiating further transactions in

Malta.

EUROPEAN PASSPORT RIGHTS FOR CREDIT INSTITUTIONS

(4) Before following the procedure set out in

sub-regulations (1) to (3), where Malta is the host

Member State, the competent authority may, in

emergencies, take any precautionary measures

necessary to protect the interests of depositors,

investors and others to whom services are provided.

The competent authority shall notify the European

Commission and the European regulatory

authorities concerned of such measures at the

earliest opportunity.

(5) Where Malta is the host Member State, the

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

regulation 6 and sub-regulations (1) to (3) of this

regulation, exercise the powers conferred upon it

under the CRD to take appropriate measures to

prevent or to punish breaches committed in Malta of

the provisions of the Act or any regulations made or

Banking Rules issued thereunder transposing the

requirements of the CRD or in the interests of the

general good. This shall include the possibility of

preventing credit institutions who have so acted in

breach, from initiating further transactions in Malta.

(6) Any measures taken in accordance with

sub-regulation (1) or sub-regulations (4) or (5)

involving penalties or restrictions on the exercise of

the freedom to provide services or the freedom of

e s t a b l ish m e n t s h a ll be p ro p e r ly re a s o ne d and

communicated to the credit institution concerned.

(7) Where Malta is the host Member State and

a E u r o p e a n cr e d i t i n s t it u t i o n c a r r y i n g ou t i t s

a c t i v i t i e s i n M a l t a i n e x e r c i s e o f a E u r o p e an

passport right has had its authorisation withdrawn

by the European regulatory authority of the home

Member State, the competent authority shall take

appropriate measures to prevent the European credit

institution concerned from initiating further

transactions in Malta and to safeguard the interests

of depositors.";

(e) regulation 15 of these regulations shall be replaced by

EUROPEAN PASSPORT RIGHTS FOR CREDIT INSTITUTIONS

the following

" Contraventions

15. (1) Where Malta is the home Member State,

by Maltese credit

if the European regulatory authority of the host

institutions.

Member State, after ascertaining that a Maltese

credit institution having a branch or providing

services within its territory in exercise of a

European passport right is not complying with the

legal provisions adopted in that Member State

pursuant to the CRD relating to the powers of the

European regulatory authority of the host Member

St a t e , r e q u i r e s t h e M a l t e s e c r e d i t i n s t i t u t i o n

concerned to remedy its non-compliance and the

Maltese credit institution concerned fails to take the

necessary steps to remedy such non-compliance, the

competent authority shall, at the earliest

opportunity, take all appropriate measures to ensure

that the Maltese credit institution concerned

remedies its non-compliance. The nature of those

measures shall be communicated to the European

regulatory authorities concerned.

(2) Any measures taken in accordance with

sub-regulation (1) involving penalties or restrictions

on the exercise of the freedom to provide services or

the freedom of establishment shall be properly

reasoned and communicated to the credit institution

concerned.

(3) In the event of withdrawal of a licence by

the competent authority of a Maltese credit

institution, the competent authority shall notify the

European regulatory authorities of the host Member

State without delay.";

(f)

regulation 16 shall be replaced by the following

" Collaboration

16. The competent authority shall collaborate

between

closely with relevant European regulatory

regulatory

authorities in order to supervise the activities of

authorities.

credit institutions operating, in particular through a

branch, in one or more Member States other than

that in which their head offices are situated. The

competent authority shall supply all information

concerning the management and ownership of credit

institutions to the relevant European regulatory

authorities in the Member States concerned, that is

likely to facilitate their supervision and the

examination of the conditions for their licensing,

and all information likely to facilitate the

monitoring of credit institutions, in particular with

regard to liquidity, solvency, deposit guarantees, the

limiting of large exposures, administrative and

accounting procedures and internal control

mechanisms.".

Until the date on which the liquidity coverage requirement

becomes applicable in accordance with a delegated act adopted by

the European Commission pursuant to Article 460 of the CRR in

terms of Article 151 of the CRD, where Malta is the host Member

State, the competent authority shall, pending further coordination,

retain responsibility in cooperation with the European regulatory

authorities of the home Member State for the supervision of the

liquidity of branches of credit institutions authorised in other

Member States, which are established in Malta.

EUROPEAN PASSPORT RIGHTS FOR CREDIT INSTITUTIONS