EUROPEAN PASSPORT RIGHTS FOR FINANCIAL INSTITUTIONS REGULATIONS

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SUBSIDIARY LEGISLATION 376.07

EUROPEAN PASSPORT RIGHTS FOR FINANCIAL

INSTITUTIONS REGULATIONS

30th April, 2020

LEGAL NOTICE 165 of 2020.

PRELIMINARY

(1)

The title of these regulations is the European

Passport Rights for Financial Institutions Regulations.

(2)

The purpose of these regulations is to transpose Articles

19, 28, 29, 30, 100 (in part) and 111 (in part) of Directive (EU) 2015/

2366 of the European Parliament and of the Council of 25 November

2015 on payment services in the internal market, amending Directives

2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No

1093/2010, and repealing Directive 2007/64/EC, and to provide for

ancillary matters related thereto.

(1)

In these regulations, unless the context otherwise

requires –

"the Act" means the Financial Institutions Act;

"Commission Delegated Regulation" means Commission

Delegated Regulation (EU) 2017/2055 of 23 June 2017

supplementing Directive (EU) 2015/2366 of the European

Parliament and of the Council with regard to regulatory

technical standards for the cooperation and exchange of

information between competent authorities relating to the

exercise of the right of establishment and the freedom to

provide services of payment institutions, as may be amended

from time to time;

"competent authority" means the Malta Financial

Services Authority established under the Malta Financial

Services Authority Act;

"Electronic Money Directive" means Directive 2009/

110/EC of the European Parliament and of the Council of 16

September 2009 on the taking up, pursuit and prudential

supervision of the business of electronic money institutions

amending Directives 2005/60/EC and 2006/48/EC and

repealing Directive 2000/46/EC as may be amended from time

to time and includes any implementing measures that may be

issued thereunder;

"European financial institution" means a legal person

authorised by a European regulatory authority to provide

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payment services in terms of the Payment Services Directive

and, or to issue and, or distribute and, or redeem electronic

money in terms of the Electronic Money Directive, or a

person registered under the Payment Services Directive to

provide solely account information services;

"European regulatory authority" means a body that is in

another Member State and is empowered by law or regulation

to supervise payment institutions, electronic money institutions

and, or account information service providers;

"European right" means the entitlement of a person to

engage an agent, or to establish a branch, or to appoint a

distributor, or to provide services, in a Member State, other than

that in which it has its registered office or, if under its national

law it has no registered office, the Member State in which it has

its head office

(a)

in accordance with the Treaty of Rome

signed in 1957, establishing the European Economic

Community as subsequently amended, and as applied in

the Member States; and

(b)

subject to the requirements of the Payment

Services Directive and, or the Electronic Money

Directive, and subject to any regulations or Financial

Institutions Rules issued under the Act implementing

such requirements;

"home Member State" means

(a) where the European financial institution or the

Maltese financial institution is a natural person, the

Member State in which his or her residence is situated;

(b) where the European financial institution or the

Maltese financial institution is a legal person, the

Member State in which its registered office is situated or,

if under its national law it has no registered office, the

Member State in which its head office is situated;

"host Member State" means the Member State in which a

Maltese financial institution or a European financial institution,

as applicable, exercises or proposes to exercise a European

right;

"Maltese financial institution" means a legal person

licensed by the competent authority in terms of the Act to

provide payment services and, or to issue and, or distribute and,

or redeem electronic money, or a person registered by the

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competent authority in terms of the Act to provide solely

account information services;

"Payment Services Directive" means Directive (EU)

2015/2366 of the European Parliament and of the Council of 25

November 2015 on payment services in the internal market,

amending Directives 2002/65/EC, 2009/110/EC and 2013/36/

EU and Regulation (EU) No 1093/2010, and repealing

Directive 2007/64/EC, as may be amended from time to time

and includes any implementing measures, implementing

technical standards, regulatory technical standards and similar

measures that have been or may be issued thereunder.

(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.

PART I - EXERCISE OF PASSPORT RIGHTS BY EUROPEAN

FINANCIAL INSTITUTIONS

(1) A European financial institution seeking to provide

payment services and, or issue and, or distribute and, or redeem

electronic money in Malta in exercise of a European right under the

freedom to provide services shall communicate to its European

regulatory authority the information prescribed in sub-regulation (2),

and shall thereafter be exempt from the provisions of article 3 of the

Provided that this regulation shall not apply to a

European financial institution seeking to provide payment services

and, or distribute and, or redeem electronic money in Malta through an

agent and, or a distributor, as applicable.

(2)

The information referred to in sub-regulation (1) shall be

the following

(i)

its intention to provide payment services and, or

issue, and or distribute and, or redeem electronic money in

Malta;

(ii)

the name, the address and where applicable, the

authorisation number and the unique identification number of

the European financial institution;

(iii) whether the European financial institution intends

to issue and, or distribute and, or redeem electronic money in

Malta and, or which payment services activities it intends to

carry out;

(iv)

where the European financial institution intends to

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outsource operational functions of payment services and, or of

the issuance and, or distribution and, or redemption of

electronic money to other entities in Malta, the operational

functions of the payment services and, or of the issuance and, or

distribution and, or redemption of electronic money which it

will be outsourcing to other entities in Malta; and

(v)

any other information which may be required in

terms of Article 14(1) of the Commission Delegated

Regulation.

(3)

Within one month of receipt of all of the information

referred to in sub-regulation (2), the competent authority shall, in

terms of Article 28(2) of the Payment Services Directive, receive the

said information from the European regulatory authority by means of

the template set out in Annex V to the Commission Delegated

Regulation.

(4)

Where the competent authority receives all the

information referred to in sub-regulation (2) from the European

regulatory authority in accordance with Article 28(2) of the Payment

Services Directive, it shall, within one month of receipt of the said

information, assess that information and provide the European

regulatory authority with relevant information in connection with the

intended provision of payment services and, or issuance, and or

distribution and, or redemption of electronic money by the relevant

European financial institution in the exercise of a European right.

(5)

Where the European regulatory authority does not agree

with the assessment of the competent authority, the latter shall, in

terms of Article 28(2) of the Payment Services Directive, be informed

of the reasons for its decision.

(6)

Within three months of receipt of all of the information

referred to in sub-regulation (2), the competent authority shall, in

terms of Article 28(3) of the Payment Services Directive, receive

communication of the European regulatory authority’s decision.

(7) Following communication to the competent authority of

the European regulatory authority’s decision in terms of sub-regulation

(6), the competent authority shall publish the information referred to in

sub-regulation (2)(ii) and (iii) in the public register established and

maintained by the competent authority in accordance with article 8D

of the Act.

(8)

In the event of a change regarding the information

communicated in accordance with sub-regulation (2), including any

additional entities to which activities are outsourced in Malta, the

competent authority shall, in terms of Article 28(4) of the Payment

Services Directive and Article 16 of the Commission Delegated

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Regulation, be informed of such changes by the European regulatory

authority and, in such cases, the provisions of sub-regulations (3) to

(6) shall apply.

(1)

A European financial institution seeking to

establish a branch in Malta in the exercise of a European right shall

communicate to its European regulatory authority the information

specified in sub-regulation (2) and shall thereafter be exempt from the

provision of article 3 of the Act.

(2)

The information referred to in sub-regulation (1) shall be

the following

(i)

its intention to establish a branch in Malta to

provide payment services and, or issue and, or distribute and, or

redeem electronic money;

(ii)

the name, the address and, where applicable, the

authorisation number and the unique identification number of

the European financial institution;

(iii) whether the European financial institution intends

to issue and, or distribute and, or redeem electronic money in

Malta and, or which payment services activities it intends to

carry out;

(iv)

the address of the proposed branch in Malta;

(v)

the identity of those

responsible

for

the

management of the proposed branch;

(vi) a description of the organisational structure of the

proposed branch;

(vii) a business plan including a forecast budget

calculation for the first three financial years which

demonstrates that the European financial institution is able to

employ the appropriate and proportionate systems, resources

and procedures to operate soundly with regard to the

proposed provision of payment services and, or the issuance

and, or the distribution and, or the redemption of the

electronic money through the proposed branch in Malta;

(viii) a description of the European financial

institution’s governance arrangements and internal control

mechanisms, including administrative, risk management and

accounting procedures, which demonstrates that those

governance arrangements, control mechanisms and procedures

are proportionate, appropriate, sound and adequate with regard

to the proposed provision of payment services and, or the

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issuance, distribution or redemption of the electronic money

through the proposed branch in Malta;

(ix) where the European financial institution intends to

outsource operational functions of payment services and, or of

the issuance and, or distribution and, or redemption of

electronic money to other entities in Malta, the operational

functions of payment services and, or of the issuance and, or

distribution and, or redemption of electronic money which it

will be outsourcing to other entities in Malta; and

(x)

any other information which may be required in

terms of Article 6(1) of the Commission Delegated Regulation.

(3)

Within one month of receipt of all of the information

referred to in sub-regulation (2), the competent authority shall, in

terms of Article 28(2) of the Payment Services Directive, receive the

said information from the European regulatory authority by means of

the template set out in Annex II to the Commission Delegated

Regulation.

(4)

Where the competent authority receives all the

information referred to in sub-regulation (2) from the European

regulatory authority in accordance with sub-regulation (3), it shall,

within one month of receipt of the said information, assess that

information and provide the European regulatory authority with

relevant information in connection with the intended provision of

payment services and, or issuance and, or distribution and, or

redemption of electronic money by the relevant European financial

institution in the exercise of a European right.

(5)

If the competent authority has any reasonable grounds

for concern in connection with the intended establishment of the

branch in Malta with regard to money laundering or terrorist financing

within the meaning of Directive (EU) 2015/849, it shall inform the

European regulatory authority accordingly.

(6)

Where the European regulatory authority does not agree

with the assessment of the competent authority, the latter shall, in

terms of Article 28(2) of the Payment Services Directive, be informed

of the reasons for its decision.

(7)

Within three months of receipt of all of the information

referred to in sub-regulation (2), the competent authority shall, in

terms of Article 28(3) of the Payment Services Directive, receive

communication of the European regulatory authority’s decision.

(8)

Upon entry in the public register of the home Member

State in terms of Article 14 of the Payment Services Directive, the

European financial institution may commence its activities in Malta

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through the branch. The competent authority shall enter the branch of

the European financial institution in the register established and

maintained by the competent authority in accordance with article 8D

of the Act.

(9)

The competent authority shall, in terms of Article 18(3)

of the Payment Services Directive, be informed by the European

regulatory authority of the date from which the European financial

institution shall commence its activities in Malta through the branch

by means of the template set out in Annex VI to the Commission

Delegated Regulation.

(10) In the event of a change regarding the information

communicated in accordance with sub-regulation (2), including any

additional branches or entities to which activities are outsourced in

Malta, the competent authority shall, in terms of Article 28(4) of the

Payment Services Directive and Article 8 of the Commission

Delegated Regulation, be informed of such changes by the European

regulatory authority concerned and, in such cases, the provisions of

sub-regulations (3) to (9) shall apply.

(1)

A European financial institution seeking to

provide payment services in Malta through an agent shall

communicate to its European regulatory authority

(i)

its intention to provide payment services in Malta

through an agent;

(ii)

the name, the address and, where applicable, the

authorisation number and the unique identification number of

the European financial institution;

(ii)

the name, the address and, where applicable, the

unique identification code or number of the proposed agent;

(iii) which payment services activities the European

financial institution intends to carry out in Malta;

(iv) a description of the internal control mechanisms

that will be used by the proposed agent in order to comply

with the obligations in relation to money laundering and

terrorist financing under Directive (EU) 2015/849, which

shall be updated without delay in the event of material

changes to the particulars communicated at the initial

notification;

(v)

the identity of the directors and persons

responsible for the management of the proposed agent and, for

agents other than payment service providers, evidence that they

are fit and proper persons;

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(vi) where the European financial institution intends to

outsource operational functions of payment services and, or of

the issuance and, or distribution and, or redemption of

electronic money to other entities in Malta, the operational

functions of payment services and, or of the issuance and, or

distribution and, or redemption of electronic money which it

will be outsourcing to other entities in Malta; and

(vii) any other information which may be required in

terms of Article 10(1) of the Commission Delegated

Regulation.

(2)

A European financial institution seeking to distribute

and, or redeem electronic money in Malta through a distributor shall

communicate to its European regulatory authority

(i)

its intention to distribute and, or redeem electronic

money in Malta through a distributor;

(ii)

the name, the address and, where applicable, the

authorisation number and the unique identification number of

the European financial institution;

(iii) the name, the address and, where applicable, the

unique identification code or number of the proposed

distributor;

(iv) a description of the internal control mechanisms

that will be used by the proposed distributor in order to

comply with the obligations in relation to money laundering

and terrorist financing under Directive (EU) 2015/849, which

shall be updated without delay in the event of material

changes to the particulars communicated at the initial

notification;

(v)

the identity of the directors and persons

responsible for the management of the proposed distributor and,

where applicable, for distributors other than payment service

providers, evidence that they are fit and proper persons;

(vi) where the European financial institution intends to

outsource operational functions of the issuance and, or

distribution and, or redemption of electronic money to other

entities in Malta, the operational functions of the issuance and,

or distribution and, or redemption of electronic money which it

will be outsourcing to other entities in Malta; and

(vii) any other information which may be required in

terms of the Commission Delegated Regulation.

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(3)

Within one month of receipt of all of the information

referred to in sub-regulations (1) or (2) as applicable, the competent

authority shall, in terms of Article 28(2) of the Payment Services

Directive, receive the information from the European regulatory

authority by means of the templates set out in Annexes III and IV to

the Commission Delegated Regulation.

(4)

Where the competent authority receives all the

information referred to in sub-regulations (1) or (2), as applicable,

from the European regulatory authority in accordance with sub-

regulation (3), it shall, within one month of receipt of the said

information, assess that information and provide the European

regulatory authority with relevant information in connection with the

intended provision of payment services and, or distribution and, or

redemption of electronic money, as applicable, by the relevant

European financial institution in the exercise of a European right.

(5)

If the competent authority has any reasonable grounds

for concern in connection with the intended engagement of the agent

or distributor, as applicable, with regard to money laundering or

terrorist financing within the meaning of Directive (EU) 2015/849, it

shall inform the European regulatory authority accordingly.

(6)

Where the European regulatory authority does not agree

with the assessment of the competent authority it shall, in terms of

Article 28(2) of the Payment Services Directive, provide the latter with

the reasons for its decision.

(7)

Within three months of receipt of all of the information

referred to in sub-regulation (1) or (2), as applicable and in terms of

Article 28(3) of the Payment Services Directive, the competent

authority shall receive communication of the European regulatory

authority’s decision.

(8)

Following communication to the competent authority of

the European regulatory authority’s decision in terms of sub-regulation

(7), the competent authority shall publish the information referred to in

sub-regulation (1)(i) to (iii), in the public register established and

maintained by the competent authority in accordance with article 8D

of the Act.

(9)

Upon entry in the public register of the home Member

State in terms of Article 14 of the Payment Services Directive, the

agent, may commence its activities in Malta.

(10) The competent authority shall, in terms of Article 18(3)

of the Payment Services Directive, be informed by the European

regulatory authority of the date from which the European financial

institution shall commence its activities in Malta through the agent or

distributor by means of the template set out in Annex VI to the

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Commission Delegated Regulation.

(11) In the event of a change regarding the information

communicated in accordance with sub-regulation (1) or (2),

including any additional agents, distributors or entities to which

activities are outsourced in Malta, as applicable, the competent

authority shall, in terms of Article 28(4) of the Payment Services

Directive and Article 8 of the Commission Delegated Regulation, be

informed of such changes by the European regulatory authority

concerned and, in such cases, the provisions of sub-regulations (3)

to (10) shall apply.

(1)

Where Malta is the host Member State, the

competent authority may require European financial institutions

having agents or branches in Malta to report periodically to the

competent authority on the activities carried out in Malta.

(2)

The reports referred to in sub-regulation (1) shall be

required for information or statistical purposes and, as far as the agents

and branches conduct their activities under the right of establishment,

to monitor compliance with articles 11A and 11B of the Act.

(3)

The power of the competent authority to require periodic

reports under sub-regulation (1) shall be exercised in close cooperation

with the Central Bank where reports as referred to in the said sub-

regulation are required to monitor compliance with articles 11A and

11B of the Act.

(4)

The information which European financial institutions

shall provide in the periodic reports required by the competent

authority in terms of sub-regulation (1) and the form and frequency of

such reports shall be prescribed in a Financial Institutions Rule.

(5)

The competent authority shall provide the European

regulatory authority of the home Member State with all essential and,

or relevant information, in particular in the case of infringements or

suspected infringements by an agent or a branch of a European

financial institution, and where such infringements occurred in the

context of the freedom to provide services. In that regard, the

competent authority shall communicate to the European regulatory

authority all relevant information and, on its own initiative, all

essential information, including on the compliance with the conditions

under Article 11(3) of the Payment Services Directive.

(6)

The competent authority shall cooperate closely with the

Central Bank in order to ensure and monitor effective compliance with

articles 11A and 11B of the Act by agents and branches conducted

under a right of establishment and, in the event of an infringement or

suspected infringement of articles 11A and 11B of the Act by an agent

or a branch conducted under the right of establishment, the competent

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authority in close cooperation with the Central Bank shall take all

appropriate measures to ensure such compliance.

(7)

Without prejudice to any provisions on anti-money

laundering and combatting the funding of terrorism, and to facilitate

supervision by the competent authority, the Central Bank and the

European regulatory authority of the home Member State, the

competent authority may, in cooperation with the Central Bank,

require European financial institutions operating in Malta through

agents under the right of establishment, the head office of which is

situated in another Member State, to appoint a central contact point in

Malta to ensure adequate communication and information reporting on

compliance with articles 11A and 11B of the Act and the provisions of

Titles III and IV of the Payment Services Directive as transposed in a

directive issued by the Central Bank under the Central Bank of Malta

Act, including by providing the competent authority with documents

and information upon request.

(8)

The competent authority shall, upon the appointment of a

central contact point by a European financial institution in terms of

sub-regulation (7), notify the Central Bank of such appointment.

(9)

A central contact point appointed by a European

financial institution pursuant to sub-regulation (7) shall provide the

competent authority with any documents and, or information required

by the competent authority.

(1)

The competent authority shall cooperate with the

European regulatory authority in order to carry out the controls and

take the necessary steps to ensure continued compliance in respect of

an agent or branch located in Malta of a European financial institution.

(2)

By way of cooperation in accordance with sub-regulation

(1), the competent authority shall, in terms of Article 29(1) of the

Payment Services Directive, receive written notification from the

European regulatory authority whenever the latter intends to carry out

an on-site inspection in the territory of Malta.

(3)

Notwithstanding the provisions of sub-regulation (2), the

competent authority may be requested by the European regulatory

authority to carry out on-site inspections of the European financial

institution concerned on behalf of such European regulatory authority.

(1)

Without prejudice to the responsibility of the

European regulatory authority of the home Member State, where the

competent authority ascertains that a European financial institution

having agents or branches or distributors in Malta does not comply

with the provisions of the Act and any regulations or Rules issued

thereunder, other than articles 11A and 11B of the Act, the competent

authority shall inform the European regulatory authority of the home

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Member State without delay

Provided that, where the competent authority ascertains

that a European financial institution having agents or branches or

distributors in Malta does not comply with articles 11A and 11B of the

Act, the competent authority shall cooperate with the Central Bank for

the purposes of informing the European regulatory authority of the

home Member State without delay in terms of Article 30(1) of the

Payment Services Directive as transposed in Directives issued by the

Central Bank under the Central Bank of Malta Act.

(2)

In emergency situations, where immediate action is

necessary to address a serious threat to the collective interests of those

making use of the services of the European financial institution in

Malta through an agent or branch or distributor, the competent

authority may, in parallel to the cross-border cooperation between the

competent authority and the European regulatory authority of the

home Member State and pending measures by the said European

regulatory authority of the home Member State, take precautionary

measures

Provided that where a proposed precautionary measure

relates to a failure to comply with articles 11A or 11B of the Act, such

precautionary measure shall be taken in close cooperation with the

Central Bank.

(3) Any precautionary measures referred to in sub-article (2)

shall be appropriate and proportionate to their purpose to protect

against a serious threat to the collective interests of those making use

of the services of the European financial institution in Malta through

an agent or branch or distributor. The said precautionary measures

shall not result in a preference for those making use of such service in

Malta over those making use of such services in other Member States.

(4)

Any precautionary measures referred to in sub-article (2)

shall be temporary and shall be terminated when the serious threats

identified are addressed, including with the assistance of, or in

cooperation with, the European regulatory authority of the home

Member State or, as provided for in Article 27(1) of the Payment

Services Directive, with the EBA.

(5)

Where compatible with the emergency situation referred

to in sub-article (2), the competent authority, , shall inform the

European regulatory authority of the home Member State and those of

any other Member State concerned, the European Commission and the

EBA in advance, and in any case without undue delay, of the

precautionary measures taken under sub-article (2) and of their

justification.

(6)

In the event of an infringement or suspected infringement

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of the Act or regulations or Rules issued thereunder, by an agent or

branch or distributor of a European financial institution conducted

under the right of establishment, the competent authority shall have the

power to exercise all the powers granted to it under the Act and any

regulations and Rules issued thereunder in relation to such agent or

branch or distributor

Provided that in relation to an infringement or suspected

infringement of Articles 11A or 11B of the Act, in exercising the

powers granted to it under the Act and any regulations or Rules issued

thereunder, the competent authority shall collaborate closely with the

Central Bank.

PART II -

EXERCISE OF PASSPORT RIGHTS BY MALTESE FINANCIAL

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(1)

A Maltese financial institution may exercise a

European right to provide payment services and, or issue and, or

distribute and, or redeem electronic money in another Member State

under the freedom to provide services if it satisfies the conditions set

out in this regulation

Provided that this regulation shall not apply to a Maltese

financial institution seeking to provide payment services and, or

distribute and, or redeem electronic money in another Member State

through an agent and, or a distributor, as applicable.

(2)

A Maltese Financial Institution wishing to provide

payment services and, or issue and, or distribute and, or redeem

electronic money, for the first time, in another Member State in the

exercise of a European right shall give notice of its intention to provide

payment services and, or to issue and, or distribute and, or redeem

electronic money in another Member State, which notice shall be

provided in English or in another language accepted by both the

competent authority and the European regulatory authority and shall

contain the following information

(i)

the name and address of the Maltese financial

institution;

(ii)

the licence number or registration number of the

Maltese financial institution, as applicable;

(iii) the Member State in which the Maltese financial

institution intends to provide payment services and, or issue

and, or distribute and, or redeem electronic money;

(iv) the payment services which the Maltese

financial institution intends to provide in such other Member

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State and whether it intends to issue and, or distribute and, or

redeem electronic money in such other Member State;

(v)

where the Maltese financial institution intends to

outsource operational functions of payment services and, or of

the issuance and, or distribution and, or redemption of

electronic money to other entities in a host Member State, the

operational functions of payment services and, or of the

issuance and, or distribution and, or redemption of electronic

money which it will be outsourcing to other entities in that host

Member State; and

(vi) any other information which may be required in

terms of Article 14(1) of the Commission Delegated

Regulation.

(3)

Within one month of receipt of all of the information

referred to in sub-regulation (2), the competent authority shall send to

the European regulatory authority the said information by means of the

template set out in Annex V to the Commission Delegated Regulation.

(4)

Where the European regulatory authority receives all the

information referred to in sub-regulation (2) from the competent

authority in accordance with sub-regulation (3), it shall, in terms of

Article 28(2) of the Payment Services Directive, within one month of

receipt of the said information, assess that information and provide the

competent authority with relevant information in connection with the

intended provision of payment services and, or issuance and, or

distribution and, or redemption of electronic money by the relevant

Maltese financial institution in the exercise of a European right.

(5)

Where the competent authority does not agree with the

assessment of the European regulatory authority, it shall provide the

latter with the reasons for its decision.

(6)

If the assessment of the competent authority, particularly

in light of the information received from the European regulatory

authority of the host Member State is not favourable, the competent

authority shall refuse to publish the information in the register referred

to in Article 8D of the Act or shall withdraw the registration if already

made.

(7) Within three months of receipt of all of the information

referred to in sub-regulation (2), the competent authority shall

communicate its decision to the European regulatory authority and to

the Maltese financial institution.

(8) Upon communication to the European regulatory

authority of its decision in terms of sub-regulation (7), the competent

authority shall publish the information referred to in sub-regulation

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(2)(i) to (iv) in the public register established and maintained by the

competent authority in accordance with article 8D of the Act.

(9)

The Maltese financial institution shall notify the

competent authority, without undue delay, of the date from which it

commences its activities in the relevant host Member State.

(10) The competent authority shall inform the European

regulatory authority of the host Member State of the notification

received from the Maltese financial institution pursuant to sub-

regulation (9) by means of the template set out in Annex V to the

Commission Delegation Regulation.

(11) The Maltese financial institution shall communicate to

the competent authority, without undue delay, any relevant change

regarding the information communicated in accordance with sub-

regulation (2) including entities to which activities are outsourced in

the host Member States in which it operates and, in such cases, the

provisions of sub-regulations (3) to (10) shall apply.

(1)

A Maltese financial institution may exercise a

European right to establish a branch in another Member State if it

satisfies the requirements set out in this regulation.

(2)

The Maltese financial institution shall give the competent

authority a notice of its intention to establish a branch in another

Member State, which notice shall be provided in English or in another

language accepted by both the competent authority and the European

regulatory authority and shall contain the following information

(i)

the name and address of the Maltese financial

institution;

(ii)

the licence number or registration number of the

Maltese financial institution, as applicable;

(iii) the Member State in which the Maltese financial

institution intends to establish a branch;

(iv) the payment services which the Maltese financial

institution intends to provide in such other Member State and

whether it intends to issue and, or distribute and, or redeem

electronic money in such other Member State;

(v)

the address of the proposed branch in the host

Member State;

(vi) the identity of those

responsible

for

the

management of the proposed branch;

(vii)

a description of the organisational structure of the

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proposed branch;

(viii) a business plan including a forecast budget

calculation for the first three financial years which

demonstrates that the Maltese financial institution is able to

employ the appropriate and proportionate systems, resources

and procedures to operate soundly with regard to the proposed

provision of payment services and, or the issuance and, or

distribution and, or redemption of the electronic money through

the proposed branch in the host Member State;

(ix) a description of the Maltese financial institution’s

governance arrangements and internal control mechanisms,

including administrative, risk management and accounting

procedures, which demonstrates that those governance

arrangements, control mechanisms and procedures are

proportionate, appropriate, sound and adequate with regard to

the proposed provision of payment services and, or the issuance

and, or distribution and, or redemption of the electronic money

through the proposed branch in the host Member State;

(x)

where the Maltese financial institution intends to

outsource operational functions of payment services and or of

the issuance, and, or distribution and, or redemption of

electronic money to other entities in the host Member State, the

operational functions of payment services and, or of the

issuance and, or distribution and, or redemption of electronic

money which it will be outsourcing to other entities in that host

Member State; and

(xi) any other information as may be required in terms

of Article 6(1) of the Commission Delegated Regulation.

(3)

Within one month of receipt of all of the information

referred to in sub-regulation (2), the competent authority shall send to

the European regulatory authority the said information by means of the

template set out in Annex II to the Commission Delegated Regulation

and the competent authority shall inform the Maltese financial

institution of such transmission of information.

(4)

Where the European regulatory authority receives all

the information referred to in sub-regulation (2) from the competent

authority in accordance with sub-regulation (3), it shall, in terms of

Article 28(2) of the Payment Services Directive, within one month

of receipt of the said information, assess that information and

provide the competent authority with relevant information in

connection with the intended provision of payment services and, or

issuance and, or distribution and, or redemption of electronic money

by the relevant Maltese financial institution in the exercise of a

European right. The European regulatory authority shall, in terms of

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Article 28(2) of the Payment Services Directive, inform the competent

authority in particular of any reasonable grounds for concern in

connection with the intended establishment of a branch with regard to

money laundering or terrorist financing within the meaning of

Directive (EU) 2015/849.

(5)

Where the competent authority does not agree with the

assessment of the European regulatory authority, it shall provide the

latter with the reasons for its decision.

(6)

If the assessment of the competent authority, particularly

in light of the information received from the European regulatory

authority of the host Member State is not favourable, the competent

authority shall refuse to register the branch or shall withdraw the

registration if already made.

(7)

Within three months of receipt of all of the information

referred to in sub-regulation (2), the competent authority shall

communicate its decision to the European regulatory authority and to

the Maltese financial institution.

(8)

Upon communication to the European regulatory

authority of its decision in terms of sub-regulation (7), the competent

authority shall register the branch in the public register established and

maintained by the competent authority in accordance with article 8D

of the Act and shall publish in the said register the information referred

to in sub-regulation (2)(i) to (v).

(9)

Upon entry in the register referred to in article 8D of the

Act, the branch of the Maltese financial institution may commence its

activities in the host Member State.

(10) The Maltese financial institution shall notify the

competent authority, without undue delay, of the date from which it

commences its activities through the branch in the relevant host

Member State.

(11) The competent authority shall inform the European

regulatory authority of the host Member State of the date from which

the Maltese financial institution shall commence its activities through

the branch in the relevant host Member State by means of the template

set out in Annex VI to the Commission Delegated Regulation.

(12) The Maltese financial institution shall communicate to

the competent authority, without undue delay, any relevant change

regarding the information communicated in accordance with sub-

regulation (2) including additional branches or entities to which

activities are outsourced in the host Member States in which it

operates and, in such cases, the provisions of sub-regulations (3) to

(11) shall apply.

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(1)

A Maltese financial institution may exercise a

European right to provide payment services and, or distribute and, or

redeem electronic money in another Member State through an agent

and or to distribute and, or redeem electronic money in another

Member State through a distributor if it satisfies the requirements set

out in this regulation.

(2)

A Maltese financial institution seeking to provide

payment services in another Member State through an agent shall

communicate to the competent authority

(i)

the name and address of the Maltese financial

institution;

(ii)

the licence number or registration number of the

Maltese financial institution, as applicable;

(iii) the Member State in which the Maltese financial

institution intends to provide payment services through the

agent;

(iv) the name, the address and, where applicable, the

unique identification code or number of the proposed agent;

(v)

the payment services activities which the

proposed agent intends to provide in another Member State on

behalf of the Maltese financial institution;

(vi) a description of the internal control mechanisms

that will be used by the proposed agent in order to comply with

their obligations at law in relation to money laundering and

terrorist financing under Directive (EU) 2015/849, which shall

be updated without delay in the event of material changes to the

particulars communicated at the initial notification;

(vii) the identity of the directors and persons

responsible for the management of the proposed agent and,

for agents other than payment service providers, evidence

that they are fit and proper persons;

(viii) where the Maltese financial institution intends to

outsource operational functions of payment services and, or of

the issuance and, or distribution and, or redemption of

electronic money to other entities in another Member State, the

operational functions of payment services and, or of the

issuance and, or distribution and, or redemption of electronic

money which it will be outsourcing to other entities in that

Member State; and

(ix)

any other information which may be required in

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terms of Article 10(1) of the Commission Delegated

Regulation.

(3)

A Maltese financial institution seeking to distribute and,

or redeem electronic money in another Member State through a

distributor shall communicate to the competent authority

(i)

the name and address, of the Maltese financial

institution;

(ii)

the licence number or registration number of the

Maltese financial institution, as applicable;

(iii) the Member State in which the Maltese financial

institution intends to distribute and, or redeem electronic money

through a distributor;

(iv) the name, the address and, where applicable, the

unique identification code or number of the proposed

distributor;

(v)

whether the distributor intends to distribute and,

or redeem electronic money by the Maltese financial

institution;

(vi) a description of the internal control mechanisms

that will be used by the proposed distributor in order to comply

with their obligations at law in relation to money laundering

and terrorist financing under Directive (EU) 2015/849, which

shall be updated without delay in the event of material changes

to the particulars communicated at the initial notification;

(vii) the identity of the directors and persons

responsible for the management of the proposed distributor and,

where applicable, for distributors other than payment service

providers, evidence that they are fit and proper persons;

(viii) where the Maltese financial institution intends to

outsource operational functions of the issuance and, or

distribution and, or redemption of electronic money to other

entities in another Member State, the operational functions of

the issuance and, or distribution and, or redemption of

electronic money which it will be outsourcing to other entities

in that Member State; and

(ix) any other information which may be required in

terms of the Commission Delegated Regulation.

(4)

Within one month of receipt of all of the information

referred to in sub-regulation (2) or (3), as applicable, the competent

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authority shall send to the European regulatory authority the said

information by means of the templates set out in Annexes III and IV to

the Commission Delegated Regulation.

(5)

Where the European regulatory authority receives all the

information referred to in sub-regulation (2) or (3), as applicable, from

the competent authority in accordance with sub-regulation (4), it shall,

in terms of Article 28(2) of the Payment Services Directive, within one

month of receipt of the said information, assess that information and

provide the competent authority with relevant information in

connection with the intended provision of payment services and, or

distribution and, or redemption of electronic money, as applicable, by

the relevant Maltese financial institution in the exercise of a European

right. The European regulatory authority shall, in terms of Article

28(2) of the Payment Services Directive, inform the competent

authority in particular of any reasonable grounds for concern in

connection with the intended engagement of an agent or distributor, as

applicable, with regard to money laundering or terrorist financing

within the meaning of Directive (EU) 2015/849.

(6)

Where the competent authority does not agree with the

assessment of the European regulatory authority, it shall provide the

latter with the reasons for its decision.

(7)

If the assessment of the competent authority, particularly

in light of the information received from the European regulatory

authority of the host Member State is not favourable, the competent

authority shall refuse to register the agent or the distributor, as

applicable, or shall withdraw the registration if already made.

(8)

Within three months of receipt of all of the information

referred to in sub-regulation (2) or (3), the competent authority shall

communicate its decision to the European regulatory authority and to

the Maltese financial institution.

(9)

Upon communication to the European regulatory

authority of its decision in terms of sub-regulation (8), the competent

authority shall register the agent in the public register established and

maintained by the competent authority in accordance with article 8D

of the Act and shall publish in the said register the information referred

to in sub-regulation (2)(i) to (v).

(10) Upon entry in the register referred to in article 8D of the

Act, the Maltese financial institution may commence its activities in

the host Member State through the agent.

(11) The Maltese financial institution shall notify the

competent authority, without undue delay, the date from which it

commences its activities through the agent and, or distributor, as

applicable, in the relevant host Member State.

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(12) The competent authority shall inform the European

regulatory authority of the host Member State of the date from which

the Maltese financial institution shall commence its activities through

the agent and, or distributor, as applicable, in the host Member State

by means of the template set out in Annex VI to the Commission

Delegated Regulation.

(13) The Maltese financial institution shall communicate to

the competent authority, without undue delay, any relevant change

regarding the information communicated in accordance with sub-

regulation (2) or (3) including additional agents and, or distributors, as

applicable, or additional entities to which activities are outsourced in

the host Member States in which it operates and, in such cases, the

provisions of sub-regulations (4) to (12) shall apply.

The competent authority shall provide the European

regulatory authority of the host Member State with all essential and, or

relevant information, in particular in the case of infringements or

suspected infringements by an agent or a branch of a Maltese financial

institution, and where such infringements occurred in the context of

the freedom to provide services. In that regard, the competent

authority shall communicate to the European regulatory authority,

upon request, all relevant information and, on their own initiative, all

essential information, including on the compliance with the conditions

under Article 11(3) of the Payment Services Directive

Provided that in order to carry out the controls and take

the necessary steps provided for in articles 11A and 11B of the Act, in

respect of the agent or branch of a Maltese financial institution located

in the territory of another Member State, the competent authority shall

also cooperate closely with the Central Bank and the European

regulatory authority of the host Member State.

(1)

Where Malta is the home Member State, the

competent authority shall, with the assistance of the Central Bank

where necessary, cooperate with the European regulatory authority of

the host Member State in order to carry out the controls and take the

necessary steps to ensure continued compliance in respect of an agent

or branch located in another Member State in respect of a Maltese

financial institution.

(2)

By way of cooperation in accordance with sub-regulation

(1), the competent authority shall notify the European regulatory

authority of the host Member State whenever it intends to carry out an

on-site inspection in the territory of the latter.

(3)

Notwithstanding the provisions of sub-regulation (2), the

competent authority may delegate to the European regulatory authority

of the host Member State the task of carrying out on-site inspections of

the Maltese financial institution concerned.

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(1)

Where the competent authority, in accordance

with Article 30(1) of the Payment Services Directive, receives

information from any European regulatory authority of a host Member

State, that a Maltese financial institution having agents or branches or

distributors in the host Member State concerned, does not comply with

Title II of the Payment Services Directive or with national law

transposing Titles III or IV of the Payment Services Directive in the

host Member State concerned, the competent authority shall, after

having evaluated the information received from the European

regulatory authority of the host Member State, without undue delay,

take all appropriate measures to ensure that the Maltese financial

institution puts an end to its irregular situation

Provided that where the information received from a

European regulatory authority of a host Member State relates to a

failure to comply with Articles 95 or 96 of the Payment Services

Directive, the appropriate measure referred to in this sub-article shall

be taken in close cooperation with the Central Bank.

(2)

The competent authority, or with respect to Articles 95 or

96 of the Payment Services Directive the competent authority in close

cooperation with the Central Bank, shall communicate without delay

to the European regulatory authority of the host Member State, and to

any other European regulatory authority of any other Member State

concerned, any measures taken in accordance with sub-article (1).