CREDIT AGREEMENTS FOR CONSUMERS RELATING TO RESIDENTIAL IMMOVABLE PROPERTY REGULATIONS

SUBSIDIARY LEGISLATION 378.10

CREDIT AGREEMENTS FOR CONSUMERS

RELATING TO RESIDENTIAL IMMOVABLE

PROPERTY REGULATIONS

1st January, 2012 *

LEGAL NOTICE 415 of 2011, as amended by Legal Notices 266 of 2014,

259 of 2016, 86 of 2018 and 167 of 2022 and Acts XVI of 2019 and XLIV of

2021 and Legal Notice 18 of 2024.

PART I

Preliminary

(1) The title of these regulations is Credit Agreements for

Consumers relating to Residential Immovable Property

Regulations.

(2) The scope of these regulations is to

(a) transpose the provisions of Directive 2014/17/EU of the

European Parliament and of the Council of 4 February

2014 on credit agreements for consumers relating to

residential immovable property and amending Directives

2008/48/EC and 2013/36/EU and Regulation (EU) No

1093/2010; and

(b) transpose article 28 of Directive (EU) 2021/2167 of the

European Parliament and of the Council of 24 November

2021 on credit servicers and credit purchasers and

amending Directives 2008/48/EC and 2014/17/EU.

(3) These regulations lay down a common framework for

certain aspects of laws, regulations and administrative provisions

concerning credit agreements, including an obligation to carry out a

creditworthiness assessment before granting credit, as a basis for

the development of effective underwriting standards in relation to

residential immovable property, and for certain prudential and

supervisory requirements, including for the establishment and

supervision of credit intermediaries.

PART II

Definitions

Amended by

L.N. 266 of 2014.

[Regulation 7(1) and (2)]

Re-numbered and

substituted by

L.N. 259 of 2016.

EUROPEAN STANDARDISED INFORMATION SHEET (ESIS)

PART A

The text in this model shall be reproduced as such in the ESIS. Indications

between square brackets shall be replaced with the corresponding information.

Instructions for the creditor or, where applicable, credit intermediary on how to

complete the ESIS are provided in Part B.

Wherever the words ‘where applicable’ are indicated, the creditor shall provide

the information required if it is relevant to the credit agreement. Where the

information is not relevant, the creditor shall delete the information in question or

the entire section (for example, in cases where the section is not applicable). Where

the entire section is deleted, the numbering of the ESIS sections shall be adjusted

accordingly.

The information below shall be provided in a single document. The font used shall

be clearly readable. Bold font, shading or larger font sizes shall be used for the

information elements to be highlighted. All applicable risk warnings shall be

highlighted.

ESIS Model

(Introductory text)

This document was produced for [name of consumer] on [current date].

This document was produced on the basis of the information that you have

provided so far and on the current financial market conditions.

The information below remains valid until [validity date], (where applicable) apart

from the interest rate and other costs. After that date, it may change in line with

market conditions.

(Where applicable) This document does not constitute an obligation for [name of

creditor] to grant you a loan.

1. Lender

[Name]

[Telephone number]

[Geographical address]

(Optional) [E-mail address]

(Optional) [Fax number]

(Optional) [Web address]

(Optional) [Contact person/point]

(Where applicable information as to whether advisory services are being

provided:) [(We recommend, having assessed your needs and circumstances, that

you take out this mortgage./We are not recommending a particular mortgage for you.

However, based on your answers to some questions, we are giving you information

about this mortgage so that you can make your own choice.)]

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2. (Where applicable) Credit intermediary

[Name]

[Telephone number]

[Geographical address]

(Optional) [E-mail address]

(Optional) [Fax number]

(Optional) [Web address]

(Optional) [Contact person/point]

(Where applicable [information as to whether advisory services are being

provided]) [(We recommend, having assessed your needs and circumstances, that

you take out this mortgage./We are not recommending a particular mortgage for you.

However, based on your answers to some questions, we are giving you information

about this mortgage so that you can make your own choice.)]

[Remuneration]

3. Main features of the loan

Amount and currency of the loan to be granted: [value] [currency]

(Where applicable) This loan is not in [national currency of the borrower].

(Where applicable) The value of your loan in [national currency of the borrower]

could change.

(Where applicable) For example, if the value of [national currency of the

borrower] fell by 20% relative to [credit currency], the value of your loan would

increase to [insert amount in national currency of the borrower]. However, it could

be more than this if the value of [national currency of the borrower] falls by more

than 20%.

(Where applicable) The maximum value of your loan will be [insert amount in

national currency of the borrower]. (Where applicable) You will receive a warning if

the credit amount reaches [insert amount in national currency of the borrower].

(Where applicable) You will have the opportunity to [insert right to renegotiate

foreign currency loan or right to convert loan into [relevant currency] and

conditions].

Duration of the loan: [duration]

[Type of loan]

[Type of applicable interest rate]

Total amount to be reimbursed

This means that you will pay back [amount] for every [unit of the currency]

borrowed.

(Where applicable) [This/Part of this] is an interest-only loan. You will still owe

[insert amount of loan on an interest- only basis] at the end of the mortgage term.

(Where applicable) Value of the property assumed to prepare this information

sheet: [insert amount]

(Where applicable) Maximum available loan amount relative to the value of the

property [insert ratio] or Minimum value of the property required to borrow the

illustrated amount [insert amount]

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(Where applicable) [Security]

4. Interest rate and other costs

The annual percentage rate of charge (APRC) is the total cost of the loan

expressed as an annual percentage. The APRC is provided to help you to compare

different offers.

The APRC applicable to your loan is [APRC].

It comprises

Interest rate [value in percentage or, where applicable, indication of a reference

rate and percentage value of creditor’s spread]

[Other components of the APRC]

Costs to be paid on a one-off basis

(Where applicable) You will need to pay a fee to register the mortgage. [Insert

amount of fee where known or basis for calculation.]

Costs to be paid regularly

(Where applicable) This APRC is calculated using assumptions regarding the

interest rate.

(Where applicable) Because [part of] your loan is a variable interest rate loan, the

actual APRC could be different from this APRC if the interest rate for your loan

changes. For example, if the interest rate rose to [scenario as described in Part B],

the APRC could increase to [insert illustrative APRC corresponding to the scenario].

(Where applicable) Please note that this APRC is calculated on the basis that the

interest rate remains at the level fixed for the initial period throughout the duration

of the contract.

(Where applicable) The following costs are not known to the lender and are

therefore not included in the APRC: [Costs]

(Where applicable) You will need to pay a fee to register the mortgage.

Please make sure that you are aware of all other taxes and costs associated with

your loan.

5. Frequency and number of payments

Repayment frequency: [frequency]

Number of payments: [number]

6. Amount of each instalment

[Amount] [currency]

Your income may change. Please consider whether you will still be able to afford

your [frequency] repayment instalments if your income falls.

(Where applicable) Because [this/part of this] is an interest-only loan you will

need to make separate arrangements to repay the [insert amount of loan on an

interest-only basis] you will owe at the end of the mortgage term. Remember to add

any extra payments you will need to make to the instalment amount shown here.

(Where applicable) The interest rate on [part of] this loan can change. This means

the amount of your instalments could increase or decrease. For example, if the

interest rate rose to [scenario as described in Part B] your payments could increase to

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[insert instalment amount corresponding to the scenario].

(Where applicable) The value of the amount you have to pay in [national currency

of the borrower] each [frequency of instalment] could change. (Where applicable)

Your payments could increase to [insert maximum amount in national currency of

the borrower] each [insert period]. (Where applicable) For example, if the value of

[national currency of the borrower] fell by 20% relative to [credit currency] you

would have to pay an extra [insert amount in national currency of the borrower] each

[insert period]. Your payments could increase by more than this.

(Where applicable) The exchange rate used for converting your repayment in

[credit currency] to [national currency of the borrower] will be the rate published by

[name of institution publishing exchange rate] on [date] or will be calculated on

[date] using [insert name of benchmark or method of calculation].

(Where applicable) [Details on tied savings products, deferred-interest loans]

7. (Where applicable) Illustrative repayment table

This table shows the amount to be paid every [frequency].

The instalments (column [relevant no.]) are the sum of interest to be paid (column

[relevant no.]), where applicable, capital paid (column [relevant no.]) and, where

applicable, other costs (column [relevant no.]). (Where applicable) The costs in the

other costs column relate to [list of costs]. Outstanding capital (column [relevant

no.]) is the amount of the loan that remains to be reimbursed after each instalment.

[Table]

8. Additional obligations

The borrower must comply with the following obligations in order to benefit from

the lending conditions described in this document.

[Obligations]

(Where applicable) Please note that the lending conditions described in this

document (including the interest rate) may change if these obligations are not

complied with.

(Where applicable) Please note the possible consequences of terminating at a later

stage any of the ancillary services relating to the loan

[Consequences]

9. Early repayment

You have the possibility to repay this loan early, either fully or partially.

(Where applicable) [Conditions]

(Where applicable) Exit charge: [insert amount or, where not possible, the method

of calculation]

(Where applicable) Should you decide to repay this loan early, please contact us to

ascertain the exact level of the exit charge at that moment.

10. Flexible features

(Where applicable) [Information on portability/subrogation] You have the

possibility to transfer this loan to another [lender][or] [property]. [Insert conditions]

(Where applicable) You do not have the possibility to transfer this loan to another

[lender] [or] [property].

(Where applicable) Additional features: [insert explanation of additional features

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listed in Part B and, optionally, any other features offered by the lender as part of the

credit agreement not referred to in previous sections].

11. Other rights of the borrower

(Where applicable) You have [length of reflection period] after [point in time

when the reflection period begins] to reflect before committing yourself to taking out

this loan. (Where applicable) Once you have received the credit contract from the

lender, you may not accept it before the end of [length of reflection period].

(Where applicable) For a period of [length of withdrawal period] after [point in

time when the withdrawal period begins] you may exercise your right to cancel the

agreement. [Conditions] [Insert procedure]

(Where applicable) You may lose your right to cancel the agreement if, during that

period, you buy or sell a property connected to this credit agreement.

(Where applicable) Should you decide to exercise your right of withdrawal [from

the credit agreement], please verify whether you will remain bound by your other

obligations relating to the loan [including the ancillary services relating to the loan]

[, referred to in Section 8].

12. Complaints

If you have a complaint please contact [insert internal contact point and source of

information on procedure].

(Where applicable) Maximum time for handling the complaint [period of time]

(Where applicable) [If we do not resolve the complaint to your satisfaction

internally,] you can also contact: [insert name of external body for out-of-court

complaints and redress] (Where applicable) or you can contact FIN-NET for details

of the equivalent body in your own country.

13. Non-compliance with the commitments linked to the loan: consequences for

the borrower

[Types of non-compliance]

[Financial and/or legal consequences]

Should you encounter difficulties in making your [frequency] payments, please

contact us straight away to explore possible solutions.

(Where applicable) As a last resort, your home may be repossessed if you do not

keep up with payments.

(Where applicable)

14. Additional information

(Where applicable) [Indication of the law applicable to the credit contract].

(Where the lender intends to use a language different from the language of the

ESIS) Information and contractual terms will be supplied in [language]. With your

consent, we intend to communicate in [language/s] during the duration of the credit

agreement.

[Insert statement on right to be provided with or offered, as applicable, a draft

credit agreement]

15. Supervisor

This lender is supervised by [Name(s), and web address(es) of supervisory

authority/ies]

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(Where applicable) This credit intermediary is supervised by [Name and web

address of supervisory authority].

PART B

Instructions to complete the ESIS

In completing the ESIS, at least the following instructions shall be followed.

Member States may however elaborate or further specify the instructions for

completing the ESIS.

Section ‘Introductory text’

(1) The validity date shall be properly highlighted. For the purpose of this

section, the ‘validity date’ means the length of time the information, e.g. the

borrowing rate, contained in the ESIS will remain unchanged and will apply should

the creditor decide to grant the credit within this period of time. Where the

determination of the applicable borrowing rate and other costs depends on the results

of the selling of underlying bonds, the eventual borrowing rate and other costs may

be different from those stated. In those circumstances only, it shall be stipulated that

the validity date does not apply to the borrowing rate and other costs by adding the

words: ‘apart from the interest rate and other costs’.

Section ‘1. Lender’

(1) Name, telephone number, and geographical address of the creditor shall

refer to the contact information that the consumer may use for future

correspondence.

(2) Information on the e-mail address, fax number, web address and contact

person/point is optional.

(3) In line with Article 3 of Directive 2002/65/EC, where the transaction is

being offered at a distance, the creditor shall indicate, where applicable, the name

and geographical address of its representative in the Member State of residence of

the consumer. Indication of the telephone number, e-mail address and web address of

the representative of the credit provider is optional.

(4) Where Section 2 is not applicable, the creditor shall inform the consumer

whether advisory services are being provided and on what basis using the wording in

Part A.

(Where applicable) Section ‘2. Credit intermediary’

Where the product information is being provided to the consumer by a credit

intermediary, that intermediary shall include the following information

(1) Name, telephone number and geographical address of the credit

intermediary shall refer to the contact information that the consumer may use for

future correspondence.

(2) Information on the e-mail address, fax number, web address and contact

person/point is optional.

(3) The credit intermediary shall inform the consumer whether advisory

services are being provided and on what basis using the wording in Part A.

(4) An explanation of how the credit intermediary is being remunerated. Where

it is receiving commission from a creditor, the amount and, where different from the

name in Section 1, the name of the creditor shall be provided.

Section ‘3. Main features of the loan’

(1)

This section shall clearly explain the main characteristics of the credit,

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including the value and currency and the potential risks associated with the

borrowing rate, including the ones referred to in sub-paragraph (8), and amortisation

structure.

(2) Where the credit currency is different from the national currency of the

consumer, the creditor shall indicate that the consumer will receive a regular

warning at least when the exchange rate fluctuates by more than 20%, where

applicable the right to convert the currency of the credit agreement or to the

possibility to renegotiate the conditions and any other arrangements available to the

consumer to limit their exposure to exchange rate risk. Where there is a provision in

the credit agreement to limit the exchange rate risk, the creditor shall indicate the

maximum amount the consumer could have to pay back. Where there is no provision

in the credit agreement to limit the exchange rate risk to which the consumer is

exposed to a fluctuation in the exchange rate of less than 20%, the creditor shall

indicate an illustration of the effect of a 20% fall in the value of consumer’s national

currency relative to the credit currency on the value of the credit.

(3) The duration of the credit shall be expressed in years or months, whichever

is the most relevant. Where the duration of the credit can vary during the lifetime of

the contract, the creditor shall explain when and under which conditions this can

occur. Where the credit is open-ended, for example, for a secured credit card, the

creditor shall clearly state that fact.

(4) The type of credit shall be clearly indicated (e.g. mortgage credit, home

loan, secured credit card). The description of the type of credit shall clearly indicate

how the capital and the interest shall be reimbursed during the life of the credit (i.e.

the amortisation structure), specifying clearly whether the credit agreement is on

capital repayment or interest-only basis, or a mixture of the two.

(5) Where all or part of the credit is an interest-only credit, a statement clearly

indicating that fact shall be inserted prominently at the end of this section using the

wording in Part A.

(6) This section shall explain whether the borrowing rate is fixed or variable

and, where applicable, the periods during which it will remain fixed; the frequency

of subsequent revisions and the existence of limits to the borrowing rate variability,

such as caps or floors.

The formula used to revise the borrowing rate and its different components

(e.g. reference rate, interest rate spread) shall be explained. The creditor shall

indicate, e.g. by means of a web address, where further information on the indices or

rates used in the formula can be found, e.g. Euribor or central bank reference rate.

(7)

If different borrowing rates apply in different circumstances, the

information shall be provided on all applicable rates.

(8) The ‘total amount to be reimbursed’ corresponds to the total amount payable

by the consumer. It shall be shown as the sum of the credit amount and the total cost

of the credit to the consumer. Where the borrowing rate is not fixed for the duration

of the contract, it shall be highlighted that this amount is illustrative and may vary in

particular in relation with the variation in the borrowing rate.

(9) Where the credit will be secured by a mortgage on the immovable property

or another comparable security or by a right related to immovable property, the

creditor shall draw the consumer’s attention to this. Where applicable the creditor

shall indicate the assumed value of the immovable property or other security used

for the purpose of preparing this information sheet.

(10) The creditor shall indicate, where applicable, either

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(a) ‘maximum available loan amount relative to the value of the property’,

indicating the loan-to-value ratio. This ratio is to be accompanied by an

example in absolute terms of the maximum amount that can be

borrowed for a given property value; or

(b)

the ‘minimum value of the property required by the creditor to lend the

illustrated amount’.

(11) Where credits are multi-part credits (e.g. concurrently part fixed rate, part

variable rate), this shall be reflected in the indication of the type of credit and the

required information shall be given for each part of the credit.

Section ‘4. Interest rate’ and other costs

(1)

The reference to ‘interest rate’ corresponds to the borrowing rate or rates.

(2) The borrowing rate shall be mentioned as a percentage value. Where the

borrowing rate is variable and based on a reference rate the creditor may indicate the

borrowing rate by stating a reference rate and a percentage value of creditor ’s

spread. The creditor shall however indicate the value of the reference rate valid on

the day of issuing the ESIS.

Where the borrowing rate is variable the information shall include: (a) the

assumptions used to calculate the APRC; (b) where relevant, the applicable caps and

floors and (c) a warning that the variability could affect the actual level of the

APRC. In order to attract the consumer’s attention the font size used for the warning

shall be bigger and shall figure prominently in the main body of the ESIS. The

warning shall be accompanied by an illustrative example on the APRC. Where there

is a cap on the borrowing rate, the example shall assume that the borrowing rate rises

at the earliest possible opportunity to the highest level foreseen in the credit

agreement. Where there is no cap the example shall illustrate the APRC at the

highest borrowing rate in at least the last 20 years, or where the underlying data for

the calculation of the borrowing rate is available for a period of less than 20 years

the longest period for which such data is available, based on the highest value of any

external reference rate used in calculating the borrowing rate where applicable or the

highest value of a benchmark rate specified by a competent authority or EBA where

the creditor does not use an external reference rate. Such requirement shall not apply

to credit agreements where the borrowing rate is fixed for a material initial period of

several years and may then be fixed for a further period following negotiation

between the creditor and the consumer. For credit agreements where the borrowing

rate is fixed for a material initial period of several years and may then be fixed for a

further period following negotiation between the creditor and the consumer, the

information shall include a warning that the APRC is calculated on the basis of the

borrowing rate for the initial period. The warning shall be accompanied by an

additional, illustrative APRC calculated in accordance with regulation 21(4). Where

credits are multi-part credits (e.g. concurrently part fixed rate, part variable rate), the

information shall be given for each part of the credit.

(3) In the section on ‘other components of the APRC’ all the other costs

contained in the APRC shall be listed, including one-off costs such as administration

fees, and regular costs, such as annual administration fees. The creditor shall list

each of the costs by category (costs to be paid on a one-off basis, costs to be paid

regularly and included in the instalments, costs to be paid regularly but not included

in the instalments), indicating their amount, to whom they are to be paid and when.

This does not have to include costs incurred for breaches of contractual obligations.

Where the amount is not known, the creditor shall provide an indication of the

amount if possible, or if not possible, how the amount will be calculated and specify

that the amount provided is indicative only. Where certain costs are not included in

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the APRC because they are unknown to the creditor, this shall be highlighted.

Where the consumer has informed the creditor of one or more components of his

preferred credit, such as the duration of the credit agreement and the total amount of

credit, the creditor shall, where possible, use those components; if a credit agreement

provides different ways of drawdown with different charges or borrowing rates and

the creditor uses the assumptions set out in Part II of Annex I, it shall indicate that

other drawdown mechanisms for this type of credit agreement may result in a higher

APRC. Where the conditions for drawdown are used for calculating the APRC, the

creditor shall highlight the charges associated with other drawdown mechanisms that

are not necessarily the ones used in calculating the APRC.

(4) Where a fee is payable for registration of the mortgage or comparable

security that shall be disclosed in this section with the amount, where known, or

where this is not possible the basis for determining the amount. Where the fees are

known and included in the APRC the existence and amount of the fee shall be listed

under ‘Costs to be paid on a one-off basis’. Where the fees are not known to the

creditor and therefore not included in the APRC the existence of the fee shall be

clearly mentioned in the list of costs which are not known to the creditor. In either

case the standardised wording in Part A shall be used under the appropriate heading.

Section ‘5. Frequency and number of payments’

(1) Where payments are to be made on a regular basis, the frequency of

payments shall be indicated (e.g. monthly). Where the frequency of payments will be

irregular, this shall be clearly explained to the consumer.

(2) The number of payments indicated shall cover the whole duration of the

credit.

Section ‘6. Amount of each instalment’

(1)

The credit currency and currency of the instalments shall be clearly

indicated.

(2) Where the amount of the instalments may change during the life of the

credit, the creditor shall specify the period during which that initial instalment

amount will remain unchanged and when and how frequently afterwards it will

change.

(3) Where all or part of the credit is an interest-only credit, a statement clearly

indicating that fact, shall be inserted prominently at the end of this section using the

wording in Part A.

If there is a requirement for the consumer to take out a tied savings product as a

condition for being granted an interest-only credit secured by a mortgage or another

comparable security, the amount and frequency of any payments for this product

shall be provided.

(4) Where the borrowing rate is variable the information shall include a

statement indicating that fact, using the wording in Part A and an illustration of a

maximum instalment amount. Where there is a cap, the illustration shall show the

amount of the instalments if the borrowing rate rises to the level of the cap. Where

there is no cap, the worst case scenario shall illustrate the level of instalments at the

highest borrowing rate in the last 20 years, or where the underlying data for the

calculation of the borrowing rate is available for a period of less than 20 years the

longest period for which such data is available, based on the highest value of any

external reference rate used in calculating the borrowing rate where applicable, or

the highest value of a benchmark rate specified by a competent authority or EBA

where the creditor does not use an external reference rate. The requirement to

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provide an illustrative example shall not apply to credit agreements where the

borrowing rate is fixed for a material initial period of several years and may then be

fixed for a further period following negotiation between the creditor and the

consumer. Where credits are multi-part credits (e.g. concurrently part fixed rate, part

variable rate), the information shall be given for each part of the credit, and in total.

(5) (Where applicable) Where the credit currency is different from the

consumer’s national currency or where the credit is indexed to a currency which is

different from the consumer ’s national currency, the creditor shall include a

numerical example clearly showing how changes to the relevant exchange rate may

affect the amount of the instalments using the wording in Part A. That example shall

be based on a 20% reduction in the value of the consumer ’s national currency

together with a prominent statement that the instalments could increase by more than

the amount assumed in that example. Where there is a cap which limits that increase

to less than 20%, the maximum value of the payments in the consumer’s currency

shall be given instead and the statement on the possibility of further increases

omitted.

(6) Where the credit is fully or partly a variable rate credit and paragraph 3

applies, the illustration in paragraph 5 shall be given on the basis of the instalment

amount referred to in paragraph 1.

(7) Where the currency used for the payment of instalments is different from the

credit currency or where the amount of each instalment expressed in the consumer’s

national currency depends on the corresponding amount in a different currency, this

section shall indicate the date at which the applicable exchange rate is calculated and

either the exchange rate or the basis on which it will be calculated and the frequency

of their adjustment. Where applicable such indication shall include the name of

institution publishing the exchange rate.

(8) Where the credit is a deferred-interest credit under which interest due is not

fully repaid by the instalments and is added to the total amount of credit outstanding,

there shall be an explanation of: how and when deferred interest is added to the

credit as a cash amount; and what the implications are for the consumer in terms of

their remaining debt.

Section ‘7. Illustrative repayment table’

(1) This section shall be included where the credit is a deferred interest credit

under which interest due is not fully repaid by the instalments and is added to the

total amount of credit outstanding or where the borrowing rate is fixed for the

duration of the credit agreement. Member States may provide that the illustrative

amortisation table is compulsory in other cases.

Where the consumer has the right to receive a revised amortisation table, this shall

be indicated along with the conditions under which the consumer has that right.

(2)

Member States may require that where the borrowing rate may vary during

the lifetime of the credit, the creditor shall indicate the period during which that

initial borrowing rate will remain unchanged.

(3) The table to be included in this section shall contain the following columns

‘repayment schedule’ (e.g. month 1, month 2, month 3), ‘amount of the instalment’,

‘interest to be paid per instalment’, ‘other costs included in the instalment’ (where

relevant), ‘capital repaid per instalment’ and ‘outstanding capital after each

instalment’.

(4) For the first repayment year the information shall be given for each

instalment and a subtotal shall be indicated for each of the columns at the end of that

first year. For the following years, the detail can be provided on an annual basis. An

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overall total row shall be added at the end of the table and shall provide the total

amounts for each column. The total cost of the credit paid by the consumer (i.e. the

overall sum of the ‘amount of the instalment’ column) shall be clearly highlighted

and presented as such.

(5) Where the borrowing rate is subject to revision and the amount of the

instalment after each revision is unknown, the creditor may indicate in the

amortisation table the same instalment amount for the whole credit duration. In such

a case, the creditor shall draw that fact to the attention of the consumer by visually

differentiating the amounts which are known from the hypothetical ones (e.g. using a

different font, borders or shading). In addition, a clearly legible text shall explain for

which periods the amounts represented in the table may vary and why.

Section ‘8. Additional obligations’

(1) The creditor shall refer in this section to obligations such as the obligation to

insure the immovable property, to purchase life insurance, to have a salary paid into

an account with the creditor or to buy any other product or service. For each

obligation, the creditor shall specify towards whom and by when the obligation

needs to be fulfilled.

(2) The creditor shall specify the duration of the obligation, e.g. until the end of

the credit agreement. The creditor shall specify for each obligation any costs to be

paid by the consumer, which are not included in the APRC.

(3) The creditor shall state whether it is compulsory for the consumer to hold

any ancillary services to obtain the credit on the stated terms, and if so whether the

consumer is obliged to purchase them from the creditor ’s preferred supplier or

whether they may be purchased from a provider of consumer’s choice. Where such

possibility is conditional on the ancillary services meeting certain minimum

characteristics, such characteristics shall be described in this section.

Where the credit agreement is bundled with other products the creditor shall state

the key features of those other products and clearly state whether the consumer has a

right to terminate the credit agreement or the bundled products separately, the

conditions for and implications of doing so, and, where applicable, of the possible

consequences of terminating the ancillary services required in connection with the

credit agreement.

Section ‘9. Early repayment’

(1) The creditor shall indicate under what conditions the consumer can repay the

credit early, either fully or partially.

(2) In the section on exit charges the creditor shall draw the consumer’s

attention to any exit charge or other costs payable on early repayment in order to

compensate the creditor and where possible indicate their amount. In cases where the

amount of compensation would depend on different factors, such as the amount

repaid or the prevailing interest rate at the moment of the early repayment, the

creditor shall indicate how the compensation will be calculated and provide the

maximum amount that the charge might be, or where this is not possible, an

i ll u s t r a t i ve e x a m p l e i n o r d e r to d e m o n s t ra t e t o t h e co n s u m e r the l e ve l o f

compensation under different possible scenarios.

Section ‘10. Flexible features’

(1) Where applicable, the creditor shall explain the possibility to and conditions

for transferring the credit to another creditor or immovable property.

(2)

(Where appropriate) Additional features: Where the product contains any of

CREDIT AGREEMENTS FOR CONSUMERS RELATING

TO RESIDENTIAL IMMOVABLE PROPERTY

the features listed in paragraph 5, this section must list these features and provide a

brief explanation of: the circumstances in which the consumer can use the feature;

any conditions attached to the feature; if the feature being part of the credit secured

by a mortgage or comparable security means that the consumer loses any statutory or

other protections usually associated with the feature; and the firm providing the

feature (if not the creditor).

(3) If the feature contains any additional credit, then this section must explain to

the consumer: the total amount of credit (including the credit secured by the

mortgage or comparable security); whether the additional credit is secured or not;

the relevant borrowing rates; and whether it is regulated or not. Such additional

credit amount shall either be included in the original creditworthiness assessment or,

if it is not, this section shall make clear that the availability of the additional amount

is dependent on a further assessment of the consumer’s ability to repay.

(4)

If the feature involves a savings vehicle, the relevant interest rate must be

explained.

(5) The possible additional features are: ‘Overpayments/Underpayments’

[paying more or less than the instalment ordinarily required by the amortisation

structure]; ‘Payment holidays’ [periods where the consumer is not required to make

payments]; ‘Borrow back’ [ability for the consumer to borrow again funds already

drawn down and repaid]; ‘Additional borrowing available without further approval’;

‘Additional secured or unsecured borrowing’ [in accordance with paragraph 3

above]; ‘Credit card’; ‘Linked current account’; and ‘Linked savings account’.

(6) The creditor may include any other features offered by the creditor as part of

the credit agreement not mentioned in previous sections.

Section ‘11. Other rights of the borrower’

(1) The creditor shall clarify the right(s) of e.g. withdrawal or reflection and

where applicable other rights such as, portability (including subrogation) that exist,

specify the conditions to which this/these right(s) is subject, the procedure that the

consumer will need to follow in order to exercise this/these right(s), inter alia, the

address to which the notification of withdrawal shall be sent, and the corresponding

fees (where applicable).

(2) Where a reflection period or right of withdrawal for the consumer applies

this shall be clearly mentioned.

(3) In line with Article 3 of Directive 2002/65/EC, where the transaction is

being offered at a distance, the consumer shall be informed of the existence or

absence of a right of withdrawal.

Section ‘12. Complaints’

(1) This Section shall indicate the internal contact point [name of the relevant

department] and a means of contacting them to complain [Geographical address] or

[Telephone number] or [Contact person:] [contact details] and a link to the

complaints procedure on the relevant page of a website or similar information

source.

(2) It shall indicate the name of the relevant external body for out-of-court

complaints and redress and where using the internal complaint procedure is a

precondition for access to that body, indicate that fact using the wording in Part A.

(3) In the case of credit agreements with a consumer who is resident in another

Member State, the creditor shall refer to the existence of FIN-NET (http://

ec.europa.eu/internal_market/fin-net/).

CREDIT AGREEMENTS FOR CONSUMERS RELATING

TO RESIDENTIAL IMMOVABLE PROPERTY

Section ‘13. Non-compliance with the commitments linked to the credit

consequences for the borrower’

(1) Where non-observance of any of the consumer’s obligations linked to the

credit may have financial or legal consequences for the consumer, the creditor shall

describe in this section the different main cases (e.g. late payments/ default, failure

to respect the obligations set out in Section 8 ‘Additional obligations’) and indicate

where further information could be obtained.

(2) For each of those cases, the creditor shall specify, in clear, easy

comprehensible terms, the sanctions or consequences to which they may give rise.

Reference to serious consequences shall be highlighted.

(3) Where the immovable property used to secure the credit may be returned or

transferred to the creditor, if the consumer does not comply with the obligations, this

section shall include a statement indicating that fact, using the wording in Part A.

Section ‘14. Additional information’

(1) In the case of distance marketing, this section will include any clause

stipulating the law applicable to the credit agreement or the competent court.

(2) Where the creditor intends to communicate with the consumer during the

life of the contract in a language different from the language of the ESIS that fact

shall be included and the language of communication named. This is without

prejudice to sub-paragraph (g) of sub-paragraph 3 of paragraph 1 of Article 3 of

Directive 2002/65/EC.

(3) The creditor or credit intermediary shall state the consumer’s right to be

provided with or offered, as applicable, a copy of the draft credit agreement at least

once an offer binding on the creditor has been made.

Section ‘15. Supervisor’

(1) The relevant authority or authorities for the supervision of the pre-

contractual stage of lending shall be indicated.

For the purpose of these regulations

"the Act" means the Consumer Affairs Act;

"advertisement" means any form of representation, including a

catalogue, a circular and a price list, about a trade, business, craft

or profession in order to promote the supply or transfer of goods or

services, immovable property, rights or obligations and the term

"advertising" shall be construed accordingly;

"advisory services" means the provision of personal

*see regulation 1(2) of these regulations, as originally promulgated.

recommendations to a consumer in respect of one or more transactions

relating to credit agreements and constitutes a separate activity from

the granting a credit and from the credit intermediation activities in

terms of the definition "credit intermediary";

"ancillary service" means a service offered to the consumer in

conjunction with the credit agreement;

"annual percentage rate of charge" or "APRC" means the total cost

of the credit to the consumer, expressed as an annual percentage of the

total amount of the credit, where applicable, including the costs

referred to in regulation 21(2) and equates, on an annual basis, to the

present value of all future or existing commitments (drawdowns,

repayments and charges) agreed by the creditor and the consumer;

"appointed representative" means a natural or legal person who

performs activities in terms of the definition "credit intermediary" that

is acting on behalf of and under the full and unconditional

responsibility of only one credit intermediary;

"borrowing rate" means the interest rate expressed as a fixed or

variable percentage applied on an annual basis to the amount of

credit drawn down;

"Bridging loan" means a credit agreement either of no fixed

duration or which is due to be repaid within twelve months, used by

the consumer as a temporary financing solution while transitioning to

another financial arrangement for the immovable property.

"bundling practice" means the offering or the selling of a credit

agreement in a package with other distinct financial products or

services where the credit agreement is also made available to the

consumer separately but not necessarily on the same terms or

conditions as when offered bundled with the ancillary services;

"Civil Court" means the Civil Court (Commercial Section)

established by article 3 of the Civil Court (Establishment of Sections)

Order;

"competent authorities" means the MFSA and the Director General;

"consumer" means any individual who in transactions and other

matters covered by the Act or any regulations made thereunder

including these regulations, is acting for purposes which are not

related to and outside his trade, business, craft or profession;

"contingent liability or guarantee" means a credit agreement

which acts as a guarantee to another separate but ancillary

transaction, and where the capital secured against an immovable

property is only drawn down if an event or events specified in the

contract occur;

"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

c re di t i n s ti t ut i on s an d t he p r ud e n ti a l s up e r v i s io n o f c re di t

institutions and investment firms, amending Directive 2002/ 87/EC

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

from time to time, and includes any implementing measures,

implementing technical standards, regulatory technical standards,

guidelines and similar measures that have been or may be issued

thereunder;

" c r e d it " m e a ns a cr e di t f a l li ng w i th in t h e sc op e o f t he s e

regulations in accordance with regulation 3;

"creditor" means a natural or legal person who, duly authorised,

grants or promises to grant credit in the course of his trade, business or

profession;

"credit agreement" means an agreement whereby a creditor,

grants or promises to grant, to a consumer, credit in the form of a

deferred payment or other similar financial arrangement, and shall

be distinct from the public deed of loan;

"Credit Intermediaries’ Rule" means a rule issued by the MFSA

in terms of these regulations;

"credit intermediary" means a natural or legal person who is not

acting as a creditor or Notary Public and not merely introducing,

either directly or indirectly, a consumer to a creditor or credit

intermediary, and who, in the course of his trade, business or

profession, for remuneration, which may take a pecuniary form or

any other agreed form of financial consideration

(a) presents or offers credit agreements to consumers;

(b) assists consumers by undertaking preparatory work or

other pre-contractual administration in respect of

credit agreements other than as referred to in

paragraph (a); or

(c) concludes credit agreements with consumers on behalf of

the creditor;

"creditworthiness assessment" means the evaluation of the

prospect for the debt obligation resulting from the credit agreement to

be met;

"Data Protection Directive" means Directive 95/46/EC of the

European Parliament and of the Council of 24 October 1995 on the

protection of individuals with regard to the processing of personal

data and on the free movement of such data, as may be amended

from time to time, and includes any implementing measures,

implementing technical standards, regulatory technical standards,

guidelines and similar measures that have been or may be issued

thereunder;

"Directive 2005/29/EC" means Directive 2005/29/EC of the

E u r o p e a n P a r l i a m e n t a n d o f t h e C o u n c i l o f 11 M a y 2 0 0 5

concerning unfair business-to-consumer commercial practices in

the internal market and amending Council Directive 84/450/EEC,

Directive 97/7/EC, 98/27/EC and 2002/65/EC of the European

Parliament and of the Council and Regulation (EC) No 2006/2004

of the European Parliament and of the Council, as amended from

time to time;

"the Director General" means the Director General (Consumer

Affairs) as defined in the Act;

"durable medium" means any instrument which enables the

consumer to store information addressed personally to him in a way

accessible for future reference for a period of time adequate for the

purposes of the information and which allows the unchanged

reproduction of the information stored;

"EBA" means the European Banking Authority established by

Regulation (EU) No 1093/2010;

"ESIS" means the European Standardised Information Sheet set

out in the First Schedule;

"European credit intermediary" means a credit intermediary

admitted in another Member State in terms of the MCD;

"European creditor" means a credit institution which is

authorised in another Member State in terms of the CRD and which

has exercised its right to establish a branch or to provide services in

Malta in terms of the CRD;

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

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

empowered by its national law or regulation, or by public

authorities in the Member State concerned expressly empowered

for that purpose by national law, to ensure the application and

enforcement of the MCD

Provided that where there is more than one European

regulatory authority in a Member State, the European regulatory

authority for the purposes of these regulations shall be the

European regulatory authority which has been designated by the

Member State concerned as the single contact point for the

purposes of the MCD in accordance with Article 36(1) of the MCD;

"financial institution" means a financial institution as defined in

regulation 2(1) of the Financial Institutions Act;

"Financial Services Tribunal" means the Financial Services

Tribunal established under the Malta Financial Services Authority

Act;

"fixed borrowing rate" means that the creditor and the consumer

agree in the credit agreement on one borrowing rate for the entire

duration of the credit agreement or on several borrowing rates for

partial periods using exclusively a fixed specific percentage. If not

all borrowing rates are determined in the credit agreement, the

borrowing rate shall be deemed to be fixed only for the partial

periods for which the borrowing rates are determined exclusively

by a fixed specific percentage agreed on the conclusion of the

credit agreement;

"foreign currency loan" means a credit agreement where the

credit is

(a) denominated in a currency other than that in which the

consumer receives the income or holds the assets from

which the credit is to be repaid; or

(b) denominated in a currency other than that of the

Member State in which the consumer is resident;

"group" means a group of creditors which are to be consolidated

for the purposes of drawing up consolidated accounts, as defined in

Directive 2013/34/EU of the European Parliament and of the

Council of 26 June 2013 on the annual financial statements,

consolidated financial statements and related reports of certain

types of undertakings, as may be amended from time to time;

"home Member State" means

(a) where the creditor or credit intermediary is a natural

person, the Member State in which his head office is

situated;

(b) where the creditor or credit intermediary 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, other than the

home Member State, in which the creditor or credit intermediary

has a branch or provides services;

"Maltese credit intermediary" means a credit intermediary who is

admitted in terms of these regulations;

" "Maltese creditor" means a credit institution which is licensed

in terms of the Banking Act and, or, a financial institution which is

licensed in terms of the Financial Institutions Act to carry out

lending;

"MCD" means Directive 2014/17/EU of the European Parliament

and of the Council of 4 February 2014 on credit agreements for

consumers relating to residential immovable property and

amending Directives 2008/48/EC and 2013/36/EU and Regulation

(EU) No 1093/2010, as amended from time to time, and includes

any implementing measures, implementing technical standards,

regulatory technical standards, guidelines and similar measures that

have been or may be issued thereunder;

"Member State" has the same meaning assigned to it in the Act;

"MFSA" means the Malta Financial Services Authority

established by the Malta Financial Services Authority Act;

"non-credit institution" means any creditor that is not a credit

institution;

"Notary Public" has the same meaning assigned to it under

article 2(1) of the Notarial Profession and Notarial Archives Act;

"public deed of loan" means the legal instrument signed before a

Notary Public as part of the security required by the creditor in the

credit agreement;

"Regulation (EU) No. 1093/2010" means Regulation (EU) No.

1093/2010 of the European Parliament and of the Council of 24

November 2010 establishing a European Supervisory Authority

(European Banking Authority), amending Decision No. 716/2009/

EC and repealing Commission Decision 2009/78/EC, as amended

from time to time, and includes any implementing measures,

implementing technical standards, regulatory technical standards,

guidelines and similar measures that have been or may be issued

thereunder;

"shared equity credit agreement" means a credit agreement where

the capital repayable is based on a contractually set percentage of the

value of the immovable property at the time of the capital repayment

or repayments;

"staff" means

(a) any natural person working for the creditor, or credit

intermediary who is directly engaged in the activities

covered by these regulations or who has contacts with

consumers in the course of activities covered by these

regulations;

(b) any natural person directly managing or supervising

the natural persons referred to in paragraph (a);

"tied credit intermediary" means any credit intermediary who

acts on behalf of and under the full and unconditional responsibility

of

(a) only one creditor;

(b) only one group; or

(c) a number of creditors or groups which does not

represent the majority of the market;

"third country" means a country that is not a Member State;

"total amount of credit" means the ceiling or the total sums made

available under a home loan agreement;

"total amount payable to the consumer" means the sum of the total

amount of the credit and the total cost of such credit to the consumer.

"total cost of the credit to the consumer" means all the costs,

including interest, commissions, taxes and any other kind of fees

and, or charge howsoever described, or to whomsoever it is paid,

which the consumer is required to pay in connection with the credit

agreement and which are known to the creditor, including the cost

of valuation of property where such valuation is necessary to obtain

the credit, but excluding

(a) notarial fees;

(b) Public Registry and Land Registry fees;

(c) costs relating to searches regarding title;

(d) costs related to property valuation, unless such

valuation is required by the creditor;

(e) costs associated with the provision of security;

(f)

stamp duties;

(g) any other fees ancillary to the publication of the public

deed of loan;

(h) any other registration fees for the transfer of

ownership of the immovable property; and

(i)

any charges payable by the consumer for non-

compliance with the commitments laid down in the

credit agreement

Provided that costs in respect of ancillary services relating

to the credit agreement, in particular insurance premiums, are also

included if, in addition, the conclusion of a service contract is

compulsory in order to obtain the creditor to obtain such credit on

the terms and conditions marketed;

"tying practice" means the offering or the selling of a credit

agreement in a package with other distinct financial products or

services where the credit agreement is not made available to the

consumer separately.

PART III

Scope and Application

Amended by

L.N. 259 of 2016.

[Regulation 21]

Calculation of the annual percentage rate of charge

I.

Basic equation expressing the equivalence of drawdowns on the one hand

and repayments and charges on the other.

The basic equation, which establishes the annual percentage rate of charge

(APRC), equates, on an annual basis, the total present value of drawdowns on the

one hand and the total present value of repayments and payments of charges on the

other hand, i.e.

where

CREDIT AGREEMENTS FOR CONSUMERS RELATING

TO RESIDENTIAL IMMOVABLE PROPERTY

X is the APR,

m is the number of the last drawdown,

k is the number of a drawdown, thus 1 ≤ k ≤ m,

Ck is the amount of drawdown k,

tk is the interval, expressed in years and fractions of a year, between the date of

the first drawdown and the date of each subsequent drawdown, thus t1 = 0

m’ is the number of the last repayment or payment of charges,

l is the number of a repayment or payment of charges,

Dl is the amount of a repayment or payment of charges,

S l is the interval, expressed in years and fractions of a year, between the date of

the first drawdown and the date of each repayment or payment of charges.

Remarks

(a) The amounts paid by both parties at different times shall not necessarily be

equal and shall not necessarily be paid at equal intervals.

(b)

The starting date shall be that of the first drawdown.

(c) Intervals between dates used in the calculations shall be expressed in years

or in fractions of a year. A year is presumed to have 365 days (or 366 days for leap

years), 52 weeks or 12 equal months. An equal month is presumed to have 30.41666

days (i.e. 365/12) regardless of whether or not it is a leap year.

Where intervals between dates used in the calculations cannot be expressed as a

whole number of weeks, months or years, the intervals shall be expressed as a whole

number of one of those periods in combination with a number of days. Where using

days

(i)

every day shall be counted, including weekends and holidays;

(ii)

equal periods and then days shall be counted backwards to the date of

the initial drawdown;

(iii)

the length of the period of days shall be obtained excluding the first day

and including the last day and shall be expressed in years by dividing

this period by the number of days (365 or 366 days) of the complete

year counted backwards from the last day to the same day of the

previous year.

(d) The result of the calculation shall be expressed with an accuracy of at least

one decimal place. If the figure at the following decimal place is greater than or

equal to 5, the figure at that particular decimal place shall be increased by one.

(e) The equation can be rewritten using a single sum and the concept of flows

(Ak), which will be positive or negative, in other words either paid or received

during periods 1 to n, expressed in years, i.e.

S being the present balance of flows. If the aim is to maintain the equivalence of

flows, the value will be zero.

II.

Additional assumptions for the calculation of the annual percentage rate of

charge

CREDIT AGREEMENTS FOR CONSUMERS RELATING

TO RESIDENTIAL IMMOVABLE PROPERTY

(a) If a credit agreement gives the consumer freedom of drawdown, the total

amount of credit shall be deemed to be drawn down immediately and in full.

(b) If a credit agreement provides different ways of drawdown with different

charges or borrowing rates, the total amount of credit shall be deemed to be drawn

down at the highest charge and borrowing rate applied to the most common

drawdown mechanism for this type of credit agreement.

(c) If a credit agreement gives the consumer freedom of drawdown in general

but imposes, among the different ways of drawdown, a limitation with regard to the

amount and period of time, the amount of credit shall be deemed to be drawn down

on the earliest date provided for in the agreement and in accordance with those

drawdown limits.

(d) If different borrowing rates and charges are offered for a limited period or

amount, the highest borrowing rate and charges shall be deemed to be the borrowing

rate and charges for the whole duration of the credit agreement.

(e) For credit agreements for which a fixed borrowing rate is agreed in relation

to the initial period, at the end of which a new borrowing rate is determined and

subsequently periodically adjusted according to an agreed indicator or internal

reference rate the calculation of the APRC shall be based on the assumption that, at

the end of the fixed borrowing rate period, the borrowing rate is the same as at the

time of calculation of the APRC, based on the value of the agreed indicator or

internal reference rate at that time, but is not less than the fixed borrowing rate.

(f)

If the ceiling applicable to the credit has not yet been agreed, that ceiling is

assumed to be EUR 170 000. In the case of credit agreements - other than contingent

liabilities or guarantees - the purpose of which is not to acquire or retain a right in

immovable property or land, overdrafts, deferred debit cards or credit cards this

ceiling is assumed to be EUR 1,500.

(g) In the case of credit agreements other than overdrafts, bridging loans, shared

equity credit agreements, contingent liabilities or guarantees and open-ended credit

agreements as referred to in the assumptions set out in sub-paragraphs (i), (j), (k), (l)

and (m)

(i)

if the date or amount of a repayment of capital to be made by the

consumer cannot be ascertained, it shall be assumed that the repayment

is made at the earliest date provided for in the credit agreement and is

for the lowest amount for which the credit agreement provides;

(ii)

if the interval between the date of initial drawdown and the date of the

first payment to be made by the consumer cannot be ascertained, it shall

be assumed to be the shortest interval.

(h) Where the date or amount of a payment to be made by the consumer cannot

be ascertained on the basis of the credit agreement or the assumptions set out in sub-

paragraphs (g), (i), (j), (k), (l) and (m) it shall be assumed that the payment is made

in accordance with the dates and conditions required by the creditor and, when these

are unknown

(i)

interest charges are paid together with the repayments of the capital;

(ii)

non-interest charges expressed as a single sum are paid at the date of the

conclusion of the credit agreement;

(iii)

non-interest charges expressed as several payments are paid at regular

intervals, commencing with the date of the first repayment of capital,

and if the amount of such payments is not known they shall be assumed

to be equal amounts;

CREDIT AGREEMENTS FOR CONSUMERS RELATING

TO RESIDENTIAL IMMOVABLE PROPERTY

(iv)

the final payment clears the balance of capital, interest and other

charges, if any.

(i) In the case of an overdraft facility, the total amount of credit shall be

deemed to be drawn down in full and for the whole duration of the credit agreement.

If the duration of the overdraft facility is not known, the APRC shall be calculated

on the assumption that the duration of the credit is three months.

(j)

In the case of a bridging loan, the total amount of credit shall be deemed to

be drawn down in full and for the whole duration of the credit agreement. If the

duration of the credit agreement is not known the APRC shall be calculated on the

assumption that the duration of the credit is 12 months.

(k) In the case of an open ended credit agreement, other than an overdraft

facility and bridging loan, it shall be assumed that

(i)

for credit agreements, the purpose of which is to acquire or retain rights

in immovable property the credit is provided for a period of 20 years

starting from the date of the initial drawdown, and that the final

payment made by the consumer clears the balance of capital, interest

and other charges, if any; in the case of credit agreements the purpose of

which is not to acquire or retain rights in immovable property or which

are drawn down by deferred debit cards or credit cards, this period shall

be of one year;

(ii)

the capital is repaid by the consumer in equal monthly payments,

commencing one month after the date of the initial drawdown.

However, in cases where the capital must be repaid only in full, in a

single payment, within each payment period, successive drawdowns and

repayments of the entire capital by the consumer shall be assumed to

occur over the period of one year. Interest and other charges shall be

applied in accordance with those drawdowns and repayments of capital

and as provided for in the credit agreement.

For the purposes of this paragraph, an open-ended credit agreement is a

credit agreement without fixed duration and includes credits which must be repaid in

full within or after a period but, once repaid, become available to be drawn down

(l)

In the case of contingent liabilities or guarantees, the total amount of credit

shall be deemed to be drawn down in full as a single amount at the earlier of

(i)

the latest draw down date permitted under the credit agreement being

the potential source of the contingent liability or guarantee; or

(ii)

in the case of a rolling credit agreement at the end of the initial period

prior to the rollover of the agreement.

(m)

In the case of shared equity credit agreements

(i)

the payments by consumers shall be deemed to occur at the latest date or

dates permitted under the credit agreement;

(ii)

percentage increases in value of the immovable property which secures the

shared equity credit agreement, and the rate of any inflation index referred

to in the agreement, shall be assumed to be a percentage equal to the higher

of the current central bank target inflation rate or the level of inflation in the

Member State where the immovable property is located at the time of

conclusion of the credit agreement or 0% if those percentages are negative.

(1)

These regulations shall apply to

(a) credit agreements which are secured by a hypothec or

privilege on residential immovable property or secured

by a right related to residential immovable property;

and

(b) credit agreements the purpose of which is to acquire or

retain property rights in land or in an existing or

projected building.

(2)

These regulations shall not apply to

(a) equity release credit agreements where the creditor

(i)

contributes a lump sum, periodic payments or

other forms of credit disbursement in return for

a sum deriving from the future sale of a

residential immovable property or a right

relating to residential immovable property; and

(ii) will not seek repayment of the credit until the

occurrence of one or more specified life events

of the consumer as may be defined by the

competent authorities, unless the consumer

breaches his contractual obligations which

allows the creditor to terminate the credit

agreement;

(b) credit agreements where the credit is granted by an

employer to his employees as a secondary activity

where such a credit agreement is offered free of

interest or at an APRC lower than those prevailing on

the market and not offered to the public generally;

(c) credit agreements where the credit is granted free of

interest and without any other charges except those

that recover costs directly related to the securing of the

credit;

(d) credit agreements in the form of an overdraft facility

and where the credit has to be repaid within one

month;

(e) credit agreements which are the outcome of a

settlement reached in court or before another statutory

authority;

(f)

credit agreements which relate to the deferred payment,

free of charge, of an existing debt and which do not fall

within the scope of sub-regulation (1)(a).

PART IV

Competent Authorities

(1) The competent authorities for the purposes of these

regulations shall be the MFSA and the Director General

Provided that the single contact point for the purposes of

the provisions of these regulations transposing the MCD, and to

receive requests for exchange of information or cooperation

pursuant to Article 36(1) of the MCD shall be the MFSA.

(2) The MFSA and the Director General shall, for the purposes

of ensuring the application and enforcement of these regulations

(a) cooperate with one another whenever necessary in

order to carry out their duties under these regulations,

including for the purposes of cooperating with the

EBA as required under these regulations; and

(b) collaborate closely in order to discharge their duties

effectively

Provided that with regard to this sub-regulation and to any

o t h e r r e f e re n c e i n th e s e r e gu la t i o ns t o t he a p p li c a t i on a n d

enforcement of these regulations by the Director General, this shall

be without prejudice to the competences assigned to the Civil Court

by the Act and by the Malta Competition and Consumer Affairs

Authority Act, and to the judicial proceedings established in the

Act

(3) The competent authorities, all persons who work or who

have worked for the competent authorities, as well as auditors and

experts instructed by the competent authorities, shall be bound by

the obligation of professional secrecy.

(4) Without prejudice to the cases covered by criminal law or

by these regulations, the competent authorities, all persons who

work or who have worked for the competent authorities, as well as

auditors and experts instructed by the competent authorities shall,

unless such information is in summary or aggregate form, not

divulge any confidential information which they may receive in the

course of their duties to any person or authority whatsoever

Provided that this sub-regulation shall not prevent the

competent authorities from exchanging or transmitting confidential

information in accordance with national and European Union law.

(5) The MFSA shall inform the European Commission and the

EBA of the designation of the MFSA and the Director General, in

terms of Article 5(4) of the MCD, and any changes thereto,

indicating any division of the respective duties between the MFSA

and the Director General

Provided that such notification shall be made as soon as

possible and at the latest on the coming into force of these

regulations.

(6) The competent authorities shall exercise their powers

directly in conformity with national law.

(1) It shall be the duty of the MFSA to carry out the

functions and duties prescribed by these regulations and any Credit

Intermediaries’ Rules issued thereunder and to ensure that creditors

and credit intermediaries carrying out their activities in Malta

comply with these regulations and any directives and Credit

Intermediaries’ Rules made or issued thereunder, and with the

conditions of their admission

Provided that in pursuance of that duty the MFSA shall at

all times afford such co-operation to the Director General, as the

Director General may require in the discharge of its duties.

(2) The MFSA shall monitor the activities of creditors and

credit intermediaries so as to assess compliance with the

requirements of these regulations and any Credit Intermediaries’

Rules issued thereunder.

(3) The MFSA may issue Credit Intermediaries’ Rules in order

to better carry out and to better implement the provisions of these

regulations and for the purpose of implementing any guidelines,

recommendations and decisions issued by the EBA in terms of

Regulation (EU) No. 1093/2010.

(4) Credit Intermediaries’ Rules shall be binding on credit

intermediaries and others as may be specified therein.

(5) Credit Intermediaries’ Rules and any amendment or

revocation thereof shall be officially communicated to credit

intermediaries and the MFSA shall make copies thereof available to

the public.

(6) Without prejudice to any of the powers conferred by these

regulations, the MFSA may, whenever it deems necessary, give, by

notice in writing, such directives as it may deem appropriate in the

circumstances in order to carry out the functions and duties

prescribed by these regulations or any Credit Intermediaries’ Rules

issued thereunder

Provided that the power to give directives under this sub-

regulation shall include the power to vary, alter, add to or withdraw

an y di rective, as well as t he pow er to issu e new or fu rther

directives.

(7) Any person to whom a notice is given in accordance with

sub-regulation (6) shall obey, comply with and otherwise give

effect to any such directive within the time and in the manner stated

in the directive.

(8) Where the MFSA is satisfied that the circumstances so

warrant, it may at any time make public any directive it has given

under the provisions of this regulation.

(9) In the event of reasonable doubt as to whether credit

i n t e r m e d i a t i on a c t i v i t i e s i n t e r m s of t h e d e f i n i t i o n " c r e d i t

intermediary" in regulation 2 are or are not being transacted in or

from Malta by any person, the matter shall be conclusively

determined by the MFSA.

PART V

Financial Education of Consumers

(1) The MFSA shall promote measures that support the

education of consumers in relation to responsible borrowing and

debt management, in particular in relation to credit agreements.

(2) The MFSA shall provide clear and general information to

consumers on the credit granting process in relation to credit, in

order to guide consumers, especially those entering into a credit

agreement for the first time.

(3) In order to carry out the obligation prescribed in sub-

regulation (2), the MFSA may request the assistance of creditors

and credit intermediaries, in writing, who shall assist and provide

the MFSA in a timely manner, with any information which the

MFSA may require.

(4) The MFSA may also request creditors and credit

intermediaries, in writing, to provide clear and general information

to consumers on the credit granting process in relation to credit, in

order to guide consumers, especially those entering into a credit

agreement for the first time.

(5) Any information provided to consumers by the MFSA in

accordance with sub-regulation (2) and any information which

creditors and credit intermediaries are required to provide to

consumers in accordance with sub-regulation (4) shall be made

publicly available.

(6) The MFSA shall also disseminate information to consumers

regarding the guidance which may be published from time to time

by the MFSA and, or, by creditors and credit intermediaries in

accordance with sub-regulation (5), as well as regarding any

guidance on the credit granting process in relation to credit, which

may be provided to consumers by the Director General and by

consumer organisations from time to time.

PART VI

Obligations of the Creditor and Credit Intermediary

Added by

L.N. 259 of 2016.

[Regulations 6 and 18A]

Minimum Knowledge and Competence Requirements

1. The minimum knowledge and competence requirements for creditors’ and

credit intermediaries’ staff referred to in regulation 6 and for persons involved in the

management of credit intermediaries referred to in regulation 18A(7)(c) shall

include

(a) appropriate knowledge of credit products falling within the scope of

these regulations in accordance with regulation 3 and the ancillary

services typically offered with them;

(b) appropriate knowledge of the laws related to the credit agreements for

consumers, in particular consumer protection;

(c) appropriate knowledge and understanding of the immovable property

purchasing process;

(d) appropriate knowledge of security valuation;

(e) appropriate knowledge of organisation and functioning of land

registers;

(f)

appropriate knowledge of the market in Malta;

(g) appropriate knowledge of business ethics standards;

(h) appropriate knowledge of the consumer’s creditworthiness assessment

process or, where applicable, competence in assessing the consumer’s

creditworthiness;

(i)

appropriate level of financial and economic competency.

2. When establishing minimum knowledge and competence requirements, the

MFSA may differentiate between the levels and types of requirements applicable to

the staff of creditors, the staff of credit intermediaries and the management of credit

intermediaries.

3. The MFSA shall determine the appropriate level of knowledge and

competence on the basis of

(a) professional qualifications, for example diplomas, degrees, training,

competency tests; or

(b) professional experience, which may be defined as a minimum number of

years working in areas related to the origination, distribution or

intermediation of credit products

Provided that after 21 March 2019, the determination of the appropriate

level of knowledge and competence shall not be based solely on the methods listed

in sub-paragraph (b) of the paragraph 1.

CREDIT AGREEMENTS FOR CONSUMERS RELATING

TO RESIDENTIAL IMMOVABLE PROPERTY

(1) A creditor and a credit intermediary shall take all

necessary steps to ensure full compliance with these regulations.

(2)

A credit intermediary shall

(a) indicate in advertising and documentation intended for

consumers, the extent of his powers, in particular

whether he is a tied credit intermediary, and in such

case, whether he acts on behalf of and under the full

and unconditional responsibility of only one creditor,

only one group, or a number of creditors or groups

which does not represent the majority of the market;

(b) disclose the fee, if any, payable by the consumer for

his services, which fee shall be agreed in writing or on

a durable medium between the consumer and the credit

intermediary before the conclusion of the credit

agreement; and

(c) disclose the fee, if any, payable by the consumer to the

credit intermediary for his services to the creditor for the

purpose of calculating the annual percentage rate of

charge.

When information is provided to consumers in compliance

with the requirements set out in these regulations, such information

shall be provided without charge to the consumer.

Added by

XLIV.2021.25.

(Regulation 17C)

Amended by

L.N. 18 of 2024.

Guidelines on the requirements regarding arrears and enforcement

Guideline 1: Establishment of policies and procedures

The creditor should establish, and keep up to date, procedures to detect, as

early as possible, consumers going into payment difficulties.

The creditor should establish, and keep up to date, policies and procedures for

the effective handling of and engagement with consumers in payment difficulties. The

consumer engagement policy should include that the creditor provides adequate

information, for example, through websites and written materials, and support for

consumers in payment difficulties.

The creditor should provide adequate training for staff dealing with consumers

in payment difficulties.

Guideline 2: Engagement with the consumer

When a consumer goes into payment difficulties, the creditor should work

with the consumer to establish why the difficulties have arisen and for the creditor to

take appropriate steps.

Any interaction by the creditor with the consumer in relation to their payment

difficulties should respect the consumer’s privacy.

The creditor, as well as any agents acting on behalf of the creditor, should

maintain a level of contact and communication with a consumer in payment difficulties

that is proportionate to the information requirements, and not excessive.

Guideline 3: Provision of information and assistance to the consumer

The creditor should communicate clearly and in plain language.

The creditor should provide support and, at least, the following information to

consumers in payment difficulties

(a)

the number of payments either missed or only paid in part;

(b)

the total sum of the payment shortfall;

(c)

the charges incurred as a result of the payment shortfall;

(d)

the importance of the consumer co-operating with the creditor to

resolve the situation.

In cases where the consumer’s payment difficulties persist, the creditor should

CREDIT AGREEMENTS FOR CONSUMERS RELATING

TO RESIDENTIAL IMMOVABLE PROPERTY

provide the following information to the consumer

(a)

information regarding the consequences of missing payments (e.g.

costs, default interest rate, possible loss of property, etc.); and

(b)

information about available government/public schemes or support.

Guideline 4: Resolution process

4.1

The creditor should take into account the individual circumstances of the

consumer, the consumer’s interests and rights and his/her ability to repay when deciding

on which steps or forbearance measures to take. Forbearance measures may include one

or both of the following concessions to the consumer

1. A total or partial refinancing of a credit agreement;

2. A modification of the previous terms and conditions of a credit

agreement, which may include among others

(a)

extending the term of the mortgage;

(b)

changing the type of the mortgage (such as, changing the

type of mortgage from a capital and interest mortgage to an interest only

mortgage);

(c)

deferring payment of all or part of the instalment repayment

for a period;

(d)

changing the interest rate;

(e)

offering a payment holiday.

Guideline 5: Documentation of dealings with the consumer and retention of records

5.1 The creditor should document the reasons why the option(s) offered to the

consumer are appropriate for his/her individual circumstances and should make and

retain adequate records of its dealings with the consumer in payment difficulties for a

reasonable period of time.

(1) When manufacturing credit products falling within the

scope of these regulations in accordance with regulation 3, or

granting, intermediating or providing advisory services on credit

and, where appropriate, ancillary services to consumers or when

executing a credit agreement, the creditor and, or the credit

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

professionally, taking account of the rights and interests of the

consumers

Provided that in relation to the granting, intermediating or

provision of advisory services on credit and, where appropriate, of

ancillary services, the activities shall be based on information

about the consumer’s circumstances and any specific requirement

made known by a consumer and on reasonable assumptions about

risks to the consumer ’s situation over the term of the credit

agreement

Provided further that in relation to such provision of

advisory services, the activity shall in addition be based on the

information required under regulation 8B(3)(a).

(2) Creditors and credit intermediaries shall ensure that the

manner in which their staff and the relevant credit intermediaries

are remunerated does not impede compliance with the obligation to

act in accordance with the obligation set out in sub-regulation (1).

(3) When establishing and applying remuneration policies for

staff responsible for the assessment of creditworthiness, creditors

shall comply with the following principles in a way and to the

extent that is appropriate to their size, internal organisation and the

nature, scope and complexity of their activities

(a) the remuneration policy is consistent with and

promotes sound and effective risk management and

does not encourage risk-taking that exceeds the level

of tolerated risk of the creditor;

(b) the remuneration policy is in line with the business

strategy, objectives, values and long-term interests of

the creditor, and incorporates measures to avoid

conflicts of interest, in particular by providing that

remuneration is not contingent on the number or

proportion of applications accepted;

(4) Creditors and credit intermediaries providing advisory

services shall ensure that the remuneration structure of the staff

involved does not prejudice their ability to act in the consumer’s

best interest and in particular is not contingent on sales targets.

(1) Creditors and credit intermediaries shall require their

staff to possess and to keep up-to-date an appropriate level of

knowledge and competence in relation to the manufacturing, the

offering or granting of credit agreements, the carrying out of credit

i n t e r m e d i a t i on a c t i v i t i e s i n t e r m s of t h e d e f i n i t i o n " c r e d i t

intermediary" in regulation 2, or the provision of advisory services.

(2) Where the conclusion of a credit agreement includes an

ancillary service, creditors and credit intermediaries shall also

require their staff to possess and to keep up-to-date an appropriate

level of knowledge and competence in relation to that ancillary

service.

(3) Where Malta is the home Member State, the MFSA shall be

responsible for establishing the minimum knowledge and

competence requirements for staff of Maltese creditors and of

Maltese credit intermediaries, in accordance with the principles set

out in the Third Schedule

Provided that where a Maltese creditor, or a Maltese credit

intermediary, provides its services within the territory of one or

more other Member States through the establishment of a branch,

the authority responsible for establishing the minimum knowledge

and competence requirements applicable to the staff of such

branch, shall, in accordance with paragraph (i) of Article 9(3) of

the MCD, be the European regulatory authority of the host Member

State

Provided further that where a Maltese creditor, or a Maltese

credit intermediary, provides its services within the territory of one

or more other Member States under the freedom to provide

services, the European regulatory authority of the host Member

State may, in accordance with paragraph (ii) of Article 9(3) of the

MCD, establish the minimum knowledge and competence

requirements referred to in paragraph 1(b), (c), (e) and (f) of the

Third Schedule.

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

creditor or a European credit intermediary provides its services

within the territory of Malta

(a) through the establishment of a branch, the MFSA shall

be responsible for establishing the minimum

knowledge and competence requirements applicable to

the staff of such a branch in accordance with the Third

Schedule;

(b) under the freedom to provide services, the MFSA may

establish the minimum knowledge and competence

requirements for those requirements referred to in

paragraph 1(b), (c), (e) and (f) of the Third Schedule.

(5) The MFSA shall supervise creditors and credit

intermediaries authorised to provide their services in Malta in order

to ensure compliance with the requirements of sub-regulations (1)

to (4)

Provided that for the purposes of this sub-regulation, the

MFSA shall have the power to require such creditors and credit

intermediaries to provide such evidence as the MFSA may deem

necessary.

(6) Where Malta is the home Member State, for the effective

supervision of Maltese creditors and Maltese credit intermediaries

providing their services within the territory of other Member States

under the freedom to provide services, the MFSA shall cooperate

closely with the European regulatory authority of the host Member

State for the effective supervision and the enforcement of the

minimum knowledge and competence requirements of the host

Member State.

(7) Where Malta is the host Member State, for the effective

supervision of European creditors and European credit

intermediaries providing their services in Malta under the freedom

to provide services, the MFSA shall cooperate closely with the

European regulatory authority of the home Member State for the

effective supervision and enforcement of the minimum knowledge

and competence requirements established under these regulations

and any Credit Intermediaries’ Rules issued thereunder.

(8) For the purposes of sub-regulations (6) and (7), the MFSA

may, in accordance with Article 9(5) of the MCD

(a) delegate tasks and responsibilities to the European

regulatory authorities of other Member States;

(b) be delegated tasks and responsibilities by European

regulatory authorities of other Member States.

(9) The MFSA may issue, amend or revoke Credit

Intermediaries’ Rules as it shall consider appropriate for carrying

into effect the provisions of this regulation and of the Third

Schedule.

(10) Any criteria established by the MFSA in order for credit

intermediaries’ or creditors’ staff to meet their professional

requirements shall be made public.

PART VII

Information and practices preliminary to the conclusion

of the credit agreement

(1) The creditor and, where applicable, the credit

intermediary, shall provide the consumer with the personalised

information needed to compare the credits available on the market,

assess their implications and make an informed decision on

whether to conclude a credit agreement

(a) without undue delay after the consumer has given the

necessary information on his needs, financial situation

and preferences in accordance with regulation 12;

(b) in good time before the consumer is bound by any

credit agreement or offer; and

(c) on paper or on another durable medium.

(2) The personalised information referred to in sub-regulation

(1) shall be provided by means of the ESIS, as set out in the First

Schedule

Provided that for the purposes of sub-regulation (2) the

creditor and, where applicable, the credit intermediary, may, up to

21 March 2019, continue to use the ESIS applicable prior to the

entry into force of this regulation.

(3) Creditors and, where applicable, credit intermediaries, shall

provide the ESIS to the consumer before the provision of an offer

binding on the creditor

Provided that when an offer binding on the creditor is

provided to the consumer, it shall be provided on paper or on

another durable medium and, where characteristics of the offer are

different from the information contained in the ESIS previously

provided in accordance with this sub-regulation, it shall be

accompanied by an updated ESIS.

(4) The consumer shall be entitled to a full seven (7) day

period, in order to ensure that sufficient time to compare offers,

assess their implications and make an informed decision, is allowed

to the consumer

Provided that the time period referred to in this sub-

regulation shall be a reflection period before the conclusion of the

credit agreement

Provided further that the reflection period specified in this

sub-regulation shall

(a) be binding on the creditor for the duration of the

reflection period; and

(b) allow that the consumer may accept the offer at any

time during the reflection period.

(5) The creditor and, where applicable, the credit intermediary

who has supplied the ESIS to the consumer shall be deemed to have

fulfilled the requirements regarding information provision to the

consumer prior to the conclusion of a distance contract as laid

down in regulation 5 of the Distance Selling (Retail Financial

Services) Regulations and shall be deemed to satisfy the

requirements of regulation 6(1) of the Distance Selling (Retail

Financial Services) Regulations only where they have at least

supplied the ESIS prior to the conclusion of the contract.

(6) The ESIS model set out in the First Schedule shall not be

modified

Provided that where the creditor or, where applicable, the

credit intermediary, wishes to provide to the consumer any

additional information, and, or where the creditor, or where

applicable the credit intermediary, is required by national law to

provide to the consumer any additional information, such

additional information shall be given in a separate document which

may be annexed to the ESIS.

(7) In case of voice telephony communications, as referred to

in regulation 5(3) of the Distance Selling (Retail Financial

Services) Regulations, the description of the main characteristics of

the financial service to be provided in accordance with sub-

paragraph (ii) of the proviso to sub-regulation (3)(a) of regulation 5

of the Distance Selling (Retail Financial Services) Regulations,

shall include at least the items referred to in sections 3 to 6 of Part

A of the First Schedule.

(8) The creditor or, where applicable, the credit intermediary

shall, at the time of the provision of an offer binding on the creditor,

provide the consumer with a copy of the draft conditions to be

eventually entered into the credit agreement.

(1) Creditors and, where applicable, credit intermediaries

shall provide adequate explanations to the consumer on the

proposed credit agreement and any ancillary services, in order to

place the consumer in a position enabling him to assess whether the

proposed credit agreement and ancillary services are adapted to his

needs and financial situation.

(2) The adequate explanations referred to in sub-regulation (1)

shall, where applicable, include in particular

(a) an explanation of the information and terms included

in the pre-contractual information to be provided in

accordance with regulation 9 in the case of creditors

and regulations 9 and 10 in the case of credit

intermediaries;

(b) the essential characteristics of the product proposed;

(c) the specific effects the products proposed may have on

the consumer, including the consequences of default in

payment by the consumer; and

(d) where ancillary services are bundled with a credit

agreement, whether each component of the bundle can

be terminated separately and the implications for the

consumer of doing so.

(3) The Director General may adapt the manner by which and

the extent to which the explanations referred to in sub-regulations

(1) and (2) is given, as well as by whom it is given, to the

circumstances of the situation in which the credit agreement is

offered, the person to whom it is offered and the nature of the credit

offered.

(1) Creditors and, where applicable, tied credit

intermediaries shall make available clear and comprehensible

general information about credit agreements at all times on paper or

on another durable medium or in electronic form, and as much as

possible, in a plain and intelligible language that can be easily

CREDIT AGREEMENTS FOR CONSUMERS RELATING

TO RESIDENTIAL IMMOVABLE PROPERTY

understood by the consumer.

(2) The general information referred to in sub-regulation (1)

shall include at least the following

(a) the identity and the geographical address of the

creditor;

(b) where applicable, the identity and geographical

address of the credit intermediary involved;

(c) the purposes for which the credit may be used;

(d) the forms of security, including, where applicable, the

possibility for it to be located in another different

Member State;

(e) a description of the types of credit agreements

available, including a short description of the

differences between fixed and variable rate products

and the related implications for the consumer;

(f)

a list of related cost elements, such as administrative

costs, insurance costs, legal costs, and where

applicable, the costs of intermediaries;

(g) an indication of the cost of a typical credit agreement

for the consumer;

(h) the possible duration of the credit agreement;

(i)

an indication of the currency or currencies in which

the credit falling within the scope of these regulations

in accordance with regulation 3 is available, including

an explanation of the implications for the consumer

where the credit is denominated in a foreign currency;

(j)

the types of available borrowing rates, the conditions

governing the application of such rates and, where

available, any index or reference rate applicable to the

initial borrowing rate, as well as the periods,

conditions, and procedures for changing the borrowing

rate

Provided that if different rates apply in different

circumstances, the above information shall be supplied

in respect of all the applicable rates;

(k) an indicative example of the total amount of credit, the

total cost of credit to the consumer, the total amount

payable by the consumer and the APRC;

(l)

an indication of possible further costs, not included in

the total cost of the credit to the consumer, to be paid

in connection with a credit agreement;

(m) the range of different options available for reimbursing

the credit to the creditor, including the number,

frequency and amount of the regular repayment

instalments;

(n) where applicable, a clear and concise statement that

compliance with the terms and conditions of the credit

agreement does not guarantee repayment of the total

amount of credit under the credit agreement;

(o) a description of the conditions directly relating to early

repayment;

(p) whether a valuation of the property is necessary and,

where applicable, who is responsible for ensuring that

the valuation is carried out, and whether any related

costs arise for the consumer;

(q) details on how to obtain information on tax relief on

the credit agreement interest or other public subsidies;

(r) an indication of ancillary services the consumer is

obliged to acquire in order to obtain the credit or to

obtain it on the terms and conditions marketed and,

where applicable, a clarification that the ancillary

services may be purchased from a provider that is not

the creditor; and

(s) a general warning concerning possible consequences

of non-compliance with the commitments linked to the

credit agreement.

(3) The Director General may oblige creditors to include other

types of warnings which are relevant in Malta.

(4) The MFSA shall notify to the European Commission,

without delay, any requirements imposed on creditors in addition to

those prescribed in Article 13(1) of the MCD

Provided that for the purposes of this sub-regulation, the

Director General shall inform the MFSA, without delay, of any such

requirements as may from time to time be imposed on creditors by the

Director General.

(1) Maltese credit intermediaries shall, in good time

before the carrying out of any of the credit intermediation activities

in terms of the definition “credit intermediary” in regulation 2,

provide the consumer with at least the following information on

paper or on another durable medium

(a) the identity and the geographical address of the

Maltese credit intermediary;

(b) the register in which he has been included, the

registration number, where applicable, and the means

for verifying such registration;

(c) whether the Maltese credit intermediary is tied to or

works exclusively for one or more creditors

Provided that where the Maltese credit intermediary is

tied to or works exclusively for one or more creditors,

it shall provide the names of the creditors for which it

is acting

Provided further that where the Maltese credit

intermediary meets the conditions laid down in

accordance with regulation 8B(4), it may disclose that

it is independent;

(d) whether

the

Maltese

credit

intermediary

offers

advisory services;

(e) the fee, where applicable, payable by the consumer to

the Maltese credit intermediary for its services or,

where this is not possible, the method for calculating

the fee;

(f)

the procedures allowing consumers or other interested

parties to register complaints internally about the

Maltese credit intermediary and, where appropriate,

the means by which recourse to out-of-court complaint

and redress procedures can be sought;

(g) where applicable, the existence and, where known, the

amount of commissions or other inducements, payable

by the creditor or third parties to the Maltese credit

intermediary for its services in relation to the credit

agreement

Provided that where the amount is not known at the

time of disclosure, the Maltese credit intermediary

shall inform the consumer that the actual amount will

be disclosed at a later stage in the ESIS.

(2) Maltese credit intermediaries who are not tied but who

receive commission from one or more creditors shall, at the

consumer’s request, provide information on the variation in levels

of commission payable by the different creditors providing the

credit agreements being offered to the consumer. Maltese credit

intermediaries shall also inform consumers that they have the right

to request such information.

(3) Where a Maltese credit intermediary charges a fee to the

consumer and additionally receives commission from the creditor

or a third party, the Maltese credit intermediary shall explain to the

consumer whether or not the commission will be offset against the

fee, either in part or in full.

(4) Maltese credit intermediary shall communicate to the

creditor the fee, if any, payable by the consumer to the Maltese

credit intermediary for its services, for the purpose of calculating

the APRC.

PART VIII

Advisory Services

(1) The creditor or credit intermediary shall explicitly

inform the consumer, in the context of a given transaction, whether

advisory services are being or can be provided to the consumer.

(2) Before the provision of advisory services or, where

applicable, the conclusion of a contract for the provision of

advisory services, the creditor or credit intermediary shall provide

the consumer with the following information on paper or another

durable medium

(a) whether the recommendation will be based on

considering only their own product range in

accordance with sub-regulation (3)(b) or a wide range

of products from across the market in accordance with

sub-regulation (3)(c) so that the consumer can

understand the basis on which the recommendation is

made;

(b) where applicable, the fee payable by the consumer for

the advisory services or, where the amount cannot be

ascertained at the time of disclosure, the method used

for its calculation

Provided that the information referred to in paragraphs (a)

and (b) may be provided to the consumer in the form of additional

pre-contractual information.

(3) Where advisory services are provided to consumers, in

addition to the requirements set out in regulations 5 and 6

(a) creditors or credit intermediaries shall obtain the

necessary information regarding the consumer’s

personal and financial situation, his preferences and

objectives so as to enable the recommendation of

suitable credit agreements. Such an assessment shall

be based on information that is up to date at that

moment in time and shall take into account reasonable

assumptions as to risks to the consumer’s situation

over the term of the proposed credit agreement;

(b) creditors or tied credit intermediaries shall consider a

sufficiently large number of credit agreements in their

product range and recommend a suitable credit

agreement or several suitable credit agreements from

among their product range for the consumer’s needs,

financial situation and personal circumstances;

(c) non-tied credit intermediaries shall consider a

sufficiently large number of credit agreements

available on the market and recommend a suitable

credit agreement or several suitable credit agreements

available on the market for the consumer’s needs,

financial situation and personal circumstances;

(d) creditors or credit intermediaries shall act in the best

interests of the consumer by

(i)

informing themselves about the consumer’s

needs and circumstances; and

(ii) recommending suitable credit agreements in

accordance with paragraphs (a), (b) and (c); and

(e) creditors or credit intermediaries shall give the

consumer a record on paper or on another durable

medium of the recommendation provided.

(4) The use of the term ‘advice’ and ‘advisor’ or similar terms

shall be prohibited when the advisory services are being provided

to consumers by creditors or tied credit intermediaries.

(5) Creditors and credit intermediaries shall warn a consumer

when, considering the consumer ’s financial situation, a credit

agreement may include a specific risk for the consumer.

(6) Advisory services shall only be provided by creditors or

credit intermediaries.

(7) This regulation is without prejudice to regulation 7A and to

Member States’ competence to ensure that services are made

available to consumers to help them understand their financial

needs and which types of products are likely to meet those needs.

PART IX

Creditworthiness Assessment

(1) The creditor shall, before concluding a credit

agree ment, m ake a thorough a ssessment of the consumer ’s

creditworthiness, taking appropriate account of factors relevant to

verifying the prospect of the consumer to meet his obligations

under the credit agreement.

(2) Creditors shall establish, document and maintain the

procedures and information on which the assessment referred to in

sub-regulation (1) is based.

(3) The assessment of creditworthiness shall not rely

predominantly on the value of the residential immovable property

exceeding the amount of the credit or on the assumption that the

residential immovable property will increase in value unless the

purpose of the credit agreement is to construct or renovate the

residential immovable property.

(4) Where a creditor concludes a credit agreement with a

consumer, the creditor shall not subsequently cancel or alter the

credit agreement to the detriment of the consumer on the grounds

that the assessment of creditworthiness was incorrectly conducted

Provided that this sub-regulation shall not apply where it is

demonstrated that the consumer knowingly withheld or falsified the

information within the meaning of regulation 12.

(5) The creditor shall only make the credit available to the

consumer where the result of the creditworthiness assessment

indicates that the obligations resulting from the credit agreement

are likely to be met in the manner required under that agreement.

(6) The creditor shall, in accordance with Article 10 of the Data

Protection Directive, inform the consumer in advance that a

database is to be consulted.

(7) Where an application for credit is rejected, the creditor

shall inform the consumer without delay of the rejection in

accordance with regulation 10.

(8) The creditor shall, before any significant increase in the

total amount of credit is granted to the consumer after t he

conclusion of the credit agreement and unless such additional credit

was envisaged and included in the original creditworthiness

assessment, re-assess the consumer’s creditworthiness on the basis

of updated information.

(9) This regulation shall be without prejudice to the Data

Protection Directive.

(1) Where the assessment of the consumer’s creditworthiness

results in a negative prospect for his ability to repay the credit over the

lifetime of the credit agreement, the creditor shall refuse to provide

such credit.

(2) Where the application for credit is rejected, the creditor

shall inform the consumer without delay and free of charge of the

rejection, of the reasons for rejection and, where applicable, that

the decision is based on automated processing of data.

(3) Where the rejection of an application for credit is based on

the result of the database consultation, the creditor shall inform the

consumer without delay and free of charge of the result of such

consultation and of the particulars of the database consulted,

including the name of the database that was consulted as well as of

its controller and of the consumer’s right to access and, where

necessary, his right to rectify his data in that database

Provided that the creditor shall not be required to give such

information if the information to be provided is prohibited by any

other law, or is contrary to the public policy or public security of

Malta.

(4) Where the application is rejected on the basis of an

automated decision or a decision based on methods such as

automated credit scoring, the creditor shall inform the consumer

without delay and free of charge.

(5) The creditor shall explain the logic involved in the

automated decision to the consumer.

(6) The consumer shall have the opportunity to request for the

decision to be reviewed manually.

(7) This regulation shall be without prejudice to the Data

Protection Directive.

If the parties agree to change the total amount of credit

after the conclusion of the credit agreement, the creditor shall

(a) update the financial information at his disposal

concerning the consumer; and

(b) re-assess the consumer’s creditworthiness, before the

total amount of credit is significantly increased.

(1) The assessment of creditworthiness referred to in

regulation 9 shall be carried out on the basis of information on the

consumer’s income and expenses and other financial and economic

circumstances which is necessary, sufficient and proportionate.

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

obtained by the creditor from relevant internal or external sources,

including the consumer, and including information provided to the

credit intermediary during the application process of the credit

Provided that such information shall be appropriately

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

independently verifiable documentation

Provided further that such information shall be up to date at

that moment in time, and on reasonable assumptions as to the

consumer situation over the term of the proposed credit agreement.

(3) Credit intermediaries shall accurately submit the necessary

information obtained from the consumer to the relevant creditor to

enable the creditworthiness assessment to be carried out.

(4) Creditors shall specify in a clear and straightforward way at

the pre-contractual phase the necessary information and

independently verifiable evidence that the consumer needs to

provide and the time-frame within which the consumer needs to

provide the information

Provided that such request for information shall be

proportionate and limited to what is necessary to conduct a proper

creditworthiness assessment

Provided further that, where necessary to enable the

assessment of creditworthiness, creditors may seek clarification of

the information received in response to that request.

(5) A creditor shall not terminate the credit agreement on the

grounds that the information provided by the consumer before the

conclusion of the credit agreement was incomplete

Provided that the creditor may terminate the credit

agreement where it is demonstrated that the consumer knowingly

withheld or falsified the information.

(6) The Director General shall have measures in place to ensure

that consumers are aware of the need to provide correct information

in respect to the request referred to in sub-regulation (4) and that

such information is as complete as necessary to conduct a proper

creditworthiness assessment.

(7) The creditor or credit intermediary shall warn the consumer

that, where the creditor is unable to carry out an assessment of the

creditworthiness because the consumer chooses not to provide the

i nformat io n or verifi cati on necessary for an assessment o f

creditworthiness, the credit cannot be granted.

(8) The warning referred to in sub-regulation (7) may be

provided in a standardised format.

(9) This regulation shall be without prejudice to the Data

Protection Directive, in particular Article 6 thereof.

Without prejudice to the provisions of the Data Protection

Act, personal data obtained from a consumer or any other person in

connection with the conclusion and management of any credit

agreement may only be processed for the purpose of assessing the

consumer’s creditworthiness or of any such other person and their

ability to repay in accordance with these regulations.

(1) The Director General shall ascertain that reliable

standards for the valuation of residential immovable property for

the purpose of credit agreements are developed in Malta.

(2) Creditors shall ensure that the standards referred to in sub-

regulation (1) are used where they carry out a property valuation, or

shall take reasonable steps to ensure that those standards are

applied where a valuation is conducted by a third party.

(3) Where third parties or other authorities are responsible for

regulating independent appraisers who carry out property

valuations, the Director General shall ensure that they comply with

the rules that are in place.

(4) The Director General shall ensure that internal and external

appraisers conducting property valuations are professionally

competent and sufficiently independent from the credit

underwriting process relating to credit agreements so that they can

provide an impartial and objective valuation, which shall be

documented in a durable medium and of which a record shall be

kept by the creditor.

PART X

Rights of the Consumer

(1) Without prejudice to regulations 7 to 8A, the consumer

shall be entitled to receive, free of charge, a copy of the draft credit

agreement

Provided that this sub-regulation shall not apply if the

creditor is, at the time of the consumer ’s request, unwilling to

proceed t o the co ncl usion of the credit agreement with the

consumer.

(2) Without prejudice to the Notarial Profession and Notarial

Archives Act, the consumer shall be entitled to receive from the

Notary Public

(a) a copy of the public deed of loan, at his request,

immediately upon the signing thereof; and

(b) in all instances, a copy of the public deed of loan duly

registered at the Public Registry by the Notary Public,

within ten days from such registration.

(1) The credit agreement shall be drawn up in writing or

on a durable medium, and shall specify as much as possible, in a

plain and intelligible language that can be easily understood by the

consumer, the following

(a) the information listed under regulation 8(2)(c), (d), (f),

(h) to (l), and (n);

(b) the identities and geographical addresses of the

contracting parties as well as, if applicable, the

identity and geographical address of the credit

intermediary involved;

(c) the annual percentage rate of charge and the total

amount payable by the consumer calculated at the time

the credit agreement is concluded

Provided that all the assumptions used in calculating

that rate shall be mentioned;

(d) the right of the consumer to receive, on request and

free of charge, at any time throughout the duration of

the credit, a statement of account in the form of an

CREDIT AGREEMENTS FOR CONSUMERS RELATING

TO RESIDENTIAL IMMOVABLE PROPERTY

amortisation table

Provided that the amortisation table shall

(i)

indicate the payments owing and the periods and

conditions relating to the payment of such

amounts;

(ii) contain a breakdown of each repayment showing

capital amortisation, the interest calculated on

the basis of the borrowing rate and where

applicable any additional costs;

(iii) where the interest is not fixed or the additional

costs may be changed under the credit

agreement, it shall indicate clearly and concisely

that the data contained in the table will remain

valid only until such time as the borrowing rate

or the additional costs are changed in

accordance with the credit agreement;

(e) if charges and interest are to be paid without capital

amortisation, a statement showing the periods and

conditions for the payment of the interest and of any

associated recurrent and non-recurrent charges;

(f)

the interest rate applicable in the case of late payments

as applicable at the time of the conclusion of the credit

agreement and the arrangement for its adjustment and,

where applicable, any charges payable for default;

(g) the procedure to be followed in exercising the right of

termination of the credit agreement;

(h) information concerning the right resulting under

regulation 16 and the conditions attached to that right;

(i)

whether or not there is an out-of-court procedure for

the consumer to make a complaint, the redress

mechanism available and the methods for having

access to it;

(j)

where applicable,

other

contractual

terms

and

conditions.

(2)

(a) In the event of any changes in the borrowing rate, the

creditor shall inform the consumer of any such change,

on paper or another durable medium, before the change

takes effect

Provided that such information shall at least state

(i)

the amount of the payments to be made after the

new borrowing rate takes effect; and

(ii) in cases where the number or frequency of the

payments changes, provide the consumer with

particulars of such payment changes.

(b) Without prejudice to paragraph (a), the parties to the

credit agreement may agree in the credit agreement

that

(i)

where the change in the borrowing rate is

correlated with a change in a reference rate, the

information referred to in paragraph (a) is to be

given to the consumer periodically;

(ii) the new reference rate is to be made publicly

available by appropriate means, which may

include a publication on the creditor’s website or

a public advert; and

(iii) the information concerning the new reference

rate is to be kept available in the premises of the

creditor and communicated personally to the

consumer together with the amount of new

periodic instalments.

(c) Where changes in the borrowing rate are determined by

way of auction on the capital markets and it is therefore

impossible for the creditor to inform the consumer of any

change before the change takes effect, the creditor shall,

in good time before the auction, inform the consumer on

paper or on another durable medium of the upcoming

procedure and provide an indication of how the

borrowing rate could be affected.

(2A) Without prejudice to other obligations provided for in these

regulations, prior to modifying the terms and conditions of the

credit agreement, the creditor shall communicate the following

information to the consumer

(a)

a clear description of the proposed changes and,

where applicable, of the need for consumer consent or of the

changes introduced by operation of law;

(b)

the time period for the implementation of the

changes referred to in paragraph (a);

(c)

the means for complaint available to the consumer

regarding the changes referred to in paragraph (a);

(d)

the time period available for filing any such

complaint;

(e)

the name and address of the Arbiter for Financial

Services as established under the Arbiter for Financial Services

Act before whom the consumer may submit the said complaint.

(3) The creditor shall make available to the consumer, free of

charge and at any time throughout the duration of the home loan, a

statement of account in the form of an amortisation table.

(4) Every public deed of loan to which these regulations apply

shall make a direct reference to the credit agreement entered into

and between the creditor and, or the credit intermediary and the

consumer, the date thereof and shall state expressly that the

consumer has received, read, understood and agreed to all the terms

set out in the credit agreement, after due explanation by the creditor

and, or the credit intermediary, as may be amended from time to

time according to the terms thereof.

(1) A consumer shall have the right to discharge his

obligations under a credit agreement, in full or in part, before the

agreed termination.

(2) If the consumer pays the credit before the agreed

termination

(a) the consumer shall be entitled to a reduction of the

total cost of the credit, such reduction consisting of the

interest and the costs for the remaining duration of the

contract; and

(b) the creditor shall be entitled to a fair and objective

compensation, where justified, for possible costs

directly linked to the early repayment of the credit in

accordance with the credit agreement and the

information provided in regulations 8(2)(i) and

15(1)(g) and (h), so long as the early repayment falls

within a period for which the borrowing rate is fixed

Provided that said compensation shall not exceed the

financial loss of the creditor and that no sanction is

imposed on the consumer

Provided further that in calculating the level of

compensation, consideration shall also be given to the

impact of early repayment on administrative costs

irrespective whether the borrowing rate is fixed or

variable.

(3) In determining the compensation for possible costs directly

linked to early repayment of credit referred to in sub-regulation

(2)(b), a creditor shall apply the same calculations to all consumers

irrespective of the reason why early repayment was effected.

(4) Without prejudice to sub-regulations (2) and (3), the

Director General may provide that the exercise of the right referred

to in sub-regulation (1) is to be subject to certain conditions, which

may include time limitations on the exercise of the right, a different

treatment depending on the type of the borrowing rate or on the

moment the consumer exercises the right, or restrictions with

regard to the circumstances under which the right may be

exercised.

(5) Where a consumer seeks to discharge his obligations under

a credit agreement before the agreed termination of the credit

agreement, the creditor shall provide the consumer without delay

after receipt of the request, on paper or on another durable medium,

with the information necessary to consider that option.

(6) The information referred to in sub-regulation (5) shall at

least quantify the implications for the consumer of discharging his

obligations before the agreed termination of the credit agreement

and clearly set out any assumptions used

Provided that any assumptions used shall be reasonable and

justifiable.

(1) Where the rights of the creditor under a credit

agreement are, or the agreement itself is, assigned to a third party,

the consumer shall be entitled to raise against that assignee any

defence available to him against the original creditor, including the

right to set-off

Provided that set-off may only be raised in accordance with

the relevant provisions of regulations 1196 to 1204 of the Civil Code,

which shall apply irrespective of anything to the contrary contained in

a credit agreement.

(2) The consumer shall be informed of the assignment referred

to in sub-regulation (1) except where the original creditor, by

agreement with the assignee, continues to service the credit vis-à-

vis the consumer.

(1) The Director General shall ensure that where a credit

agreement relates to a foreign currency loan, an appropriate

regulatory framework shall be in place at the time the credit

agreement is concluded to ensure that the consumer has a right to

convert the credit agreement into an alternative currency under

specified conditions.

(2) In accordance with sub-regulation (1), the alternative

currency referred to in the preceding sub-regulation shall be

(a) the currency in which the consumer primarily receives

income or holds assets from which the credit is to be

repaid, as indicated at the time the most recent

creditworthiness assessment in relation to the credit

agreement was made; and, or

(b) the currency of the Member State in which the

consumer either was resident at the time the credit

agreement was concluded or is currently resident.

(3) Where a consumer has a right to convert the credit

agreement into an alternative currency in accordance with sub-

regulation (1), the exchange rate at which the conversion is carried

out shall be the market exchange rate applicable on the day of

application for conversion unless otherwise specified in the credit

agreement.

(4) Where a consumer has a foreign currency loan, the creditor

shall warn the consumer on a regular basis on paper or on another

durable medium at least where the value of the total amount

payable by the consumer which remains outstanding or of the

regular instalments varies by more than 20% from what it would be

if the exchange rate between the currency of the credit agreement

and the currency of the Member State applicable at the time of the

conclusion of the credit agreement were applied. The warning shall

inform the consumer of a rise in the total amount payable by the

consumer, set out where applicable the right to convert to an

alternative currency and the conditions for doing so and explain

any other applicable mechanism for limiting the exchange rate risk

to which the consumer is exposed.

(5) The arrangements applicable under this regulation shall be

disclosed to the consumer in the ESIS and in the credit agreement.

Where there is no provision in the credit agreement to limit the

exchange rate risk to which the consumer is exposed to a

fluctuation in the exchange rate of less than 20%, the ESIS shall

include an illustrative example of the impact of a 20% fluctuation

in the exchange rate.

(6) The Director General may further regulate foreign currency

loans provided that such regulation is not applied with

retrospective effect.

Where the credit agreement is a variable rate credit

(a) any indexes or reference rates used to calculate the

borrowing rate shall be clear, accessible, objective and

verifiable by the parties to the credit agreement and

the Director General; and

(b) historical records of indexes for calculating the

borrowing rates shall be maintained either by the

providers of these indexes or by the creditors.

(1) Creditors shall have adequate policies and procedures to

ensure that they make efforts to exercise, where appropriate,

reasonable forbearance before enforcement proceedings are

instituted. The said forbearance measures shall take into account,

among other elements, the consumer’s circumstances and among

other possibilities may consist of

(a)

a total or partial refinancing of a credit agreement;

(b)

a modification of the existing terms and

conditions of a credit agreement, which among others may

include

(i)

extending the term of the credit agreement;

(ii)

changing the type of credit agreement;

(iii) deferring payment of all or part of the

instalment repayment for a period;

(iv)

changing the interest rate;

(v)

offering a payment holiday;

(vi)

partial repayments;

(vii)

currency conversions;

(viii)

partial forgiveness and debt consolidation

Provided that the list of potential forbearance measures set

out in this sub-regulation is without prejudice to the rules set out in

national law, including in particular the national provisions

implementing the European Banking Authority Guidelines on

management of non-performing and forborne exposures (EBA/GL/

2018/06), the European Central Bank Guidance to banks on non-

performing loans, and the Guidelines on the requirements regarding

arrears and enforcement set out in the Fourth Schedule which

implement the European Banking Authority Guidelines on arrears and

foreclosure.

(2) The Director General shall adopt measures to encourage

creditors to exercise reasonable forbearance in accordance with

sub-regulation (1).

(3) Where the creditor is permitted to define and impose

charges on the consumer arising from the default, those charges

shall not be greater than is necessary to compensate the creditor for

costs it has incurred as a result of the default.

(4) The parties to a credit agreement may expressly agree that

the return or transfer to the creditor of the security or proceeds

from the sale of the security is sufficient to repay the credit.

(5) Where the price obtained for the immovable property

affects the amount owed by the consumer, the Director General

shall implement procedures or measures to enable the best efforts

(6) Where after enforcement proceedings outstanding debt

remains, the Director General shall ensure that measures to

facilitate repayment in order to protect consumers are put in place.

(7) In accordance with sub-regulation (2)(1)(a) of regulation

3A and in terms of sub-regulations (2) and (3) of this regulation,

the Director General shall adopt measures on the requirements

regarding arrears and enforcement which emanate from the EBA

Guidelines with the reference EBA/GL/2015/12 as set out in the

Fourth Schedule

Provided that the terms used and defined in these Regulations

shall have the same meaning assigned to them in the Guidelines in the

Fourth Schedule.

PART XI

Obligations of the Consumer

(1) Consumers shall provide creditors and, where

applicable, credit intermediaries with complete and correct

information on their financial situation and personal circumstances

in the context of the application process for credit.

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

supported, when necessary, by documentary evidence from

independently verifiable sources.

(3) In order for the creditor and, where applicable, credit

intermediaries to be able to conduct a thorough assessment of the

consumer’s creditworthiness and make a decision on whether or not

to grant the credit under the credit agreement, the creditors and,

where applicable, credit intermediaries shall at the pre-contractual

phase, clearly specify the information, including independently

verifiable evidence where necessary, that the consumer needs to

provide.

(4) Creditors and, where applicable, credit intermediaries shall

state the timing by which consumers are required to provide such

information.

(5) In cases where the consumer chooses not to provide the

information necessary for an assessment of his creditworthiness,

the creditor or credit intermediary shall warn the consumer that he

is unable to carry out a creditworthiness assessment and therefore

that the credit agreement may not be granted. This warning may be

provided in a standardised format.

(6) This regulation is without prejudice to the application of

the Data Protection Act.".

PART XII

Requirements for Establishment of Credit Intermediaries

(1) Any credit intermediary who, carries out all or part of

the credit intermediation activities in terms of the definition "credit

intermediary" in regulation 2, or who provides advisory services in

or from Malta, shall apply for admission with the MFSA in terms of

these regulations.

(2) An application for admission in terms of these regulations

shall be made in such form and manner as the MFSA may from

time to time determine.

(3) The MFSA shall have the power to require any person to

provide such information as it may deem necessary for the purpose

of determining an application for admission or for the purposes of

determining whether to restrict or withdraw an admission in terms

of these regulations

Provided that an application may only be withdrawn by

written notice to the MFSA before admission is granted or refused.

(4) The MFSA shall determine an application by doing any of

the following

(a) granting an admission without conditions;

(b) granting an admission subject to such conditions as it

may deem appropriate;

(c) refusing to grant an admission

Provided that if it refuses an application it shall inform

the applicant, in writing, of the reasons for the refusal.

(5) The MFSA may grant admission in terms of these

regulations only if it is satisfied, on the basis of the information

required to be submitted in terms of these regulations and any

Credit Intermediaries’ Rules issued thereunder, that admission

ought to be granted.

(6) Subject to the provisions of these regulations, the MFSA

may subject the admission referred to in this regulation to such

conditions as it may deem appropriate, and having granted an

admission it may, from time to time, vary or revoke any condition

so imposed or impose new conditions.

(7) Credit intermediaries shall not be admitted by the MFSA

unless they fulfil at l east the requi rem ents pro vid ed f or in

regulation 6 and the following professional requirements

(a) credit intermediaries shall hold, at all times,

professional indemnity insurance covering the

territories in which they offer services, or some other

comparable guarantee against liability arising from

professional negligence

Provided that for tied credit intermediaries who act on

behalf of and under the full and unconditional

responsibility of only one creditor, such a professional

indemnity insurance or other comparable guarantee

shall be provided by the creditor for which the credit

intermediary is empowered to act;

(b) a natural person established as a credit intermediary,

the members of the Board of Directors of a credit

intermediary established as a legal person and natural

persons performing equivalent tasks within a credit

intermediary which is a legal person but does not have

a Board of Directors, shall be of good repute. Such

persons shall, as a minimum, have a clean police

record or any other national equivalent in relation to

serious criminal offences linked to crimes against

property or other crimes related to financial activities

and they shall not have previously been declared

bankrupt, unless they have been rehabilitated in

accordance with national law;

(c) a natural person established as a credit intermediary,

the members of the Board of Directors of a credit

intermediary established as a legal person and natural

persons performing equivalent tasks within a credit

intermediary which is a legal person but does not have

a Board of Directors, shall possess the appropriate

level of knowledge and competence in relation to

credit agreements.

(8) The MFSA shall, for the purposes of paragraph (c) of sub-

regulation (7) establish the appropriate level of knowledge and

competence in accordance with the principles set out in the Third

Schedule.

(9) A credit intermediary admitted in terms of these regulations

shall provide the MFSA with particulars of any changes in the

information provided under these regulations and any Credit

Intermediaries’ Rules issued thereunder as soon as such credit

intermediary becomes aware of such change.

(10) Where Malta is the home Member State, all Maltese credit

intermediaries, whether established as natural or legal persons,

shall be entered into a register with the MFSA.

(11) The register referred to in sub-regulation (10) shall be

maintained by the MFSA, who shall ensure that the said register is

kept up to date and is publicly available online.

(12) The register referred to in sub-regulation (10) shall contain

at least the following information

(a) the names of the persons within the management who

are responsible for the intermediation business;

(b) the Member States in which the Maltese credit

intermediary conducts business under the rules on the

freedom of establishment or the freedom to provide

services and of which the Maltese credit intermediary

has informed the MFSA in accordance with Article

32(3) of the MCD;

(c) whether the Maltese credit intermediary is tied or not;

(d) where a tied credit intermediary acts on behalf of and

under the full and unconditional responsibility of only

one creditor, the creditor on whose behalf the tied

credit intermediary acts.

(13) Any credit intermediary who is to be admitted under these

regulations who -

(a) is a legal person, shall have its head office and its

registered office in Malta;

(b) is not a legal person, shall have its head office in Malta

and shall actually carry on its main business in Malta.

(14) The MFSA shall establish a single information point to

allow quick and easy public access to information from the register

referred to in sub-regulation (10), which shall be compiled

electronically and kept constantly updated.

(15) Without prejudice to regulations 18B and 18C, all admitted

credit intermediaries shall comply with the requirements defined in

sub-regulations (6), (7) and (8) on a continuing basis.

(16) The MFSA may issue, amend or revoke Credit

Intermediaries’ Rules as it shall consider appropriate for carrying

into effect the provisions of this regulation.

(17) This regulation shall not apply to credit institutions

licensed in terms of the Banking Act and, or to financial

institutions licensed in terms of the Financial Institutions Act.

(1) Tied credit intermediaries specified in paragraph (a)

of the definition "tied credit intermediary" in regulation 2, may be

admitted by the MFSA through the creditor on whose behalf the

tied credit intermediary is exclusively acting.

(2) In the cases referred to in sub-regulation (1), the creditor

shall remain fully and unconditionally responsible for any action or

omission on the part of the tied credit intermediary that is acting on

behalf of the creditor in areas regulated by the provisions of these

regulations.

(3) The creditor shall ensure that the tied credit intermediaries

referred to in this regulation comply with at least the professional

requirements set out in regulation 18A(7) and (8).

(4) Without prejudice to regulations 22F and 22G, creditors

shall monitor the activities of tied credit intermediaries specified in

paragraph (a) of the definition "tied credit intermediary" in

regulation 2 in order to ensure that they comply with the provisions

of these regulations. In particular, the creditor shall be responsible

for monitoring compliance with the knowledge and competence

requirements of the tied credit intermediary and its staff.

Maltese credit intermediaries shall not appoint appointed

representatives.

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

admission of a credit intermediary by the MFSA shall, provided the

activities that the credit intermediary intends to carry out in the

host Member State are covered by the said admission and in

accordance with regulation 18A(1), be effective for the entire

territory of the European Union without further admission being

required by the European regulatory authority of the host Member

State for the carrying out of the activities and provision of service

covered by the admission

Provided that Maltese credit intermediaries shall not be

allowed to provide their services in relation to credit agreements

offered by

(a) financial institutions licensed in terms of the Financial

Institutions Act, to consumers in a host Member State

in which such financial institutions are not allowed to

operate;

(b) credit institutions licensed in terms of the Banking Act

to consumers in a host Member State, where such

credit institutions have not exercised their right to

establish a branch or to provide services in the relevant

host Member State in terms of the Banking Act or any

regulations made or Banking Rules issued thereunder.

(2) Where Malta is the home Member State, any Maltese credit

intermediary intending to carry out business for the first time in one

or more Member States under the freedom to provide services or

when establishing a branch, shall inform the MFSA.

(3) Within a period of one month after being informed in

accordance with sub-regulation (2), the MFSA shall notify the

European regulatory authority of the host Member State concerned

of

(a) the intention of the Maltese credit intermediary; and

(b) where the Maltese credit intermediary is a tied credit

intermediary, the creditors to which the Maltese credit

intermediary is tied and whether the creditors take full

and unconditional responsibility for the Maltese credit

intermediary’s activities.

(4)

The MFSA shall also, at the same time as a notification is

sent to the European regulatory authority of the host Member State

concerned, inform the Maltese credit intermediary concerned of

that notification.

(5) The Maltese credit intermediary may only start business in

the host Member State concerned one month after the date on which

he was informed by the MFSA in accordance with sub-regulation

(4).

(6) Where the European regulatory authority of the host

Member State concerned indicates to the Maltese credit

intermediary the conditions under which, in areas not harmonised

in European Union law, the activities of the Maltese credit

intermediary are to be carried out in the host Member State

concerned in accordance with Article 32(4) of the MCD, the

Maltese credit intermediary shall carry out its activities in the host

Member State in accordance with the conditions indicated by the

European regulatory authority of the host Member State concerned.

(1) Where Malta is the host Member State, a European

credit intermediary shall only carry out in Malta activities which

are covered by the admission granted by the European regulatory

authority of the home Member State without further admission by

the MFSA being required

Provided that European credit intermediaries may not

provide their services in relation to credit agreements offered by

(a) non-credit institutions established in other Member

States to consumers in Malta where such non-credit

institutions are not allowed to operate in Malta; or

(b) credit institutions authorised in other Member States in

terms of the CRD, where such credit institutions have

not exercised their right to establish a branch or to

provide services in Malta in terms of the CRD.

(2) Appointed representatives appointed by European credit

intermediaries may not carry out any of the credit intermediation

activities in terms of the definition "credit intermediary" in

regulation 2, or provide advisory services in Malta.

(3) Where a European credit intermediary informs the

European regulatory authority of the home Member State about its

intention to carry out business for the first time in Malta under the

freedom to provide services or when establishing a branch in

accordance with Article 32(3) of the MCD, the European regulatory

authority of the home Member State shall, in accordance with

Article 32(3) of the MCD, notify the MFSA of

(a) the intention of the European credit intermediary; and

(b) where the European credit intermediary is a tied credit

intermediary, the creditors to which the European

credit intermediary is tied and whether the creditors

take full and unconditional responsibility for the

European credit intermediary’s activities

(4)

The MFSA shall use the information received in accordance

with sub-regulation (3) to enter the necessary information into its

register.

(5) A European credit intermediary may only start business in

Malta one month after the date on which he is informed by the

European regulatory authority of the home Member State of the

notification submitted to the MFSA in accordance with Article

32(3) of the MCD.

(6) Before the branch of a European credit intermediary

commences its activities, or within two months of receiving the

notification referred to sub-regulation (3), the MFSA shall prepare

f or t he s up e r vi s i o n o f th e Eu r o pe a n c r e d i t i n t e r m e d i a r y in

accordance with regulations 22F and 22G and, if necessary,

indicate to the European credit intermediary the conditions under

which, in areas not harmonised in European Union law, those

activities are to be carried out in Malta.

(1) An admission granted to a credit intermediary by the

MFSA shall automatically cease to have any effect if the holder

(a) expressly renounces the admission;

(b) has carried out neither credit intermediation activities

in terms of the definition "credit intermediary" in

regulation 2, nor provided advisory services, for the

preceding six months; or

(c) where the credit intermediary is a legal person, has

ceased to operate as a result of a merger with another

credit intermediary or for any other reason whatsoever.

(2) The MFSA may withdraw the admission granted to a credit

intermediary in accordance with regulation 18A where such a credit

intermediary

(a) has obtained the admission through false or misleading

statements or any other irregular means;

(b) no longer fulfils the requirements under which

admission was granted;

(c) has seriously or systematically infringed

the

provisions of these regulations governing

the

operating conditions for credit intermediaries;

(d) if any document or information accompanying an

application for an admission or any information given

in connection therewith is false in any material

particular;

(e) conceals from, or fails to notify the MFSA with any

document or information or change therein which it

was its duty to reveal or notify under these regulations

or any Credit Intermediaries’ Rules issued thereunder;

(f)

where the credit intermediary is a legal person, is

declared bankrupt or,

goes into liquidation or is

otherwise dissolved;

(g) fails to comply with any of the provisions of these

regulations or any Credit Intermediaries’ Rules issued

thereunder or with the conditions under which the

admission is granted; or

(h) has insufficient assets to cover its liabilities.

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

admission of a credit intermediary automatically ceases to have effect

in accordance with sub-regulation (1) or is withdrawn by the MFSA in

accordance with sub-regulation (2), the MFSA shall immediately

notify the European regulatory authority of the relevant host Member

States of such automatic cessation of admission or of such withdrawal

as soon as possible and at the latest within fourteen (14) days from the

date on which the admission automatically ceases to have effect or

from the date of the withdrawal, by any appropriate means.

(4) The MFSA shall, without undue delay, delete from the

register referred to in regulation 18A any credit intermediaries

whose admission has automatically ceased to have effect or has been

withdrawn.

(5) The MFSA may also impose restrictions on an admission

granted in terms of these regulations as it shall consider appropriate

for the proper compliance by credit intermediaries with the

provisions of these regulations, any Credit Intermediaries’ Rules

issued thereunder and the conditions, if any, of its admission, and

may include

(a) the removal of any officer of the credit intermediary or

the replacement of any officer by such person as the

MFSA may designate;

(b) the requirement for the credit intermediary to take or

refrain from any action;

(c) the requirement that the credit intermediary be

prohibited from undertaking any transaction or

transactions or any class of business or be permitted to

undertake any transaction or transactions or any class

of business only upon such terms as the MFSA may

prescribe

Provided that the MFSA shall have the power to vary or

remove any restrictions imposed under this regulation.

(6) Where the MFSA intends to restrict or withdraw an

admission or to vary any restriction, it shall serve written notice of

its intention on the credit intermediary; such notice shall specify

the grounds upon which the MFSA intends to take action and shall

specify a period within which the credit intermediary shall be

entitled to make representations to the MFSA as to why such action

should not be taken. Unless the MFSA decides that the matter is

urgent, it shall not impose or vary any restriction or withdraw an

admission before the expiry of such period.

(7) Where the MFSA is satisfied that the circumstances so

warrant, it may at any time make public any action it has taken

under this regulation.

PART XIII

Miscellaneous

(1) Without prejudice to Directive 2005/29/EC, any

advertising and marketing communications concerning credit

agreements shall be fair, clear and not misleading. In particular,

wording that m ay create false ex pectations f or a consumer

regarding the availability or the cost of a credit agreement shall be

prohibited.

(2) Without prejudice to the provisions relating to unfair

commercial practices under the Act, any advertising concerning

credit agreements which indicates an interest rate or any figures

relating to the cost of the credit to the consumer, shall include the

standard information in accordance with this regulation.

(3) The standard information referred to in sub-regulation (2)

shall specify in a clear, concise and prominent way

(a) the identity of the creditor or, where applicable, the

credit intermediary;

(b) that the product advertised is a credit agreement and,

where applicable, that the credit agreement will be

secured by a hypothec or privilege on residential

immovable property, by a right related to residential

immovable property;

(c) the borrowing rate, indicating whether this is fixed or

variable or a combination of both;

(d) particulars of any charges included in the total cost of

credit to the consumer;

(e) the total amount of credit;

(f)

the APRC which shall be included in the

advertisement at least as prominently as any interest

rate;

(g) where applicable, the duration of the credit agreement;

(h) where applicable, the total amount payable by the

consumer;

(i)

where applicable, the amount of the instalments and

the amount of each repayment of credit;

(j)

where applicable, a warning regarding the fact that

possible fluctuations of the exchange rate could affect

the amount payable by the consumer; and

(k) where applicable, a warning concerning the risk of

losing the immovable property in the event of non-

observance of the commitments linked to the credit

agreement.

(4) The information listed in sub-regulation (3) other than that

listed in paragraphs (a), (b) or (j) thereof, shall be specified by

means of a representative example and shall adhere to that

representative example throughout

Provided that the Director General shall adopt criteria for

determining a representative example.

(5)

(a) Any advertising concerning credit agreements which

include an interest rate or any figures relating to the

cost of the credit to the consumer, shall include a clear

and concise statement in respect of any obligation to

enter into a contract in respect of an ancillary service

relating to the credit agreement, in particular an

insurance service, where

(i)

the conclusion of that service is compulsory in

order to obtain the credit or to obtain it on the

terms and conditions advertised; and

(ii) the cost of that service cannot be determined in

advance.

(b) The obligation referred to in paragraph (a) shall be

advertised in a prominent way together with the

APRC.

(6) The information referred to in sub-regulations (3) and (5)

shall be easily legible or clearly audible as appropriate, depending

on the medium used for advertising and marketing.

(7) The Director General may require the inclusion of a concise

and proportionate warning concerning specific risks associated

with credit agreements

Provided that the Director General shall notify the MFSA

of any such requirements without undue delay

Provided further that the MFSA shall, upon receipt of the

notification from the Director General referred to in this sub-

regulation, notify those requirements to the European Commission

without delay.

(8) This regulation shall be without prejudice to Directive

2005/29/EC.

(1) Whilst bundling practices shall be allowed, tying

practices shall be prohibited.

(2) Notwithstanding sub-regulation (1) creditors can request

the consumer or a family member or close relation of the consumer

to open or maintain a payment or a savings account, where the only

purpose of such an account is to accumulate capital to repay the

credit, to service the credit, to pool resources to obtain the credit,

or to provide additional security for the creditor in the event of

default.

(3) Creditors may require the consumer to hold a relevant

insurance policy related to the credit agreement

Provided that a creditor shall accept insurance policies from

a supplier different to his preferred supplier where such policy has

a level of guarantee equivalent to the one the creditor has proposed.

(1) Maltese and European creditors shall have access to

databases used in Malta for assessing the creditworthiness of

consumers

Provided that creditors may only access such databases for

the sole purpose of monitoring consumers’ compliance with the

credit obligations over the life of the credit agreement.

(2) Any conditions imposed for access to the databases referred

to in sub-regulation (1) shall be non-discriminatory.

(3) Sub-regulation (1) shall apply both to databases which are

operated by private credit bureaux or credit reference agencies and

to public registers

Provided that a request by a creditor for access to such

databases may be refused by the holder of the database if the

information to be provided is prohibited by any other law, or is

contrary to the public policy or public security of Malta.

(4) This regulation shall be without prejudice to the Data

Protection Directive.

(1) The annual percentage rate of charge shall be

calculated in accordance with the mathematical formula set out in

the Second Schedule.

(2) The costs of opening and maintaining a specific account, of

using a means of payment for both transactions and drawdowns on

that account and of other costs relating to payment transactions

shall be included in the total cost of credit to the consumer

whenever the opening or maintaining of an account is obligatory in

order to obtain the credit or to obtain it on the terms and conditions

marketed.

(3) The calculation of the annual percentage rate of charge

shall be based on the assumption that the credit agreement is to

remain valid for the period agreed and that the creditor and the

consumer will fulfil their obligations under the terms and by the

dates specified in the credit agreement.

(4) In the case of credit agreements containing clauses allowing

variations in the borrowing rate and, where applicable, in the

charges contained in the annual percentage rate of charge but

unquantifiable at the time of calculation, the annual percentage rate

of charge shall be calculated on the assumption that the borrowing

rate and other charges will remain fixed in relation to the level set

at the conclusion of the contract.

(5) For credit agreements for which a fixed borrowing rate is

agreed in relation to the initial period of at least five years, at the

end of which a negotiation on the borrowing rate takes place to

agree on a new fixed rate for a further material period, the

calculation of the additional, illustrative annual percentage rate of

charge disclosed in the ESIS shall cover only the initial fixed rate

period and shall be based on the assumption that, at the end of the

fixed borrowing rate period, the capital outstanding is repaid.

(6) Where the credit agreement allows for variations in the

borrowing rate, creditors shall inform consumers of the possible

impacts of variations on the amounts payable and on the annual

percentage rate of charge at least by means of the ESIS, by

providing the consumer with an additional annual percentage rate

of charge which illustrates the possible risks linked to a significant

increase in the borrowing rate

Provided that where the borrowing rate is not capped, the

information referred to in this sub-regulation shall be accompanied

by a warning highlighting that the total cost of the credit to the

consumer, shown by the annual percentage rate of charge, may

change

Provided further that this sub-regulation shall not apply to

credit agreements where the borrowing rate is fixed for an initial

period of at least five years, at the end of which a negotiation on the

borrowing rate takes place in order to agree on a new fixed rate for

a further material period, for which an additional, illustrative

annual percentage rate of charge is provided for in the ESIS.

(7) Where applicable, the additional assumptions set out in the

Second Schedule shall be used in calculating the annual percentage

rate of charge.

(1) The Director General shall ensure that appropriate

mechanisms are in place in Malta to ensure that the claim against

the security is enforceable by or on behalf of creditors.

(2) Creditors shall keep appropriate records concerning the

types of immovable property accepted as a security as well as the

related underwriting policies used in relation to credit agreements.

(3) The Director General shall take the necessary measures to

ensure an appropriate statistical monitoring of the residential

property market, including for market surveillance purposes, where

appropriate by encouraging the development and use of specific

(1) Without prejudice to the responsibilities and

obligations of European regulatory authorities in accordance with

the MCD, it shall be the responsibility of the competent authorities

to

(a) monitor the working and effectiveness of these

regulations and to take such measures as may be

deemed necessary in order to ensure compliance with

these regulations; and

(b) supervise creditors and credit intermediaries in terms

of these regulations, and ensure that there is

compliance by them with the obligations identified

under these regulations

Provided that the allocation of tasks between the competent

authorities and the European regulatory authorities in accordance

with Article 34 of the MCD shall be without prejudice to Member

States’ competences in relation to fields not covered by the MCD in

conformity with their obligations under European Union law.

(2)

For the purposes of sub-regulation (1), the MFSA may

(a) require a credit intermediary to take the necessary

measures at an early stage to address relevant

problems in circumstances where the credit

intermediary does not meet the requirements of these

regulations or any Credit Intermediaries’ Rules issued

thereunder, or where the MFSA has evidence that the

credit intermediary is likely to breach these

regulations or any Credit Intermediaries’ Rules issued

thereunder, within the following twelve months; and

(b) require a credit intermediary to submit any

information as the MFSA may determine, or as the

MFSA may from time to time require, in such form

and at such time or times or at such intervals or in

respect of such period or periods as may be prescribed

by the MFSA.

(3) Credit intermediaries shall submit to the MFSA any

information which it may reasonably require in the exercise of its

duties under these regulations and any Credit Intermediaries’ Rules

issued thereunder, and the MFSA may enquire into and ask for

clarification of any information so submitted.

(4) The MFSA may also authorise an officer, employee, agent

or inspector of the MFSA, on producing evidence of his authority,

to require any credit intermediary to provide him forthwith with

such information, or to produce to him forthwith such documents,

as he may specify, being such information or documents as the

MFSA may reasonably require for the performance of its functions

under these regulations or any Credit Intermediaries’ Rules made

thereunder

Provided that any such officer, employee, agent or inspector

shall have the power to require the production of those documents

from any person who appears to be in possession of them.

(5) The power under this regulation to require an intermediary

or any other person to produce any documents includes the power -

(a) if the documents are produced, to take copies of them

or extracts from them and to require that credit

intermediary or person, or any other person who is a

present or past officer of, or is or was at any time

employed by or acting as an employee of, the credit

intermediary in question, to provide an explanation of

any of them; and

(b) if the documents are not produced, to require the

person who was required to produce them to state, to

the best of his knowledge and belief, where they are.

(6) Without prejudice to articles 4(2) and 17 of the Malta

Financial Services Authority Act, the MFSA may provide any

information submitted by a credit intermediary to the MFSA or to

any of its officers, servants or agents, to the Director General

without such an act being considered as a breach of any

confidentiality or professional secrecy obligations in terms of

national law.

(1) Any officer, employee or agent of the MFSA may, for

the purposes of regulation 22(1), carry out investigations on and,

or, on-site inspections at the premises of, any person who appears

to be in possession of relevant information.

(2) For the purposes of sub-regulation (1), the MFSA may

appoint one or more competent persons, as inspectors, to

investigate and report on the nature, conduct or state of the credit

intermediary’s business or any particular aspect of it

Provided that if any such person appointed under this sub-

regulation deems it necessary for the purposes of his investigation

or for the purposes of an on-site inspection, he may also investigate

and report on the business of any person who is or has at any

relevant time been involved with, or in any matters of, the credit

intermediary concerned, including

(a) a holding company, subsidiary or a company which is

a connected person of the credit intermediary under

investigation; or

(b) a subsidiary or a company which is a connected person

of a holding company of that credit intermediary; or

(c) a holding company of a subsidiary of that credit

intermediary; or

(d) a controller of that credit intermediary; or

(e) an outsourcing

service

provider

of

that

credit

intermediary.

(3) Where the MFSA decides to investigate the business of, or

carry out an on-site inspection at the premises of, any person in

terms of sub-regulation (1), it shall inform that person by notice in

writing.

(4) It shall be the duty of every person who is or was an officer

or employee of, or who is otherwise related to the credit

intermediary, which is under investigation in terms of these

regulations

(a) to produce to the person or persons appointed under

sub-regulation (2), within such time and at such place

as they may require, all documents relating to the

person concerned which are in his custody or power;

(b) to attend before the person or persons so appointed at

such time and place as they may require; and

(c) otherwise to give such person or persons all assistance

in connection with the investigation which he is

reasonably able to give, and such person or persons

may take copies of or extracts from any documents

produced to them under paragraph (a).

(5) A person exercising powers by virtue of an appointment

under this regulation shall, if so required, produce evidence of his

authority.

(6)

No person shall -

(a) without lawful excuse fail to produce any documents

which it is his duty to produce under sub-regulation

(4);

(b) without lawful excuse fail to attend before the person

or persons appointed under sub-regulation (2) when

required to do so; or

(c) without lawful excuse fail to answer any question

which is put to him by persons so appointed.

(7) A statement made by a person in compliance with a

requirement imposed by virtue of this regulation may be used as

evidence against him.

(8) The MFSA shall have the power to order that all expenses

of, and incidental to, an investigation pursuant to this regulation be

paid by the credit intermediary concerned.

(1) Any officer, employee, agent or inspector of the

MFSA may, on producing, if required, evidence of his authority

(a) enter any premises occupied by a person on whom a

notice has been served in terms of regulation 22A for

the purpose of obtaining the information or documents

required by that notice;

(b) enter any premises occupied by any person on whom a

notice could be served in terms of regulation 22A for

the purpose of obtaining there such information or

documents as may be specified by the MFSA, being

information or documents that could have been

required by such a notice

Provided that the MFSA shall not authorise any person to

act under paragraph (b) unless it has reasonable cause to believe

that if such a notice were served it would not be complied with or

that any documents to which it would relate would be removed,

tampered with or destroyed

Provided further that where an entry as is mentioned in this

sub-regulation involves premises that are occupied for the purposes

of habitation, such entry shall be carried out in the presence of an

officer of the Police of a rank not below that of inspector and shall

moreover not take place between nine in the evening and five in the

morning.

(2) No person shall intentionally obstruct a person exercising

rights conferred by this regulation.

(1) Where the MFSA has reasonable grounds for

suspecting that a person has contravened or has failed to comply

with any provision of these regulations or any Credit

Intermediaries’ Rules issued thereunder, it may by notice in writing

require that person or any other person

(a) to provide at such place as may be specified in the

notice and either forthwith or at such time as may be

so specified, such information as it may reasonably

require for the purpose of investigating the suspected

contravention or failure to comply;

(b) to produce, at such place as may be specified in the

notice and either forthwith or at such time as may be

so specified, such documents, or documents of such

description as may be specified which it may

reasonably require for that purpose;

(c) to attend at such place and time as may be specified in

the notice, and answer questions relevant for

determining whether such a contravention or failure to

comply has occurred.

(2) The MFSA or its duly authorised officer, employee, agent

or inspector, may take copies of or extracts from any documents

produced under this regulation.

(3) Any officer, employee, agent or inspector of the MFSA

may, between five o’clock in the morning and nine o'clock at night,

on producing if required evidence of his authority, enter any

premises occupied by a person on whom a notice has been served in

terms of sub-regulation (1) for the purpose of obtaining there the

information or documents required by the notice, putting the

questions referred to in paragraph (c) of that sub-regulation or

exercising the powers conferred by sub-regulation (2).

(4) No person shall without lawful excuse fail to comply with a

requirement imposed on him under this regulation or intentionally

obstruct a person in the exercise of the rights conferred by sub-

regulation (3).

(5) A statement made by a person in compliance with a

requirement imposed by virtue of this regulation may be used as

evidence against him.

No person who knows or suspects that an investigation is

being or is likely to be carried out in terms of these regulations may

falsify, conceal, destroy or otherwise dispose of, or cause or permit

the falsification, concealment, destruction or disposal of,

documents which he knows or suspects are or would be relevant to

such an investigation unless he proves that he had no intention of

concealing facts disclosed by the documents from persons carrying

out such an investigation.

Every officer of a credit intermediary shall take all

reasonable steps

(a) to secure compliance by the credit intermediary with

all of the provisions of these regulations or any Credit

Intermediaries’ Rules issued thereunder and of its

admission in terms of these regulations; and

(b) to ensure that no incorrect information is provided to

the MFSA either wilfully or as the result of gross

negligence.

(1) Maltese credit intermediaries shall comply with these

regulations and shall be subject to supervision of their ongoing

activities by the competent authorities

Provided that where Maltese credit intermediaries provide

services within the territory of another Member State through the

establishment of a branch

(a) Maltese credit intermediaries shall, with respect to the

services provided within the territory of the Member

State concerned, comply with the obligations laid

down in Articles 7(1), 8, 9, 10, 11, 13, 14, 15, 16, 17,

20, 22 and 39 of the MCD and with any measures

adopted pursuant thereto by the host Member State

concerned; and

(b) the European regulatory authority of the host Member

State concerned shall, in accordance with Article 34(3)

of the MCD, have the right to examine branch

arrangements and to request such changes as may be

strictly needed to fulfil its obligations under Article

34(2) of the MCD and to enable the Director General

to enforce the obligations under regulation 5(2), (3)

and (4) and any measures adopted pursuant thereto by

the Director General with respect to the services

provided by the branch.

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

authorities shall determine on a case-by-case basis, whether tied

credit intermediaries who are admitted in terms of these regulations

and who act for and on behalf of a Maltese creditor, are to be

subject to supervision directly or as part of the supervision of the

creditor on behalf of which they act

Provided that if such tied credit intermediaries provide

services in another Member State, such tied credit intermediaries

shall be subject to supervision directly.

(3) Where Malta is the home Member State, a European

regulatory authority may, in accordance with Article 34(2) of the

MCD, where it ascertains that a Maltese credit intermediary

providing services within its territory through the establishment of

a branch is in breach of the measures adopted in the relevant host

Member State pursuant to regulations Articles 7(1), 8, 9, 10, 11, 13,

14, 15, 16, 17, 20, 22 and 39 of the MCD, require the Maltese credit

intermediary concerned to put an end to its irregular situation

Provided that if the Maltese credit intermediary concerned

fails to take the necessary steps, the European regulatory authority

of the host Member State concerned may, in accordance with

Article 34(2) of the MCD, take all appropriate action to ensure that

the Maltese credit intermediary concerned puts an end to its

irregular situation

Provided further that in such cases, the European regulatory

authority shall, in accordance with Article 34(2) of the MCD

communicate the nature of any such action to the MFSA.

(4) In the event that, despite the action taken by the European

regulatory authority of the host Member State concerned in

accordance with Article 34(2) of the MCD, the Maltese credit

intermediary persists in breaching the measures referred to in

Article 34(2) of the MCD in force in the host Member State

concerned, the European regulatory authority of the host Member

State may, in accordance with Article 34(2) of the MCD, take

appropriate action to prevent or to penalise further irregularities

a n d , i n s o f a r a s n e c e s s a r y, t o p r e v e n t t h e M a l t e s e c r e d i t

intermediary from initiating any further transactions within its

territory

Provided that where the MFSA or the Director General, as

the case may be, disagrees with any such actions taken by the

European regulatory authority of the host Member State concerned,

the Director General may refer the matter to the EBA and request

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

1093/2010.

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

regulatory authority of a host Member State refers findings to the

MFSA in accordance with Article 34(4) of the MCD, with respect

to breaches by Maltese credit intermediaries acting under the

freedom to provide services or the freedom of establishment in the

host Member State concerned, of the obligations arising from the

measures adopted pursuant to the MCD other than those specified

in Article 34(2) of the MCD, the MFSA or the Director General, as

the case may be, shall take appropriate action

Provided that where the MFSA or the Director General, as

the case may be, fail to take any such action within one month from

obtaining those findings, or where, despite any such action taken by

the MFSA or the Director General, as the case may be, the Maltese

credit intermediary concerned persists in acting in a manner that is

clearly prejudicial to the interests of the consumers of the relevant

host Member State or the orderly functioning of the markets, the

European regulatory authority of the host Member State concerned

may, in accordance with Article 34(4) of MCD

(a) after having informed the MFSA, take all appropriate

action needed to protect consumers and ensure the

proper functioning of the markets, including by

preventing the offending Maltese credit intermediary

form initiating any further transactions within the

territory of the host Member State;

(b) refer the matter to the EBA and request its assistance

in accordance with Article 19 of Regulation (EU) No

1093/2010.

(6) The MFSA shall forward to the Director General any

information received from European regulatory authorities of host

Member States in accordance sub-regulations (3) and (5).

(7) Where Malta is the home Member State and a Maltese

credit intermediary provides services within the territory of another

Member State through the establishment of a branch, the MFSA

a n d t h e D i r e c t o r G e n e r a l m a y, i n t h e e x e r c i s e o f t h e i r

responsibilities and in accordance with Article 34(5) of the MCD,

carry out on-site inspections in that branch

Provided that such on-site inspections shall only be carried

o u t f ol l ow i ng a no ti f i c a t i on b y t h e M F S A t o t h e E ur o pe a n

regulatory authority of the host Member State concerned.

(8) For the purposes of this regulation, the Director General

and the MFSA shall collaborate closely and shall cooperate

whenever necessary, including by exchanging all the necessary

information in order for such competent authorities to be able to

fulfil their respective duties, responsibilities and obligations.

(1) Branches in Malta of European credit intermediaries

shall comply with the obligations laid down in regulations 4A, 5(1),

6, 7, 7A, 8, 8A, 8B, 12A, 19, 21 and 24A and with any measures

adopted pursuant thereto by the MFSA and, or the Director

General, as the case may be, and shall be subject to supervision by

such competent authorities of their ongoing activities with respect

to such obligations and measures

Provided that where Malta is the host Member State, the

MFSA and, or the Director General, as the case may be, shall also

have the right to examine branch arrangements and to request such

changes as are strictly needed to fulfil their responsibilities under

Article 34(2) of the MCD and to enable the European regulatory

authority of the home Member State concerned to enforce the

obligations under Articles 7(2), (3) and (4) of the MCD and any

measures adopted pursuant thereto by the home Member State

concerned with respect to the services provided by the branch of

the European credit intermediary.

(2) Where Malta is the host Member State and the MFSA and,

or the Director General, as the case may be, ascertain that a

European credit intermediary providing services in Malta through

the establishment of a branch is in breach of the measures adopted

in Malta pursuant to regulations 4A, 5(1), 6, 7, 7A, 8, 8A, 8B, 12A,

19, 21 and 24A, such competent authorities shall require the

European credit intermediary concerned to put an end to its

irregular situation.

(3) In the event that a European credit intermediary providing

its services in Malta through the establishment of a branch fails to

take the necessary steps following a request made by the MFSA

and, or the Director General, as the case may be, in accordance

with sub-regulation (2), such competent authorities shall take

appropriate action to ensure that the European credit intermediary

concerned puts an end to its irregular situation

Provided that the MFSA shall communicate the nature of

such action to the European regulatory authority of the home

Member State concerned.

(4) In the event that, despite the action taken by the MFSA and,

or the Director General, as the case may be, in accordance with

sub-regulation (3), the European credit intermediary concerned

persists in breaching the measures referred to in sub-regulation (2),

the MFSA and, or the Director General, as the case may be, may

take appropriate action to prevent or to penalise further

irregularities and, in so far as necessary, to prevent the European

credit intermediary form initiating any further transactions in

Malta

Provided that in any such case, the MFSA shall

(a) before any appropriate action is taken by the MFSA

and, or the Director General, as the case may be, in

accordance with this sub-regulation, inform the

European regulatory authority of the home Member

State concerned;

(b) inform the European Commission of any such action

without undue delay

Provided further that where the European regulatory

authority of the home Member State concerned disagrees with any

such action taken by the MFSA and, or the Director General, as the

case may be, the European regulatory authority concerned may, in

accordance with Article 34(2) of the MCD, refer the matter to the

EBA and request its assistance in accordance with Article 19 of

Regulation (EU) No 1093/2010.

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

or the Director General, as the case may be, have clear and

demonstrable grounds for concluding that a European credit

intermediary acting within its territory under the freedom to

provide services is in breach of the obligations arising from the

measures adopted pursuant to the provisions of these regulations

transposing the MCD, or that a European credit intermediary that

has a branch in Malta is in breach of the obligations arising from

the measures adopted pursuant to the provisions of these

regulations transposing the MCD other than those specified in

Article 34(2) of the MCD, the MFSA shall refer those findings to

the European regulatory authority of the home Member State

concerned, which shall, in accordance with Article 34(4) of the

MCD, take appropriate action.

(6) In the event that the European regulatory authority of the

h o m e M e m b e r St a t e c o n c e r n e d f a i l s t o t a k e a n y a c t i o n i n

accordance with Article 34(4) the MCD, or where, despite the

action taken by the European regulatory authority of the home

Member State concerned, the European credit intermediary

concerned persists in acting in a manner that is clearly prejudicial

to the interests of Maltese consumers or orderly functioning of the

markets

(a) the MFSA and, or the Director General, as the case

may be, shall take all appropriate action needed to

protect consumers and ensure the proper functioning

of the markets, including by preventing the defaulting

European credit intermediary from initiating any

further transactions in Malta

Provided that prior to taking any such action, the

MFSA shall inform the European regulatory authority

of the home Member State concerned

Provided further that the MFSA shall inform the

European Commission and the EBA of any action

taken by the MFSA and, or the Director General, as the

case may be, in accordance with this paragraph

without undue delay;

(b) the MFSA may refer the matter to the EBA and request

its assistance in accordance with Article 19 of

Regulation (EU) No 1093/2010.

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

credit intermediary provides services in Malta through the

establishment of a branch, the European regulatory authority of the

home Member State may, in accordance with Article 34(5) of the

MCD, in the exercise of its responsibilities and after having

informed the MFSA, carry out on-site inspections in that branch

Provided that the MFSA shall forward to the Director

General any information received from the European regulatory

authority concerned in accordance with Article 34(5) of the MCD.

(8) For the purposes of this regulation, the Director General

and the MFSA shall collaborate closely and shall cooperate

whenever necessary, including by exchanging all the necessary

information in order for such competent authorities to be able to

fulfil their respective duties, responsibilities and obligations.

(1) The MFSA shall cooperate with European regulatory

authorities whenever necessary for the purpose of carrying out its

duties under the provisions of the MCD, making use of its powers,

whether set out in these regulation or in any other law.

(2) The MFSA shall render assistance to European regulatory

authorities and shall, in particular, exchange information and

cooperate in any investigation or supervisory activities

Provided that in order to facilitate such assistance, the

MFSA shall take the necessary administrative and organisational

measures

Provided further that where a European regulatory authority

requests the cooperation of the MFSA, in particular the exchange of

information, and the MFSA rejects the request or does not act upon

it within a reasonable time, the European regulatory authority

concerned may, in accordance with Article 37 of the MCD, refer

the situation to the EBA and request the EBA’s assistance in

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

(3) The MFSA shall communicate to the European Commission

and to the other Member States its name and contact details as the

authority which, in accordance with regulation 3A(1), has been

designated as the single contact point for the purposes of the MCD

and to receive requests for exchange of information or cooperation

pursuant to Article 36(1) of the MCD.

(4) The MFSA shall without undue delay supply European

regulatory authorities with the information required for the

purposes of carrying out their duties set out in the measures

adopted pursuant to the MCD.

(5) The MFSA may, when exchanging information with

European regulatory authorities, indicate at the time of

communication that such information must not be disclosed

without its express agreement

Provided that in such case, such information may, in

accordance with Article 36(3) of the MCD be exchanged solely for

the purposes for which the MFSA gave its agreement

Provided further that the European regulatory authority

receiving this information from the MFSA may, in accordance with

Article 36(3) of the MCD, transmit such information received to

other authorities designated as competent in its Member State in

accordance with Article 5 of the MCD, solely for the purposes for

which the MFSA gave its agreement, and shall not, in accordance

with Article 36(3) of the MCD, transmit the information to other

bodies or natural or legal persons without the express agreement of

the MFSA, except in duly justified circumstances

Provided further that in the event of such circumstances,

the European regulatory authority shall, in accordance with Article

36(3) of the MCD, immediately inform the MFSA.

(6) Where the MFSA receives information from a European

regulatory authority and at the time of the communication the

European regulatory authority concerned indicates that such

information must not be disclosed without its express agreement,

the MFSA may only exchange such information solely for the

purposes for which the European regulatory authority concerned

gave its agreement

Provided that the MFSA may transmit the information

received to the Director General solely for the purposes for which

the European regulatory authority concerned gave its agreement,

and shall not transmit the information to other bodies or natural or

legal persons without the express agreement of the European

regulatory authority concerned, except in duly justified

circumstances

Provided further that in the event of such circumstances,

the MFSA shall immediately inform the European regulatory

authority that supplied the information.

(7) The MFSA may refuse to act on a request for cooperation in

carrying out an investigation or supervisory activity or to exchange

information as provided for in Article 36(3) of the MCD only

where

(a) such an investigation, on-the-spot verification,

supervisory activity or exchange of information might

adversely affect the sovereignty, security or public

policy of Malta;

(b) judicial proceedings have already been initiated in

respect of the same actions and the same persons

before Maltese authorities;

(c) final judgement has already been delivered in Malta,

addressed in respect of the same persons and the same

actions

Provided that in the event of such a refusal, the MFSA shall

notify the requesting European regulatory authority accordingly,

providing as detailed information as possible.

(8) For the purposes of this regulation, the Director General

and the MFSA shall collaborate closely and shall cooperate

whenever necessary, including by exchanging all the necessary

information in order for the competent authorities to be able to

fulfil their respective duties, responsibilities and obligations.

22 I. (1) Where a request for cooperation, in particular the

exchange of information, by the MFSA to a European regulatory

authority has been rejected or has not been acted upon within a

reasonable time by the European regulatory authority concerned,

the MFSA may refer the situation to the EBA and request the

EBA’s assistance in accordance with Article 19 of Regulation (EU)

No 1093/2010.

(2) Any binding decision made by the EBA in accordance with

Article 19 of Regulation (EU) No 1093/2010 further to a request by

the MFSA in accordance with sub-regulation (1), or a request by a

European regulatory authority made in accordance with Article 37

of the MCD, shall be binding on the competent authorities and, in

accordance with Article 37 of the MCD, on the European

regulatory authority concerned and on any other authorities

designated as competent in the Member State concerned in

accordance with Article 5 of the MCD, regardless of whether such

authorities are members of the EBA or not.

(1)

Without prejudice to the provisions of regulation

23A, the Director General shall proceed according to article 12 of the

Act and where, upon the conclusion of an investigation, it appears

prima facie to the Director General, that an infringement of these

regulations has occurred, the Director General shall institute judicial

proceedings against the person concerned before the Civil Court by

means of a sworn application and the provisions of Part IIA of the Act

shall apply to these judicial proceedings.

(2)

Subject to the provisions of Part IIA of the Act, the Civil

Court, in its judgement, shall impose a penalty and issue such order, or

take such measure as it may deem appropriate in terms of the Act,

upon any person who contravenes or fails to comply with any of the

provisions of these regulations

Provided that the MFSA shall not, through these judicial

proceedings or through any other procedures, request the imposition of

a penalty in respect of the same infringement.

(3)

Any person who contravenes any provision of these

regulations shall be guilty of an infringement punishable by a penalty

of not less than one thousand euro (€1,000) and not exceeding forty-

five thousand euro (€45,000).

(4)

In the case of non-compliance with a compliance order, the

Civil Court shall also impose a daily penalty of not less than one

hundred and thirty euro (€130) and not more than two hundred and

thirty euro (€230) for each day of non-compliance.

(5)

In determining the amount of the penalty specified in this

regulation, the Civil Court shall be guided by the following

considerations

(a) for infringements under these regulations, the basic

amount of the penalty shall be twenty thousand euro

(€20,000)

Provided that the Civil Court may, in setting the

penalty, take into account circumstances that may lead

to an increase or decrease in the basic amount

Provided further that the Civil Court shall do so on the

basis of an overall assessment which takes into

account all the relevant circumstances, including the

value of the credit under the credit agreement and the

turnover of the creditor;

(b) the Civil Court may impose a higher penalty than the

basic amount where there are aggravating

circumstances, having regard, in particular, to the

gravity and duration of the infringement and, or to the

amount of gains improperly made as a result of the

infringement;

(c)

without prejudice to the generality of paragraph

(b), the following shall in all cases be deemed as aggravating

circumstances

(i)

a second or subsequent infringement;

(ii)

where the infringement constitutes an

unfair commercial practice in terms of the Act; and

(d)

the basic amount may be decreased where the

Civil Court finds that there are mitigating circumstances in

particular

(i)

where the creditor or the credit

intermediary, as the case may be, provides evidence that

he terminated the infringement concerned prior to or as

soon as the Director General commenced an

investigation;

(ii)

where the creditor or the credit

intermediary, as the case may be, provides evidence that

he has taken adequate steps to reduce the negative

effects of the infringement.

(6)

In discharging his functions under these regulations, the

Director General shall have the same powers as prescribed under the

Act except where competences are assigned to the Civil Court by the

Act and by the Malta Competition and Consumer Affairs Authority

Act.

(7)

Any person who feels aggrieved by a judgement, order,

penalty or measure issued by the Civil Court, may appeal before the

Court of Appeal, on any point of law and, or of fact, by means of an

application filed in the registry of the Court of Appeal within twenty

days from the date of the judgment of the Civil Court

Provided that the Court of Appeal shall appoint the case for

hearing by not later than six months from the judgement of the Civil

Court.

(1) Without prejudice to the provisions of regulation 23,

where a credit intermediary fails to comply with any of the

conditions imposed in an admission, and, or where the MFSA is

satisfied that a person’s conduct amounts to a breach of any of the

provisions of these regulations transposing the MCD, or any Credit

Intermediaries’ Rules issued thereunder, or such person has failed

to comply with a directive issued by the MFSA under these

regulations, the MFSA may, by notice in writing and without

recourse to a court hearing, impose on such person an

administrative penalty of not less than one thousand euro (€1,000)

and not exceeding forty-five thousand euro (€45,000)

Provided that in determining the amount of the

administrative penalty referred to in this sub-regulation, the MFSA

shall be guided by the considerations referred to in regulation

23(4)

Provided that the Director General shall not in any manner

request the imposition of a penalty in respect of the same act or

omission.

(2) Where the MFSA decides to impose an administrative

penalty, it shall notify the person on whom the administrative

penalty is being imposed by means of a notice in writing.

(3) Where the person upon whom the notice referred to in sub-

regulation (2) is served -

(a) fails to pay to the MFSA the amount of the

administrative penalty within a period of thirty days of

the service of the notice, and fails to appeal from the

decision of the MFSA to the Financial Services

Tribunal; or

(b) appeals to the Financial Services Tribunal and fails

within a period of fifteen days from the decision of the

said Tribunal to pay the administrative penalty as

confirmed or as reduced by that Tribunal,

then, in every case, the amount of the administrative penalty, as

originally imposed or as reduced, as the case may be, shall be due

to the MFSA as a civil debt, and the provisions of sub-regulation

(4) shall apply.

(4) A notice as is referred to in sub-regulation (2), or the

decision of the Financial Services Tribunal, as the case may be,

shall upon the service by judicial act of a copy thereof on the

person indicated in the notice, constitute an executive title for all

effects and purposes of Title VII of Part I of Book Second of the

Code of Organization and Civil Procedure.

Any person who feels aggrieved by a decision and, or

measure taken by the MFSA pursuant to these regulations or any

Credit Intermediaries’ Rules issued thereunder, may appeal against

the decision and, or measure to the Financial Services Tribunal

within such period and under such conditions as established under

the Malta Financial Services Authority Act.

(1) The MFSA may publish, on its official website and, or

in any other media as it considers appropriate, any administrative

penalties imposed under the provisions of these regulations. Such

publications shall include information on the type and nature of the

breach and the identity of the person on whom the administrative

penalty is imposed, without undue delay after that person is

informed of those penalties

Provided that the MFSA shall not publish any

administrative penalties imposed under the provisions of these

regulations where such publication would seriously jeopardise the

financial markets or cause disproportionate damage to the parties

involved

Provided further that in cases where an administrative

penalty or penalties imposed under the provisions of these regulations

have been published in terms of this sub-regulation and an appeal has

been filed by the person on whom such administrative penalty or

penalties have been imposed, the MFSA shall, without undue delay,

also publish on its official website and in any other media as it

considers appropriate, information on the status of the appeal and the

outcome thereof.

(2) Information published in terms of this regulation shall

remain on the official website of the MFSA for a period of not less

than five years. Personal data shall be retained on the official

website of the MFSA and in any other media it considers

appropriate only for the period necessary, in accordance with the

provisions of Maltese legislation on data protection.

(1) The provisions of these regulations cannot be

circumvented in a way which could lead to consumers losing the

protection granted by these regulations as a result of the way in which

credit agreements are formulated, in particular by integrating credit

agreements into agreements, the character or purpose of which would

make it possible to avoid the application of those measures.

(2) Any waiver by the consumer of any of the rights granted to

him by these regulations shall be null and void.

(3) Notwithstanding any provision in the credit agreement to the

effect that the applicable law to the credit agreement shall be the law

of a non-Member State, the protection granted by these regulations

shall continue to apply where the credit agreement has a close link

with Malta or any other Member State.

(1) The Director General shall ensure that appropriate

and effective complaints and redress procedures are established for

the out of-court settlement of consumer disputes with creditors and

credit intermediaries in relation to credit agreements, using existing

bodies where appropriate. The Director General shall also ensure

that such procedures are applicable to credit ors and credit

intermediaries and cover the activities of appointed representatives.

(2) The bodies responsible for the out-of-court settlement of

consumer disputes to shall cooperate with bodies responsible for

the out-of-court settlement of consumer disputes in other Member

State so that cross-border disputes concerning credit agreements

can be resolved.

Agreements entered into under the Consumer Credit

Regulations, 2005 * , before their revocation, shall remain in force

and be regulated by the terms and conditions applicable thereto.

(1) The provisions of these regulations as amended by means

of the Home Loan (Amendment) Regulations shall not apply to credit

agreements existing before the coming into force of the said

regulations.

(2) Credit intermediaries already carrying out credit

i nt e r m e d i a t i o n a c t i vi t i e s i n t e r m s o f t h e d e f in i t i o n " c r e di t

intermediary" in regulation 2 before the coming into force of these

regulations and which have not yet been admitted in terms of these

regulations may continue to carry out those activities in compliance

with national law until 21 March 2017

Provided that where a Maltese credit intermediary relies on

this derogation, unless it also satisfies t he necessary legal

requirements of the host Member States, it may only perform its

activities in Malta.

(3) Creditors and credit intermediaries performing activities

regulated by these regulations before 20 March 2014 shall comply

with the sub-regulations (1) to (9) of regulation 6 by 21 March 2017.

*revoked by these Regulations.

CREDIT AGREEMENTS FOR CONSUMERS RELATING

TO RESIDENTIAL IMMOVABLE PROPERTY

41666 jum (i.e. 365/12) irrispettivament minn jekk hix sena biżestili jew le.

KUNTRATTI TA’ KREDITU GĦALL-KONSUMATURI

MARBUTIN MA’ PROPRJETÀ IMMOBBLI RESIDENZJALI

Fejn l-intervalli bejn id-dati wżati fil-kalkoli ma jistgħux jiġu indikati f ’numru

sħiħ ta’ ġimgħat, xhur jew snin, l-intervalli għandhom ikunu espressi bħala numru

sħiħ ta’ wieħed minn dawk il-perijodi flimkien ma’ numru ta’ ġranet. Meta jintużaw

il-ġranet

(i)

kull jum għandu jingħadd, inkluż tmiem il-ġimgħa u l-btajjel;

(ii)

perjodi ndaqs u imbagħad ġranet għandhom jingħaddu b’lura għad-data

tal-prelevament inizjali;

(iii)

it-tul tal-perijodu ta’ ġranet għandu jinkiseb billi l-ewwel data tiġi

eskluża u l-aħħar data tiġi inkluża u għandha tiġi indikata fi snin billi

dan il-perijodu jiġi diviż bin-numru ta’ ġranet (365 jew 366 jum) tas-

sena sħiħa u jingħadd b’lura mill-aħħar jum għall-istess jum tas-sena

preċedenti.

(d) Ir-riżultat tal-kalkolazzjoni għandu jiġi espress bi preċiżjoni ta’ mill-inqas

punt deċimali wieħed. Jekk iċ-ċifra fil-post deċimali li jsegwi tkun akbar minn jew

ugwali għal 5, iċ-ċifra f’dak il-post deċimali partikolari għandha tiżdied b’wieħed.

(e) L-ekwazzjoni tista’ tinkiteb mill-ġdid bl-użu ta’ somma waħda u l-kunċett

ta’ flussi (Ak), li jkun pożittiv jew negattiv, fi kliem ieħor imħallas jew riċevut matul

il-perjodi 1 sa n, espress fi snin, jiġifieri

S huwa l-bilanċ preżenti tal-flussi. Jekk l-għan hu li tinzamm l-ekwivalenza tal-

flussi, l-valur ikun żero.

II.

Supożizzjonijiet

addizzjonali

għall-kalkolazzjoni

tar-rata

perċentwali

annwali tal-imposti

(a) Jekk ftehim ta’ kreditu jagħti lill-konsumatur libertà fil-prelevament ta’

kreditu, l-ammont totali ta’ kreditu għandu jitqies li jkun prelevat immedjatament u

interament.

(b) Jekk ftehim ta’ kreditu jipprovdi modi differenti għall-prelevament ta’

kreditu b’imposti jew rati tat-teħid ta’ self differenti, l-ammont totali tal-kreditu

għandu jitqies bħala li ġie prelevat fl-ogħla imposta u rata ta’ teħid ta’ self applikata

għall-mekkaniżmu għall-prelevament tal-kreditu l-iktar komuni għal dan it-tip ta’

ftehim ta’ kreditu.

(ċ) Jekk ftehim ta’ kreditu jagħti lill-konsumatur il-libertà ta’ prelevament ta’

kreditu b’mod ġenerali iżda jimponi fost il-modi differenti ta’ prelevament, limitu

fir-rigward tal-ammont u l-perjodu ta’ żmien, l-ammont ta’ kreditu għandu jitqies

bħala li ġie prelevat fl-aktar data bikrija prevista fil-ftehim u skont dawk il-limiti ta'

prelevament ta’ kreditu.

(d) Jekk jiġu offruti rati tal-imgħax tas-self u imposti differenti għal perijodu

jew ammont limitat, l-għola rata tal-imgħax tas-self u imposti għandhom jitqiesu li

huma r-rata tal-imgħax tas-self u l-imposti għat-tul ta’ żmien kollu tal-kuntratt ta’

kreditu.

(e) Għal kuntratti ta’ kreditu li għalihom tkun miftiehma rata tal-imgħax tas-self

fissa fir-rigward tal-perijodu inizjali, li fit-tmiem tagħhom tiġi ddeterminata rata tal-

imgħax tas-self ġdida u sussegwentement perjodikament aġġustata skont indikatur

jew rata ta’ referenza interna miftehmin, il-kalkolu tar-RPAI għandha tkun ibbażata

fuq il-preżunzjoni li, fi tmiem il-perijodu ta’ rata tal-imgħax tas-self fissa, ir-rata tal-

KUNTRATTI TA’ KREDITU GĦALL-KONSUMATURI

MARBUTIN MA’ PROPRJETÀ IMMOBBLI RESIDENZJALI

imgħax tas-self tkun l-istess bħal dik fil-mument tal-kalkolu tar-RPAI, abbażi tal-

valur tal-indikatur jew ir-rata ta’ referenza interna miftehmin f’dak iż-żmien, iżda

ma tkunx inqas mir-rata tal-imgħax tas-self fissa.

(f)

Jekk il-limitu massimu applikabbli għall-kreditu jkun għadu ma ġiex

miftiehem, dak il-limitu massimu jitqies li hu EUR170 000. Fil-każ ta’ kuntratti ta’

kreditu - għajr responsabbiltajiet kontinġenti jew garanziji - li l-iskop tagħhom ma

jkunx li jinxtara jew jinżamm dritt fi proprjetà immobbli jew art, overdrafts, karti ta’

debitu differit u karti ta’ kreditu, dan il-limitu massimu jitqies li hu EUR 1 500.

(g) Fil-każ ta’ kuntratti ta’ kreditu, għajr kuntratti ta’ overdrafts, self

intermedjarju, kuntratti ta’ kreditu b’ekwità kondiviża, responsabbiltajiet

kontinġenti jew garanziji u kuntratti ta’ kreditu għal żmien indefinit kif imsemmijin

fil-preżunzjonijiet stabbiliti fis-subparagrafi (i), (j), (k), (l) u (m)

(i)

jekk id-data jew l-ammont tal-ħlas lura tal-kapital, li għandu jsir mill-

konsumatur ma jistgħux jiġu aċċertati, għandu jitqies li l-ħlas lura isir

fid-data l-aktar kmieni prevista fil-kuntratt ta’ kreditu u huwa għall-

inqas ammont li l-kuntratt ta’ kreditu jipprevedi;

(ii) jekk l-intervall bejn id-data ta’ prelevament inizjali u d-data tal-ewwel

ħlas li għandu jsir mill-konsumatur ma jistax jiġi aċċertat, għandu

jitqies li jkun l-intervall l-iktar qasir.

(h) Fejn id-data jew l-ammont ta’ ħlas li għandu jsir mill-konsumatur ma

jistgħux jiġu aċċertati abbażi tal-kuntratt ta’ kreditu jew il-preżunzjonijiet stabbiliti

fis-subparagrafi (g), (i), (j), (k), (l) u (m), għandu jitqies li l-ħlas isir skont id-dati u

l-kundizzjonijiet rikjesti mill-kreditur u, meta dawn ma jkunux magħrufa

(i)

imposti tal-imgħax jitħallsu flimkien mal-ħlas lura tal-kapital;

(ii) imposti mhux tal-imgħax indikati bħala somma waħda jitħallsu fid-data

tal-konklużjoni tal-kuntratt ta’ kreditu;

(iii) imposti mhux tal-imgħax indikati f’diversi pagamenti jitħallsu

f’intervalli regolari, li jibdew mad-data tal-ewwel ħlas lura tal-kapital, u

jekk l-ammont ta’ tali pagamenti mhuwiex magħruf għandhom jitqiesu

bħala ammonti ndaqs;

(iv)

il-ħlas finali jħassar il-bilanċ tal-kapital, l-imgħax u imposti oħrajn,

jekk ikun hemm.

(i) Fil-każ ta’ faċilità ta’ overdraft, l-ammont totali tal-kreditu għandu jitqies

prelevat kompletament u għat-tul ta’ żmien kollu tal-kuntratt ta’ kreditu. Jekk it-tul

ta’ żmien tal-kuntratt ta’ kreditu mhux magħruf, ir-RPAI għandha tiġi kkalkolata fuq

il-preżunzjoni li ż-żmien tal-kreditu huwa ta’ tliet xhur.

(j)

Fil-każ ta’ self transitorju l-ammont totali tal-kreditu għandu jitqies li jiġi

prelevat kompletament u għat-tul ta’ żmien kollu tal-kuntratt ta’ kreditu. Jekk it-tul

ta’ żmien tal-kuntratt ta’ kreditu mhux magħruf, ir-RPAI għandha tiġi kkalkolata fuq

il-preżunzjoni li ż-żmien tal-kreditu huwa ta’ tnax-il xahar.

(k) Fil-każ ta’ kuntratt ta’ kreditu għal żmien indefinit, għajr faċilità ta’

overdraft u self transitorju, għandu jitqies li

(i)

għal kuntratti ta’ kreditu, li l-iskop tagħhom huwa li jinxtraw jew

jinżammu drittijiet fi proprjetà immobbli, il-kreditu jingħata għal

perijodu ta’ għoxrin sena li jibda fid-data tal-prelevament inizjali, u li l-

ħlas finali mill-konsumatur jaqta l-bilanċ tal-kapital, l-imgħax u imposti

oħrajn, jekk ikun hemm; fil-każ ta’ kuntratti ta’ kreditu li l-iskop

tagħhom mhuwiex li jinxtraw jew jinżammu drittijiet fi proprjetà

immobbli jew fejn il-kreditu jiġi prelevat permezz ta’ karti ta’ debitu

differit jew karti ta’ kreditu, dan il-perijodu għandu jkun ta’ sena;

(ii) il-kapital jitħallas lura mill-konsumatur f’pagamenti ndaqs kull xahar, li

jibdew xahar wara d-data tal-prelevament inizjali. Madankollu, f’każi

fejn il-kapital għandu biss jitħallas lura bis-sħiħ, f’pagament wieħed,

f’kull perijodu ta’ ħlas, prelevamenti suċċessivi u ħlas lura tal-kapital

kollu mill-konsumatur għandhom jitqiesu li jsiru matul il-perijodu ta’

sena. L-imgħax u imposti oħrajn għandhom jiġu applikati skont dawn il-

prelevamenti u l-ħlasijiet lura tal-kapital u kif previst fil-kuntratt ta’

kreditu.

Għall-finijiet ta’ dan il-paragrafu, kuntratt ta’ kreditu għal żmien indefinit

huwa kuntratt ta’ kreditu mingħajr żmien fiss u jinkludi krediti li għandhom jitħallsu

lura kompletament fi żmien perijodu jew wara perijodu, iżda, la darba jitħallsu lura,

jsiru disponibbli mill-ġdid għal prelevament.

(l)

il-każ ta’ responsabbiltajiet kontinġenti jew garanziji, l-ammont totali tal-

kreditu jitqies li jiġi prelevat kollu f’ammont wieħed fl-aktar kmieni minn

(i)

id-data tal-aħħar prelevament permessa taħt il-kuntratt tal-kreditu li

huwa s-sors potenzjali tar-responsabbiltà jew il-garanzija kontinġenti;

jew

(ii)

il-każ ta’ kuntratt ta’ kreditu miftuħ, fit-tmiem tal-perijodu inizjali

qabel it-tiġdid tal-kuntratt.

(m)

Fil-każ ta’ kuntratti ta’ kreditu b’ekwità kondiviża

(i)

il-pagamenti mill-konsumaturi għandhom jitqiesu li jsiru fl-aħħar data

jew dati permessi taħt il-kuntratt ta’ kreditu;

(ii) żidiet perċentwali fil-valur ta’ proprjetà immobbli li tiggarantixxi l-kuntratt

ta’ kreditu b’ekwità kondiviża, u r-rata ta’ kwalunkwe indiċi tal-inflazzjoni

msemmi fil-kuntratt, għandhom jitqiesu li huma perċentwali ugwali għall-

ogħla mill-objettiv attwali għar-rata tal-inflazzjoni tal-bank ċentrali jew il-

livell ta’ inflazzjoni fl-Istat Membru fejn tinsab il-proprjetà immobbli, fil-

mument tal-konklużjoni tal-kuntratt ta’ kreditu, jew 0 % jekk dawk il-

perċentwali jkunu negattivi.