2014, as amended by Legal Notices 299
2015, 30
2022, 71
2023 and 252
2024. 1.
these regulations is the Investment Services Act (Supervisory Review) Regulations, 2013.
these regulations is to transpose articles 3 (in part), 4
the CRD. 2.
2022. Interpretation. Amended by: L.N. 71
2023.; L.N. 252
the European Parliament and
the Council
26 June 2013 on access to the activity
credit institutions and the prudential supervision
credit institutions, amending Directive 2002/87/EC and repealing Directives 2006/48/ EC and 2006/49/EC, as amended from time to time, and includes any implementing measures that have been or may be issued thereunder; "credit institution" means a person licensed in terms
the Banking Act, whose head
fice is in Malta or an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account, authorised by a European Regulatory Authority in terms
the CRD or authorised by a European regulatory authority in an EEA Member State; "CRR" means Regulation (EU) No. 575/2013
the European Parliament and
the Council
26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation Mi FIDU) No. 648/2012, as amended from time to time, and includes any implementing measures that have been or may be issued thereunder; "DORA Regulation" means Regulation (EU) 2022/2554
the European Parliament and
the Council
14 December 2022 on digital operational resilience for the financial sector, and amending Regulations (EC) No 1060/2009, (EU) No 648/2012, (EU) No 600/ 2014, (EU) No 909/2014 and (EU) 2016/1011, as may be amended from time to time, and includes any binding legal instruments, guidelines and other measures that have been or may be issued thereunder; "EBA" means the European Banking Authority established by Regulation (EU) No. 1093/2010
the European Parliament and
the Council
the 24 November 2010; Cap. 371. 2 [ S.L.370.15 INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) "EIOPA" means the European Insurance and Occupational Pensions Authority as established by Regulation (EU) No. 1093/ 2 0 10
th e E u r op e a n P a r l ia m e n t an d o f t h e C o un c i l o f 2 4 November, 2010 establishing a European Supervisory Authority; "ESCB central banks" shall have the same meaning as that assigned to it in point 45
the CRR; "ESFS" means European System
Financial Supervision; "ESRB" means the European Systemic Risk Board established by regulation EU No. 1092/2010; "European investment firm" means a firm as defined in article 4
the CRR, authorised by its European regulatory authority within the meaning
the MiFID Directive, or authorised by a European regulatory authority in an EEA State; "home member state" means (a) in the case
an investment firm, within the meaning
these regulations, Malta; (b) in the case
a "European investment firm", within the meaning
these regulations, the Member State where such European investment Firm is authorised by its European regulatory authority; S.L. 370.10 "host member state" means a Member State or an EEA State where an investment firm has established a branch or provides services on a cross border basis in terms
the European Passport Rights for Investment Firms Regulations; "investment firm" means a person who holds an investment services licence issued by the competent authority under the Act, and which is subject to the requirements
the CRD; "third country" means a country which is not a Member State or an EEA State.
the competent authority. Cap. 330. 3.
implementing the relevant provisions
the CRD and the CRR and any reference in these regulations to the competent authority shall be read and construed accordingly.
financial supervision. 4. In the exercise
its duties, the competent authority shall take into account the convergence in respect
supervisory tools and supervisory practices in the application
the laws, regulations and administrative requirements adopted pursuant to the CRD and the CRR. For that purpose, the competent authority: INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) [ S.L.370.15 (a) as party to the ESFS shall cooperate with trust and full mutual respect, in particular when ensuring the flow
appropriate and reliable information between the other parties to the ESFS in accordance with the principle
sincere cooperation set out in Article 4
the Treaty on European Union; (b) shall participate in the activities
the EBA and, as appropriate, in the colleges
supervisors; (c) shall make every effort to comply with those guidelines and recommendations issued by the EBA in accordance with Article 16
Regulation (EU) No. 1093/2010 and to respond to the warnings and recommendations issued by the ESRB pursuant to Article 16
Regulation (EU) No. 1092/2010; (
its duties as member
the EBA and the ESRB, or its duties under the CRD and the CRR. 5. The competent authority shall, in the exercise
its general duties, duly consider the potential impact
its decisions on the stability
the financial system in the other Member States concerned and, in particular, in emergency situations, based on the information available at the relevant time. Union dimension
supervision. 6.
investment firms and operating in particular through a branch, in one or more Member States other than Malta. The competent authority shall supply all information concerning the management and ownership
such investment firms to the relevant European regulatory authorities in the Member States concerned, that is likely to facilitate their supervision and the examination
the conditions for their licensing, and all information likely to facilitate the monitoring
investment firms, in particular with regard to liquidity, solvency, the limiting
large exposures, other factors that may influence the systemic risk posed by the investment firm, administrative and accounting procedures and internal control mechanisms. Collaboration concerning supervision.
the host Member State immediately with any information and findings pertaining to liquidity supervision in accordance with Part Six
the CRR and the Supervisory Consolidation Regulations,
the activities performed by an investment firm through its branches, to the extent that such information and findings are relevant to the protection
investors in the host Member State.
all the investment firms’ host Member States immediately where liquidity stress occurs or can reasonably be expected to occur. That information shall also include details about the planning and implementation
a recovery plan and S.L. 371.15 3 4 [ S.L.370.15 INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) about any prudential supervisory measures taken in that context.
the investment firm, the competent authority shall communicate and explain upon request to the European regulatory authorities
the host Member State
that investment firms’ branch, how information and findings provided by the latter have been taken into account. (b) Where the competent authority disagrees with the measures to be taken by the European regulatory authority
the host Member State in relation to the information and findings referred to in paragraph (a), the competent authority may refer the matter to the EBA and request its assistance in accordance with Article 19
Regulation (EU) No. 1093/2010. (c) Where Malta is the host member state
a branch belonging to a European investment firm and the competent authority, following communication by the European regulatory authority
the said European investment firm,
information and findings relating to the said European investment firm, maintains that no appropriate measures have been taken by the said European regulatory authority, the competent authority may, after informing the European regulatory authority concerned and the EBA, take appropriate measures to prevent further breaches in order to protect the interests
investors and others to whom services are provided or to protect the stability
the financial system.
its supervisory functions in accordance with the CRD and the CRR: Provided that the information received or exchanged by the competent authority or by its
ficers, employees or agents as well as inspectors, auditors and experts engaged by the competent authority, from the bodies listed in the said Schedule, shall be treated as confidential and protected by the duty
professional secrecy. On the spot checks and inspection
branches in another Member State. 7.
the home Member State concerned, after it has notified the competent authority, to carry out, itself or through an intermediary appointed for that purpose, on-the-spot checks
the information referred to in regulation 6 and inspections
such branches. INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) [ S.L.370.15
sub-regulation
the Supervisory Consolidation Regulations. S.L. 371.15
the activities carried out by branches
European investment firms in Malta and require information from a branch about its activities and for supervisory purposes, where it considers it relevant for reasons
stability
the financial system in Malta. Before carrying out such checks and inspections, the competent authority shall consult the European regulatory authority
the home Member State concerned.
branches when carried out in Malta shall be conducted in accordance with the laws
Malta.
the home Member State, the information obtained and findings that are relevant for the risk assessment
the investment firm or the stability
the financial system in Malta.
a host Member State pursuant to its on-thespot checks and inspections
the activities carried out by branches
investment firms, and shall also have regard to the stability
the financial system in the host Member State concerned: Provided that the European regulatory authority may also, for the purposes
the inspection
branches, have recourse to one
the other procedures set out in regulation 12
the Supervisory Consolidation Regulations. 8. (Deleted by Legal Notice 299
2015). 9.
the CRR as well as the information provided by investment firms on the gender pay gap and shall use that information to benchmark remuneration trends and practices. The competent authority shall provide this information to the EBA.
natural persons per investment firm that are remunerated EUR 1 million or more per financial year, in pay brackets
€1 million, including data on their work responsibilities, the business area involved and the main elements
their salary, including bonuses, long-service awards and pension contributions, and shall forward this information to the EBA. S.L. 371.15 Recovery and resolution plans. Oversight
remuneration. Amended by: L.N. 30
2022. 5 6 [ S.L.370.15 Supervisory benchmarking
internal approaches. INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) 10.
internal approaches permitted to be used by investment firms, it shall do so in consultation with the EBA and shall en sure that in vestm ent f irm s report the result s o f the calculations for these specific portfolios separately from the results
the calculations for the benchmark portfolios required under Article 78
the CRD.
the information submitted by investment firms, monitor the range
risk weighted exposure amounts or own funds requirements, as applicable, except for operational risk, for the exposures or transactions in the benchmark portfolio resulting from the internal approaches
those investment firms. The competent authority shall make an assessment at least annually
the quality
those approaches paying particular attention to: (
own funds requirements.
their peers or where there is little commonality in approach leading to a wide variance
results, the competent authority shall investigate the reasons therefor and, if it can be clearly identified that an investment firm’s approach leads to an underestimation
own funds requirements which is not attributable to differences in the underlying risks
the exposures or positions, the competent authority shall take corrective action.
corrective actions as referred to in subregulation
an internal approach and therefore do not: (
2022; L.N. 252
2024. 11.
an investment firm’s activities; and (c) risks revealed by digital operational resilience testing in INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) [ S.L.370.15 accordance with Chapter IV
the DORA Regulation.
the review and evaluation referred to in subregulation
the CRR, the Act, regulations or Investment Services Rules issued thereunder.
the review and evaluation referred to in subregulation
their risks.
the review and evaluation referred to in sub-regulation
the activities
the investment firm concerned and taking into account the principle
proportionality. The review and evaluation shall be updated at least on an annual basis for investment firms covered by the supervisory examination programme referred to in regulation 13: Provided that when conducting the review and evaluation referred to in sub-regulation
proportionality in accordance with the criteria disclosed pursuant to Regulation 21
the review and evaluation referred to in subregulation
exposures. Such tailored methodologies may include risk-oriented benchmarks and quantitative indicators, shall allow for due consideration
the specific risks that each investment firm may be exposed to, and shall not affect the institution-specific nature
measures imposed in accordance with paragraph 1
Schedule III: Provided that where the competent authority uses tailored methodologies pursuant to this paragraph, it shall notify the EBA.
systemic risk established in terms
Regulation (EU) No. 1093/2010, the competent authority shall inform the EBA without delay about the results
the review.
governance arrangements, the business model, or the activities
an investment firm, gives the competent authority reasonable grounds to suspect that, in connection with that investment firm, money laundering or terrorist financing is being or has been committed or attempted, or there is increased risk thereof, the competent authority shall immediately notify the EBA and the authority or body that supervises the investment firm in accordance with Directive (EU) 2015/849 and is competent for ensuring compliance with the said Directive. In the event
potential increased risk
money laundering or terrorist financing, the competent authority and the 7 8 [ S.L.370.15 INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) authority or body that supervises the investment firm in accordance with Directive (EU) 2015/849 and is competent for ensuring compliance with the said Directive shall liaise and notify their common assessment immediately to the EBA. The competent authority shall take the necessary measures, as it deems appropriate, in accordance with the CRD as transposed in Maltese Law. Criteria for supervisory review and evaluation.
permission to use internal approaches. 15.
own funds requirements in accordance with Part Three
the CRR. In this regard it shall take cognizance
changes in an investment firm’s business and to the implementation
those approaches to new products. Where material deficiencies are identified in risk capture by an investment firm’s internal approach, the competent authority shall ensure they are rectified or take appropriate steps to mitigate their consequences, including by imposing higher multiplication factors, or imposing capital add-ons, or taking other appropriate and effective measures.
the CRR indicate that the model is not or is no longer sufficiently accurate, the competent authority shall revoke the permission for using the internal model or impose appropriate measures to ensure that the model is improved promptly.
own funds requirements in accordance with Part Three
the CRR but no longer meets the requirements for applying that approach, the competent authority shall require the investment firm to either demonstrate to the satisfaction
the competent authority that the effect
non-compliance is immaterial, where applicable in accordance with the requirements
the CRR, or present a plan for the timely restoration
compliance with the requirements and set a deadline for its implementation. The competent authority shall INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) [ S.L.370.15 require improvements to that plan if it is unlikely to result in full compliance or if the deadline is inappropriate. If the investment firm is unlikely to be able to restore compliance within an appropriate deadline and, where applicable, has not satisfactorily demonstrated that the effect
non-compliance is immaterial, the permission to use the approach shall be revoked or limited to compliant areas or those where compliance can be achieved within an appropriate deadline.
the CRD and the guidelines containing benchmarks on the basis
that analysis issued by the EBA, for the review
the permissions it grants to investment firms to use internal approaches for the calculations
own funds requirements. 16.
the Act, regulations or Investment Services Rules issued thereunder, transposing the requirements
the CRD or
the CRR; (b) the competent authority has evidence that the investment firm is likely to breach the Act, regulations or Investment Services Rules issued thereunder, or the provisions
the CRR, within the following twelve months.
sub-regulation
the competent authority shall include those contained in Schedule III. 17. (Deleted by: L.N. 30
2022). 18.
determining the appropriate level
liquidity requirements on the basis
the review and evaluation carried out in accordance with these regulations, the competent authority shall assess whether any imposition
a specific liquidity requirement is necessary to capture liquidity risks to which an investment firm is or might be exposed, taking into account the following: (a) the particular business model
the investment firm; (
the review and evaluation carried out in accordance with regulation 11; (d) (Deleted by L.N. 30
2022).
the Act, the regulations and the Investment Services Rules transposing the Application
supervisory measures to institutions with similar risk profiles. Specific liquidity requirements. 9 10 [ S.L.370.15 INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) requirements
the CRD, the competent authority will consider the need to apply administrative penalties or other administrative measures, including prudential charges, proportionate to the disparity between the actual liquidity position
an investment firm and any liquidity and stable f unding requirements established by the competent authority or at European Union level.
the investment firm itself.
: (a) the functioning
its review and evaluation process referred to in regulation 11; (b) the methodology used to reach decisions in relation to the technical criteria for supervisory review contained in Schedule I, the supervisory stress testing in regulation 14, the review
internal approaches in regulation 15, the supervisory measures in regulation 16, the supervisory powers contained in Schedule III and the specific liquidity requirements in regulation 18, when engaging in this process. Review and evaluation and application
supervisory measures. Amended by: L.N. 71
2023. 20.
application
the requirements
Part One, Title II
the CRR. Publication. Amended by: L.N. 30
2022. 21.
2023. (a) the texts
laws, regulations, administrative rules and general guidance adopted in Malta in the field
prudential regulation; (b) the general criteria and methodologies it uses in the review and evaluation pursuant to regulation 11, including the criteria for applying the principle
proportionality as referred to in regulation 11
exercise
the options and discretions available in European Union law; (d) without prejudice to the confidentiality provisions
the Act, aggregate statistical data on key aspects
the implementation
the prudential framework in Malta, INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) [ S.L.370.15 11 including the number and nature
supervisory measures taken and
administrative penalties imposed in terms
the Act.
the approaches adopted by the European regulatory authorities. The disclosures shall be published following a common format and updated regularly. The disclosures shall be accessible at a single electronic location. 22. For the purpose
Part Five
the CRR relating to exposures to transferred credit risks, the competent authority shall publish the information set out in Schedule IV. Publication
information relating to exposures to transferred credit risks. 23. In encouraging certain investment firms to develop internal credit risk assessment capacity and to increase use
internal ratings based approach for calculating own funds requirements, the competent authority shall monitor, taking into account the nature, scale and complexity
the investment firms’ activities, that such investment firms do not solely or mechanistically rely on external credit ratings for assessing the creditworthiness
an entity or financial instrument. Reliance on credit ratings for the purposes
assessing creditworthiness
an entity or financial instrument. 24. The competent authority shall inform the EBA
any authorisations it issues to the members
an investment firm’s management body to hold one additional non-executive directorship in terms
the CRD. Notification to the EBA. 25. The competent authority shall collect the information disclosed in accordance with Article 435
the CRR and shall use it to benchmark diversity practices. The competent authority shall provide that information to the EBA. Benchmarking
diversity practices by the competent authority. 26. The competent authority, when processing personal data for the purposes
the CRD, shall do so in accordance with Directive 95/46/EC and, where relevant, with Regulation (EC) No. 45/2001. Data protection. 27. The provisions
regulation 6, shall not apply until the date on which th e li qui dit y co verag e requi rem ent becom es applicable in accordance with a delegated act adopted by the European Commission pursuant to Article 460
the CRR in accordance with Article 151
the CRD: Applicability
regulation 6. Provided that until the date referred to in this regulation, the provisions
regulation 6 shall be substituted with the following: "The competent authority shall collaborate closely in order to supervise the activities
investment firms and operating, in particular through a branch, in one or more Member States other than Malta. The competent authority shall supply all information concerning the management and ownership
such investment firms to the relevant European Regulatory authorities in the Member states concerned, that is likely to facilitate 12 [ S.L.370.15 INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) their supervision and the examination
the conditions for their licensing, and all information likely to facilitate the monitoring
such investment firms, in particular with regard to liquidity, solvency, the limiting
large exposures, administrative and accounting procedures and internal control mechanisms. Applicability
regulation
regulation 7 shall not apply until the date on which the liquidity coverage requirement becomes applicable in accordance with a delegated act adopted by the European Commission pursuant to Article 460
the CRR in accordance with Article 151
the CRD: Provided that until the date referred to in this regulation, the provisions
regulation 7 shall be substituted with the following: "
the home Member State concerned, after it has notified the competent authority, to carry out, itself or through an intermediary, on-the-spot checks
the information referred to in regulation 6
these regulations. S.L. 371.157
the European investment firm referred to in sub-regulation
the inspection
branches have recourse to one
the other procedures set out in regulation 12
the Supervisory Consolidation Regulations.
2022. The provisions
sub-regulations
the competent authority to carry out in the discharge
its responsibilities under the CRD, on-the-spot checks
branches established in Malta. 29.
the Investment Services Act by 28 June 2021. If a financial holding company or mixed financial holding company fails to apply for approval by 28 June 2021, appropriate measures shall be taken pursuant to Article 10CA
the Investment Services Act.
the Investment Services Act for the purposes
consolidated supervision. INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) Substituted by: L.N. 30
2022. [ S.L.370.15 13 SCHEDULE I SUPERVISORY REVIEW AND EVALUATION (Regulation 11)
the stress test carried out in accordance with Article 177
the CRR by investment firms applying an internal ratings based approach to calculate their credit risk-weighted exposure; (b) the exposure to and management
concentration risk by investment firms including their compliance with the Investment Services Rules transposing the requirements
the CRD and the requirements set out in Part Four
the CRR; (c) the robustness, suitability and manner
application
the policies and procedures implemented by investment firms for the management
the residual risk associated with the use
recognised credit risk mitigation techniques; (d) the extent to which the own funds held by an investment firm in respect
assets which it has securitised are adequate having regard to the economic substance
the transaction, including the degree
risk transfer achieved; (e) the exposure to, measurement and management
liquidity risk by investment firms including the development
alternative scenario analyses, the management
risk mitigants (in particular the level, composition and quality
liquidity buffers) and effective contingency plans; (f) the impact
diversification effects and how such effects are factored into the risk measurement system; (g) the results
stress tests carried out by investment firms using an internal model to calculate market risk own funds requirements under Part Three, Title IV
the CRR; (h) the geographical location
investment firm’s exposures; (i) the business model
the investment firm;
point (e)
paragraph 1
this Schedule, the competent authority shall regularly carry out a comprehensive assessment
the overall liquidity risk management by investment firms and promote the development
sound internal methodologies. In its review, the competent authority shall have regard to the role played by investment firms in the financial markets. The competent authority shall also duly consider the potential impact
their decisions on the stability
the financial system in all other Member States concerned.
the increased expectation that it will provide future support to its securitisation thus failing to achieve a significant transfer
risk.
the determination to be made under regulation 11
the CRR, enable the investment firm to sell or hedge out its positions within a short period without incurring material losses under normal market conditions.
investment firms to the interest rate risk arising from non-trading activities.
equity as referred to in Article 84
the CRD as transposed in Maltese Law declines by more than 15%
its Tier 1 capital as a result
a sudden and unexpected change in interest rates as set out in any
the six supervisory shock scenarios applied to interest rates; (b) where an investment firm’s net interest income referred to in Article 84
the CRD as transposed in Maltese Law experiences a large decline as a result
a sudden and unexpected change in interest rates as set out in any
the two supervisory shock scenarios applied to interest rates.
paragraph
interest rate risk arising from non-trading book activities is adequate and that the investment firm is not excessively exposed to interest rate risk arising from nontrading book activities.
this paragraph, the term "supervisory powers" means the powers referred to in paragraph 1
Schedule III or the power to specify modelling and parametric assumptions, other than those identified by the EBA pursuant to point (b)
paragraph 5a
the CRD as transposed in Maltese Law, to be reflected by investment firms in their calculation
the economic value
equity under Article 84
the CRD as transposed in Maltese Law.
investment firms to the risk
excessive leverage as reflected by indicators
excessive leverage, including the leverage ratio determined in accordance with Article 429
the CRR. In determining the adequacy
the leverage ratio
investment firms and
the arrangements, strategies, processes and mechanisms implemented by investment firms to manage the risk
excessive leverage, the competent authority shall take into account the business model
those investment firms.
investment firms, their corporate culture and values, and the ability
members
the management body to perform their duties. INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) [ S.L.370.15 15 In conducting that review and evaluation, the competent authority shall, at least, have access to agendas and supporting documents for meetings
the management body and its committees, and the results
the internal or external evaluation
performance
the management body. Amended by: L.N. 30
2022. SCHEDULE II SUPERVISORY EXAMINATION PROGRAMME (Regulation 13)
how the competent authority intends to carry out its tasks and allocate its resources; (b) an identification
which investment firms are intended to be subject to enhanced supervision and the measures taken for such supervision as set out in paragraph 3; (c) a plan for inspections at the premises used by an investment firm, including its branches and subsidiaries established in other Member States in accordance with regulation 7
these regulations and regulations 3, 10, and 19
the Supervisory Consolidation Regulations.
the stress tests referred to in points (a) and (g)
paragraph
Schedule I and regulation 14, or the outcome
the supervisory review and evaluation process under regulation 11, indicate significant risks to their on going financial soundness or indicate breaches
the Act, and any regulations and rules issued thereunder transposing the requirements
the CRD and
the CRR; (b) any other investment firm which the competent authority may deem necessary.
on-site inspections
the investment firm; (b) a permanent presence
the competent authority at the investment firm; (
the operational, strategic or business plans
the investment firm; (e) thematic examinations monitoring specific risks that are likely to materialise.
a supervisory examination programme by a home Member State 16 [ S.L.370.15 INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) European regulatory authority with respect to a European Investment Firm which has established a branch in Malta, shall not prevent the competent authority in its capacity as the host Member State from carrying out, on a case-by-case basis, onthe-spot checks and inspections
the activities carried out by branches
investment firms in Malta in accordance with the Act and these regulations. SCHEDULE III SUPERVISORY POWERS (Regulations 11, 16, paragraphs
Schedule I and regulation 15
2015; Substituted by: L.N. 30
2022. Amended by:
regulations 11, 16 and paragraphs
Schedule I, regulation 15
the CRR, the competent authority shall have at least the following powers: (a) to require investment firms to have additional own funds in excess
the requirements set out in the CRR under the conditions set out in paragraphs 3 to 7
this Schedule; (b) to require the reinforcement
the arrangements, processes, mechanisms and strategies implemented in accordance with Articles 73 and 74
the CRD as transposed in Maltese Law; (
assets in terms
own funds requirements; (e) to restrict or limit the business, operations or network
institutions or to request the divestment
activities that pose excessive risks to the soundness
an investment firm; (f) to require the reduction
the risk inherent in the activities, products and systems
investment firms, including outsourced activities; (g) to require investment firms to limit variable remuneration as a percentage
net revenues where it is inconsistent with the maintenance
a sound capital base; (
Additional Tier 1 instruments within the meaning
the CRR, where the prohibition does not constitute an event
default
the investment firm; (
paragraph 1(j)
this Schedule, the competent authority may only impose additional or more frequent reporting requirements on investment firms where the relevant requirement is appropriate and proportionate with regard to the purpose for which the information is required and where the information requested is not duplicative.
regulations 11 to 16, any additional information that may be required from investment firms shall be deemed as duplicative where the same, or substantially the same, information has already been otherwise reported to the competent authority or may be produced by the competent authority.
granularity and that different format or granularity does not prevent the competent authority from producing information
the same quality and reliability as that produced on the basis
the additional information that would be otherwise reported.
this Schedule where, on the basis
the reviews carried out in accordance with regulations 11 and 15, it determines any
the following situations for an individual investment firm: (a) the investment firm is exposed to risks or elements
risk that are not covered or sufficiently covered, as specified in paragraph 4
this Schedule, by the own funds requirements set out in Parts Three, Four and Seven
the CRR and in Chapter 2
Regulation (EU) No. 2017/ 2402; (b) the investment firm does not meet the requirements set out in Articles 73 and 74
the CRD as transposed in the Investment Services Rules or in Article 393
the CRR and it is unlikely that other supervisory measures would be sufficient to ensure that those requirements can be met within an appropriate time frame; (c) the adjustments referred to in paragraph
Schedule I are deemed to be insufficient to enable the investment firm to sell or hedge out its positions within a short period without incurring material losses under normal market conditions; (d) the evaluation carried out in accordance with regulation 15
the permitted approach shall likely lead to inadequate own funds requirements; (e) the investment firm repeatedly fails to establish or maintain an adequate level
additional own funds to cover the guidance communicated in accordance with paragraph 10
this Schedule; (f) other institution-specific situations deemed by the competent authority to raise material supervisory concerns.
this Schedule to cover the risks incurred by individual investment firms due to their activities, including those reflecting the impact
certain economic and market developments on the risk profile
an individual investment firm. 18 [ S.L.370.15 INVESTMENT SERVICES ACT (SUPERVISORY REVIEW)
paragraph 3
this Schedule, risks or elements
risk shall only be considered as not covered or sufficiently covered by the own funds requirements set out in Parts Three, Four and Seven
the CRR and in Chapter 2
Regulation (EU) No. 2017/2402 where the amounts, types and distribution
capital considered adequate by the competent authority, taking into account the supervisory review
the assessment carried out by investment firms in accordance with the first paragraph
the CRD as transposed in Maltese Law are higher than the own funds requirements set out in Parts Three, Four and Seven
the CRR and in Chapter 2
Regulation (EU) No. 2017/2402.
the first sub-paragraph, the competent authority shall assess, taking into account the risk profile
each individual investment firm, the risks to which the investment firm is exposed, including: (a) institution-specific risks or elements
such risks that are explicitly excluded from or not explicitly addressed by the own funds requirements set out in Parts Three, Four and Seven
the CRR and in Chapter 2
Regulation (EU) No. 2017/2402; (b) institution-specific risks or elements
such risks likely to be underestimated despite compliance with the applicable requirements set out in Parts Three, Four and Seven
the CRR and in Chapter 2
Regulation (EU) No. 2017/2402.
risk are subject to transitional arrangements or grandfathering provisions laid down in the CRD and transposed in Maltese Law or in the CRR, they shall not be considered risks or elements
such risks likely to be underestimated despite compliance with the applicable requirements set out in Parts Three, Four and Seven
the CRR and in Chapter 2
Regulation (EU) No. 2017/2402.
sub-paragraph
risks identified as material pursuant to the assessment laid down in sub-paragraph
the CRR and in Chapter 2
Regulation (EU) No. 2017/2402.
Schedule I, unless the competent authority, in performing the review and evaluation, come to the conclusion that the investment firm’s management
interest rate risk arising from nontrading book activities is adequate and that the investment firm is not excessively exposed to interest rate risk arising from non-trading book activities.
excessive leverage not sufficiently covered by point (d)
the CRR, the competent authority shall determine the level
additional own funds required under paragraph 3(a)
this Schedule as the difference between the capital considered adequate pursuant to paragraph 4
this Schedule and the relevant own funds requirements set out in Parts Three, Four and Seven
Regulation (EU) No. 575/2013 and in Chapter 2
Regulation (EU) No. 2017/2402. INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) [ S.L.370.15 19
excessive leverage not sufficiently covered by point (d)
the CRR, the competent authority shall determine the level
the additional own funds required under paragraph 3(a)
this Schedule as the difference between the capital considered adequate pursuant to paragraph 4
this Schedule and the relevant own funds requirements set out in Parts Three, Four and Seven
the CRR.
this Schedule to address risks other than the risk
excessive leverage with own funds that satisfy the following conditions: (a) at least three quarters
the additional own funds requirement shall be met with Tier 1 capital; (b) at least three quarters
the Tier 1 capital referred to in point (a) shall be composed
Common Equity Tier 1 capital.
derogation from the first sub-paragraph
Tier 1 capital or Common Equity Tier 1 capital, where necessary, and having regard to the specific circumstances
the investment firm.
this Schedule imposed by the competent authority to address the risk
excessive leverage not sufficiently covered by point (d)
the CRR shall not be used to meet any
the following: (a) the own funds requirement set out in point (d)
the CRR; (
this Schedule where that guidance addresses the risks other than the risk
excessive leverage.
this Schedule imposed by the competent authority to address the risk
excessive leverage not sufficiently covered by point (d)
the CRR shall not be used to meet any
the following: (a) the own funds requirement set out in point (d)
the CRR; (b) the leverage ratio buffer requirement referred to in Article 92
the CRR; (c) the guidance on additional own funds referred to in paragraph 10
this Schedule, where that guidance addresses risks
excessive leverage.
this Schedule. That justification shall include, in the case set out in paragraph 3(e)
this Schedule, a specific statement
the reasons for which the imposition
guidance on additional own funds is no longer considered sufficient. 20 [ S.L.370.15 INVESTMENT SERVICES ACT (SUPERVISORY REVIEW)
the CRD as transposed in Maltese Law, investment firms shall set their internal capital at an adequate level
own funds that is sufficient to cover all the risks that an investment firm is exposed to and to ensure that the investment firm’s own funds can absorb potential losses resulting from stress scenarios, including those identified under the supervisory stress test referred to in regulation 14.
the internal capital set by each investment firm in accordance with paragraph 8
this Schedule as part
the reviews and evaluations performed in accordance with regulation 11
own funds it considers appropriate.
own funds required pursuant to Parts Three, Four and Seven
the CRR, Chapter 12
Regulation (EU) No. 2017/2402, paragraph 1(a)
this Schedule and Article 128
the CRD as transposed in Maltese Law or pursuant to Article 92
the CRR as relevant, which are required to reach the overall level
own funds considered appropriate by the competent authority pursuant to paragraph 9
this Schedule.
this Schedule shall be institution-specific. The guidance may cover risks addressed by the additional own funds requirement imposed pursuant to paragraph
this Schedule only to the extent that it covers aspects
those risks that are not already covered under that requirement.
this Schedule to address risks other than the risk
excessive leverage shall not be used to meet any
the following: (
the CRR; (b) the requirement laid down in paragraphs 3 to 7
this Schedule imposed by the competent authority to address risks other than the risk
excessive leverage and the combined buffer requirement.
this Schedule to address the risk
excessive leverage shall not be used to meet the own funds requirement set out in point (d)
the CRR, the requirement laid down in paragraphs 3 to 7
this Schedule imposed by the competent authority to address the risk
excessive leverage and the leverage ratio buffer requirement referred to in Article 92
the CRR.
this Schedule INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) [ S.L.370.15 21 where an investment firm meets the relevant own funds requirements set out in Parts Three, Four and Seven
the CRR and in Chapter 2
Regulation (EU) No. 2017/2402, the relevant additional own funds requirement referred to in paragraph 1(a)
this Schedule and, as relevant, the combined buffer requirement or the leverage ratio buffer requirement referred to in Article 92
the CRR shall not trigger the restrictions referred to in Article 141 or 141b
the CRD as transposed in the Investment Services Rules.
the additional own funds requirement imposed on investment firms pursuant to paragraph 1(a)
this Schedule and
any guidance on additional own funds communicated to investment firms in accordance with paragraph 10
this Schedule. SCHEDULE IV DISCLOSURE REQUIREMENTS (Regulation 22)
the CRR; (b) without prejudice to the confidentiality provisions in the Act, a summary description
the outcome
the supervisory review and description
the measures imposed in cases
non-compliance with Articles 405 to 409
the CRR identified on an annual basis.
the CRR it shall publish the following information: (a) the criteria it applies to determine that there is no current or foreseen material practical or legal impediment to the prompt transfer
own funds or repayment
liabilities; (b) the number
parent investment firms or credit institutions which benefit from the exercise
the discretion laid down in Article 7
the CRR and the number
those which incorporate subsidiaries in a third country; (
own funds on the consolidated basis
the parent investment firm or credit institution in Malta, which benefits from the exercise
the discretion laid down in Article 7
the CRR, which are held in subsidiaries in a third country; (ii) the percentage
total own funds on the consolidated basis
parent investment firms in Malta which benefit from the exercise
the discretion laid down in Article 7
the CRR, represented by own funds which are held in subsidiaries in a third country; (iii) the percentage
total own funds required under Article 92
the CRR on the consolidated basis
parent investment firms or 22 [ S.L.370.15 INVESTMENT SERVICES ACT (SUPERVISORY REVIEW) credit institutions in Malta, which benefit from the exercise
the discretion laid down in Article 7
the CRR, represented by own funds which are held in subsidiaries in a third country.
the CRR it shall publish all the following: (a) the criteria it applies to determine that there is no current or foreseen material practical or legal impediment to the prompt transfer
own funds or repayment
liabilities; (b) the number
parent investment firms or credit institutions which benefit from the exercise
the discretion laid down in Article 9
the CRR and the number
such parent investment firms which incorporate subsidiaries in a third country; (
own funds
parent investment firms which benefit from the exercise
the discretion laid down in Article 9
the CRR which are held in subsidiaries in a third country; (ii) the percentage
total own funds
parent investment firms or credit institutions which benefit from the exercise
the discretion laid down in Article 9
the CRR represented by own funds which are held in subsidiaries in a third country; (iii) the percentage
total own funds required under Article 92
the CRR
parent investment firms or credit institutions which benefit from the exercise
the discretion laid down in Article 9
the CRR represented by own funds which are held in subsidiaries in a third country. Amended by: L.N. 30
2022. SCHEDULE V BODIES WITH WHOM THE COMPETENT AUTHORITY MAY EXCHANGE INFORMATION (Regulation 6) The competent authority may exchange information with:
Regulation (EU) No. 1092/2010, with Articles 31, 35 and 36
Regulation (EU) No. 1093/2010 and with Articles 31 and 36
Regulation (EU) No. 1095/2010;
supervising other financial sector entities and the authorities responsible for the supervision
financial markets;
the financial system in Member States through the use
macro prudential rules;
the financial system;
the CRR;
institutions and in other similar procedures;
the accounts
institutions, insurance undertakings and financial institutions;
information necessary for the exercise
their functions;
institutions and in other similar procedures; (b) contractual or institutional protection schemes as referred to in Article 113
the CRR; (c) persons charged with carrying out statutory audits
the accounts
institutions, insurance undertakings and financial institutions; In the cases referred to sub-paragraphs (a) to (c) above, the exchange
information shall be subject to the following conditions: (i) that the information is exchanged for the purpose
performing the tasks referred to; (ii) where the information originates in another Member State, that it is not disclosed without the express agreement
the authorities which have disclosed it and, where appropriate, solely for the purposes for which those authorities gave their agreement;
breaches
company law subject to the following conditions: (i) that the information is exchanged for the purpose
detecting and investigating breaches
company law; (ii) where the information originates in another Member State, that it is not disclosed without the express agreement
the authorities which have disclosed it and, where appropriate, solely for the purposes for which those authorities gave their agreement. (b) Where the authorities or bodies referred to in paragraph (a) above perform their task
detection or investigation with the aid, in view
their specific competence,
persons appointed for that purpose and not employed in the public sector, information may be exchanged with such persons under the conditions specified in points (i) and (ii)
subparagraph (a)
this paragraph. The competent authority shall communicate to the EBA the names
the authorities or bodies which may receive information pursuant to this Article;
their respective statutory tasks, including the conduct
monetary policy and related liquidity provisions, oversight
payments, clearing and settlement systems and the safeguarding
stability
the financial system;
the CRR;
their tasks under Regulations (EU) No 1092/2010, (EU) No 1094/2010 or (EU) No. 1095/2010;
the Supervisory Consolidation Regulations, the competent authority shall communicate, without delay, information to the ESCB central banks where that information is relevant for the exercise
their statutory tasks, including the conduct
monetary policy and related liquidity provision, the oversight
payments, clearing and settlement systems, and the safeguarding
the stability
the financial system, and to the ESRB where such information is relevant for the exercise
its statutory tasks;
Member States central government administrations responsible for law on the supervision
institutions, financial institutions and insurance undertakings and to inspectors acting on behalf
those departments provided that (a) such disclosures may be made only where necessary for reasons
prudential supervision, and prevention and resolution
failing institutions. (b) persons having access to such information shall be subject to professional secrecy.
the CRD, to disclose information which is relevant to the departments referred to in the first subparagraph
this article in all Member States concerned;
auditors and other entities in charge
enquiries relating to the prudential supervision
institutions in Malta, subject to the following conditions: (a) that the entities have a precise mandate under national law to investigate or scrutinise the actions
authorities responsible for the supervision
institutions or for laws on such supervision; (
the authorities which have disclosed it and, solely for the purposes for which those authorities gave their agreement.
this Schedule, and information obtained by means
an on-the-spot check or inspection referred to in regulation 7
these regulations, shall not be disclosed to the bodies referred to in paragraphs 16 and 17
this Schedule save with the express consent
the authorities which disclosed the information or
the authorities
the Member State in which such an on-the-spot check or inspection was carried out.
clearing or settlement services in order to ensure the proper functioning
those bodies in relation to defaults or potential defaults by market participants
the information referred to in paragraph
this Schedule and articles 17
the Act.
this Schedule shall not be disclosed in the circumstances referred to in sub-paragraph
this paragraph without the express consent
the competent authorities, which have disclosed it.
Directive (EU) 2015/849 on the prevention
the use
the financial system for the purposes
money laundering or terrorist financing
the European Parliament and
the Council for compliance with the said Directive.
the Investment Services Act, the competent authority may, subject to the conditions set out in sub-paragraphs 2, 3 and 4
this paragraph, transmit or share certain information with the following: (a) the International Monetary Fund and the World Bank, for the purposes
assessments for the Financial Sector Assessment Program; (b) the Bank for International Settlements, for the purposes
quantitative impact studies; (c) the Financial Stability Board, for the purposes
its surveillance function.
the specific tasks performed by the requesting body in accordance with its statutory mandate; (b) the request is sufficiently precise as to the nature, scope and format
the required information, and the means
its disclosure or transmission; (c) the requested information is strictly necessary for the performance
the specific tasks
the requesting body and does not go beyond the statutory tasks conferred on the requesting body; (d) the information is transmitted or disclosed exclusively to the persons directly involved in the performance
the specific task; (e) the persons having access to the information are subject to professional secrecy requirements at least equivalent to those referred to in Article 26
the Investment Services Act.
the entities referred to in sub-paragraph 1, the competent authority may only transmit aggregate or anonymised information and may only share other information at the premises
the competent authority.
information involves processing
personal data, any processing
personal data by the requesting body shall comply with the requirements laid down in Regulation (EU) 2016/679
the European Parliament and
the Council.
AI explanation based on the official legal text. Indicative, not a substitute for legal advice.