or member or to any person of whom or of which any one or more of the credit institution's directors is a guarantor; (iii) to any body of persons in which the credit institution or any one or more of its directors jointly or severally maintains control, not being itself a credit institution or the parent undertaking of the credit institution, a subsidiary of this parent undertaking or a subsidiary of the credit institution; and where the competent authority has reason to Prohibited transactions.
\n
Substituted by:
\n
XVII. 2002.171.
\n
Amended by:
\n
IV. 2003.179;
\n
XX. 2007.85, 97;
\n
L.N. 425 of 2007;
\n
XVII. 2009.20;
\n
II. 2011.15;
\n
X. 2015.21;
\n
LXXI.2021.38.
\n
BANKING believe that such favourable terms and conditions have been applied, it shall have the power to require the credit institution to rectify the position and if the credit institution fails to take the necessary action to rectify the position as required, the competent authority shall take such measures as it deems appropriate until the position is rectified; (c) grant to or permit to be outstanding in respect of any officer other than a director, or any employee, unsecured credit facilities which in the aggregate exceed twelve months’ emolument of such officer or employee:
\n
Provided that the competent authority may by Banking Rule extend the restrictions listed in paragraphs (a), (b) and (c) or any of them to other officers, employees or shareholders of credit institutions or to other categories of persons in such manner and to such extent as may be specified; (d) without the consent of the competent authority acquire or hold shares in another company which is not a credit institution, which exceeds five per centum of that company's issued share capital or any other subsequent acquisition which exceeds the per centum amount approved by the competent authority; (e) purchase, acquire or otherwise hold any immovable property or any right thereon except as may be reasonably necessary for the purpose of conducting its business or housing or providing amenities for its staff:
\n
Provided that this paragraph shall not prevent a credit institution (i) from letting part of any building which is used for the purpose of conducting its business; or (ii) from securing a debt on any immovable property and, in the event of default in payment of such debt, from acquiring or holding such property, for realisation within twelve months, or any longer period as may be determined by the competent authority; (iii) in other instances from acquiring immovable property with the prior approval of the competent authority the original cost of which property shall not in the aggregate exceed five per centum of the credit institution’s own funds.
\n
(2)In sub-article (1)(b) and (c) the expression \"unsecured credit facilities\" shall mean credit facilities made without security or, in respect of any credit facility made with security, any part thereof which at any time exceeds the market value of the assets constituting that security, or where the competent authority is satisfied that there is no established market value, on the basis of a valuation approved by the competent authority itself.
\n
B A N K I NG
\n
Art. 15A
\n
15A. (Deleted by Act X. 2015.22).
\n
Supervision on a consolidated basis.
\n
Added by:
\n
XVII. 2002.172.
\n
Amended by:
\n
XX. 2007.85.
\n
Art. 16
\n
(Deleted by Act X. 2015.23).
\n
Large exposures.
\n
Amended by:
\n
XX. 2007.85.
\n
Art. 16A
\n
16A. (Deleted by Act X. 2015.24).
\n
Own funds.
\n
Added by:
\n
XVII. 2002.173.
\n
Amended by:
\n
XX. 2007.85, 98;
\n
XVII. 2009.21;
\n
XX. 2013.61.
\n
Art. 16B
\n
16B. The competent authority shall issue a Banking Rule as it shall consider appropriate for the regulation of capital buffers.
\n
Art. 17
\n
(Deleted by Act X. 2015.26).
\n
Capital buffers.
\n
Added by:
\n
X. 2015.25.
\n
Capital adequacy.
\n
Amended by:
\n
XVII. 2002.174;
\n
XX. 2007.85, 99;
\n
III. 2009.19;
\n
XVII. 2009.22;
\n
II. 2011.16;
\n
XX. 2013.62.
\n
Art. 17A
\n
17A. The competent authority may issue a Banking Rule as it considers appropriate for the implementation of measures aimed at addressing credit risks arising from the assessment of the quality of a credit institution’s asset portfolio.
\n
Measures aimed at addressing credit risks.
\n
Added by:
\n
XVII. 2002.175.
\n
Amended by:
\n
XX. 2007.85, 100.
\n
Substituted by:
\n
XVII. 2009.23.
\n
Amended by:
\n
II. 2011.17.
\n
Substituted by:
\n
X. 2015.27.
\n
Art. 17B
\n
17B. (1) Every credit institution shall put in place robust governance arrangements which include a clear organisational structure with well defined, transparent and consistent lines of responsibility, effective processes to identify, manage, monitor and report the risks it is or might be exposed to, adequate internal control mechanisms including sound administrative and accounting procedures, network and information systems that are established and managed in accordance with the DORA Regulation, and remuneration policies and practices that are consistent with and promote sound and effective risk management:
\n
Internal governance and recovery and resolution plans.
\n
Added by:
\n
XX. 2007.101.
\n
Amended by:
\n
III. 2009.20;
\n
II. 2011.18;
\n
X. 2015.28;
\n
XXI. 2015.22;
\n
XXVI.2019.8;
\n
LXXI.2021.39;
\n
XI.2025.31.
\n
Provided that such remuneration policies and practices shall be gender neutral.
\n
(2)The arrangements, processes and mechanisms referred to in sub-article (1), shall be comprehensive and proportionate to the nature, scale and complexity of the risks inherent in the business model and the credit institution’s activities. Credit institutions shall take into account the technical criteria laid down in a Banking Rule.
\n
(3)Every credit institution shall also ensure that its internal BANKING control mechanisms and administrative and accounting procedures permit the checking of compliance with the rules adopted in accordance with the provisions of this Act and any regulations made and, or Banking Rules and, or Conduct of Business Rules issued thereunder, with any binding legal instruments issued under the CRD, and with the CRR at all times.
\n
(4)Deleted by Act XXVI.2019.8.
\n
(5)A credit institution shall cooperate closely with the Resolution Committee established under the Malta Financial Services Authority Act, and with any relevant European Resolution Authorities or Third-Country Resolution Authorities and shall provide them with all information necessary for the preparation and drafting of a viable resolution plan setting out options for the orderly resolution of the credit institution in the case of failure, in accordance with the principle of proportionality.
\n
Credit institutions’ internal capital adequacy assessment process.
\n
Added by:
\n
XX. 2007.101.
\n
Amended by:
\n
II. 2011.19.
\n
Supervisory review and evaluation process.
\n
Added by:
\n
XX. 2007.101.
\n
Amended by:
\n
II. 2011.20.
\n
Transactions with parent mixed activity holding companies and their subsidiaries.
\n
Added by:
\n
LXXI.2021.40.
\n
S.L. 371.16.
\n
Supervisory measures.
\n
Added by:
\n
X. 2015.30.
\n
Amended by:
\n
LXXI.2021.41.
\n
Art. 17C
\n
17C. All credit institutions shall have in place sound, effective and complete strategies and processes to assess and maintain on an on-going basis, the amounts, types and distribution of internal capital that they consider adequate to cover the nature and level of risks to which they are or might be exposed. These strategies and processes shall be subject to regular internal review to ensure that they remain comprehensive and proportionate to the nature, scale and complexity of the activities of the credit institution concerned.
\n
The competent authority shall issue a Banking Rule providing for, inter alia the internal capital adequacy assessment process that has to be maintained by credit institutions in relation to their risk profile.
\n
Art. 17D
\n
17D. (Deleted by Act X. 2015.29).
\n
17DA. Credit institutions shall have in place adequate risk management processes and internal control mechanisms, in accordance with the Banking Act (Supervisory Review) Regulations and as may be prescribed from time to time in a Banking Rule, including sound reporting and accounting procedures in order to identify, measure, monitor and control transactions with their parent mixed activity holding company and its subsidiaries appropriately. Credit institutions shall report any significant transaction with those entities other than the one referred to in Article 394 of the CRR:
\n
Provided that those procedures and significant transactions shall be subject to overview by the competent authority.
\n
Art. 17E
\n
17E. (1) The competent authority shall require a credit institution to take the necessary measures at an early stage to address relevant problems in circumstances where (a) the credit institution does not meet the requirements of this Act or any regulations made or Banking Rules issued thereunder, of any binding legal instruments issued under B A N K I NG the CRD or of the CRR; (b) the competent authority has evidence that the credit institution is likely to breach this Act or any regulations made or Banking Rules issued thereunder, any binding legal instruments issued under the CRD or the provisions of the CRR, within the following twelve months.
\n
(2)For the purposes of sub-article (1), the powers of the competent authority shall include the supervisory powers referred to in regulation 9 of the Banking Act (Supervisory Review) Regulations.
\n
S.L. 371.16
\n
(3)The competent authority shall apply supervisory measures in accordance with the level of application of the requirements of Part One, Title II of the CRR.
\n
Art. 18
\n
18.The competent authority may issue a Banking Rule specifying what shall constitute the specified liquid assets and the deposit liabilities of a credit institution and laying down the minimum holding of specified assets as a proportion of deposit liabilities which a credit institution must hold.
\n
Liquidity.
\n
Amended by:
\n
XVII. 2002.176;
\n
XX. 2007.85, 102.
\n
Art. 19
\n
19.(1) A credit institution shall submit to the competent authority - Information to be submitted to the competent authority and the Central Bank.
\n
Amended by:
\n
XVII. 2002.177;
\n
XX. 2007.85, 103;
\n
XVII. 2009.24;
\n
II. 2011.21;
\n
X. 2015.31;
\n
LXXI.2021.42. (a) periodic statements showing its assets and liabilities and profit and loss position on an individual and, where appropriate, on a consolidated basis including analysis thereof; (b) such information as is required by the competent authority for prudential supervision, conduct supervision and, or statistical purposes; (c) all the information necessary for the assessment of its compliance with this Act and any regulations made and, or Banking Rules and, or Conduct of Business Rules issued thereunder, with any binding legal instruments issued under the CRD, and with the CRR, as the competent authority may require; (d) such separate statements relating to its offices and branches outside Malta in such form and at such times as the competent authority may require in the discharge of its duties. (1A) A financial holding company and a mixed financial holding company shall submit to the competent authority all the information necessary for the assessment of its compliance with this Act and any regulations made or Banking Rules issued thereunder, with any binding legal instruments issued under the CRD, and with the CRR, as the competent authority may require.
\n
(2)A credit institution shall submit to the Central Bank such information as the Central Bank may require in the discharge of its duties and the Central Bank may enquire into and ask for clarification of any information so submitted.
\n
(3)A credit institution shall register all its transactions and BANKING document systems and processes, which are subject to this Act and any regulations made and, or Banking Rules and, or Conduct of Business Rules issued thereunder, to any binding legal instruments issued under the CRD, and to the CRR, in such a manner that the competent authority may be able to verify compliance with the requirements of the CRR, of any binding legal instruments issued under the CRD, of this Act and of any regulations made or Banking Rules and, or Conduct of Business Rules issued thereunder at all times.
\n
(4)Without prejudice to article 11A, the provisions of this article shall also apply to all branches, agencies or representative offices in Malta of a credit institution which is not licensed in Malta.
\n
(5)All statements required under sub-article (1) shall be submitted in such form and at such periods as the competent authority may from time to time prescribe by a Banking Rule and, or as may be prescribed in any applicable binding legal instrument.
\n
(6)All statements and other information furnished by any credit institution, financial holding company and mixed financial holding company, as the case may be, under sub-articles (1), (1A) and
\n
(2)shall, unless otherwise provided in this Act or in any other law, be regarded as secret and confidential except as between that credit institution, financial holding company or mixed financial holding company, as the case may be, and the competent authority or the Central Bank as the case may be save that the competent authority shall furnish such information under this article as may be required by the Minister or the Central Bank and shall inform the Minister and the Central Bank if at any time in its opinion there is concern regarding the state of affairs of that credit institution.
\n
Outsourcing service providers.
\n
Added by:
\n
XX. 2007.104.
\n
Amended by:
\n
II. 2011.22;
\n
XXVI.2019.9;
\n
LXXI.2021.43.
\n
Art. 19A
\n
19A. (1) Where a credit institution intends to outsource its material services or activities, it shall first inform the competent authority accordingly.
\n
Access to accounts maintained with a credit institution.
\n
Added by:
\n
XXVI.2019.9.
\n
Art. 19B
\n
19B. (1) Credit institutions shall grant payment institutions, electronic money institutions and account information service providers access to a credit institution’s payment account services on an objective, non-discriminatory and proportionate basis.
\n
(2)The competent authority may issue a Banking Rule laying down what constitutes material services or activities, the requirements for the information to be submitted regarding the outsourcing service provider and the provision of such outsourced services.
\n
(2)The access referred to in sub-article (1) shall be sufficiently extensive as to allow payment institutions, electronic money institutions and account information service providers to provide payment services in an unhindered and efficient manner.
\n
(3)In the event that a credit institution does not allow a payment institution, an electronic money institution, or an account information service provider, to have access to the credit institution’s payment account services, such institution shall provide the competent authority with duly motivated reasons for any such rejection.
\n
B A N K I NG
\n
(4)The competent authority shall, in case of an event as referred to in sub-article (3), notify the Central Bank of said event together with the reasons provided by the credit institution, without undue delay.
\n
Art. 19C
\n
Without prejudice to the application of Chapter II of the DORA Regulation, credit institutions shall establish a framework with appropriate mitigation measures and control mechanisms to manage the operational and security risks, relating to the payment services they provide. As part of that framework, credit institutions shall establish and maintain effective incident management procedures, including for the detection and classification of major operational and security incidents.
\n
Management of operational and security risks.
\n
Added by:
\n
XXVI.2019.9.
\n
Amended by:
\n
XI.2025.32.
\n
(2)Credit institutions shall provide to the Central Bank on an annual basis or at shorter intervals, as may be determined by the competent authority in co-operation with the Central Bank, an updated and comprehensive assessment of the operational and security risks relating to the payment services they provide and on the adequacy of the mitigation measures and control mechanisms implemented in response to those risks.
\n
(3)The competent authority shall co-operate with the Central Bank in the assessment and processing of documents referred to in sub-article (2).
\n
(4)The competent authority may issue, amend or revoke Banking Rules as may be required in order to better implement the provisions of this article.
\n
Art. 19D
\n
19D. (1) Deleted by Act XI.2025.33.
\n
(2)Deleted by Act XI.2025.33.
\n
(3)Deleted by Act XI.2025.33.
\n
(4)Deleted by Act XI.2025.33.
\n
(5)Deleted by Act XI.2025.33.
\n
(6)Credit institutions shall, at least on an annual basis, provide to the Central Bank statistical data on fraud relating to different means of payment.
\n
(7)The competent authority may issue, amend or revoke any Banking Rules as may be required to better implement the provisions of this article.
\n
(8)Deleted by Act XI.2025.33.
\n
Incident reporting.
\n
Added by:
\n
XXVI.2019.9.
\n
Amended by:
\n
XI.2025.33.
\n
Supervision of credit institutions.
\n
Amended by:
\n
XVII. 2002.178;
\n
XX. 2007.105;
\n
XVII. 2009.25;
\n
II. 2011.23;
\n
X. 2015.32;
\n
LXXI.2021.44.
\n
BANKING
\n
Art. 20
\n
20.(1) Every credit institution licensed in terms of this Act, and where applicable, a financial holding company or a mixed financial holding company, shall submit to the competent authority any information which it may reasonably require in the exercise of its duties under this Act or any regulations made or Banking Rules or Conduct of Business Rules issued thereunder, the CRR or any binding legal instruments issued under the CRD, and the competent authority may enquire into and ask for clarification of any information so submitted.
\n
(2)Any request for information or for clarification thereof under this article shall be made by notice in writing and shall require the recipient to provide the information at such time or times or at such intervals or in respect of such period or periods as may be specified by the notice.
\n
(3)Further, the competent authority may (a) by notice in writing served on a credit institution, a financial holding company or a mixed financial holding company, require the credit institution, financial holding company or mixed financial holding company, as the case may be, to provide a report by an accountant or other person with relevant professional skill on, or on any aspect of, any matter about which the competent authority has required or could require the credit institution, financial holding company or mixed financial holding company, as the case may be, to provide information under sub-article (1); (b) by notice in writing served on a credit institution, a financial holding company or a mixed financial holding company, require the credit institution, financial holding company or mixed financial holding company, as the case may be, to produce within such time and at such place as may be specified in that notice, such document or documents of such description as may be so specified in the notice; (c) authorise an officer, servant or agent of the competent authority, on producing evidence of his authority, to require any credit institution, financial holding company or mixed financial holding company, 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 competent authority may reasonably require for the performance of its functions under this Act or any regulations made or Banking Rules or Conduct of Business Rules issued thereunder.
\n
(4)The accountant or other person appointed by a credit institution, a financial holding company or a mixed financial holding company to make any report required under sub-article (3)(a) shall be a person nominated or approved by the competent authority; and the competent authority may require the report to be in such form as is specified in the notice.
\n
B A N K I NG
\n
(5)Where, by virtue of sub-article (3), any person has power to require the production of any documents from a credit institution, a financial holding company or a mixed financial holding company, that person shall have the same power to require the production of those documents from any person who appears to be in possession of them.
\n
(6)The power under this article to require a credit institution, a financial holding company or a mixed financial holding company, 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 the credit institution, financial holding company, mixed financial holding company, or person concerned, 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 institution, financial holding company and mixed financial holding company 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.
\n
(7)If it appears to the competent authority to be desirable in the interests of the depositors or potential depositors of a credit institution to do so, or if otherwise required to fulfil its supervisory responsibilities, it may also exercise the powers conferred by subarticles (1) and (3) in relation to any person who is or has at any relevant time been (a) a holding company, subsidiary or a company which is a connected person of that credit institution; (b) a subsidiary or a person which is a company connected to a holding company of that credit institution; (c) a holding company of a subsidiary of that credit institution; or (d) a controller of that credit institution; or (e) an outsourcing institution. service provider of that credit
\n
(8)The competent authority may by notice in writing served on any person who is or is to be an officer of a credit institution, financial holding company or mixed financial holding company, as the case may be, require him to furnish, within such time as may be specified in the notice, such information or documents as the competent authority may reasonably require for determining whether he is a suitable person to hold the particular position which he holds or is to hold.
\n
(9)The competent authority may exercise the powers conferred by sub-articles (1) and (3) in relation to any person who has a qualifying shareholding in a credit institution, financial holding company or mixed financial holding company, if it considers that the exercise of those powers is desirable in the interests of the BANKING depositors or potential depositors of that credit institution.
\n
(10)A statement made by a person in compliance with a requirement imposed by virtue of this article may be used in evidence against him.
\n
(11)The competent authority shall have the power to recover from a credit institution, financial holding company or mixed financial holding company reported on under sub-article (3) the costs and expenses incurred in relation to such report.
\n
Right of entry to obtain information and documents.
\n
Amended by:
\n
X. 2015.33.
\n
Art. 21
\n
21.(1) Any officer, employee, agent or inspector of the competent authority may, on producing, if required, evidence of his authority (a) enter any premises occupied by a person on whom a notice has been served under article 20 above or article 22 below for the purpose of obtaining there the information or documents required by that notice; (b) enter any premises occupied by any person on whom a notice could be served under article 20 above or article 22 below for the purpose of obtaining there such information or documents as are specified in the authority, being information or documents that could have been required by such a notice; but the competent authority shall not authorise any person to act under this paragraph 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:
\n
Provided that where an entry as is mentioned in this subarticle 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.
\n
(2)No person shall intentionally obstruct a person exercising rights conferred by this article.
\n
Investigations.
\n
Amended by:
\n
XVII. 2002.179;
\n
XX. 2007.106;
\n
XVII. 2009.26;
\n
II. 2011.24;
\n
X. 2015.34;
\n
LXXI.2021.45.
\n
Art. 22
\n
22.(1) If it appears to the competent authority desirable to do so in the interests of the depositors or potential depositors of a credit institution, or if otherwise required to fulfil its supervisory responsibilities, it may appoint one or more competent persons, as inspectors, to investigate and report on (a) the nature, conduct or state of the credit institution’s business or any particular aspect of it, or (b) the ownership or control of the credit institution, and the competent authority shall give written notice of any such appointment to the credit institution concerned.
\n
(2)If a person appointed under sub-article (1) thinks it necessary for the purposes of his investigation, he may also investigate the business of any person who is or has at any relevant B A N K I NG time been - (a) a holding company, subsidiary or a company which is a connected person of the credit institution under investigation; (b) a subsidiary or a company which is a connected person of a holding company of that credit institution; (c) a holding company of a subsidiary of that credit institution; or (d) a controller of that credit institution; or (e) an outsourcing institution. service provider of that credit
\n
(3)The competent authority may exercise the powers conferred by sub-article (1) in relation to any person who has a qualifying shareholding in a credit institution if it considers that the exercise of those powers is desirable in the interests of the depositors or potential depositors of that credit institution.
\n
(4)Where a person appointed under sub-article (1) decides to investigate the business of any person by virtue of sub-article (2) or sub-article (3) he shall inform that person by notice in writing.
\n
(5)It shall be the duty of every person who is or was an officer, employee, agent, banker or auditor of a body which is under investigation under this Act and any regulations made and, or Banking Rules and, or Conduct of Business Rules issued thereunder, or any person appointed to make a report in respect of that body under this Act and any regulations made and, or Banking Rules and, or Conduct of Business Rules issued thereunder and anyone who has a qualifying shareholding in, or is a controller of, that body (a) to produce to the persons appointed under sub-article
\n
(1), within such time and at such place as they may require, all documents relating to the body concerned which are in his custody or power; (b) to attend before the persons so appointed at such time and place as they may require; and (c) otherwise to give those persons all assistance in connection with the investigation which he is reasonably able to give, and tho se pe rson s m ay t ake copi es of o r e xtracts from any documents produced to them under paragraph (a) above.
\n
(6)A person exercising powers by virtue of an appointment under this article shall, if so required, produce evidence of his authority.
\n
(7)No person shall (a) without lawful excuse fail to produce any documents which it is his duty to produce under sub-article (5); (b) without lawful excuse fail to attend before the persons appointed under sub-article (1) when required to do so; or BANKING (c) without lawful excuse fail to answer any question which is put to him by persons so appointed with respect to any credit institution which is under investigation or a body which is being investigated by virtue of sub-article (2) or (3).
\n
(8)A statement made by a person in compliance with a requirement imposed by virtue of this article may be used in evidence against him.
\n
(9)The competent authority shall have the power to recover from a credit institution reported on under sub-article (1) the costs and expenses incurred in relation to such report.
\n
(10)For the purposes of this article, reference to a credit institution shall include reference to persons appearing to be carrying out the business of banking.
\n
Suspected breaches.
\n
Amended by:
\n
XX. 2007.107;
\n
II. 2011.25;
\n
X. 2015.35;
\n
XXVI.2019.11;
\n
LXXI.2021.46.
\n
Art. 23
\n
23.(1) Where the competent authority has reasonable grounds for suspecting that a person has contravened or has failed to comply with any provision of this Act or any regulations made or Banking Rules or Conduct of Business 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.
\n
(2)The competent authority or their duly authorised officer, employee or agent may take copies of or extracts from any documents produced under this article.
\n
(3)Any officer, employee or agent of the competent authority 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 under sub-article (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-article or exercising the powers conferred by sub-article (2).
\n
(4)No person shall without lawful excuse fail to comply with a requirement imposed on him under this article or intentionally obstruct a person in the exercise of the rights conferred by subarticle (3).
\n
B A N K I NG
\n
(5)A statement made by a person in compliance with a requirement imposed by virtue of this article may be used in evidence against him.
\n
Art. 24
\n
24.No person who knows or suspects that an investigation is being or is likely to be carried out (a) under article 20, article 22 or article 23; or Obstruction.
\n
Amended by:
\n
XX. 2007.108;
\n
XXVI.2019.12. (b) into the suspected commission of any breach under this Act, 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.
\n
Art. 25
\n
25.(1) On the basis of Malta’s international commitments, the competent authority may share its supervisory duties with overseas regulatory authorities in the case of a credit institution licensed in terms of this Act and operating in the country of such overseas regulatory authority or a branch established in Malta and having its head office in another Member State.
\n
(2)The competent authority may further, on the basis of Malta’s international commitments, exchange information with overseas regulatory authorities in other Member States or transmit information to the ESRB, the EBA or the European Securities and Markets Authority established by Regulation (EU) No. 1095/2010, in accordance with this Act and any regulations made and Banking Rules issued thereunder transposing the CRD, with any binding legal instruments issued under the CRD, with the CRR, with Regulation (EU) 2019/2033, with Article 15 of Regulation (EU) No. 1092/2010, with Articles 31, 35 and 36 of Regulation (EU) No. 1093/2010, with Articles 31 and 36 of Regulation (EU) No. 1095/2010, with Directive (EU) 2019/2034 and with other Directives applicable to credit institutions. Such information shall be subject to professional secrecy provided for under this Act and any regulations issued thereunder. (2A) Notwithstanding article 17(1) of the Malta Financial Services Authority Act and articles 19(6), 34(2), 34(4) and 34(7), the competent authority may also, subject to the conditions set out in subarticles (2B) and (4A), transmit or share certain information with the following: (a) the International Monetary Fund and the World Bank, for the purposes of assessments for the Financial Sector Assessment Program; (b) the Bank for International Settlements, for the purposes of quantitative impact studies; (c) the Financial Stability Board, for the purposes of its surveillance function:
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Provided that where the disclosure of information in terms Co-operation, sharing and transmission of information.
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Amended by:
\n
XVII. 2002.180;
\n
IV. 2003.180;
\n
XX. 2007.109;
\n
XVII. 2009.27;
\n
II. 2011.26;
\n
XX. 2013.63;
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X. 2015.36;
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XXVI.2019.13;
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LXXI.2021.47;
\n
LXXII.2021.32.
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BANKING of this sub-article involves the processing of personal data, any processing of p ersonal data w ill be in accordance with the requirements laid down in the GDPR. (2B) The competent authority may only share confidential information with the international bodies referred to in sub-article (2A) following an explicit request and where at least the following conditions are met: (a) the request is duly justified in light of 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 of the required information, and the means of its disclosure or transmission; (c) the requested information is strictly necessary for the performance of the specific tasks of 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 of 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 34(4).
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(3)Notwithstanding article 17(1) of the Malta Financial Services Authority Act and articles 19(6) and 34(2), the competent authority may also conclude cooperation agreements, providing for exchanges of information, with third country overseas regulatory authorities or with authorities or bodies of third countries in accordance with sub-articles (7) and (8), only if the information disclosed is subject to a guarantee that professional secrecy requirements at least equivalent to those referred to in article 34(4) are complied with:
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Provided that such exchange of information shall be for the purpose of performing the supervisory tasks of the authorities or bodies mentioned in this sub-article:
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Provided further that where the information originates in another Member State, it shall only be disclosed with the express agreement of the overseas authority which has disclosed it, and where appropriate, solely for the purposes for which the overseas authority gave its agreement.
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(4)The competent authority may disclose information under the provisions of sub-article (2) only to the extent that the authorities receiving the information restrict its use for supervisory and regulatory purposes or for such other purposes as may specifically be agreed upon with the competent authority. (4A) Where a request is made by any of the entities referred to in sub-article (2A), the competent authority may only transmit aggregate or anonymised information and may only share other information at the premises of the competent authority.
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B A N K I NG
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(5)The competent authority may further, on the basis of international agreements, or upon reciprocity agreements, authorise overseas regulatory authorities to carry out themselves, or through the intermediation of competent persons they appoint, on-site inspections for supervisory and regulatory purposes in branches or subsidiaries of credit institutions having their head office in the country of the overseas regulatory authority making the inspection:
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Provided that on-the-spot checking and inspection of branches established in Malta of credit institutions authorised in another Member State, shall be carried out in accordance with the European Passport Rights for Credit Institutions Regulations.
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(6)Nothing in this Act or in any other law shall prevent the competent authority from transmitting information to the following for the purposes of their tasks (a) the Central Bank, ESCB central banks and other bodies with a similar function in their capacity as monetary authorities when the information is relevant for the exercise of their respective statutory tasks, including the conduct of monetary policy and related liquidity provision, oversight of payments, clearing and settlement systems and the safeguarding of stability of the financial system; (b) contractual or institutional protection schemes as referred to in Article 113(7) of the CRR; (c) where appropriate, other public authorities responsible for overseeing payment systems; (d) the ESRB, the European Insurance and Occupational Pensions Authority established by Regulation (EU) No. 1094/2010 and the European Securities and Markets Authority established by Regulation (EU) No.
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1095/2010, where that information is relevant for the exercise of their tasks under Regulations (EU) No.
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1092/2010, (EU) No. 1094/2010 or (EU) No. 1095/ 2010:
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Provided that the competent authority shall take the appropriate measures to remove obstacles preventing it from transmitting information in accordance with this sub-article:
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Provided further that information received in accordance with this sub-article shall be subject to professional secrecy requirements at least equivalent to those referred to in article 34(4):
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Provided further that in an emergency situation, including a situation as described in Article 18 of Regulation (EU) No. 1093/ 2010 or a situation of adverse developments in markets arises, which potentially jeopardises the market liquidity and the stability of the financial system, the competent authority shall communicate without delay information to the ESCB central banks where that information is relevant for the exercise of their statutory tasks, including the conduct of monetary policy and related liquidity provision, the oversight of payments, clearing and settlement systems, and to the ESRB where such information is relevant for S.L. 371.11 BANKING the exercise of its statutory tasks.
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(7)The provisions of article 17(1) of the Malta Financial Services Authority Act and of article 34(2), (4) and (7) shall not preclude the exchange of information between the competent authority and other authorities in Malta; between the competent authority and overseas regulatory authorities in other Member States; or between the competent authority and the following, in the discharge of their supervisory functions (a) authorities entrusted with the public duty of supervising other financial sector entities and the authorities responsible for the supervision of financial markets; (b) authorities or bodies charged with responsibility for maintaining the stability of the financial system in Member States through the use of macro-prudential rules; (c) reorganisation bodies or authorities aiming protecting the stability of the financial system; at (d) contractual or institutional protection schemes as referred to in Article 113(7) of the CRR; (e) bodies involved in the liquidation and bankruptcy of institutions and in other similar procedures; (f) persons responsible for carrying out statutory audits of the accounts of institutions, insurance undertakings and financial institutions; (g) authorities responsible for supervising the obliged entities listed in points (1) and (2) of Article 2(1) of Directive (EU) 2015/849 for compliance with that Directive, and financial intelligence units in other Member States; (h) authorities or bodies responsible for the application of rules on structural separation within a banking group;
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Provided that the provisions of article 34(4) and (7) shall not preclude the disclosure to bodies which administer depositguarantee schemes and investor compensation schemes of information necessary for the exercise of their functions:
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Provided further that the information received shall in any event be subject to professional secrecy requirements at least equivalent to those referred to in article 34(4).
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(8)Notwithstanding article 17(1) of the Malta Financial Services Authority Act, the provisions of sub-articles (2) and (3) and of articles 19(6), 34(2), 34(4), 34(5) and 34(7), the competent authority shall exchange information w i t h t h e a u t h o r i t i e s r e s p o n s i b l e f o r overseeing (a) the bodies involved in the liquidation and bankruptcy of institutions and in other similar procedures; (b) contractual or institutional protection schemes as referred to in Article 113(7) of the CRR;
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B A N K I NG (c) persons charged with carrying out statutory audits of the accounts of institutions, insurance undertakings and financial institutions:
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Provided that in the cases referred to in this sub-article, the com petent authority shall require fulfilment of at least the following conditions: (i) that the information is exchanged for the purpose of performing the tasks referred to in this sub-article; (ii) that the information received is subject to professional secrecy requirements at least equivalent to those referred to in article 34(4); (iii) where the information originates in another Member State, that it is not disclosed without the express agreement of the overseas regulatory authorities which have disclosed it and, where appropriate, solely for the purposes for which those authorities gave their agreement:
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Provided further that where the authorities or bodies referred to in this sub-article perform their task of detection or investigation through the assistance of persons appointed for that purpose in view of their specific competence and not employed in t h e p u b l i c s e c t o r, t h e c o m p e t e n t a u t h o r i t y m a y e x c h a n g e information with the authorities or bodies responsible under the law for the detection and investigation of breaches of company law, to such persons, and shall require the fulfilment of at least the following conditions: (i) that the information is exchanged for the purpose of detecting and investigating breaches of company law; (ii) that the information received is subject to professional secrecy requirements at least equivalent to those referred to in article 34(4); (iii) where the information originates in another Member State, that it is not disclosed without the express agreement of the overseas regulatory authorities which have disclosed it and, where appropriate, solely for the purposes for which those authorities gave their agreement.
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(9)Notwithstanding article 17(1) of the Malta Financial Services Authority Act and the provisions of articles 19(6), 34(4) and 34(7), the competent authority may authorise the disclosure of certain information to other government departments of other Member States’ central government ad ministrations responsible for legislation on the supervision of institutions, financial institutions and insurance undertakings and to inspectors acting on behalf of those departments:
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Provided that such disclosures may be made only where necessary for reasons of prudential supervision and prevention and resolution of failing credit institutions. Without prejudice to subarticle (10), persons having access to the information shall be BANKING subject to professional secrecy requirements at least equivalent to those referred to in article 34(4):
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Provided further that in an emergency situation, including a situation as described in Article 18 of Regulation (EU) No. 1093/ 2010 or a situation of adverse developments in markets arises, which potentially jeopardises the market liquidity and the stability of the financial system, the competent authority may disclose information which is relevant to the departments referred to in this sub-article in all Member States concerned. (9A) The competent authority shall communicate to the EBA the names of the authorities or bodies that may receive information as described in sub-articles (8) and (9). (9B) In order to implement sub-article (9), the authorities or bodies referred to in sub-article (8), shall communicate to the competent authority which disclosed the information, the names and responsibilities of the persons to whom it is to be sent.
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(10)Notwithstanding article 17(1) of the Malta Financial Services Authority Act, and the provisions of articles 19(6), 34(4) and 34(7), the competent authority may disclose certain information relating to the prudential supervision of credit institutions to parliamentary enquiry committees, courts of auditors and other entities in charge of enquiries in Malta, under the following conditions (a) that the entities have a precise mandate under Maltese law to investigate or scrutinise the actions of the competent authority or for laws on the supervision of credit institutions; (b) that the information is strictly necessary for fulfilling the mandate referred to in paragraph (a); (c) the persons with access to the information are subject to professional secrecy requirements at least equivalent to those referred to in article 34(4); (d) where the information originates in another Member State, such information shall not be disclosed without the express agreement of the overseas regulatory authorities which have disclosed it and, solely for the purposes for which those overseas regulatory authorities gave their agreement:
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Provided that where the disclosure of information relating to prudential supervision involves the processing of personal data, any processing by the entities referred to in this sub-article shall comply with any applicable data protection legislation.
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(11)The competent authority shall not disclose in terms of subarticles (9) and (10), any information received under Article 52, Article 53(2) and Article 56 of the CRD, except with the express consent of the overseas regulatory authority of the Member State in which such an on-the-spot check or inspection was carried out or of the overseas regulatory authority of the Member State which disclosed such information.
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(12)Notwithstanding article 17(1) of the Malta Financial Services B A N K I NG Authority Act and of articles 19(6) and 34(2), the competent authority may communicate information referred to in sub-articles (2) and (3) and in articles 34(4), 34(5) and 34(7), to a clearing house or other similar body recognised under national law for the provision of clearing or settlement services of the relevant national market, if it considers that it is necessary to communicate such information in order to ensure the proper functioning of these bodies in relation to defaults or potential defaults by market participants:
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Provided that the information received under this article shall be subject to the conditions of professional secrecy at least equivalent to those referred to in article 34(4):
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Provided further that information received by the competent authority under Article 53(2) of the CRD may not be disclosed by the competent authority without the express consent of the overseas regulatory authority in another Member State and the authority in another Member State responsible for the supervision of investment firms which had disclosed it.
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(13)There shall be meetings held between a credit institution, its appointed auditors and the competent authority on a trilateral or bilateral basis as circumstances may warrant. These meetings may be called by any of the parties concerned but shall always be chaired by the competent authority.
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Art. 25A
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25A. The competent authority shall cooperate closely with overseas regulatory authorities in all matters with respect to supervision on a consolidated basis. Such cooperation shall be regulated through the Supervisory Consolidation Regulations.
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Co-operation and sharing of information with respect to supervision on a consolidated basis.
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Added by:
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XX. 2007.110.
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Amended by:
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XVII. 2009.28;
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II. 2011.27;
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XX. 2013.64.
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Substituted by:
\n
X. 2015.37.
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S.L. 371.15.
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Art. 25B
\n
25B. (Deleted by Act X. 2015.38).
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Competent authority as consolidating supervisor.
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Added by:
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II. 2011.29.
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Amended by:
\n
XX. 2013.65.
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Art. 25C
\n
25C. (Deleted by Act X. 2015.39).
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Verification of information in specific cases.
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Added by:
\n
XX. 2007.110.
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Re-numbered by:
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II. 2011.28.
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Amended by:
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II. 2011.30.
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XX. 2013.66.
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Communication by auditors, etc., with the competent authority.
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Amended by:
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XVII. 2002.181;
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XX. 2007.111;
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II. 2011.31;
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X. 2015.40;
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LXXI.2021.48.
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BANKING
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Art. 26
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26.(1) The disclosure in good faith to the competent authority by (a) an auditor of a credit institution, financial holding company or mixed financial holding company, as the case may be; or (b) a person appointed to make a report under article 20(3)(a) or article 22(1), of any fact or decision referred to in article 31(9) shall not constitute a breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision and shall not involve such persons in any liability. Such disclosure shall be made simultaneously to the board of directors or to the management body, as applicable, of the credit institution, financial holding company or mixed financial holding company, as the case may be, unless there are compelling reasons not to do so.
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(2)In relation to a person appointed to make a report under article 20(3)(a), this article applies to any matter of which he becomes aware in his capacity as the person making the report and which (a) relates to the business or affairs of the credit institution in relation to which a report is made or any associated body of that credit institution; or (b) if by virtue of article 20(7) the report relates to an associated body of a credit institution, to the business or affairs of that body.
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(3)In relation to a person appointed to make a report under article 22(1), this article applies to any matter of which he becomes aware in his capacity as the person making the report and which (a) relates to the business or affairs of the credit institution in relation to which his report is made or any associated body of that credit institution, or (b) if, by virtue of article 22(2), the report relates to an associated body of a credit institution, to the business or affairs of that body.
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(4)In this article \"associated body\", in relation to an institution, means any such body as is mentioned in article 20(7) or in article 22(2).
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(5)In relation to an auditor of a credit institution, financial holding company and mixed financial holding company, as the case may be, this article shall apply to any matter falling within article 31(9).
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Joint Banking Committee.
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Art. 27
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27.Repealed by Act XVII. 2002.182.
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B A N K I NG
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Art. 28
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28.Notwithstanding any investigation provided for in this Act and any regulations made and, or Banking Rules and, or Conduct of Business Rules issued thereunder (a) where a credit institution, financial holding company or mixed financial holding company establishes that it is likely to become unable to meet its obligations or that it is about to suspend payment, it shall forthwith inform the competent authority and the Governor of the Central Bank in writing;
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Credit institutions unable to meet obligations.
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Amended by:
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XVII. 2002.183;
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XX. 2007.112;
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II. 2011.32;
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X. 2015.41;
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LXXI.2021.49. (b) where the competent authority becomes aware that a credit institution, financial holding company or mixed financial holding company is likely to become unable to meet its obligations or that it is about to suspend payment, it shall forthwith inform the Governor of the Central Bank in writing; (c) where the Central Bank becomes aware that a credit institution, financial holding company or mixed financial holding company is likely to become unable to meet its obligations or that it is about to suspend payment, it shall forthwith inform the competent authority in writing.
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Art. 28A
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28A. Without prejudice to the powers arising under article 3, the Minister, acting on the advice of the competent authority, may make regulations to establish schemes or other arrangements with such distinct legal personality or otherwise as may be prescribed, for the protection of depositors in cases where credit institutions are unable to satisfy their obligations towards depositors and to regulate the management and the financing of any such schemes or arrangements for compensation and the contributions and levies to be paid thereto, to set out minimum and maximum levels of compensation, to exclude certain deposits from the application of such schemes or arrangements, and to make provision for any other aspect related to depositor protection schemes including rules on advertising; and such schemes shall be exempt from the payment of income tax as from the date of establishment of such schemes.
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Depositor protection.
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Added by:
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XVII. 2002.184.
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Amended by:
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IV. 2003.181;
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XX. 2007.113.
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Art. 29
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29.(1) If, whether from any report made under article 20 or article 22 or otherwise, it appears to the competent authority that any of the circumstances indicated in article 9(2) apply, the competent authority, after consulting with the Central Bank, may, without prejudice to the provisions of article 9(2) and to any other powers conferred on the competent authority under this Act or any other applicable law – Power of competent authority to take control of credit institutions.
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Amended by:
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XVII. 2002.185;
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XX. 2007.114;
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XLIV.2018.11;
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XXVI.2019.14;
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LXXI.2021.50;
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XI.2025.34. (a) require the credit institution forthwith to take such steps as the competent authority may consider necessary to remedy or rectify the matter; (b) appoint a competent person to advise the credit institution in the proper conduct of its business; (c) appoint a competent person to take charge of the assets of the credit institution or any portion of them for the purpose of safeguarding the interests of depositors;
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BANKING (d) appoint a competent person to assume control of the business of the credit institution and either to carry on that business or to carry out such other function or functions in respect of such business, or part thereof, including to take the necessary action for the credit institution to be dissolved and wound up, as the competent authority may direct; (e) require the credit institution to wind up its business or to wind up its business in Malta; (f) appoint a competent person to act as liquidator for the purpose of winding up the affairs of the credit institution; (g) fix the remuneration to be paid by the credit institution to any person appointed under this sub-article; (h) appoint a person to act as controller and, or to assume control of a credit institution for the purposes of the Controlled Companies (Procedure for Liquidation) Act; and having adopted any one or more of the measures aforesaid, the competent authority may further adopt any one or more measures, whether in addition thereto or in substitution therefor.
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(2)Where a competent person is appointed by the competent authority: (a) under sub-article (1)(b), the credit institution shall act in accordance with the advice given by such person unless and until the competent authority otherwise directs; (b) under sub-article (1)(c), the credit institution shall deliver to such person all the assets of which he is placed in charge, and all the powers, functions and duties of the credit institution in respect of those assets whether exercisable by the company in general meeting or by the board of directors or by any other person, including the legal and judicial representation of the credit institution, shall be exercisable by and vest in him to the exclusion of the credit institution; (c) under sub-article (1)(d), the credit institution shall submit its business to the control of such person and shall provide him with such facilities as he may require in order to carry on that business or to carry out the functions assigned to him under that paragraph, and all the powers, functions and duties of the credit institution, whether exercisable by the company in general meeting or by the board of directors or by any other person, including for the purpose of the dissolution and winding up of the credit institution as well as the legal and judicial representation of the credit institution in all matters, shall be exercisable by and vest in him to the exclusion of any other person:
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B A N K I NG Provided that the competent person shall not take any decision for the purpose of the dissolution and winding up of the credit institution unless the competent authority, after consulting with the Central Bank, issues a directive to that effect in terms of article 4B and any such directive may contain such instructions, requirements and conditions as the competent authority may consider necessary, including with regard to the mode of winding up.
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(3)Where a person is appointed under sub-article (1)(c) or (d) (a) any function, power or duty exercisable by any other person, including the curator of a bankrupt or any other person appointed by or under any other law, and relating to any assets or business of which the person appointed under either of the paragraphs aforesaid is placed in charge or in control, shall, unless or until the competent authority otherwise directs or an express provision of law specifically provides otherwise, cease to be so exercisable; (b) the person appointed under either of the paragraphs aforesaid shall, in respect of such property, partnerships, firms or other business as the competent authority may specify and in which the credit institution has an interest, whether directly or indirectly, including any interest arising from advances or loans made or credit facilities given or any liability undertaken, have such powers, functions and duties, including legal and judicial representation, as the competent authority may direct, and any such power, function or duty shall be exercisable by and vest in such person to the exclusion of any other person:
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Provided that: (i) the competent authority shall have power to direct that all or any of the powers, functions or duties aforesaid should be exercisable by any other person, and in any such case, with effect from such date or dates as the competent authority may specify and unless and until the competent authority otherwise directs, the powers, functions and duties to which the direction of the competent authority applies shall be exercisable by and vest in such other person appointed for the purpose to the exclusion of all others; (ii) where the competent authority is of the opinion that the credit institution has ceased to have any interest as aforesaid, it shall direct that any powers, functions and duties exercisable under this paragraph shall cease to be so exercisable, but any such direction shall not affect anything BANKING done or omitted to be done by virtue or by reason of any of the aforesaid powers, functions or duties; (c) the person appointed under either of the paragraphs aforesaid shall have the power to require any other person to provide him with such facilities as he may deem necessary to carry out any of the powers, functions or duties under this article; (d) the provision of law relating to bankruptcy and in particular Part III of the Commercial Code shall cease to apply to, and shall cease to operate in respect of any property, partnership, firm or other business specified by the competent authority under paragraph (b), unless and until, or except to the extent that, the competent authority otherwise directs; and in any such case the person appointed as aforesaid shall, subject to any directions of the competent authority given in the interest of the creditors, act as if those provisions did not exist and as if any declaration of bankruptcy had not been made. (e) Deleted by Act XI.2025.34.
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(3a)Any person appointed by the competent authority under paragraphs (c), (d), (f) or (h) of sub-article (1) shall submit sixmonthly reports of his activities and annual accounts of all transactions carried out by him in the performance of his functions, audited by an independent auditor, to the Minister who shall place such reports and accounts on the Table of the House within fifteen
\n
(15)days.
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(4)Where a person is appointed under sub-article (1)(f), such person shall be the liquidator of the company for all purposes of law to the exclusion of any other person.
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(5)The provisions of this article shall have effect notwithstanding any other provision of any enactment, and notwithstanding any deed, contract, instrument or other document whatsoever.
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(6)The foregoing provisions of this article vesting exclusive powers of representation in a person appointed by the competent authority thereunder shall apply also to any act or proceedings commenced or instituted before such representation vested as aforesaid, and in respect of any such act or proceedings any other person acting or purporting to act, or in respect of whom action is taken, in that capacity shall cease to be a party to, and shall be excluded from, any such act or proceedings.
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(7)No person shall in any way obstruct a person appointed under sub-article (1) in the performance of any of his functions, powers or duties under this article.
\n
(8)Deleted by Act XXVI.2019.14.
\n
(9)Upon receipt of a report as is mentioned in sub-article (1), the competent authority shall inform the Central Bank on whether it B A N K I NG intends to take any action pursuant to such report and of any action it intends to take thereon.
\n
(10)Without prejudice to the powers of the competent authority in terms of sub-article (1), the competent authority may also make an application to the Civil Court (Commercial Section) for the dissolution and winding up by the Civil Court (Commercial Section) of a credit institution where it appears to the competent authority that a credit institution should be dissolved and wound up by the Civil Court (Commercial Section) for the reason set out in article 214(2)(b)(iii) of the Companies Act, and where the Civil Court (Commercial Section) accedes to the application the relevant provisions of the Companies Act in relation to the dissolution and winding up by the Civil Court (Commercial Section) and any other applicable provisions of any other law shall apply.
\n
(11)Any measure adopted in terms of sub-article (1) shall remain in force notwithstanding that a credit institution ceases to hold a licence for whatever reason or such licence ceases to have effect, unless the competent authority otherwise directs.
\n
Art. 29A
\n
29A. Repealed by Act LXXII of 2021 .
\n
29AA. (1) Without prejudice to any other power of the competent authority under this Act or any other law, where the competent authority is the consolidating supervisor and has established that the conditions set out in article 11B(4) are not met or have ceased to be met, the competent authority shall take the appropriate supervisory measures to ensure or restore, as the case may be, continuity and integrity of consolidated supervision and ensure compliance with the requirements laid down in this Act and any regulations made and Banking Rules issued thereunder transposing the CRD , in any binding legal instruments issued under the CRD, and in the CRR, on a consolidated basis. In the case of a mixed financial holding company, the supervisory measures applied by the competent authority as the consolidating supervisor shall, in particular, take into account the effects on the financial conglomerate. The supervisory measures referred to in this sub-article shall include: (a) withdrawing the approval granted to a financial holding company or mixed financial holding company in terms of article 11B; (b) suspending the exercise of voting rights attached to the shares of the subsidiary institutions held by the financial holding company or mixed financial holding Ranking of creditors in case of insolvency or winding up of a credit institution.
\n
Substituted by:
\n
X. 2017.3.
\n
Amended by:
\n
XLIV.2018.12;
\n
LXXI.2021.51.
\n
Supervisory measures related to financial holding companies and mixed financial holding companies.
\n
Added by:
\n
LXXI.2021.52.
\n
BANKING company; (c) issuing administrative measures or administrative penalties, in terms of this Act and any regulations made or Banking Rules issued thereunder, against the financial holding company, the mixed financial holding company or the directors and managers, subject to the provisions of national law transposing Articles 65 to 72 of the CRD; (d) issuing instructions or directions to the financial holding company or mixed financial holding company, to transfer to its shareholders the participations in its subsidiary institutions; (e) issuing a directive to the financial holding company or mixed financial holding company in terms of Article 4B; (f) designating on a temporary basis another financial holding company, mixed financial holding company or institution within the group as responsible for ensuring compliance with the requirements laid down in this Act and, or any regulations made and, or Banking Rules issued thereunder transposing the CRD, in the CRD and, or in the CRR on a consolidated basis; (g) restricting or prohibiting distributions or interest payments to shareholders; (h) requiring financial holding companies or mixed financial holding companies to divest from, or reduce, holdings in institutions or other financial sector entities; (i) requiring financial holding companies or mixed financial holding companies to submit a plan on return, without delay, to compliance; (j) restraining any person within financial holding companies or mixed financial holding companies and, or financial holding companies or mixed financial holding companies from taking, or continuing to take, any action as a result of which the conditions set out in article 11B(4) are not met or have ceased to be met; (k) requiring any person within financial holding companies or mixed financial holding companies and, or financial holding companies or mixed financial holding companies to take such steps as may be necessary to restore the position existing immediately before any action, as a result of which the conditions set out in article 11B(4) are not met or have ceased to be met, was taken; (l) restraining any person within financial holding companies or mixed financial holding companies and, or financial holding companies or mixed financial holding companies from exercising any rights which a lawful action, as a result of which the conditions set B A N K I NG out in article 11B(4) are not met or have ceased to be met, would have conferred upon them, including the right to receive any payment or to exercise any voting rights attaching to the shares acquired;
\n
(m) any measure under article 29 of this Act:
\n
Provided that in exercising any of its powers under article 29, the provisions of the said article shall apply mutatis mutandis, and provided further that any reference to ''the credit institution'' shall be deemed to be reference to ''the financial holding company\" and, or \"the mixed financial holding company\", as applicable.
\n
(2)Where the competent authority intends to withdraw an approval in accordance with sub-article (1)(a), it shall serve written notice of its intention on the financial holding company or mixed financial holding company; such notice shall specify the grounds upon which the competent authority intends to take such action and shall specify a period, being a period not less than forty-eight hours and not more than thirty calendar days, in which the financial holding company or mixed financial holding company shall be entitled to make representations to the competent authority as to why such action should not be taken. Unless the competent authority decides that the matter is urgent, it shall not withdraw an approval before the expiry of such period.
\n
(3)For the purpose of taking decisions on the supervisory measures referred to in sub-article (1), where the financial holding company or the mixed financial holding company is established in a Member State other than Malta and the competent authority is the consolidating supervisor, the competent authority shall work together with the overseas regulatory authority in the Member State where the financial holding company or the mixed financial holding company is established, as the case may be, in full consultation.
\n
(4)Where the competent authority is not the consolidating supervisor but the financial holding company or the mixed financial holding company is established in Malta, the competent authority shall, for the purposes of taking decisions on the supervisory measures referred to in Article 21a(6) of the CRD, work together with the overseas regulatory authority acting as the consolidating supervisor in full consultation.
\n
(5)Where the competent authority is the consolidating supervisor and where the financial holding company or the mixed financial holding company is not established in Malta, the competent authority shall prepare an assessment on the matters referred to in subarticle (1), and shall forward that assessment to the overseas regulatory authority in the Member State where the financial holding company or the mixed financial holding company is established.
\n
BANKING
\n
(6)The competent authority, whether acting as the consolidating supervisor or whether it is in receipt of an assessment referred to in Article 21a(8) of the CRD from the overseas regulatory authority acting as the consolidating supervisor, shall do everything within its powers to reach a joint decision on the measures referred to in sub-article (1) of this article and, or in Article 21a(6) of the CRD, with the overseas regulatory authority in the Member State where the financial holding company or the mixed financial holding company is established or with the overseas regulatory authority acting as the consolidating supervisor, as the case may be, within two months of receipt of that assessment:
\n
Provided that the joint decision shall be duly documented and reasoned and where the competent authority is the consolidating supervisor, it shall communicate the joint decision to the financial holding company or the mixed financial holding company.
\n
(7)In the event of a disagreement between the competent authority and the overseas regulatory authority acting as the consolidating supervisor or with the overseas regulatory authority in the Member State where the financial holding company or the mixed financial holding company is established, as the case may be, the competent authority shall refrain from taking the joint decision referred to in sub-article (6) and shall refer the matter to the EBA in accordance with Article 19 of Regulation (EU) No. 1093/2010. In such cases, the competent authority shall adopt a joint decision with the overseas regulatory authority acting as the consolidating supervisor or with the overseas regulatory authority in the Member State where the financial holding company or the mixed financial holding company is established, as the case may be, in conformity with the decision of the EBA:
\n
Provided that the matter shall not be referred to the EBA after the end of the two-month period referred to in sub-article (6) or after a joint decision has been reached.
\n
(8)In the case of mixed financial holding companies, where the coordinator appointed in terms of Article 10 of Directive 2002/87/EC is neither the competent authority, nor the overseas regulatory authority acting as the consolidating supervisor, nor the overseas regulatory authority in the Member State where the mixed financial holding company is established, the agreement of the said coordinator shall be required for the purposes of the decisions or joint decisions referred to in sub-article (1) of this article and, or in Article 21a(6) of the CRD, as applicable.
\n
Where the agreement of the coordinator is required, the competent authority shall refer any disagreements to the relevant European Supervisory Authority, namely, to the EBA or to the European Supervisory Authority (European Insurance and Occupational B A N K I NG Pensions Authority) (EIOPA), established by Regulation (EU) No.
\n
1094/2010, which shall take its decision within one month of receipt of the referral. Any decision taken in accordance with this sub-article shall be without prejudice to the obligations under Directive 2002/87/ EC or Directive 2009/138/EC.
\n
Art. 29B
\n
29B. Regulations, Banking Rules and Conduct of Business Rules made under this Act and any amendment thereto or revocation thereof may be made in the English language only.
\n
Language of regulations.
\n
Added by:
\n
XIII. 2004.84.
\n
Amended by:
\n
XX. 2007.117;
\n
LXXI.2021.53.
\n
Art. 30
\n
30.Every credit institution, and, where applicable, financial holding company and mixed financial holding company, shall, not later than four months from the closing of its financial year or at any other time as may be authorised in writing by the competent authority - Publication of audited financial statements.
\n
Amended by:
\n
XVII. 2002.187;
\n
XX. 2007.85, 118;
\n
II. 2010.5;
\n
X. 2015.43;
\n
XXVI.2019.15;
\n
LXXI.2021.54. (a) forward to the competent authority and the Central Bank, and (b) make available to the public, in paper or in electronic form, a copy of its audited financial statements or consolidated financial statements, as may be applicable, drawn up and published in such manner as may be specified in accordance with a Banking Rule.
\n
Art. 30A
\n
30A. (1) The institutions - competent authority may require credit (a) to publish information referred to in Part Eight of the CRR more than once per year and to set deadlines for publication;
\n
Specific publication requirements.
\n
Added by:
\n
X. 2015.44. (b) to use specific media and locations for publications other than the financial statements.
\n
(2)The competent authority may require parent undertakings to p u b l i sh a n n u a l l y, e i t h e r i n f u l l o r b y w a y o f r e f e r e n c e s t o equivalent information, a description of their legal structure and governance and organisational structure of the group of institutions in accordance with Article 14(3), Article 74(1) and Article 109(2) of the CRD .
\n
Art. 31
\n
31.(1)(a) Every credit institution shall each year appoint an approved auditor or auditors whose duty shall be to report on the financial statements of the credit institution examined by them and on all financial statements prepared by the credit institution. (b) For the purpose of this article an approved auditor shall be a person who is qualified to be an auditor in accordance with the Companies Act, and holds the authorisation of the competent authority to act as auditor of a credit institution.
\n
(2)If a credit institution fails to appoint an auditor under subarticle (1) or, at any time fails to fill any vacancy in the office of an Auditors.
\n
Amended by:
\n
XXV. 1995.434;
\n
XVII. 2002.188;
\n
XX. 2007.85, 119;
\n
X. 2015.45;
\n
LXXI.2021.55.
\n
BANKING auditor, the competent authority shall have the power to appoint an auditor for that credit institution and shall fix the remuneration to be paid by that credit institution to such auditor.
\n
(3)The auditors’ report shall include statements as to the following matters (a) whether they have obtained all the information and explanations which to the best of their knowledge and belief were necessary for the purpose of their audit; (b) whether in their opinion, proper books of account have been kept by the credit institution, so far as appears from their examination of those books, (c) whether the credit institution’s financial statements dealt with by the report are in agreement with the books of account; (d) whether, in their opinion, and to the best of their knowledge and according to the explanations given to them, the said financial statements give the information required by any law which may from time to time be in force in the manner so required and give a true and fair view.
\n
(4)The report of the auditors shall be read together with the report of the directors of the credit institution at the annual meeting of shareholders.
\n
(5)Every auditor of a credit institution shall have the right to demand such information or explanation as he deems necessary in the performance of his duties from any officer or employee of the credit institution.
\n
(6)A credit institution shall forthwith give written notice to the competent authority (a) on the appointment of its auditors; (b) if it proposes to give notice to its shareholders to (i) replace its auditors at the expiration of their term of office; (ii) remove its auditors before the expiration of their term of office; (c) if the auditors cease to be auditors of the credit institution for any reason other than those in paragraph (b).
\n
(7)The competent authority may require a credit institution to change its appointed auditors where, in the competent authority’s opinion, such auditors are considered unfit for this appointment at any time during their term of office.
\n
(8)An auditor shall immediately advise the competent authority if (a) he resigns; (b) he does not seek to be re-appointed; or B A N K I NG (c) he decides to qualify the audit report.
\n
(9)In his capacity as an auditor of a credit institution or due to a direct request by the competent authority under article 20 or under article 22, an auditor shall promptly notify the competent authority of any fact or decision concerning that credit institution of which he has become aware while carrying out his tasks, which is liable to (a) constitute a material breach of this Act or any regulations made or Banking Rules or Conduct of Business Rules issued thereunder which lay down the licensing conditions or which specifically govern the activities of credit institutions; (b) affect the ongoing functioning of the credit institution; (c) affect the depositors of the credit institution, of the branches in Malta of a credit institution authorised by an overseas regulatory authority or of any connected person which is a credit institution; (d) lead to refusal to certify the accounts or to the expression of reservations:
\n
Provided that an auditor shall also have the duty to report any fact or decision of which he becomes aware in the course of carrying out his tasks in an undertaking having close links resulting from a control relationship with the credit institution within which he is carrying out that task. (9A) The competent authority may require the replacement of an auditor if that auditor acts in breach of his obligations under subarticle (9).
\n
(10)Notwithstanding any of the provisions of the foregoing subarticles, the competent authority may in the case of a credit institution not licensed in Malta grant exemption by way of Banking Rule from any of the requirements of this article provided that the same does not materially detract from the main objects of this article.
\n
(11)In so far as the provisions of this article are inconsistent with the provisions of the Companies Act, the provisions of this article shall prevail and the provisions of the said Act shall, to the extent of the inconsistency, not apply to credit institutions.
\n
Art. 32
\n
32.(1) No person (a) who has been adjudged bankrupt or has made a composition with his creditors or has been an officer of a credit institution which has had its licence withdrawn under article 9(2); and who has not been exempted in writing by the competent authority from the provisions of this article; or (b) who is interdicted or incapacitated or who has been involved in money laundering or found guilty of a crime affecting public trust, theft, fraud, extortion or of knowingly receiving property obtained by theft or fraud, Disqualification of officers.
\n
Amended by:
\n
XVII. 2002.188;
\n
XX. 2007.120;
\n
X. 2015.46.
\n
BANKING shall act or continue to act as an officer of a credit institution.
\n
Duties of officers of credit institutions.
\n
Amended by:
\n
XVII. 2002.188;
\n
XX. 2007.85;
\n
X. 2015.47;
\n
LXXI.2021.56.
\n
Art. 33
\n
33.Every officer of a credit institution shall take all reasonable steps (a) to secure compliance by the credit institution with its licence and with the provisions of this Act and any regulations made and, or Banking Rules and, or Conduct of Business Rules issued thereunder, and (b) to ensure that no incorrect information is provided to the competent authority either wilfully or as the result of gross negligence.
\n
Duties of officers of financial holding companies and mixed financial holding companies.
\n
Added by:
\n
LXXI.2021.57.
\n
Art. 33A
\n
33A. Every officer of a financial holding company or a mixed financial holding company shall take all reasonable steps – (a) to secure compliance by the financial holding company or the mixed financial holding company, as the case may be, with its approval and with this Act and any regulations made or Banking Rules issued thereunder (b) to ensure that no incorrect information is provided to the competent authority either wilfully or as the result of gross negligence.
\n
Confidentiality.
\n
Amended by:
\n
XVII. 2002.189;
\n
XX. 2007.85, 121;
\n
II. 2011.33;
\n
X. 2011.39;
\n
X. 2015.48;
\n
XXXI. 2017.72;
\n
XXVI.2018.91;
\n
XXVI.2019.16;
\n
LXXI.2021.58;
\n
LXXII.2021.34;
\n
XXIX.2025.18.
\n
Art. 34
\n
34.(1) Nothing in this Act shall authorise the Central Bank or the competent authority to enquire or cause an enquiry to be made in a credit institution into the affairs of any individual customer of a credit institution except (a) for the purpose of ensuring compliance with any of the provisions of this or any other Act, or (b) for the purpose of enabling the Central Bank to satisfy its responsibilities under the Central Bank of Malta Act, or (c) for the purpose of enabling the Central Bank or the competent authority, as the case may be, to satisfy their respective obligations arising under Malta’s international commitments.
\n
(2)No person, including past and present officers or agents of a bank, financial holding company or mixed financial holding company, shall disclose any information relating to the affairs of a bank or of a customer of a bank, or relating to the affairs of a financial holding company or a mixed financial holding company, which he has acquired in the performance of his duties or the exercise of his functions under this Act or any regulations made or Banking Rules or Conduct of Business Rules issued thereunder except (a) when authorised to do so under any of the provisions of this Act or any regulations made or Banking Rules or Conduct of Business Rules issued thereunder; or B A N K I NG (b) for the purpose of the performance of his duties or the exercise of his functions; (c) when lawfully required to do so by any court or tribunal or under a provision of any law; (d) for the purpose of enabling the Central Bank or the competent authority, as the case may be, to satisfy their respective obligations arising under Malta’s international commitments; or (e) when the customer expressly consents, in writing, to the disclosure of information relating to his affairs, to the extent authorised by the customer.
\n
(3)Where an officer of a credit institution has reason to believe that a transaction or a proposed transaction could involve money laundering or the funding of terrorism, he shall act in compliance with the reporting and other obligations set out in the regulations made under article 12 of the Prevention of Money Laundering Act, and any procedures and guidance issued thereunder, and such disclosure shall not constitute a breach of confidentiality.
\n
(4)Officers of the competent authority and of the Central Bank, including past and present officers, as well as auditors or experts acting on behalf of the competent authority or the Central Bank, shall be governed by the obligation of professional secrecy and shall not disclose information obtained in the course of carrying ou t s up e rv i s o r y a nd o th e r d u ti e s u n l e s s s u c h d is c l o s ur e o f information be done in summary or collective form, such that individual credit institutions cannot be identified, without prejudice to the provisions of the Criminal Code:
\n
Provided that the said officers, auditors or experts may divulge such information for the purpose of the performance of their duties, or the exercise of their functions, only in summary and collective form as specified in sub-article (4), or when lawfully required to do so, by any court or under a provision of any law:
\n
Provided further that where a credit institution has been declared bankrupt or is being compulsorily wound up, confidential information which does not concern third parties involved in attempts to rescue that credit institution may be disclosed in civil or commercial proceedings.
\n
(5)The provisions of sub-article (4) shall not prevent the competent authority from exchanging information with overseas regulatory authorities in other Member States and authorities in other Member States responsible for the supervision of credit institutions and investment firms or transmitting information to the ESRB, the EBA or the European Securities and Markets Authority established by Regulation (EU) No. 1095/2010, in accordance with the Act and any regulations made and Banking Rules issued thereunder transposing the CRD, with any binding legal instruments issued under the CRD, with the CRR, with Regulation (EU) 2019/2033, with Article 15 of Regulation (EU) No. 1092/2010, with Articles 31, 35 and 36 of Regulation (EU) No. 1093/2010 and with Articles 31 and 36 of BANKING Regulation (EU) No.1095/2010, with Directive (EU) 2019/2034 and with other Directives applicable to credit institutions. Such information shall be subject to the provisions of sub-article (4):
\n
S.L. 371.16.
\n
S.L. 371.16 Substituted by:
\n
XXXI. 2017.72.
\n
Provided that the provisions of sub-article (4) shall not prevent the competent authority from publishing the outcome of stress tests carried out in accordance with the Banking Act (Supervisory Review) Regulations or Article 32 of Regulation (EU) No. 1093/ 2010 or from transmitting the outcome of the stress tests to the EBA for the purpose of publication by the EBA of the results of Union-wide stress tests.
\n
Provided that the provisions of sub-article (4) shall not prevent the competent authority from publishing the outcome of stress tests carried out in accordance with the Banking Act (Supervisory Review) Regulations or Article 32 of Regulation (EU) No. 1093/2010 or from transmitting the outcome of the stress tests to the EBA for the purpose of the publication by the EBA of the results of Union-wide stress tests.
\n
(6)Notwithstanding the provisions of the Professional Secrecy Act and of article 257 of the Criminal Code, a credit institution may, where necessary for the proper carrying out of its activities or for the fulfilment of its obligations, communicate any information which is in its possession and which is related to the affairs of a customer or of a connected person to: (a) other members of the group of companies of which that credit institution forms part, which carry out any activities licensed or authorised by the competent authority under this Act, the Trusts and Trustees Act, the Investment Services Act, the Financial Institutions Act or the Insurance Business Act, or which otherwise carry out activities equivalent to those activities mentioned in this paragraph, and which are authorised by an overseas authority in a recognised jurisdiction, as well as the credit institution’s holding company or financial holding company or mixed financial holding company or mixed activity holding company, where this is necessary for the proper carrying out of its activities or for the fulfilment of its obligations or for the carrying out of risk management, audit or compliance processes of the credit institution or of the group of companies of which it forms part; or (b) any auditor or expert engaged by the credit institution to carry out a compliance assessment, monitoring, auditing or a similar review in relation to any of the activities or risk management, audit or compliance processes of the credit institution or of the group of companies of which it forms part or in order to assess the credit institution’s compliance with any statutory obligations relating to the prevention of money laundering and the funding of terrorism; (c) an outsourcing service provider in whose favour a credit institution has outsourced any of its activities.
\n
B A N K I NG This shall be without prejudice to article 19A:
\n
Provided that, for the purposes of this sub-article, any such communication of information shall be made subject to all proper controls and safeguards, so that it shall be the responsibility of the credit institution to ensure that the group company member, the auditor or expert, or the outsourcing service provider, as the case may be, is subject to equivalent obligations of data protection, confidentiality and care as required under Maltese law and any European Union law, including the GDPR:
\n
Provided further that for the purpose of this article, advertising, marketing or promotion, shall not, under any circumstances, be considered as necessary for the proper carrying out of the activities of a credit institution or for the fulfilment of its obligations:
\n
Provided further that communication of information made in terms of paragraphs (a) to (c) shall be without prejudice to any provision of the Prevention of Money Laundering and Funding of Terrorism Regulations.
\n
S.L. 373.01.
\n
(7)Where the competent authority receives confidential information under sub-articles (4) and (5), it shall use s u c h information only in the course of its duties and only for any of the following purposes (a) to check that the conditions governing access to the activity of credit institutions are met and to facilitate monitoring, on a non-consolidated or consolidated basis, of the conduct of such activity, especially with regard to the monitoring of liquidity, solvency, large exposures and administrative and accounting procedures and internal control mechanisms; (b) to impose penalties; (c) in an appeal against a decision of the competent authority pursuant to article 10 and in any court proceedings before the Court of Appeal in terms of article 21(14) of the Malta Financial Services Authority Act; (d) in court proceedings initiated pursuant to special provisions provided for in European Union law adopted in the field of credit institutions.
\n
(8)The competent authority, when processing personal data for the purposes of this Act and any regulations and, or Banking Rules and, or Conduct of Business Rules issued thereunder, shall do so in accordance with any applicable legislation on data protection.
\n
(9)The provisions of article 25(2) and sub-articles (4), (5) and
\n
(7)of this article shall be without prejudice to the powers of investigation conferred on the European Parliament pursuant to Article 226 of the Treaty on the Functioning of the European Union.
\n
Data protection.
\n
Added by:
\n
XXVI.2019.17.
\n
BANKING
\n
Art. 34A
\n
Credit institutions may, when necessary to safeguard the prevention, investigation and detection of payment fraud, process personal data.
\n
(2)The provision of information to individuals about the processing of personal data, the processing of such personal data and any other processing of personal data for the purposes of this Act and any regulations and, or Rules issued thereunder shall be carried out in accordance with any applicable data protection legislation.
\n
(3)Unless otherwise permitted under other provisions of this Act and under applicable legislation, credit institutions shall only access, process and retain personal data necessary for the provision of their services with the explicit consent of those making use of their services.
\n
Offences.
\n
Amended by:
\n
XVII. 2002.190;
\n
XX. 2007.85, 122;
\n
L.N. 425 of 2007;
\n
II. 2011.34;
\n
X. 2011.40.
\n
Substituted by:
\n
X. 2015.49.
\n
Amended by:
\n
XXI. 2015.23;
\n
LXXI.2021.59.
\n
Art. 35
\n
35.(1) Any person who (a) fails to comply with any directive issued by the competent authority under this Act; (b) without reasonable excuse alters, suppresses, conceals, destroys or refuses to produce any document which he is lawfully required to produce by any person under this Act or any regulations made or Banking Rules or Conduct of Business Rules issued thereunder; (c) makes a statement, promise or forecast which he knows to be misleading, false or deceptive, or dishonestly conceals any material facts; (d) recklessly makes (dishonestly or otherwise) a statement, promise or forecast which is misleading, false or deceptive; or (e) contravenes or fails to comply with any of the provisions of articles 2A, 5(1) and (2), 6(1), 6A, 12, 13, 17B, 21(2), 22(7), 23(4), 24, 28(a), 29(7), 32, 33(b), and 34(2) and (4), shall be guilty of an offence:
\n
Provided that, with respect to paragraphs (c) and (d), a person shall be guilty of an offence if he makes the statement, promise or forecast or conceals the facts for the purpose of inducing, or is reckless as to whether it may induce, another person (whether or not to the person to whom the statement, promise or forecast is made or from whom the facts are concealed) (i) to make, or refrain from making, a deposit with him or any other person; or (ii) to enter, or refrain from entering, into an agreement for the purpose of making such a deposit:
\n
Provided further that, with respect to paragraphs (c) and (d), a person shall not be guilty of an offence unless (i) the statement, promise or forecast is made in or from Malta, or the facts are concealed in or from B A N K I NG Malta, or arrangements are made in or from Malta for the statement, promise or forecast to be made or the facts to be concealed; (ii) the person on whom the inducement is intended to or may have effect on is in Malta; or (iii) the deposit is or would be made, or the agreement is or would be entered into, in Malta.
\n
(2)Any person who is knowingly a party to, or procures or aids and abets the commission of any offence under sub-article (1), shall be guilty of an offence and shall be liable to the same penalties as the principal offender.
\n
(3)Any person found guilty of an offence shall, on conviction, b e l i ab l e t o a f i n e (m u l t a ) n o t e x c e e d i n g t w o m i l l i o n e u r o (€2,000,000) or to a term of imprisonment not exceeding three years or to both such fine and imprisonment.
\n
(4)No proceedings for an offence under this Act shall be commenced without the sanction of the Attorney General.
\n
Art. 35A
\n
35A. (1) Without prejudice to the provisions of articles 29AA(1)(c), 35 and 35B and to any regulations made under articles 3(1)(a), 3(1)(c) and 3(1)(e), where any person fails to comply with any of the conditions imposed in a licence, and, or where the competent authority is satisfied that a person’s conduct amounts to a breach of any of the provisions of this Act, or any regulations made or Banking Rules issued thereunder, or the CRR, or such pe r s o n h a s f a i l e d to co m p l y w it h a d ir e c t iv e i s s u e d b y t h e competent authority under this Act, or any regulation made or Banking Rules or Conduct of Business Rules issued thereunder, or the CRR, or any binding legal instruments issued under the CRD, the competent authority may, by notice in writing and without recourse to a court hearing, impose on such person an administrative penalty of (a) up to twice the amount of the benefit derived from the breach where that benefit can be determined; (b) in the case of a natural person, up to five million euro (€5,000,000); or (c) in the case of a legal person, up to 10% of the total annual net turnover of the undertaking in the preceding business year including the gross income consisting of interest receivable and similar income, income from shares and other variable or fixed-yield securities, and commissions or fees receivable in accordance with Article 316 of the CRR:
\n
Provided that, in the case of a subsidiary of a parent undertaking, the relevant gross income shall be the gross income resulting from the consolidated account of the ultimate parent undertaking in the preceding business year.
\n
(2)The Minister may, acting on the advice of the competent authority, make regulations as shall be deemed appropriate to provide for the establishment and imposition of administrative Administrative penalties and other administrative measures imposed by the competent authority.
\n
Added by:
\n
XVII. 2002.191.
\n
Amended by:
\n
XX. 2007.123.
\n
Substituted by:
\n
X. 2015.50.
\n
Amended by:
\n
LXXI.2021.60.
\n
BANKING penalties and other administrative measures on licence holders or others as may be specified therein.
\n
(3)Where the competent authority decides to impose an administrative penalty in terms of this Act or any regulations made thereunder, it shall notify the person on whom the penalty is being imposed by means of a notice in writing.
\n
(4)Where the person upon whom the notice referred to in subarticle (3) is served (a) fails to pay to the competent authority the amount of the penalty within a period of thirty days of the service of the notice, and fails to appeal from the decision of the competent authority to the Financial Services Tribunal; or (b) appeals to the Financial Service Tribunal and fails within a period of fifteen days from the decision of the 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 competent authority as a civil debt, and the provisions of sub-article (5) shall apply.
\n
(5)A notice as is referred to in sub-article (3), 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.
\n
(6)The imposition by the competent authority of an administrative penalty in terms of this Act, or any regulations made thereunder, shall be without prejudice to any other consequences of the act or omission of the offender under civil or criminal law:
\n
Provided that in all cases where the competent authority imposes an administrative penalty in respect of anything done or omitted to be done by any person and such act or omission also constitutes a criminal offence, no proceedings may be taken or continued against the said person in respect of such criminal offence.
\n
Publication of administrative penalties.
\n
Added by:
\n
X. 2015.51.
\n
Amended by:
\n
LXXI.2021.61.
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Art. 35B
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35B. (1) The competent authority shall publish, on its official website and in any other media as it considers appropriate, any administrative penalty or penalties imposed under the provisions of this Act or of any regulations made or Banking Rules or Conduct of Business Rules issued thereunder, of the CRR, or of any binding legal instruments issued under the CRD. Such publications shall include information on the type and nature of the breach and the identity of the person on whom the penalty is imposed, without undue delay after that person is informed of those penalties:
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Provided that in cases where an appeal has been filed by the person on whom such administrative penalty or penalties have been imposed, the competent authority shall, without undue delay, also B A N K I NG 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.
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(2)The competent authority shall publish the penalties imposed under the provisions of this Act or of any regulations made or Banking Rules or Conduct of Business Rules issued thereunder, of the CRR, or of any binding legal instruments issued under the CRD, on an anonymous basis, in any of the following circumstances: (a) where the penalty is imposed on a natural person and, following an obligatory prior assessment, publication of personal data is found to be disproportionate; (b) where publication would jeopardise the stability of financial markets or an on-going criminal investigation; (c) where publication would cause, insofar as it can be determined, disproportionate damage to the credit institutions or natural persons involved:
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Provided that, with respect to paragraphs (a), (b) and (c), publication on an anonymous basis in any such circumstances shall be an exceptional measure which needs to be justified by a detailed report compiled by the competent authority:
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Provided further that, where the circumstances referred to in this sub-article are likely to cease within a reasonable period of time, publication under this article may be postponed for such a period of time.
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(3)Information published in terms of this article shall remain on the official website of the competent authority for a period of not less than five years. Personal data shall be retained on the official website of the competent authority and in any other media i t c o n s i d e r s a p p r o p r i a t e o n l y f o r t h e p e r i o d n e c e s s a r y, i n accordance with the provisions of Maltese legislation on data protection.
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Art. 35C
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35C. In exercising its supervisory powers in accordance with this Act and any regulations made and, or Banking Rules and, or Conduct of Business Rules issued thereunder, with the CRR and with any binding legal instruments issued under the CRD, the competent authority shall, in its decisions, state the grounds on which such decisions have been based.
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Obligation to give reasons.
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Art. 36
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36.The provisions of this Act shall not apply to the Central Bank, save where and to the extent that the Central Bank is referred to by name.
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Application of Act to the Central Bank.
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Added by:
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LXXI.2021.62.
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Complaints.
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Transitory provisions.
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Amended by:
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LXXI.2021.63.
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BANKING
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Art. 37
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Any complaints made by any person making use of a payment service provided by a credit institution or by other interested third parties, including consumer associations within the meaning of the Consumer Affairs Act, in relation to any alleged infringements of the provisions of this Act transposing the Payment Services Directive by a credit institution licensed in terms of this Act, or an agent or a branch established in Malta under the right of establishment of a credit institution in another Member State, shall be submitted to the Arbiter in terms of the Arbiter for Financial Services Act.
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Art. 38
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(1)Credit institutions that, before 12 January 2016, have performed in Malta activities of payment initiation service providers and account information service providers shall not until eighteen months after the date of entry into force of the regulatory technical standards referred to in Article 98 of the Payment Services Directive, be prohibited from continuing to perform such activities in Malta in accordance with the currently applicable regulatory framework.
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(2)Until credit institutions acting as account servicing payment service providers comply with the regulatory technical standards referred to in Article 98 of the Payment Services Directive, such credit institutions shall not block or obstruct the use of payment initiation services or account information services for the accounts that they are servicing.
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(3)By way of derogation from article 11C(1), where a thirdcountry group operates through a credit institution licensed in terms of this Act, and through one or more other institutions in the European Union and with a total value of assets in the European Union equal to or greater than forty billion euro (€40,000,000,000) on 27 June 2019, the credit institution licensed in terms of this Act shall ensure that the intermediate EU parent undertaking referred to in article 11C(1) or the two (2) intermediate EU parent undertakings referred to in article 11C(2), as the case may be, shall be established by 30 December 2023.
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Added by:
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XVII. 2002.192.
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Amended by:
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II. 2010.6;
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II. 2011.35;
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X. 2015.52;
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LXXI.2021.64;
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XXXVI.2024.61.
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FIRST SCHEDULE (Article 2(2)) List of Additional Activities 1.
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2.
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Act;
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Financial leasing;
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Payment Services as defined in the Financial Institutions 3.
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Issuing and administering other means of payment (travellers’ cheques, bankers’ drafts and similar instruments) insofar as this activity is not covered by activity 2 above;
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4.
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Guarantees and commitments;
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5.
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Trading for own account or for account of customers in: (a) money market instruments (cheques, bills, certificates B A N K I NG of deposit, and similar instruments); (b) foreign exchange; (c) financial futures and options; (d) exchange and interest-rate instruments; (e) transferable securities.
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6.
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Participation in securities issues and the provision of services related to such issues;
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7.
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Advice to undertakings on capital structure, industrial strategy and related questions and advice as well as services relating to mergers and the purchase of undertakings;
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8.
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Money broking;
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9.
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Portfolio management and advice;
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10.
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Safekeeping and administration of securities;
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11.
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Credit reference services;
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12.
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Safe custody services;
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13.Issuing electronic money including electronic money tokens as defined in point (7) of Article 3(1) of the MiCA Regulation;
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14.Issuing of asset-referenced tokens as defined in point (6) of Article 3(1) of the MiCA Regulation;
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15.Crypto-asset services as defined in point (16) of Article 3 of the MiCA Regulation.
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SECOND SCHEDULE (Article 6(1)) List of entities that are not subject to the requirement to apply to the competent authority for a licence under this Act:
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1.
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The Central Bank and central banks of other Member States;
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2.
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Post office giro institutions;
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3.
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In Denmark, the \"Eksport Kredit Fonden\", the \"Eksport Kredit Fonden A/S\", the \"Danmarks Skibskredit A/S\" and the \"KommuneKredit 4.
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In Germany, the \"Kreditanstalt für Wiederaufbau\", \"Landwirtschaftliche Rentenbank\", \"Bremer Aufbau-Bank GmbH\", \"Hamburgische Investitions- und Förderbank\", \"Investitionsbank Berlin\", \"Investitionsbank des Landes Brandenburg\", \"Investitionsbank Schleswig-Holstein\", \"Investitions- und Förderbank Niedersachsen – NBank\", \"Investitions- und Strukturbank RheinlandPfalz\", \"Landeskreditbank Baden-Württemberg – Förderbank\", \"LfA F ö r d e r b a n k B a y e r n \" , \" N RW. B A N K \" , \" S a a r l ä n d i s c h e Added by:
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LXXI.2021.65.
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BANKING Investitionskreditbank AG\", \"Sächsische Aufbaubank – Förderbank\", \"Thüringer Aufbaubank\", undertakings which are recognised under the \"Wohnungsgemeinnützigkeitsgesetz\" as bodies of State housing policy and are not mainly engaged in banking transactions, and undertakings recognised under that law as non-profit housing undertakings;
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5.
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In Estonia, the \"hoiu-laenuühistud\", as cooperative undertakings that are recognised under the \"hoiu-laenuühistu seadus 6.
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In Ireland, the Strategic Banking Corporation of Ireland, credit unions and friendly societies;
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7.
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In Greece, the \"Ταμείο Παρακαταθηκών και Δανείων\" (Tamio Parakatathikon kai Danion);
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8.
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In Spain, the \"Instituto de Crédito Oficial 9.
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In France, the \"Caisse des dépôts et consignations 10.
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In Croatia, the \"kreditne unije\" and the \"Hrvatska banka za obnovu i razvitak 11.
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In Italy, the \"Cassa depositi e prestiti 12.
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In Latvia, the \"krājaizdevu sabiedrības\", undertakings that are recognised under the \"krājaizdevu sabiedrību likums\" as cooperative undertakings rendering financial services solely to their members;
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13.
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In Lithuania, the \"kredito unijos\" other than the \"centrinės kredito unijos 14.
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In Hungary, the \"MFB Magyar Fejlesztési Bank Zártkörűen Működő Részvénytársaság\" and the \"Magyar Export-Import Bank Zártkörűen Működő Részvénytársaság 15.
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In Malta, \"The Malta Development Bank\" established in terms of the Malta Development Bank Act;
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16.
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In the Netherlands, the \"Nederlandse Investeringsbank voor Ontwikkelingslanden NV\", the \"NV Noordelijke Ontwikkelingsmaatschappij\", the \"NV Limburgs Instituut voor Ontwikkeling en Financiering\", the \"Ontwikkelingsmaatschappij Oost-Nederland NV\" and kredietunies;
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17.
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In Austria, undertakings recognised as housing associations in the public interest and the \"Österreichische Kontrollbank AG 18.
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In Poland, the \"Spółdzielcze Kasy Oszczędnościowo — Kredytowe\" and the \"Bank Gospodarstwa Krajowego 19.
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In Portugal, the \"Caixas Económicas\" existing on 1 January B A N K I NG 1986 with the exception of those incorporated as limited companies and of the \"Caixa Económica Montepio Geral 20.
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In Slovenia, the \"SID-Slovenska izvozna in razvojna banka, d.d. Ljubljana 21.
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In Finland, the \"Teollisen yhteistyön rahasto Oy/Fonden för industriellt samarbete AB\", and the \"Finnvera Oyj/Finnvera Abp 22.
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In Sweden, the \"Svenska Skeppshypotekskassan.