Din il-liġi tirregola n-negozju tal-istituzzjonijiet finanzjarji. L-għan tagħha huwa li tistabbilixxi qafas legali għall-operat tagħhom.
financial institutions. 15th November, 1994 ACT XXII
1994 as amended by Acts XXIV and XXV
1995, XVII
2002, IV
2003, XIII
2004 and XII
2006; Legal Notice 425
2007; and Acts II
2010, X
2011, XX
2013, XI
2014, LII
2016, XXVI
2019, LXII , LXXI
2021 and LXXII
2021 and XI
this Act is the Financial Institutions Act. Short title. 2.
the Payment Services Directive to provide solely account information services; "account servicing payment service provider" means a payment service provider providing and maintaining a payment account for a payer; "acquiring
payment transactions" means a payment service provided by a payment service provider contracting with a payee to accept and process payment transactions that result in a transfer
funds to the payee; "agent" means a person who acts on behalf
a financial institution in providing those services listed under the First Schedule, other than issuing electronic money; "alternative investment fund" shall have the same meaning as assigned to it in the Investment Services Act (Notified CISs) Regulations; "alternative investment fund manager" shall have the same meaning as assigned to it in the Investment Services Act (Notified CISs) Regulations; S.L. 370.34. S.L. 370.34. FINANCIAL INSTITUTIONS "Arbiter" means the Arbiter for Financial Services appointed under article 14
the Arbiter for Financial Services Act; "authentication" means a procedure which allows the payment service provider to verify the identity
a payment service user or the validity
the use
a specific payment instrument, including the use
the user’s personalised security credentials; "average outstanding electronic money" means the average total amount
financial liabilities related to the electronic money in issue at the end
each calendar day over the preceding six calendar months, calculated on the first calendar day
each calendar month, and applied for that calendar month; "body corporate" means a body
persons having a legal personality distinct from that
its members; "branch" means a place
business other than the head
fice which is a part
a financial institution not having a legal personality and which carries out directly some or all
the transactions as licensed or registered, inherent in the business
a financial institution; all the places
business set up in Malta by a financial institution with a head
fice in another Member State shall be regarded as a single branch; "Central Bank" means the Central Bank
Malta as defined by the Central Bank
Malta Act; "close links" shall have the same meaning as that assigned to it in paragraph
the CRR; "Commission Delegated Regulation (EU) No. 241/ 2014" means Commission Delegated Regulation (EU) No. 241/ 2014
7 January 2014 supplementing Regulation (EU) No. 575/2013
the European Parliament and
the Council with regard to regulatory technical standards for Own Funds requirements for institutions, as may be amended from time to time; "Common Equity Tier 1 capital" shall have the same meaning as that assigned to it in Article 50
the CRR; "company" means a limited liability company constituted in Malta in accordance with the Companies Act or any law which may from time to time be in force; FINANCIAL INSTITUTIONS "competent authority" means the Malta Financial Services Authority established by the Malta Financial Services Authority Act; "consumer" means a natural person who in payment service contracts covered by the provisions
the Payment Services Directive, as transposed in directives issued by the Central Bank under the Central Bank
Malta Act, is acting for purposes other than his or her trade, business or profession; "control" in relation to a body corporate means the power to determine in any manner the financial and operating policies
the body corporate; "controller" means a person who alone or together with others exercises control in relation to a body corporate; " CRD" means Directive 2013/36/EU
the European Parliament and
the Council
26 June 2013 on access to the activity
credit institutions and the prudential supervision
credit institutions, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "credit facility" means the lending
a sum
money by way
an advance, overdraft or loan, or any other line
credit, including discounting
bills
exchange and promissory notes, guarantees, indemnities, acceptances, bills
exchange endorsed pour aval and financial leasing; "credit institution" shall have the same meaning as that assigned to it in the Banking Act; "credit transfer" means a payment service for crediting a payee’s payment account with a payment transaction or a series
payment transactions from a payer’s payment account by the payment service provider that holds the payer’s payment account, based on an instruction given by the payer; "CRR" means Regulation (EU) No. 575/2013
the European Parliament and
the Council
26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No. 648/2012, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; FINANCIAL INSTITUTIONS "digital content" means goods or services which are produced and supplied in digital form, the use or consumption
which is restricted to a technical device and that do not include in any way the use or consumption
physical goods or services; "Directive 86/635/EEC" means Council Directive 86/ 635/EEC
8 December 1986 on the annual accounts and consolidated accounts
banks and other financial institutions, as amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "Directive 2002/21/EC" means Directive 2002/21/EC
the European Parliament and
the Council
7 March 2002 on a common regulatory framework for electronic communications networks and services, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "Directive 2004/39/EC" means Directive 2004/39/EC
the European Parliament and
the Council
21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/ EC
the European Parliament and
the Council and repealing Council Directive 93/22/EEC, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "Directive 2008/48/EC" means Directive 2008/48/EC
the European Parliament and
the Council
23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC, as amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "Directive 2013/34/EU" means Directive 2013/34/EU
the European Parliament and
the Council
26 June 2013 on the annual financial statements, consolidated financial statements and related reports
certain types
undertakings, amending Directive 2006/43/EC
the European Parliament and
the Council and repealing Council Directives 78/660/ EEC and 83/349/EEC, as may be amended from time to time, and includes any implementing measures, implementing FINANCIAL INSTITUTIONS technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "Directive (EU) 2015/849" means Directive (EU) 2015/849
the European Parliament and
the Council
20 May 2015 on the prevention
the use
the financial system for the purposes
money laundering or terrorist financing, amending Regulation (EU) No. 648/2012
the European Parliament and
the Council, and repealing Directive 2005/ 60/EC
the European Parliament and
the Council and Commission Directive 2006/70/EC, as amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "director" includes an individual occupying the position
director
a company, by whatever name he may be called, empowered to carry out substantially the same functions in relation to the direction
the company as those carried out by a director; and in respect
a company registered or incorporated outside Malta, includes a member
a local board or agent or representative
that company; "direct debit" means a payment service for debiting a payer’s payment account, where a payment transaction is initiated by the payee on the basis
the consent given by the payer to the payee, to the payee’s payment service provider, or to the payer’s own payment service provider; "DORA Regulation" means Regulation (EU) 2022/2554
the European Parliament and
the Council
14 December 2022 on digital operational resilience for the financial sector and amending Regulations (EC) No. 1060/2009, (EU) No. 648/ 2012, (EU) No. 600/2014, (EU) No. 909/2014 and (EU) 2016/ 1011, as may be amended from time to time, and includes any binding legal instruments, guidelines and other measures that have been or may be issued thereunder; "EBA" means the European Banking Authority established by Regulation (EU) No. 1093/2010
the European Parliament and
the Council
24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/78/EC, as may be amended from time to time; "EEA State" means a State which is a contracting party to the agreement on the European Economic Area signed at Oporto on the 2nd May, 1992 as amended by the Protocol FINANCIAL INSTITUTIONS signed at Brussels on the 17th March, 1993, and as amended by any subsequent acts; "electronic communications network" means a network as defined in paragraph (a)
Directive 2002/21/ EC; "electronic communications service" means a service as defined in paragraph (c)
Directive 2002/21/EC; "electronic money" means electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt
funds for the purpose
making payment transactions and that is accepted by a person other than the financial institutions that issued the electronic money; "Electronic Money Directive" means Directive 2009/ 110/EC
the European Parliament and
the Council
16 September 2009 on the taking up, pursuit and prudential supervision
the business
electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "electronic money institution" means a financial institution that has been licensed in accordance with this Act and authorised to issue electronic money or that holds an equivalent authorisation in another country in terms
the Electronic Money Directive to issue electronic money; "equity release financial products" means products consisting
equity release credit agreements where the creditor: (a) grants on loan a lump sum, periodic payments or other forms
credit disbursement in return for a sum deriving from the future sale
a residential immovable property or a right relating to residential immovable property; and (b) will not seek repayment
the credit until the occurrence
the death
the consumer or his move to long-term care or any one or more other specified life events
the consumer as may be defined by the competent authority, unless the consumer breaches his contractual obligations which allows the creditor to terminate the credit agreement: FINANCIAL INSTITUTIONS Provided that the creditor cannot commence proceedings, judicial or otherwise, for the sale or other transfer
the property securing the equity release financial product for a period
at least thirty six
the consumer or his move to long-term care: Provided further that, in the case
a move into long-term care, the creditor and the consumer may agree to retain the equity release financial product even after the lapse
such thirty six
the consumer; and any such other product as may be defined as an equity release financial product by the competent authority from time to time; "European regulatory authority" means a body that is in another Member State and is empowered by law or regulation to supervise payment institutions, electronic money institutions and, or account information service providers; "European right" means the right
establishment and, or the freedom to provide services; "EuSEF Regulation" means Regulation (EU) No. 346/ 2013
the European Parliament and
the Council
17 April 2013 on European social entrepreneurship funds, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards, guidelines and similar measures that have been or may be issued thereunder; "EuVECA Regulation" means Regulation (EU) No. 345/2013
the European Parliament and
the Council
17 April 2013 on European venture capital funds, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards, guidelines and similar measures that have been or may be issued thereunder; "financial institution" means any person who regularly or habitually undertakes the carrying out
any activity listed in the First Schedule for the account and at the risk
the person carrying out the activity and who is licensed or registered under this Act: Provided that any person
fering equity release financial products shall be considered a financial institution irrespective
whether such equity release financial products are
fered on a regular or habitual basis, or otherwise; FINANCIAL INSTITUTIONS "Financial Institutions Rules" means a Rule issued by the competent authority to regulate financial institutions in terms
the powers under this Act, and "Rule" shall be read accordingly; "Financial Services Tribunal" or "Tribunal" means the Financial Services Tribunal established under the Malta Financial Services Authority Act; "framework contract" means a payment service contract which governs the future execution
individual and successive payment transactions and that may contain the obligation and conditions for setting up a payment account; S.L. 370.34. "fund manager" shall have the same meaning as assigned to it in the Investment Services Act (Notified CISs) Regulations; "funding
terrorism" has the same meaning as that assigned to it by the Prevention
Money Laundering Act, as may be amended from time to time; "funds" means banknotes and coins, scriptural money and electronic money; "group" means a group
undertakings which are linked to each other by a relationship referred to in Article 22
Directive 2013/34/EU or undertakings as defined in Articles 4, 5, 6 and 7
Commission Delegated Regulation (EU) No. 241/2014 that are linked to each other by a relationship referred to in Article 10
the CRR; "holding company" or "parent company" has the same meaning as that assigned to the term "parent company" in the Companies Act; "home Member State" means either
the following: (a) the Member State in which the registered
fice
the payment service provider is situated; or (b) if the payment service provider has no registered
fice under its national law, the Member State in which its head
fice is situated; "host Member State" means the Member State other than the home Member State in which a payment service provider has an agent or a branch, or provides payment services; "initial capital" means paid up capital and reserves as defined in a Financial Institutions Rule; FINANCIAL INSTITUTIONS "issuing
payment instruments" means a payment service by a payment service provider contracting to provide a payer with a payment instrument to initiate and process the payer’s payment transactions; "licence" means a licence granted under this Act to provide any
the activities listed in the First Schedule; "loan acquisition" means the acquisition
one
loans which give rise to a direct legal relationship between the acquirer as lender and the borrower or borrowers; "Member State" means a Member State
the European Union and includes an EEA State; "the Minister" means the Minister responsible for the regulation
Financial Services; "money laundering" has the same meaning as that assigned to it by the Prevention
Money Laundering Act, as may be amended from time to time; "money remittance" means a payment service where funds are received from a payer without any payment accounts being created in the name
the payer or the payee, for the sole purpose
transferring a corresponding amount to a payee or to another payment service provider acting on behalf
the payee and, or where such funds are received on behalf
and made available to the payee; "
ficer", in relation to a company, includes a director, partner, manager or company secretary or any person effectively acting in such capacity whether formally appointed or not; "outsourcing" means the use
a third party (the outsourcing service provider) by a financial institution to perform activities and, or operational functions that would normally be undertaken by the financial institution; "outsourcing service provider" means a supplier
goods, services or facilities, and which may be an affiliated entity within a corporate group or an entity that is external to the group; "overseas regulatory authority" means an authority that in a country or territory outside Malta exercises any function corresponding to the functions
the competent authority under this Act; FINANCIAL INSTITUTIONS "own funds" means funds as defined in paragraph 118
the CRR where at least 75%
the Tier 1 capital is in the form
Common Equity Tier 1 capital as referred to in Article 50
that Regulation and Tier 2 capital is equal to or less than one third
Tier 1 capital; "PAD" means Directive 2014/92/EU
the European Parliament and
the Council
23 July 2014 on the comparability
fees related to payment accounts, payment account switching and access to payment accounts with basic features, as may be amended from time to time and including any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "payee" means a person who is the intended recipient
funds that have been the subject
a payment transaction; "payer" means a person who holds a payment account and allows a payment order from that payment account or where there is no payment account, a person who gives a payment order; "payment account" means an account held in the name
one or more payment service users which is used for the execution
payment transactions; "payment initiation service" means a service to initiate a payment order at the request
the payment service user with respect to a payment account held at another payment service provider; "payment initiation service provider" means a payment service provider that has been licensed under this Act or that holds an equivalent authorisation in another country in terms
the Payment Services Directive to provide payment initiation services; "payment institution" means a company that has been licensed in accordance with this Act or that holds an equivalent authorisation in another country in terms
the Payment Services Directive to provide and execute payment services throughout the European Union; "payment instrument" means any personalised device and, or set
procedures agreed between the payment service user and the payment service provider and used in order to initiate a payment order; "payment order" means an instruction by a payer or payee to his payment service provider requesting the execution FINANCIAL INSTITUTIONS
a payment transaction; "payment service" means any business activity set out in paragraph 2
the Second Schedule; "Payment Services Directive" means Directive (EU) 2015/2366
the European Parliament and
the Council
25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/ EU and Regulation (EU) No. 1093/2010, and repealing Directive 2007/64/EC, as may be amended from time to time and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "payment service provider" means: (a) credit institutions, including branches thereof as defined in article 2
the Banking Act where such branches are located in the European Union, irrespective
whether the head
fices
those branches are located within the European Union or, in accordance with Article 47
the CRD and national law, if they are located outside the European Union; (b) electronic money institutions, being companies that have been granted authorisation under Title II
the Electronic Money Directive to issue electronic money, including branches thereof, in accordance with Article 8
that Directive and national law, where such branches are located within the European Union and their head
fices are located outside the European Union, in so far as the payment services provided by those branches are linked to the issuance
electronic money; (c) post
fice giro institutions that are entitled under national law
any Member State to provide payment services; (
a payment service in the capacity
payer, payee or both; "payment system" means a funds transfer system with formal and standardised arrangements and common rules for the processing, clearing and, or settlement
payment transactions; "payment transaction" means an act, initiated by the payer or on his behalf by the payee,
placing, transferring, or withdrawing funds, irrespective
any underlying obligations between the payer and the payee; "personalised security credentials" means personalised features provided by the payment service provider to a payment service user for the purposes
authentication; S.L. 370.34. "professional investor fund" shall have the same meaning as assigned to it in the Investment Services Act (Notified CISs) Regulations; "qualifying shareholding" shall have the same meaning as that assigned to it in paragraph
the CRR: Provided that, in determining whether the criteria for a qualifying shareholding are fulfilled, the voting rights referred to in Articles 9 and 10
Directive 2004/109/EC
the European Parliament and
the Council
15 December 2004 on the harmonisation
transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC, and the conditions regarding aggregation thereof set out in Article 12
that Directive, shall be taken into account: Provided further that, in determining whether the criteria for a qualifying shareholding are fulfilled, the competent authority shall not take into account voting rights or shares which investment firms or credit institutions may hold as a result
providing the underwriting
financial instruments or placing
financial instruments on a firm commitment basis in terms
paragraph 6
Section A
Annex 1 to Directive 2004/39/EC, provided that those rights are not exercised or otherwise used to intervene in the management
the issuer and are disposed
within one year
acquisition; "receivables financing" means factoring, with or without recourse and, or forfaiting; FINANCIAL INSTITUTIONS "reconstruction" has the same meaning as that assigned to it by the Companies Act; "registration" means a registration granted under this Act to provide solely account information services in terms
this Act; "Regulation (EC) No. 1606/2002" means Regulation (EC) No. 1606/2002
the European Parliament and
the Council
19 July 2002 on the application
international accounting standards, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "Regulation (EU) No. 1093/2010" means Regulation (EU) No. 1093/2010
the European Parliament and
the Council
24 November 2010, establishing a European Supervisory Authority (European Banking Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/78/EC, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "Regulation (EU) No. 1093/2010" means Regulation (EU) 2015/847
the European Parliament and
the Council
20 May 2015 on information accompanying transfers
funds and repealing Regulation (EC) No. 1781/2006, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "subsidiary" shall have the same meaning as that assigned to "subsidiary undertaking" in the Companies Act; "third country" means a country that is not a Member State or an EEA State; "Tier 1 capital" shall have the same meaning as that assigned to in Article 25
the CRR; "Tier 2 capital" shall have the same meaning as that assigned to it in Article 71
the CRR; "trade bills" means bills
exchange and promissory notes.
any conflict between the English and the Maltese FINANCIAL INSTITUTIONS texts
this Act, the English text shall prevail. S.L. 378.12.
this Act shall be without prejudice to the provisions
Directive 2008/48/EC as transposed in the Consumer Credit Regulations, other relevant European Union law or national measures regarding conditions for granting credit to consumers not harmonised by the Payment Services Directive that comply with European Union Law. Substituted by: XXVI.2019.
this Act, other than account information services, shall be transacted regularly or habitually, in or from Malta, except by a company that is in possession
a licence granted under this Act by the competent authority: Provided that the activities listed under the First Schedule
this Act, other than account information services, may also be transacted in or from Malta, by a legal person that is in possession
an authorisation granted by another Member State under the Payment Services Directive or the Electronic Money Directive, in exercise
its European rights and in accordance with the provisions
the Payment Services Directive and the Electronic Money Directive. (1A) No account information services shall be transacted regularly or habitually in or from Malta, except by a natural person or a company in possession
a registration granted under this Act by the competent authority: Provided that account information services may also be transacted in or from Malta, by a natural or legal person in possession
a registration granted by another Member State under the Payment Services Directive, in exercise
its European rights and in accordance with the provisions
the Payment Services Directive: Provided further that a financial institution licensed in terms
article 4
sub-article
sub-article
the fact that the person either: (a) belongs to a group and provides any
the activities listed in the First Schedule, except for activities 4 and, or 10 thereof, to companies which are not banks or financial institutions and that belong to the same group; (b) is an undertaking and provides any
the activities listed in the First Schedule, except for activities 4 and, or 10 thereof, to other undertakings, which are not FINANCIAL INSTITUTIONS banks or financial institutions, and all such undertakings are controlled directly or indirectly by the same person; (c) is an undertaking and provides any
the activities listed in the First Schedule, except for activities 4 and, or 10 thereof, to a person which is not a bank or financial institution, that directly or indirectly controls it; or (d) draws and issues trade bills in the normal course
business under hire purchase agreements, or under sales on credit where trade bills are drawn in respect
the price due: Provided that for the purposes
this sub-article, a person shall be deemed to control an undertaking if such person: (i) is a "parent company" as defined in article 2
the Companies Act; or (ii) has all
the following characteristics: (
the person’s returns. For the purposes
this sub-article: "person" means a natural person or an undertaking; and "undertaking" means a body corporate or incorporate which carries on a trade or business. (2A) Sub-article
the following activities: (
an agreement to negotiate or conclude the sale or purchase
goods or services, exclusively on behalf
the payer or the payee; (c) professional physical transport
banknotes and coins, FINANCIAL INSTITUTIONS including their collection, processing and delivery; (d) payment transactions consisting
the nonprofessional cash collection and delivery within the framework
a non-profit or charitable activity; (e) services where cash is provided by the payee to the payer as part
a payment transaction following an explicit request by the payment service user just prior to the execution
the payment transaction, by means
a payment for the purchase
goods or services; (
the system and payment service providers, without prejudice to Article 35
the Payment Services Directive, as transposed in directives issued by the Central Bank under the Central Bank
Malta Act; (i) payment transactions related to securities asset servicing including dividends, income or other distributions, redemption or sale carried out by persons referred to in paragraph (h), by investment firms, credit institutions, collective investment undertakings, or asset management companies providing investment services and, or any other entities allowed to have the custody
financial instruments; (j) services provided by technical service providers that support the provision
payment services, without them entering at any time into possession
the funds to be transferred, including processing and storage
data, trust and privacy protection services, data and entity authentication, information and communication technology (ICT) and communication network provision, provision and maintenance
terminals and devices used for payment services, with the exclusion
payment initiation services and account information services; (k) services based on specific payment instruments that can be used only in a limited way, provided they meet one
the following conditions: (i) instruments allowing the holder to acquire goods or services only in the premises
the issuer, or within a limited network
service providers under a direct commercial agreement with a professional issuer; (ii) instruments that can be used only to acquire a very limited range
goods or services; FINANCIAL INSTITUTIONS (iii) instruments valid only in a single Member Sate provided at the request
an undertaking or a public sector entity and regulated by a national or regional public authority for specific social or tax purposes, to acquire specific goods or services from suppliers having a commercial agreement with the issuer: Provided that service providers carrying out either
the activities referred to in sub-paragraphs (
payment transactions executed over the preceding twelve months exceeds the amount
one million euro (€1,000,000), shall send an annual notification to the competent authority containing a description
the services
fered, specifying under which exclusion referred to in sub-paragraphs (
such a notification, the competent authority shall take a duly motivated decision on the basis
criteria referred to in this paragraph where the activity does not qualify as a limited network, and shall inform the service provider accordingly; (l) payment transactions by a provider
electronic communication networks or services, provided in addition to electronic communication services for a subscriber to the network or service: (i) for purchase
digital content and voicebased services regardless
the device used for the purchase or consumption
the digital content and charged to the related bill; or (ii) performed from or by means
an electronic device and charged to the related bill within the framework
a charitable activity, or for the purchase
tickets: Provided that the value
any single payment transaction referred to in sub-paragraphs (
payment transactions for an individual subscriber does not exceed three hundred euro (€300) per month; or with - where a subscriber pre-funds its account the provider
the electronic FINANCIAL INSTITUTIONS communications network or service, the cumulative value
payment transactions does not exceed three hundred euro (€300) per month: Provided further that service providers carrying out an activity referred to in this paragraph shall send a notification to the competent authority and provide the competent authority with an annual audit opinion, testifying that the activity complies with the limits set out in this paragraph; (m) payment transactions carried out between payment service providers, their agents or branches for their own account; (n) payment transactions and related services between a parent undertaking and its subsidiary, or between subsidiaries
the same parent undertaking, without any intermediary intervention by a payment service provider, other than an undertaking belonging to the same group; and, or (o) cash withdrawal services
fered by means
ATM by providers, acting on behalf
one or more card issuers, that are not a party to the framework contract with the customer withdrawing money from a payment account, on condition that those providers do not conduct other payment services as referred to in the Second Schedule: Provided that any person providing such cash withdrawal service shall abide by any requirements, as may be specified in a directive issued by the Central Bank under the Central Bank
Malta Act, transposing Article 3(o)
the Payment Services Directive.
reasonable doubt as to whether an activity constitutes the business
a financial institution, or whether the business
a financial institution is being transacted or otherwise in or from Malta by any person, the matter shall be conclusively determined by the competent authority. (3A) (a) A person that is neither a payment service provider, nor is explicitly excluded from the scope
this Act, shall be prohibited from providing payment services. (b) Notwithstanding paragraph (a)
this sub-article, the competent authority shall inform the EBA
the services notified pursuant to paragraphs (k) and (l)
sub-article (2A), stating under which exclusion the activity is carried out. (c) The description
the activity notified under paragraphs (k) and (l)
sub-article (2A) shall be made publicly available in the public register referred to in FINANCIAL INSTITUTIONS article 8D and the electronic central register developed, operated and maintained by the EBA in accordance with Article 15
the Payment Services Directive.
a licence or registration, as applicable, shall be subject to fees as may be prescribed in accordance with the provisions
article 12.
the Banking Act.
the Investment Services Act (Notified CISs) Regulations, in so far that such alternative investment fund is performing the activity
: (a) lending by virtue
loan acquisition as specified in Investment Services Rules issued in accordance with the Investment Services Act; or (b) S.L. 370.34. receivables financing, shall not require a licence for such an activity under this Act.
loan origination, loan acquisition and, or receivables financing as part
its exposure to those assets that fall within the definition "qualifying investments" in the EuSEF Regulation or the EuVECA Regulation, as the case may be, an alternative investment fund or a professional investor fund notified to the competent authority in accordance with the Investment Services Act (Notified CISs) Regulations, shall not require a licence under this Act in those circumstances where the alternative investment fund manager
such alternative investment fund or the fund manager
the said professional investor fund, chooses: (a) to establish the alternative investment fund or the professional investor fund as a European social entrepreneurship fund in accordance with the EuSEF Regulation, and therefore uses the designation "EuSEF" in relation to the marketing
the qualifying social entrepreneurship fund in the European Union; or (b) to establish the alternative investment fund or the professional investor fund as a European venture capital fund in terms
the EuVECA Regulation, and therefore uses the designation "EuVECA" in relation to the marketing
the S.L. 370.34. FINANCIAL INSTITUTIONS qualifying venture capital fund in the European Union: Provided that for purposes
this sub-article "loan origination" shall be deemed to be referring to the direct origination
loans. Exemption for financial leasing
ships and aircrafts. Added by: LII. 2016.
article 3, any entity, whether established or operating in Malta or otherwise, carrying out the activity
financial leasing in or from Malta, and all related transactions involving: (
this Act, where: (i) such entity is owned and controlled, or is a subsidiary
, or exclusively funded by; and (ii) any relevant financial leasing transaction, or the relevant underlying asset, being an aircraft, an aircraft engine, or a ship, is exclusively financed by persons or entities as described in Annex II to Directive 2014/65/EU
the European Parliament and
the Council
15 May 2014 on markets in financial instruments, or persons or entities who are recognised as eligible counter-parties in accordance with Article 30
such Directive 2014/65/EU: Provided that in the interpretation and application
sub-paragraphs (
such entity as described in sub-paragraph (i), or
the entity financing the transaction indicated in sub-paragraph (ii), or its underlying assets is vested in a trustee, or is otherwise held by another intermediary on a fiduciary basis, the criteria described in Annex II
Directive 2014/65/EU shall apply by reference to the beneficial interests involved, and not to the said trustee or intermediary.
this article shall only apply to an entity where the business
such entity is limited to the financial leasing
aircrafts, aircraft engines, or ships as described in sub-article
other types
assets and activities otherwise falling within the purposes
this Act. FINANCIAL INSTITUTIONS 4.
transacting, regularly or habitually, activities listed under the First Schedule
this Act in or from Malta, other than account information services, shall before regularly or habitually transacting any such activities, apply in writing to the competent authority for a licence under this Act: Provided that a legal person that is in possession
an authorisation granted by another Member State under the Payment Services Directive or the Electronic Money Directive, may exercise its European rights in accordance with the provisions
the Payment Services Directive and the Electronic Money Directive. (1A) Any natural person or company with the intention
transacting, regularly or habitually, account information services shall, before regularly or habitually transacting any such services, apply in writing to the competent authority for a registration under this Act: Provided that a natural or legal person that is in possession
a registration granted by another Member State under the Payment Services Directive, may exercise its European rights in accordance with the provisions
the Payment Services Directive.
determining an application for a licence or a registration, as applicable.
a licence or a registration. Amended by: XVII. 2002.205; L.N. 425
2007; II. 2010.8, 11; X. 2011.
this Act unless: (
individuals as may be otherwise determined by the competent authority, who will effectively direct the business
the financial institution from Malta; (c) the competent authority is satisfied that the company has sound and prudent management and has robust governance arrangements that include a clear organisational structure with well defined, transparent and consistent lines
responsibility, effective procedures to identify, manage, monitor and report the risks to which it is or might be exposed, and adequate internal control mechanisms, including sound administrative and accounting procedures: Provided that such arrangements, procedures and mechanisms shall be comprehensive and proportionate to the nature, scale and complexity
the services provided by the company, as may be determined by the competent authority from time to time and, or as may be specified by a Financial Institutions Rule; (d) the competent authority is satisfied that taking into account the need to ensure the sound and prudent management
the company, shareholders having a qualifying holding, controllers and all persons who will effectively direct the business
the financial institution are suitable persons to ensure its sound and prudent management; (e) the competent authority is satisfied that, where there are close links between the company and another person or persons, such links do not prevent it from the effective exercise
its supervisory functions; (f) the competent authority is satisfied that where there are close links between the company and another person or persons, the laws, regulations or administrative provisions
a third country governing one or more persons with which the company has close links, or difficulties involved in the enforcement
those laws, regulations or administrative provisions, do not prevent the effective exercise
its supervisory functions; and FINANCIAL INSTITUTIONS (g) it satisfies any other conditions for the granting
a licence, as may be specified in a Financial Institutions Rule: Provided that the company shall, after being licensed under this Act, inform the competent authority forthwith
any change in circumstances concerning the application and shall be further required to provide the competent authority with information necessary to monitor compliance with the conditions referred to in this sub-article on a continuous basis. (1A) No natural person or company shall be granted a registration to carry out account information services unless: (a) the competent authority is satisfied, where applicable, that qualifying shareholders, controllers and all persons who effectively direct the business
the account information service provider are suitable persons to ensure its sound and prudent management; (b) the competent authority is satisfied that the natural person or company has sound and prudent management and has robust governance arrangements that include a clear organisational structure with well defined, transparent and consistent lines
responsibility, effective procedures to identify, manage, monitor and report the risks to which it is or might be exposed, and adequate internal control mechanisms, including sound administrative and accounting procedures: Provided that such arrangements, procedures and mechanisms shall be comprehensive and proportionate to the nature, scale and complexity
the services provided by the natural person or company, as may be determined by the competent authority from time to time and, or as may be specified by a Financial Institutions Rule; (c) the competent authority is satisfied that where there are close links between the natural persons or the company and another person or persons, such links do not prevent it from the effective exercise
its supervisory functions; (d) the competent authority is satisfied that where there are close links between the natural person or the company and another person or persons, the laws, regulations or administrative provisions
a third country governing one or more persons with which the company has close links, or difficulties involved in the enforcement
those laws, regulations or administrative provisions, do not prevent the effective exercise
its supervisory functions; and FINANCIAL INSTITUTIONS (e) the natural person or company satisfies any other conditions for the granting
a registration as may be specified in a Financial Institutions Rule: Provided that the natural person or company shall, after being registered under this Act, inform the competent authority forthwith
any change in circumstances concerning the application, and shall be further required to provide the competent authority with information necessary to monitor compliance with the conditions referred to in this subarticle on a continuous basis. (1B) A natural person or a company who applies for a licence or a registration as applicable in terms
this article, to provide payment initiation services and, or account information services, shall as a condition for the granting
its licence or registration, as applicable, also be required to hold a professional indemnity insurance covering the territories in which it
fers services, or some other comparable guarantee against liability. With respect to an applicant who intends to provide payment initiation services, the required professional indemnity insurance or other comparable guarantee against liability, shall be required to ensure that it can cover its liabilities as specified in Articles 73, 89, 90 and 92
the Payment Services Directive, as transposed in directives issued by the Central Bank under the Central Bank
Malta Act. With respect to an applicant who intends to provide account information services, the required professional indemnity insurance or other comparable guarantee against its liability shall be required vis-à-vis the account servicing payment service provider or the payment service user resulting from the unauthorised or fraudulent access to, or the unauthorised or fraudulent use
payment account information: Provided that the amount
the professional indemnity insurance or other comparable guarantee referred to in this sub-article shall be calculated in accordance with the method as may be established in a Financial Institutions Rule: Provided further that any information required by the competent authority in order to calculate the amount
the professional indemnity insurance or other comparable guarantee required in terms
this sub-article shall be provided to the competent authority in terms
a Financial Institutions Rule. (1C) Financial institutions required to hold a professional indemnity insurance or other comparable guarantee in accordance with sub-article (1B) shall review, and if necessary recalculate, the minimum monetary amount
their professional indemnity insurance or other comparable guarantee at least on an annual basis and as may be established in a Financial Institutions Rule.
receipt
the application or, in the event that the application does not comply with article 4
compliance with the said sub-article or the submission
the information required, as the case may be, whichever is the later.
the provisions
this Act, the competent authority may, from time to time, issue and publish Financial Institutions Rules in terms
article 13.
the services referred to in the First Schedule and at the same time intends to engage in activities other than those listed in the First Schedule, it shall not do so without the prior consent
the competent authority. The competent authority may require the establishment
a separate entity for the carrying out
the business for which the financial institution is licensed or registered, where the activities in which the financial institution is engaged or intends to engage and that are not listed in the First Schedule, impair or are likely to impair, either the financial soundness
the financial institution or the ability
the competent authority to monitor the financial institution’s compliance with all obligations set out in this Act and any regulations and, or Rules issued thereunder.
fice and its registered
fice in Malta and shall carry out at least part
its licensable and, or registrable activities in Malta: Provided that where a registered account information service provider is a natural person, such a natural person shall have its contact address in Malta. Own funds. Added by: II. 2010.12. Amended by: X. 2011.46. Substituted by: XXVI.2019.26. FINANCIAL INSTITUTIONS 5A.
the capital requirements as may be set out in a Financial Institutions Rule, the own funds
a financial institution, other than an account information service provider, shall not fall below the amount
initial capital as may be set out in a Financial Institutions Rule, or the amount
own funds as calculated in accordance with a Financial Institutions Rule issued by the competent authority, whichever is the higher.
the services listed in the Second or the Third Schedule, except for payment initiation services and account information services, shall hold at all times own funds calculated in accordance with one or more, where applicable,
the methods as may be set out in a Financial Institutions Rule. (2A) Where a payment institution or an electronic money institution belongs to the same group as another payment institution, electronic money institution, credit institution, investment firm, asset management company or insurance undertaking, or where a payment institution or an electronic money institution carries out activities other than providing payment services or issuing electronic money, as applicable, the multiple use
elements eligible for own funds shall be prohibited. (2B) In the event that the conditions set out in Article 7
the CRR are satisfied, the competent authority may choose not to apply sub-article
the parent credit institutions pursuant to the CRD.
own funds
a financial institution, other than an account information service provider, falls below the amount established under sub-articles
own funds within such period as the competent authority may determine: Provided that if the level
own funds
a financial institution, other than an account information service provider, is not restored within the determined period, the competent authority may, in addition to the power to impose an administrative penalty, exercise any
the powers granted to it under the provisions
article 6. Restriction, suspension and withdrawal
a licence or a registration. Amended by: XVII. 2002.206; II. 2010.13; X. 2011.47. XXVI.2019.27. 6.
its issue, or any later date as FINANCIAL INSTITUTIONS may be specified by the competent authority, or has ceased to engage in business for more than six months, or for such other period
time as may be determined by the competent authority; (
the licence or registration, or any conditions stipulated in any Financial Institutions Rule, or fails to inform the competent authority on major developments in this respect; (
a merger with another financial institution; (g) the financial institution is a branch
an institution incorporated outside Malta, and the overseas regulatory authority in the country
incorporation withdrew the authorisation or registration
the institution; (h) the financial institution would constitute a threat to the stability
the payment system by continuing its payment services or electronic money; (i) the financial institution fails or is likely to fail to comply with any
the provisions
this Act and any regulations or Financial Institutions Rules issued thereunder or with the conditions under which the licence or registration is granted or any directive as may be issued by the Authority; (j) the financial institution has insufficient assets to cover its liabilities; or (k) the competent authority considers that, by reason
the manner in which the financial institution is conducting or proposes to conduct its affairs, or for any other reason, these would constitute a threat to the stability or integrity
the financial system. FINANCIAL INSTITUTIONS
the reasons for the withdrawal, suspension or restriction
the licence or registration.
a licence or a registration issued to a financial institution, that are imposed by the competent authority pursuant to sub-article
this Act and any regulations and, or Rules issued thereunder, in addition to the conditions, if any,
its licence or registration and the protection
the integrity
the country’s financial system, and may include: (
the reasons for the variation or removal
any such restrictions.
an institution incorporated outside Malta may only be withdrawn after consultation with the overseas regulatory authority
the country
incorporation, unless the competent authority decides that the matter is urgent, or that there are circumstances which make such prior consultation inappropriate.
a licence or a registration
a financial institution incorporated in Malta, the competent authority shall inform the overseas regulatory authorities
the country in which the financial institution or its subsidiaries are carrying on any activity under the First Schedule or any other activity as the competent authority may deem complementary to the institution’s activities in Malta.
a licence or registration, including those in the public register referred to in article 8D, and in the electronic central register developed, operated and maintained by the EBA in accordance with Article 15
the Payment Services Directive. FINANCIAL INSTITUTIONS 7.
its intention on the financial institution and shall specify the grounds upon which the competent authority intends to take such action. Notification
any variation, restriction, suspension or withdrawal
a licence or registration. Amended by: XVII. 2002.207. Substituted by: XXVI.2019.28.
not less than forty-eight hours and not more than thirty days, make representations in writing to the competent authority giving reasons why such action should not be taken, and the competent authority shall consider any such representations before arriving to a final decision.
the period as set out in sub-article
any changes in the information provided under this Act and any regulations and, or Rules issued thereunder, as soon as such financial institution becomes aware
such change. Changes in information. Added by: XVII. 2002.208. Substituted by: XXVI.2019.29. 7B.
the powers conferred under this Act, the competent authority may, in order to carry out the functions and duties prescribed by the Malta Financial Services Authority Act and by this Act and any regulations and, or Rules issued thereunder, whenever it deems necessary, give by notice in writing such directives as it may deem appropriate in the circumstances. Power to issue directives. Added by: XXVI.2019.30.
the provisions
this article. FINANCIAL INSTITUTIONS Information to be provided to customers or potential customers. Added by: XXVI.2019.30. 7C. A financial institution licensed or registered under this Act shall provide its customers or potential customers, including in any form or medium
marketing activity or communication disseminated to the public by means
all types
media, with a statement
the fact that the financial institution is licensed or registered, as applicable, by the competent authority, together with the address
the competent authority. Substituted by: XXVI.2019.31. OBLIGATIONS
FINANCIAL AND OTHER INSTITUTIONS Opening
branches and subsidiaries. Substituted by: II. 2010.
fice outside Malta to provide any
the activities listed in the First Schedule, with the exception
activities 4 or 10 thereof, and a financial institution intending to open a branch or
fice in a third country in order to provide any
the activities listed in the First Schedule, shall require the prior written approval
the competent authority. (2A) A financial institution intending to provide the activities listed in the Second or Third Schedules in another Member State in exercise
a European right, shall inform the competent authority in accordance with the procedure set out in Article 28
the Payment Services Directive. Opening
subsidiaries. Information to customers and potential customers. Agency distribution arrangements.. Added by: XVII. 2002.
the competent authority.
this fact. 8A.
the activities referred to in the Schedules to this Act through an agent or, in the case
an electronic money institution intending to appoint a d i s t r i b ut o r to di s tr i b u t e or r e d e e m e l e c t r o ni c m o n e y, sh a ll communicate the following information to the competent authority: (a) the name and address
the agent and, or distributor; (b) a description
the internal control mechanisms that will be used by the agent in order to comply with the obligations in relation to money laundering and the funding
terrorism under any anti-money laundering and combating the funding
terrorism legislation; FINANCIAL INSTITUTIONS (c) the identity
directors and persons responsible for the management
the agent to be used in the provision
the activities referred to in the Schedules to this Act, and for agents other than payment service providers, evidence that they are fit and proper persons; (
the agent or distributor: Provided that a person who is appointed as agent
a financial institution shall only act as agent in respect
those activities for which the financial institution to which he will act as agent, is licensed or registered under this Act. (1A) In the event
material changes to the particulars communicated to the competent authority at the initial notification pursuant to paragraph (b)
sub-article
the obligations imposed on the financial institution under this Act.
receipt
the information referred to in sub-article
the Payment Services Directive.
the Schedules in Malta through a branch or by engaging an agent or distributor, the financial institution shall follow the procedures established in any Financial Institutions Rule: Provided that if the competent authority has reasonable grounds to suspect that, through such branch, agent or distributor, money laundering or the funding
terrorism is being or has been committed or attempted, or that the engagement
such branch or agent could increase the risk
money laundering or the funding
terrorism, it shall inform the Member State in which the financial institution is established, and may refuse to register the branch or agent, or may withdraw the registration
the branch or agent.
agents or distributors, including additional agents or distributors.
the competent authority. Information to customers and potential customers.
this fact. Outsourcing
operational functions. Added by: II. 2010.
its services it shall inform the competent authority accordingly: Provided that the outsourcing
important operational functions, including ICT systems, shall not be undertaken in such a way as to impair materially the quality
the financial institution’s internal control and the competent authority’s ability to monitor and retrace the financial institution’s compliance with all
the obligations established in this Act and any regulations and, or Rules made thereunder.
sub-article
a financial institution with the requirements
its licence or registration, its other FINANCIAL INSTITUTIONS obligations under this Act or any regulations and, or Rules issued thereunder, its financial performance, or the soundness or continuity
its services: Provided that financial institutions that outsource important operational functions shall comply with the following conditions: (a) the outsourcing shall not result in the delegation by senior management
its responsibility; (b) the relationship and obligations
the financial institution towards any person making use
its services under this Act and any regulations and, or Rules issued thereunder shall not be altered; (c) the conditions with which the financial institution must comply with in order to be licensed and remain so in accordance with this Act and any
the regulations and, or Rules issued thereunder shall not be undermined; and (d) none
the other conditions subject to which the financial institution’s licence or registration was granted shall be removed or modified. (2A) Financial institutions shall, without undue delay, communicate to the competent authority any changes regarding the use
entities to which activities are outsourced.
such outsourced services. 8C.
operational functions, those financial institutions shall take reasonable steps to ensure that the requirements
this Act and any regulations and, or Rules issued thereunder are complied with. Liability. Added by; II. 2010.16. Substituted by: XXVI.2019.35.
their employees, or any agent, branch or entity to whom or to which activities may have been outsourced. 8D.
this Act; (b) agents
financial institutions in Malta or in another Member State; (c) branches
financial institutions, established in or outside Malta, if those branches provide services in another Member State; (d) branches in Malta
payment institutions authorised in another Member State; Public register. Added by; II. 2010.
account information service providers authorised in another Member State; (
the CRD that are entitled under national law to provide payment services; (i) branches in Malta
electronic money institutions authorised in another Member State; (
the following conditions: (i) instruments allowing the holder to acquire goods or services only in the premises
the issuer, or within a limited network
service providers under direct commercial agreement with a professional issuer; (ii) instruments that can be used only to acquire a very limited range
goods or services; and (m) service providers carrying out payment transactions by a provider
electronic communication networks or services provided in addition to electronic communication services for a subscriber to the network or service: (i) for the purchase
digital content and voice-based services, regardless
the device used for the purchase or consumption
the digital content and charged to the related bill; or (ii) performed from or by means
an electronic device and charged to the related bill within the framework
a charitable activity, or for the purchase
tickets.
a licence or registration.
the reasons for the withdrawal
any licence or registration.
the information entered in the public register.
the information specified in sub-article
an application for the opening
a branch by an electronic money institution having its head
fice outside the European Union, the competent authority may not apply provisions which result in more favourable treatment than that accorded to an electronic money institution having its head
fice within the European Union. Opening
branches having their head
fice outside the European Union.. Added by: X. 2011.51. Substituted by: XXVI.2019.37.
all authorisations for branches
electronic money institutions having their head
fice outside the European Union as stated in sub-article
funds.
the electronic money held without delay.
the provisions
this article and to bette transpose the provisions
the Electronic Money Directive, the competent authority may, from time to time, issue, amend or revoke Financial Institutions Rules that shall be binding on electronic money institutions as specified therein. 8G. Without prejudice to any anti-money laundering or combating the funding
terrorism legislation, or other relevant European Union Law, financial institutions other than account information service providers, shall keep all appropriate records for the purposes
this Act and any regulations and, or Rules issued thereunder for at least five years. Issuance and redeemability
electronic money. Added by: X. 2011.
new or variation in participation or control. Amended by: XVII. 2002.210; XII. 2006.69; II. 2010.17; X. 2011.52; Substituted by: XXVI.2019.39. 9. FINANCIAL INSTITUTIONS
a qualifying shareholding in a financial institution, or to further increase or reduce, directly or indirectly, such qualifying shareholding so that the proportion
the voting rights, or
the share capital held by that person in that financial institution reaches, exceeds or falls below twenty per centum, thirty per centum or fifty per centum, or so that the financial institution becomes or ceases to be the subsidiary
such person; or (b) any financial institution takes or intends to take action to sell or dispose
its business or any significant part thereof, merge with any other company, undergo any reconstruction or vary its nominal or issued share capital, or effect any material change in voting rights, without obtaining the prior approval
the competent authority or, if after having obtained such approval it subsequently appears to the competent authority that any
these actions, or the influence exercised by the person who intends to take such action, is operating or is likely to operate to the detriment
the prudent and sound management
the financial institution, without prejudice to the provisions
article 22, the competent authority shall express its opposition and shall have the power to take appropriate measures to rectify the situation. (1A) The appropriate measures referred to in sub-article
sub-article
the voting rights attached to the shares held by the shareholders or members
the financial institution in question.
an acquisition
shares in a financial institution, the financial institution in which a person proposes to acquire the shareholding would become a subsidiary or be subject to the control
the person acquiring those shares, it shall be within the discretion
the competent authority to consider whether any request made by such person for the approval
the competent authority under the provisions
this article constitutes a request to apply for a licence to conduct the business
a financial institution under the provisions
this Act and any regulations and, or Rules issued thereunder.
the relevant shares are listed on a regulated market in terms
the Financial Markets Act, or on an equivalent market in a third country.
any such decision in advance, indicating the size
the intended shareholding and providing any relevant information as and in the manner that the competent authority may, by a Financial Institutions Rule, require, including the form in which such notification shall be made and the criteria adopted by the competent authority in determining whether such person is a suitable person. (b) Where the qualifying shareholding is acquired despite the opposition
the competent authority, the said authority shall, regardless
any other administrative penalty or other supervisory measure that may be adopted, provide for the suspension
the exercise
the voting rights
the acquirer, the nullity
the votes cast, or the possibility
annulling those votes. (c) Where a person fails to comply with the obligation to provide prior information in accordance with paragraph (a)
this subarticle, the competent authority shall have the power to take appropriate measures in accordance with sub-article (1A).
any person who is proposed to become a controller or director
the financial institution or any person who is proposed to cease to be a controller or director
the financial institution. (b) If the competent authority is
the opinion that any person who is or is proposed to become a controller or director
a financial institution is not a suitable person to be a controller or director, the competent authority may make an order requiring such a person to cease to be a controller or director, or restraining such a person from becoming a controller or director. FINANCIAL INSTITUTIONS
this article. Prohibited transactions. Amended by: XVII. 2002.211; L.N. 425
2007; II. 2010.18; LXXI.2021.70. 10.
paragraph 3(d)
the Second Schedule, a financial institution shall not (a) grant any credit facility against the security
its own shares or against any other securities issued by the financial institution itself or against any shares or any other securities
another body corporate in which the financial institution has control; (
its directors or their spouses whether jointly or severally as well as with third parties: Provided that, in any case where unsecured credit facilities are granted, these shall not in the aggregate exceed the sum
twenty-three thousand and two hundred and ninety-three euro and seventy-three cents (€23,293.73); (ii) to any person in whom or in which the financial institution or any one or more
its directors is interested as a director, partner, manager, agent or member or to any person
whom or
which any one or more
the financial institution's directors is a guarantor; (iii) to any body
persons in which the financial institution or any one or more
its directors jointly or severally maintains control, not being itself a financial institution or the parent undertaking
the financial institution, a subsidiary
this parent undertaking or a subsidiary
the financial institution; and where the competent authority has reason to believe that such favourable terms and conditions have been applied, it shall have the power to require the financial institution to rectify the position and if the financial 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
any
ficer, other than a director, or any employee, unsecured credit facilities which in the aggregate exceed twelve months’ emoluments
such
ficer or employee.
any credit facility made with security, any part thereof which at any time exceeds the market value
the assets constituting that security, or where the competent authority is satisfied that there is no established market value, on the basis
a valuation approved by the competent authority itself. 10A. The granting
interest or
any other benefit related to the length
time during which an electronic money institution holds electronic money shall be prohibited. Prohibition
interest. Added by: X. 2011.
the Second Schedule and an electronic money institution shall safeguard all funds received from any person making use
its services, or received through another payment service provider for the execution
payment transactions, or in exchange for electronic money that has been issued. Safeguarding requirements. Added by: X. 2011.53. Substituted by: XXVI.2019.42.
the provisions
this Act on safeguarding requirements, the competent authority may, from time to time, issue, amend or revoke any Financial Institutions Rule which shall be binding on financial institutions as specified therein. 11. Notwithstanding any investigation provided for in this Act: (a) where a financial institution considers that it has failed to comply with, or that it is likely to fail to comply with any
the provisions
this Act and any regulations and, or Financial Institutions Rules issued thereunder, or with the conditions under which the licence or registration was granted, it shall forthwith inform the competent authority and the Central Bank in writing; (b) where the competent authority becomes aware that a financial institution has failed to comply with, or that it is likely to fail to comply with any
the provisions
this Act and any regulations and, or Financial Institutions Rules issued thereunder, or with the conditions under which the licence or registration was granted, it shall forthwith inform the Central Bank in writing; (c) where the Central Bank becomes aware that a financial institution has failed to comply with, or that it is likely to fail to comply with, any
the provisions
this Act and any regulations and, or Financial Institutions Rules issued thereunder, or with the conditions under which the licence or registration was granted, it shall forthwith inform the competent authority in writing. Financial institutions unable to meet obligations. Substituted by: XXVI.2019.43. Management
operational and security risks. Added by: XXVI.2019.
the DORA Regulation, payment institutions, electronic money institutions and account information service providers 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
that framework, payment institutions, electronic money institutions and account information service providers, shall establish and maintain effective incident management procedures, including for the detection and classification
major operational and security incidents.
the operational and security risks relating to the payment services they provide, and on the adequacy
the mitigation measures and control mechanisms implemented in response to those risks.
documents referred to in sub-article
this article. 11B.
payment.
this article. FINANCIAL INSTITUTIONS REGULATORY AND INVESTIGATORY POWERS 12.
the competent authority, may make regulations to give effect to the provisions
this Act, and without prejudice to the generality
the foregoing may, by such regulations, in particular, do any
the following: (a) amend any
the Schedules to this Act; (b) exempt any person from any one or more provisions
this Act, including an exemption from requiring a licence or a registration under this Act, subject to such variations, additions, adaptations and modifications as may be prescribed and subject to such conditions or other requirements, including other forms
authorisation and notification procedures, as may be prescribed; Powers and duties
the Minister. Amended by: XVII. 2002.212; II. 2010.19; X. 2011.
the Electronic Money Directive and the Payment Services Directive: Provided that, when any
the options referred to in Article 107
the Payment Services Directive are made use
, the Minister shall inform the European Commission
the use
any such options as well as
any subsequent changes thereof; (d) transpose, implement and give effect to the provisions, requirements, obligations and commitments relating to the regulation
payment institutions and electronic money institutions arising out
membership in, affiliation or relationship with international or regional organisations, or groupings
countries, or arising out
any treaty, convention or other international agreement whether bilateral, regional or multilateral to which Malta is a party; (e) provide that any other law or any provision thereof, shall not apply to matters falling under the regulations and in particular, may exempt activities as may be designated from the application
any article or provision
the Civil Code; (f) transpose, implement and, or give effect to the requirements
the PAD, and in so doing may also establish or maintain measures alternative to those referred to in Article 10
the PAD: Provided that: (i) it is clearly in the interest
the consumer; (ii) there is no additional burden for the consumer; and (iii) the switching as defined in Article 2
the PAD is completed within, as a maximum, the same overall time frame as that indicated in Article 10
the PAD; FINANCIAL INSTITUTIONS (g) set up a specific mechanism to ensure that consumers who do not have a payment account as defined in Article 2
the PAD in their territory, and who have been denied access to such a payment account for which a fee is charged by credit institutions, will have effective access to a payment account with basic features in terms
the PAD, free
charge; (h) transpose, implement and, or give effect to the provisions and requirements
Directives, Regulations and any other legislative measures
the European Union requiring transposition and, or implementation as they may be amended from time to time, including any implementing measures that have been or may be issued thereunder and relating, but not limited to licence holders as may be specified therein; any such regulations strictly related to transposition or implementation as aforesaid, may contain provisions which are inconsistent with the provisions
this Act or any other law, and for this purpose may provide that any provision in this Act or in any other law shall not apply to matters falling under the regulations and in case
such inconsistency, the provisions in any such regulations shall prevail; (i) regulate products and services
fered by financial institutions; (j) impose such fees and charges in respect
any request, application or other matter that may be submitted to the competent authority under this Act, including the fees and charges in respect
any permission, licence, authorisation, exemption or other benefit, as well as any fees and charges in respect
the competent authority’s regulatory, supervisory or investigative functions under this Act or any regulations made or Rules issued thereunder.
adaptation
the regulations as may be specified.
this article the competent authority may issue, amend or revoke any Financial Institutions Rule within the meaning
this Act to better carry out and implement the provisions
the regulations. Language
regulations. Added by: XIII. 2004.
such may be made in the English language only. FINANCIAL INSTITUTIONS 13.
the competent authority to carry out the functions assigned to it by this Act and any regulations and, or Rules issued thereunder and to ensure that financial institutions carrying out business in or from Malta comply with this Act, any regulations and, or Rules issued thereunder and with the conditions
their licence or registration. In carrying out such functions, the competent authority shall ensure that the controls exercised for checking continued compliance in terms
this Act, and any regulations and, or Rules issued thereunder are proportionate, adequate and responsive to the risks to which financial institutions are exposed. The said functions consist, inter alia,
the following: Powers and duties
the competent authority. Amended by: II. 2010.8, 22; X. 2011.55; XXVI.2019.47. (a) to require the financial institution, in terms
article 14, to provide any information needed to monitor compliance specifying the purpose
the request as appropriate and the time limit by which the information is to be provided; (b) to carry out on-site inspections at the financial institution, at any agent or branch thereof providing services under the responsibility
the financial institution, or at any entity to which activities are outsourced; (
this article and binding administrative provisions in terms
this Act and any regulations and, or Rules issued thereunder. (1A) Notwithstanding the requirements
article 5A
the Payment Services Directive, the competent authority may take steps as referred to in sub-article
a financial institution other than those listed in the Schedules impair or are likely to impair the financial soundness
the financial institution concerned. (1B) Without prejudice to the procedures for the withdrawal
a licence or a registration, or to article 22, or to national provisions
criminal law and to any other power granted to the competent authority under the provisions
this Act and any regulations and, or Rules issued thereunder or under the provisions
the Malta Financial Services Authority Act, where the competent authority is satisfied that a financial institution’s conduct amounts to a breach
any
the provisions
this Act or any regulations and, or Rules issued thereunder, or
any directive, restriction and, or suspension imposed, or
any other request or order made by the competent authority pursuant to the provisions
this Act or any regulations and, or Rules issued thereunder, or the Malta Financial Services Authority Act, or a licence condition, or a condition required for the granting
a licence FINANCIAL INSTITUTIONS or a registration; the competent authority may adopt or impose on any such financial institution and, or on those who effectively control the business
such financial institution, any measures as it may deem appropriate aimed specifically at ending observed breaches or the causes
such breaches. (1C) The competent authority shall possess all powers and adequate resources necessary for the performance
its duties and shall guarantee independence from economic bodies and avoid conflicts
interest.
the provisions
this Act and any regulations and, or Financial Institution Rules issued thereunder. The said Rules may establish additional requirements and conditions in relation to activities
financial institutions, the conduct
their business, their relations with customers, the public and other parties, their responsibilities to the competent authority, reporting requirements and any other matters, as the competent authority may consider appropriate. (2A) The competent authority may issue, amend or revoke any Financial Institutions Rule as may be required for the purpose
implementing any guidelines, recommendations, decisions, opinions or any other instrument issued by the EBA, as may be required. (2B) A Financial Institutions Rule shall be binding on financial institutions and others as may be specified therein.
ficially communicated to all financial institutions and the competent authority shall make copies thereof available to the public, upon request.
financial institutions, licensed under this Act, to ensure that business is conducted in a prudent manner.
the provisions
the Payment Services Directive for which it is responsible. The competent authority that has been designated in part, to ensure and monitor effective compliance with the Payment Services Directive, shall immediately notify the European Commission
any subsequent change concerning its designation and competence.
financial institutions other than for the provision
the services listed in the Schedules to this Act. FINANCIAL INSTITUTIONS
the Payment Services Directive, shall be vested in the competent authority when the competent authority is the home Member State.
their customers, from the provisions
this Act and any regulations and, or Rules issued thereunder, except where explicitly provided for therein: Provided that financial institutions may, without prejudice to article 10, decide to grant more favourable terms to their customers. 13A. Any measure taken by the competent authority, or by the competent authority in collaboration with the Central Bank as applicable, pursuant to the European Passport Rights for Financial Institutions Regulations and article 23
a European right shall be properly justified and communicated to the payment institution, the electronic money institution or the account information service provider concerned: Reasons and communication. Added by: XXVI.2019.48; Amended by: LXXI.2021.71. S.L. 376.05. Provided that article 25
the Financial Intelligence Analysis Unit established in terms
the Prevention
Money Laundering Act and the obligations
those authorities in other Member States which, under Directive (EU) 2015/849 and Regulation (EU) 2015/ 847, in particular under Article 48
Directive (EU) 2015/849 and Article 22
Regulation (EU) 2015/847, are responsible for supervising or monitoring compliance with the requirements laid down in those instruments. S.L. 376.07. 14.
its duties under this Act and any regulations and, or Rules issued thereunder or any other law, and the competent authority may enquire into and ask for clarification
any information submitted. Power
competent authority to require information. Amended by: XVII. 2002.213; II. 2010.8, 23; X. 2011.56; XXVI.2019.49; LXXI.2021.72.
this article shall also apply to all branches, agencies or
fices in Malta
a financial institution which is not incorporated in Malta.
its duties and the Central Bank may enquire into and ask for clarifications on FINANCIAL INSTITUTIONS any information so submitted.
its
ficers to do all or any
the following: (a) to furnish to the competent authority, at such time and place and in such form as it may specify, such information and documentation as it may require and
such description as may be so specified in the notice; (
its functions under this Act and any regulations and, or Rules issued thereunder.
any documents submitted in terms
this article.
his knowledge, that information or documentation is, and the competent authority may require any person, whether indicated as aforesaid or not, who appears to it to be in possession
that information or documentation, to provide it.
any requirement under this article may be used in evidence against the person making the statement or providing the documentation as well as against any person to whom they relate.
carrying out his functions under his appointment, have all the powers conferred on the competent authority by this article and a requirement made by him shall be deemed to be and have the same force and effect as a requirement
the competent authority.
that financial institution; (b) a subsidiary or a company which is a connected person
a holding company
that financial institution; FINANCIAL INSTITUTIONS (c) a holding company
a subsidiary
that financial institution; (d) a controller
that financial institution; (e) a qualifying shareholder
that financial institution; or (f) an agent appointed in terms
article 8A.
committing any
fence under this Act or any regulations and Rules issued thereunder. 15.
a financial institution’s business or any particular aspect
it, or to report on the ownership or control
the financial institution.
that investigation, investigate the affairs
any other person as prescribed under article 14
the competent authority; (c) may, and if so directed by the competent authority shall, make interim reports and on the conclusion
his investigation shall make a final report to the competent authority.
, and incidental to, an investigation pursuant to this article be paid by the persons or financial institution concerned.
every person who is or was an
ficer, employee, agent, or auditor
a person under investigation in terms
this Act and any regulations and, or Rules issued thereunder, or any person appointed to draw up a report in respect
that person under this Act and any regulations and, or Rules issued thereunder and any person who has a qualifying shareholding in, or is a controller the said person under investigation: (a) to produce to the inspector or inspectors appointed under sub-article
inspectors. Amended by: XVII. 2002.
or extracts from, any documents produced to them under paragraph (a).
an appointment under this article shall, if so required, produce evidence
his authority.
this article may be used as evidence against him. Right
entry. Substituted by: XXVI.2019.51. 16.
ficer, employee or agent
the competent authority, or an inspector appointed under article 15
his authority, if required to do so, enter into premises occupied by a person on whom a notice has been served under article 14, or whose affairs are being investigated under article 15, for the purpose
obtaining the information or documents required by that notice, or otherwise for the purpose
the investigation, and
exercising any
the powers conferred by the said articles.
ficer, employee or agent
the competent authority, or an inspector appointed under article 15
his authority, if required to do so, enter into any premises referred to in sub-article
obtaining any information or documents specified in the authority, being information or documents that could have been required under such notice, as is referred to in sub-article
any action taken under the provisions
this article, the competent authority may request the assistance
the Commissioner
Police, who may for such purpose exercise FINANCIAL INSTITUTIONS such powers as are vested in him for the prevention
criminal
fences and the enforcement
law and order: Provided that where an entry as is mentioned in this article involves premises that are occupied for the purpose
habitation, such entry shall be carried out in the presence
an
ficer
the Police
a rank not below that
inspector and shall not take place between nine in the evening and five in the morning. 16A.
the provisions
this Act and any regulations and, or 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
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
such description as may be specified therein, which it may reasonably require for that purpose; and, or (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.
ficer, employee or agent may retain copies
or extracts from any documents submitted in terms
this article.
ficer, employee or agent
the competent authority may between five o’clock in the morning and nine o’clock at night, on producing, if required, evidence
his authority, enter into any prem
AI explanation based on the official legal text. Indicative, not a substitute for legal advice.