Chapter 376 – Financial Institutions Act

FINANCIAL INSTITUTIONS

CHAPTER 376

FINANCIAL INSTITUTIONS ACT To regulate the business of financial institutions.

15th November, 1994 ACT XXII of 1994 as amended by Acts XXIV and XXV of 1995, XVII of 2002, IV of 2003, XIII of 2004 and XII of 2006; Legal Notice 425 of 2007; and Acts II of 2010, X of 2011, XX of 2013, XI of 2014, LII of 2016, XXVI of 2019, LXII , LXXI of 2021 and LXXII of 2021 and XI of 2025.

PRELIMINARY

Art. 1

The short title of this Act is the Financial Institutions Act.

Short title.

Art. 2

Interpretation.

Amended by:

XXIV. 1995.362;

XXV. 1995.434;

XVII. 2002.203;

XII. 2006.67;

II. 2010.8;

X. 2011.43.

Substituted by:

XXVI.2019.20.

Amended by:

LXXI.2021.67;

LXXII.2021.37;

XI.2025.36. "account information service" means an online service to provide consolidated information on one or more payment accounts held by the payment service user with either another payment service provider or with more than one payment service provider; "account information service provider" means a payment service provider that has been registered in accordance with this Act or that holds an equivalent registration in another country in terms of 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 of 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 of funds to the payee; "agent" means a person who acts on behalf of 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 of the Arbiter for Financial Services Act; "authentication" means a procedure which allows the payment service provider to verify the identity of a payment service user or the validity of the use of a specific payment instrument, including the use of the user’s personalised security credentials; "average outstanding electronic money" means the average total amount of financial liabilities related to the electronic money in issue at the end of each calendar day over the preceding six calendar months, calculated on the first calendar day of each calendar month, and applied for that calendar month; "body corporate" means a body of persons having a legal personality distinct from that of its members; "branch" means a place of business other than the head office which is a part of a financial institution not having a legal personality and which carries out directly some or all of the transactions as licensed or registered, inherent in the business of a financial institution; all the places of business set up in Malta by a financial institution with a head office in another Member State shall be regarded as a single branch; "Central Bank" means the Central Bank of Malta as defined by the Central Bank of Malta Act; "close links" shall have the same meaning as that assigned to it in paragraph (38) of Article 4(1) of the CRR; "Commission Delegated Regulation (EU) No. 241/ 2014" means Commission Delegated Regulation (EU) No. 241/ 2014 of 7 January 2014 supplementing Regulation (EU) No.

575/2013 of the European Parliament and of 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 of 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 of the Payment Services Directive, as transposed in directives issued by the Central Bank under the Central Bank of 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 of 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 of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of 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 of a sum of money by way of an advance, overdraft or loan, or any other line of credit, including discounting of bills of exchange and promissory notes, guarantees, indemnities, acceptances, bills of 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 of 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 of the European Parliament and of the Council of 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 of which is restricted to a technical device and that do not include in any way the use or consumption of physical goods or services; "Directive 86/635/EEC" means Council Directive 86/ 635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of 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 of the European Parliament and of the Council of 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 of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/ EC of the European Parliament and of 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 of the European Parliament and of the Council of 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 of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of 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 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No. 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/ 60/EC of the European Parliament and of 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 of director of a company, by whatever name he may be called, empowered to carry out substantially the same functions in relation to the direction of the company as those carried out by a director; and in respect of a company registered or incorporated outside Malta, includes a member of a local board or agent or representative of 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 of 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 of the European Parliament and of the Council of 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 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/78/EC, as 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) of Article 2 of Directive 2002/21/ EC; "electronic communications service" means a service as

defined in paragraph (c) of Article 2 of 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 of funds for the purpose of 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 of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC, as may be amended from time to time, and includes any implementing measures, 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 of the Electronic Money Directive to issue electronic money; "equity release financial products" means products consisting of equity release credit agreements where the creditor: (a) grants on loan a lump sum, periodic payments or other forms of credit disbursement in return for a sum deriving from the future sale of a residential immovable property or a right relating to residential immovable property; and (b) will not seek repayment of the credit until the occurrence of the death of the consumer or his move to long-term care or any one or more other specified life events of 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 of the property securing the equity release financial product for a period of at least thirty six (36) months from the death of the consumer or his move to long-term care:

Provided further that, in the case of a move into long-term care, the creditor and the consumer may agree to retain the equity release financial product even after the lapse of such thirty six (36) month period, for so long as such agreement subsists, until the death of 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 of establishment and, or the freedom to provide services; "EuSEF Regulation" means Regulation (EU) No. 346/ 2013 of the European Parliament and of the Council of 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 of the European Parliament and of the Council of 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 of any activity listed in the First Schedule for the account and at the risk of the person carrying out the activity and who is licensed or registered under this Act:

Provided that any person offering equity release financial products shall be considered a financial institution irrespective of whether such equity release financial products are offered 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 of 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 of 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 of terrorism" has the same meaning as that assigned to it by the Prevention of 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 of undertakings which are linked to each other by a relationship referred to in Article 22(1), (2) or (7) of Directive 2013/34/EU or undertakings as defined in Articles 4, 5, 6 and 7 of Commission Delegated Regulation (EU) No. 241/2014 that are linked to each other by a relationship referred to in Article 10(1) or in Article 113(6) or

FINANCIAL INSTITUTIONS "issuing of 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 of the activities listed in the First Schedule; "loan acquisition" means the acquisition of one (1) or more loans or portfolios of 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 of the European Union and includes an EEA State; "the Minister" means the Minister responsible for the regulation of Financial Services; "money laundering" has the same meaning as that assigned to it by the Prevention of 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 of the payer or the payee, for the sole purpose of transferring a corresponding amount to a payee or to another payment service provider acting on behalf of the payee and, or where such funds are received on behalf of and made available to the payee; "officer", 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 of 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 of 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 of the competent authority under this Act;

FINANCIAL INSTITUTIONS "own funds" means funds as defined in paragraph 118 of Article 4(1) of the CRR where at least 75% of the Tier 1 capital is in the form of Common Equity Tier 1 capital as referred to in Article 50 of that Regulation and Tier 2 capital is equal to or less than one third of Tier 1 capital; "PAD" means Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014 on the comparability of 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 of funds that have been the subject of 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 of one or more payment service users which is used for the execution of payment transactions; "payment initiation service" means a service to initiate a payment order at the request of 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 of 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 of the Payment Services Directive to provide and execute payment services throughout the European Union; "payment instrument" means any personalised device and, or set of 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 of a payment transaction; "payment service" means any business activity set out in paragraph 2 of the Second Schedule; "Payment Services Directive" means Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/

EU and Regulation (EU) No. 1093/2010, and repealing Directive 2007/64/EC, as may be amended from time to time and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "payment service provider" means: (a) credit institutions, including branches thereof as defined in article 2(1) of the Banking Act where such branches are located in the European Union, irrespective of whether the head offices of those branches are located within the European Union or, in accordance with Article 47 of 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 of the Electronic Money Directive to issue

electronic money, including branches thereof, in accordance with Article 8 of that Directive and national law, where such branches are located within the European Union and their head offices are located outside the European Union, in so far as the payment services provided by those branches are linked to the issuance of electronic money; (c) post office giro institutions that are entitled under national law of any Member State to provide payment services; (d) payment institutions; (e) account information service providers; (f) the ECB and national central banks when not acting in their capacity as monetary authority or other public authorities; or (g) Member States or their regional or local authorities when not acting in their capacity as public authorities;

FINANCIAL INSTITUTIONS "payment service user" means a person making use of a payment service in the capacity of 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 of payment transactions; "payment transaction" means an act, initiated by the payer or on his behalf by the payee, of placing, transferring, or withdrawing funds, irrespective of 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 of 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 (36) of Article 4(1) of 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 of Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of 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(4) and (5) of 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 of providing the underwriting of financial instruments or placing of financial instruments on a firm commitment basis in terms of paragraph 6 of Section A of Annex 1 to Directive 2004/39/EC, provided that those rights are not exercised or otherwise used to intervene in the management of the issuer and are disposed of within one year of 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 of this Act; "Regulation (EC) No. 1606/2002" means Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of 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 of the European Parliament and of the Council of 24 November 2010, establishing a European Supervisory Authority (European Banking Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/78/EC, as 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 of the European Parliament and of the Council of 20 May 2015 on information accompanying transfers of 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 of the CRR; "Tier 2 capital" shall have the same meaning as that assigned to it in Article 71 of the CRR; "trade bills" means bills of exchange and promissory notes.

S.L. 378.12.

Substituted by:

XXVI.2019.21.

LICENSING AND REGISTRATION REQUIREMENTS.

Activities carried out by financial institutions.

Amended by:

XII. 2006.68;

II. 2010.9;

X. 2011.44;

XX. 2013.68;

XI. 2014.32;

LII. 2016.43.

Substituted by:

XXVI.2019.22.

Amended by:

LXXI.2021.68;

XI.2025.37.

Art. 3

Provided that the activities listed under the First Schedule of this Act, other than account information services, may also be transacted in or from Malta, by a legal person that is in possession of an authorisation granted by another Member State under the Payment Services Directive or the Electronic Money Directive, in exercise of its European rights and in accordance with the provisions of 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 of 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 of a registration granted by another Member State under the Payment Services Directive, in exercise of its European rights and in accordance with the provisions of the Payment Services Directive:

Provided further that a financial institution licensed in terms of article 4(1) shall not require a registration in accordance with this sub-article, in order to provide account information services.

Provided that for the purposes of 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(2)(a) of the Companies Act; or (ii) has all of the following characteristics: (aa) power over the undertaking, based on the current ability to direct the relevant activities which significantly affect returns; (bb) exposure, or right to variable returns from its involvement with the undertaking; and (cc) the ability to use its power over the undertaking to affect the amount of the person’s returns.

For the purposes of 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 (1) shall not apply to persons that carry out any of the following activities: (a) payment transactions effected exclusively in cash directly by the payer to the payee, without any intermediary intervention; (b) payment transactions effected by the payer to the payee through a commercial agent authorised by means of an agreement to negotiate or conclude the sale or purchase of goods or services, exclusively on behalf of the payer or the payee; (c) professional physical transport of banknotes and coins, FINANCIAL INSTITUTIONS including their collection, processing and delivery; (d) payment transactions consisting of the nonprofessional cash collection and delivery within the framework of a non-profit or charitable activity; (e) services where cash is provided by the payee to the payer as part of a payment transaction following an explicit request by the payment service user just prior to the execution of the payment transaction, by means of a payment for the purchase of goods or services; (f) (deleted by Act. LXXI.2021.68); (g) (deleted by Act. LXXI.2021.68); (h) payment transactions carried out within a payment or securities settlement system between settlement agents, central counter-parties, clearing houses and, or central banks and other participants of the system and payment service providers, without prejudice to Article 35 of the Payment Services Directive, as transposed in directives issued by the Central Bank under the Central Bank of 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 of financial instruments; (j) services provided by technical service providers that support the provision of payment services, without them entering at any time into possession of the funds to be transferred, including processing and storage of data, trust and privacy protection services, data and entity authentication, information and communication technology (ICT) and communication network provision, provision and maintenance of terminals and devices used for payment services, with the exclusion

of 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 of the following conditions: (i) instruments allowing the holder to acquire goods or services only in the premises of the issuer, or within a limited network of service providers under a direct commercial agreement with a professional issuer; (ii) instruments that can be used only to acquire a very limited range of goods or services;

FINANCIAL INSTITUTIONS (iii) instruments valid only in a single Member Sate provided at the request of 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 of the activities referred to in sub-paragraphs (i) and (ii) or both, for which the total value of payment transactions executed over the preceding twelve months exceeds the amount of one million euro (€1,000,000), shall send an annual notification to the competent authority containing a description of the services offered, specifying under which exclusion referred to in sub-paragraphs (i) and (ii) the activity is considered to be carried out:

Provided further that, on the basis of such a notification, the competent authority shall take a duly motivated decision on the basis of 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 of electronic communication networks or services, provided in addition to electronic communication services for a subscriber to the network or service: (i) for purchase of digital content and voicebased services regardless of the device used for the purchase or consumption of the digital content and charged to the related bill; or (ii) performed from or by means of an electronic device and charged to the related bill within the framework of a charitable activity, or for the purchase of tickets:

Provided that the value of any single payment transaction referred to in sub-paragraphs (i) and (ii) does not exceed fifty euro (€50), and:

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 of 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 offered by means of ATM by providers, acting on behalf of 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 of Malta Act, transposing Article 3(o) of the Payment Services Directive.

FINANCIAL INSTITUTIONS qualifying venture capital fund in the European Union:

Provided that for purposes of this sub-article "loan origination" shall be deemed to be referring to the direct origination of loans.

Exemption for financial leasing of ships and aircrafts.

Added by:

LII. 2016.43.

Substituted by:

XXVI.2019.23.

Art. 3A

Notwithstanding the provisions of article 3, any entity, whether established or operating in Malta or otherwise, carrying out the activity of financial leasing in or from Malta, and all related transactions involving: (a) an aircraft registered or to be registered in the National Aircraft Register as defined in the Aircraft Registration Act or registered in any other jurisdiction whatsoever and any aircraft engine; or (b) a ship registered or to be registered in the register as defined in the Merchant Shipping Act or registered in any other jurisdiction whatsoever, shall not require a licence from the competent authority for the purposes of this Act, where: (i) such entity is owned and controlled, or is a subsidiary of, 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 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments, or persons or entities who are recognised as eligible counter-parties in accordance with Article 30 of such Directive 2014/65/EU:

Provided that in the interpretation and application of sub-paragraphs (i) and (ii) and in order to ensure compliance with their requirements, where the ownership of such entity as described in sub-paragraph (i), or of 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 of Directive 2014/65/EU shall apply by reference to the beneficial interests involved, and not to the said trustee or intermediary.

FINANCIAL INSTITUTIONS

Art. 4

Provided that a legal person that is in possession of 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 of the Payment Services Directive and the Electronic Money Directive. (1A) Any natural person or company with the intention of 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 of a registration granted by another Member State under the Payment Services Directive, may exercise its European rights in accordance with the provisions of the Payment Services Directive.

Amended by:

XVII. 2002.204;

II. 2010.8, 10.

Substituted by:

XXVI.2019.24.

FINANCIAL INSTITUTIONS provider concerned, to provide the services that are covered by the licence or registration throughout the European Union, pursuant to a European right.

Granting of a licence or a registration.

Amended by:

XVII. 2002.205;

L.N. 425 of 2007;

II. 2010.8, 11;

X. 2011.45.

Substituted by:

XXVI.2019.25.

Art. 5

Provided that such arrangements, procedures and mechanisms shall be comprehensive and proportionate to the nature, scale and complexity of 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 of the company, shareholders having a qualifying holding, controllers and all persons who will effectively direct the business of 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 of 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 of a third country governing one or more persons with which the company has close links, or difficulties involved in the enforcement of those laws, regulations or administrative provisions, do not prevent the effective exercise of its supervisory functions; and FINANCIAL INSTITUTIONS (g) it satisfies any other conditions for the granting of 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 of 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 of 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 of 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 of 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 of 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 of a third country governing one or more persons with which the company has close links, or difficulties involved in the enforcement of those laws, regulations or administrative provisions, do not prevent the effective exercise of its supervisory functions; and FINANCIAL INSTITUTIONS (e) the natural person or company satisfies any other conditions for the granting of 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 of 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 of this article, to provide payment initiation services and, or account information services, shall as a condition for the granting of its licence or registration, as applicable, also be required to hold a professional indemnity insurance covering the territories in which it offers 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 of the Payment Services Directive, as transposed in directives issued by the Central Bank under the Central Bank of 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 of payment account information:

Provided that the amount of 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 of the professional indemnity insurance or other comparable guarantee required in terms of this sub-article shall be provided to the competent authority in terms of 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 of their professional indemnity insurance or other comparable guarantee at least on an annual basis and as may be established in a Financial Institutions Rule.

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

Art. 5A

Without prejudice to the minimum level of the capital requirements as may be set out in a Financial Institutions Rule, the own funds of a financial institution, other than an account information service provider, shall not fall below the amount of initial capital as may be set out in a Financial Institutions Rule, or the amount of own funds as calculated in accordance with a Financial Institutions Rule issued by the competent authority, whichever is the higher.

Provided that if the level of own funds of 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 of the powers granted to it under the provisions of article 6.

Restriction, suspension and withdrawal of a licence or a registration.

Amended by:

XVII. 2002.206;

II. 2010.13;

X. 2011.47.

XXVI.2019.27.

Art. 6

proposes to conduct its affairs, or for any other reason, these would constitute a threat to the stability or integrity of the financial system.

FINANCIAL INSTITUTIONS

FINANCIAL INSTITUTIONS

Art. 7

Notification of any variation, restriction, suspension or withdrawal of a licence or registration.

Amended by:

XVII. 2002.207.

Substituted by:

XXVI.2019.28.

Art. 7A

7A. A financial institution licensed or registered under this Act shall provide the competent authority with particulars of 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 of such change.

Changes in information.

Added by:

XVII. 2002.208.

Substituted by:

XXVI.2019.29.

Art. 7B

Without prejudice to any of 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.

FINANCIAL INSTITUTIONS Information to be provided to customers or potential customers.

Added by:

XXVI.2019.30.

Art. 7C

7C. A financial institution licensed or registered under this Act shall provide its customers or potential customers, including in any form or medium of marketing activity or communication disseminated to the public by means of all types of media, with a statement of the fact that the financial institution is licensed or registered, as applicable, by the competent authority, together with the address of the competent authority.

Substituted by:

XXVI.2019.31.

OBLIGATIONS OF FINANCIAL AND OTHER INSTITUTIONS Opening of branches and subsidiaries.

Substituted by:

II. 2010.14.

Amended by:

X. 2011.48;

XXVI.2019.32.

Art. 8

Opening of subsidiaries.

Information to customers and potential customers.

Agency distribution arrangements..

Added by:

XVII. 2002.209.

Substituted by:

II. 2010.15.

Amended by:

X. 2011.49;

XX. 2013.69.

Substituted by:

XXVI.2019.33.

Amended by:

LXXI.2021.69.

S.L. 373.01 (2B) A financial institution intending to set up or acquire a subsidiary in or outside Malta shall require the prior written approval of the competent authority.

Art. 8A

A financial institution intending to provide any of the activities referred to in the Schedules to this Act through an agent or, in the case of 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 of the agent and, or distributor; (b) a description of 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 of terrorism under any anti-money laundering and combating the funding of terrorism legislation;

FINANCIAL INSTITUTIONS (c) the identity of directors and persons responsible for the management of the agent to be used in the provision of 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; (d) the activities referred to in the Schedules to this Act that are carried out by the financial institution and for which the agent is mandated; and (e) where applicable, the unique identification code or number of the agent or distributor:

Provided that a person who is appointed as agent of a financial institution shall only act as agent in respect of 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 of material changes to the particulars communicated to the competent authority at the initial notification pursuant to paragraph (b) of sub-article (1), the financial institution concerned shall provide the competent authority with the updated information without delay.

Provided that an electronic money institution may, subject to such conditions as may be established by the competent authority, distribute and redeem electronic money through distributors.

Provided that, if the competent authority is not satisfied that the information provided is correct, it shall take further action to verify the information before entering the agent in the register:

Provided further that, if after taking action to verify the information, the competent authority is not satisfied that the information provided pursuant to sub-article (1) is correct, it shall refuse to enter the agent in the public register referred to in article 8D and shall inform the financial institution without undue delay. (4A) An agent may only commence providing the relevant activities upon entry in the public register referred to in article 8D.

FINANCIAL INSTITUTIONS (4B) Where a payment institution or an electronic money institution intends to provide payment services in another Member State by engaging an agent or establishing a branch, it shall also follow the procedures set out in Article 28 of the Payment Services Directive.

Provided that if the competent authority has reasonable grounds to suspect that, through such branch, agent or distributor, money laundering or the funding of terrorism is being or has been committed or attempted, or that the engagement of such branch or agent could increase the risk of money laundering or the funding of 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 of the branch or agent.

Information to customers and potential customers.

Outsourcing of operational functions.

Added by:

II. 2010.16.

Amended by:

X. 2011.50.

Substituted by:

XXVI.2019.34.

Amended by:

XI.2025.38.

Art. 8B

Where a financial institution intends to outsource operational functions of its services it shall inform the competent authority accordingly:

Provided that the outsourcing of important operational functions, including ICT systems, shall not be undertaken in such a way as to impair materially the quality of the financial institution’s internal control and the competent authority’s ability to monitor and retrace the financial institution’s compliance with all of the obligations established in this Act and any regulations and, or Rules made thereunder.

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 of its responsibility; (b) the relationship and obligations of the financial institution towards any person making use of 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 of the regulations and, or Rules issued thereunder shall not be undermined; and (d) none of 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 of entities to which activities are outsourced.

Art. 8C

8C. (1) Where financial institutions rely on third parties for the performance of operational functions, those financial institutions shall take reasonable steps to ensure that the requirements of this Act and any regulations and, or Rules issued thereunder are complied with.

Liability.

Added by;

II. 2010.16.

Substituted by:

XXVI.2019.35.

Art. 8D

The competent authority shall establish and maintain a public register in which the following are entered: (a) financial institutions licensed or registered in terms of this Act; (b) agents of financial institutions in Malta or in another Member State; (c) branches of financial institutions, established in or outside Malta, if those branches provide services in another Member State; (d) branches in Malta of payment institutions authorised in another Member State;

Public register.

Added by;

II. 2010.16.

Substituted by:

XXVI.2019.36.

FINANCIAL INSTITUTIONS (e) branches in Malta of account information service providers authorised in another Member State; (f) account information service providers registered under this Act exercising their European right to provide services in another Member State; (g) account information service providers authorised in another Member State exercising their European right to provide services in Malta; (h) the institutions referred to in paragraphs (4) to (23) of Article 2(5) of the CRD that are entitled under national law to provide payment services; (i) branches in Malta of electronic money institutions authorised in another Member State; (j) payment institutions and electronic money institutions licensed under this Act exercising their European right to provide services in another Member State; (k) payment institutions and electronic money institutions authorised in another Member State exercising their European right to provide services in Malta; (l) service providers carrying out services based on specific payment instruments that can be used only in a limited way, provided they satisfy any of the following conditions: (i) instruments allowing the holder to acquire goods or services only in the premises of the issuer, or within a limited network of service providers under direct commercial agreement with a professional issuer; (ii) instruments that can be used only to acquire a very limited range of goods or services; and (m) service providers carrying out payment transactions by a provider of electronic communication networks or services provided in addition to electronic communication services for a subscriber to the network or service: (i) for the purchase of digital content and voice-based services, regardless of the device used for the purchase or consumption of the digital content and charged to the related bill; or (ii) performed from or by means of an electronic device and charged to the related bill within the framework of a charitable activity, or for the purchase of tickets.

Art. 8E

In the assessment of an application for the opening of a branch by an electronic money institution having its head office 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 office within the European Union.

Opening of branches having their head office outside the European Union..

Added by:

X. 2011.51.

Substituted by:

XXVI.2019.37.

Art. 8F

8F. (1) Electronic money institutions shall issue electronic money at par value on the receipt of funds.

Art. 8G

8G. Without prejudice to any anti-money laundering or combating the funding of terrorism legislation, or other relevant European Union Law, financial institutions other than account information service providers, shall keep all appropriate records for the purposes of this Act and any regulations and, or Rules issued thereunder for at least five years.

Issuance and redeemability of electronic money.

Added by:

X. 2011.51.

Substituted by:

XXVI.2019.38.

Record-keeping.

Added by:

XXVI.2019.39.

Notification of 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.

Art. 9

FINANCIAL INSTITUTIONS

FINANCIAL INSTITUTIONS

Prohibited transactions.

Amended by:

XVII. 2002.211;

L.N. 425 of 2007;

II. 2010.18;

LXXI.2021.70.

Art. 10

Provided that, in any case where unsecured credit facilities are granted, these shall not in the aggregate exceed the sum of 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 of its directors is interested as a director, partner, manager, agent or member or to any person of whom or of which any one or more of the financial institution's directors is a guarantor; (iii) to any body of persons in which the financial institution or any one or more of its directors jointly or severally maintains control, not being itself a financial institution or the parent undertaking of the financial institution, a subsidiary of this parent undertaking or a subsidiary of 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 of any officer, other than a director, or any employee, unsecured credit facilities which in the aggregate exceed twelve months’ emoluments of such officer or employee.

Art. 10A

10A. The granting of interest or of any other benefit related to the length of time during which an electronic money institution holds electronic money shall be prohibited.

Prohibition of interest.

Added by:

X. 2011.53.

Substituted by:

XXVI.2019.41.

Art. 10B

A payment institution providing payment services as referred to in paragraphs 2(a) to (f) of the Second Schedule and an electronic money institution shall safeguard all funds received from any person making use of its services, or received through another payment service provider for the execution of payment transactions, or in exchange for electronic money that has been issued.

Safeguarding requirements.

Added by:

X. 2011.53.

Substituted by:

XXVI.2019.42.

Art. 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 of the provisions of 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 of the provisions of 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 of the provisions of 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 of operational and security risks.

Added by:

XXVI.2019.44.

Amended by:

XI.2025.39.

FINANCIAL INSTITUTIONS

Art. 11A

11A. (1) Without prejudice to the application of Chapter II of 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 of 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 of major operational and security incidents.

Incident reporting.

Added by:

XXVI.2019.45.

Amended by:

XI.2025.40.

Art. 11B

11B. (1) Deleted by XI.2025.40.

FINANCIAL INSTITUTIONS REGULATORY AND INVESTIGATORY POWERS

Art. 12

Powers and duties of the Minister.

Amended by:

XVII. 2002.212;

II. 2010.19;

X. 2011.54.

Substituted by:

XXVI.2019.46.

Amended by:

XI.2025.41. (c) transpose, implement and give effect to the requirements of the Electronic Money Directive and the Payment Services Directive:

Provided that, when any of the options referred to in Article 107(1) of the Payment Services Directive are made use of, the Minister shall inform the European Commission of the use of any such options as well as of any subsequent changes thereof; (d) transpose, implement and give effect to the provisions, requirements, obligations and commitments relating to the regulation of payment institutions and electronic money institutions arising out of membership in, affiliation or relationship with international or regional organisations, or groupings of countries, or arising out of 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 of any article or provision of the Civil Code; (f) transpose, implement and, or give effect to the requirements of the PAD, and in so doing may also establish or maintain measures alternative to those referred to in Article 10(2) to (6) of the PAD:

Provided that: (i) it is clearly in the interest of the consumer; (ii) there is no additional burden for the consumer; and (iii) the switching as defined in Article 2(18) of the PAD is completed within, as a maximum, the same overall time frame as that indicated in Article 10(2) to (6) of 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(3) of 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 of the PAD, free of charge; (h) transpose, implement and, or give effect to the provisions and requirements of Directives, Regulations and any other legislative measures of 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 of 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 of such inconsistency, the provisions in any such regulations shall prevail; (i) regulate products and services offered by financial institutions; (j) impose such fees and charges in respect of any request, application or other matter that may be submitted to the competent authority under this Act, including the fees and charges in respect of any permission, licence, authorisation, exemption or other benefit, as well as any fees and charges in respect of the competent authority’s regulatory, supervisory or investigative functions under this Act or any regulations made or Rules issued thereunder.

Language of regulations.

Added by:

XIII. 2004.93.

Re-numbered by:

II. 2010.21.

Art. 12A

12A. Regulations made under this Act and any amendment or revocation of such may be made in the English language only.

FINANCIAL INSTITUTIONS

Art. 13

Powers and duties of the competent authority.

Amended by:

II. 2010.8, 22;

X. 2011.55;

XXVI.2019.47. (a) to require the financial institution, in terms of article 14, to provide any information needed to monitor compliance specifying the purpose of 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 of the financial institution, or at any entity to which activities are outsourced; (c) to withdraw, suspend or restrict any licence or registration pursuant to article 6; and (d) to issue non-binding recommendations and guidelines, Rules within the meaning of this article and binding administrative provisions in terms of this Act and any regulations and, or Rules issued thereunder. (1A) Notwithstanding the requirements of article 5A(1), (2A) and (2) and Articles 7 and 9 of the Payment Services Directive, the competent authority may take steps as referred to in sub-article (1) to ensure sufficient capital for the activities carried out by a financial institution and, or to ensure compliance with Article 5(1B), in particular where the activities of a financial institution other than those listed in the Schedules impair or are likely to impair the financial soundness of the financial institution concerned. (1B) Without prejudice to the procedures for the withdrawal of a licence or a registration, or to article 22, or to national provisions of criminal law and to any other power granted to the competent authority under the provisions of this Act and any regulations and, or Rules issued thereunder or under the provisions of the Malta Financial Services Authority Act, where the competent authority is satisfied that a financial institution’s conduct amounts to a breach of any of the provisions of this Act or any regulations and, or Rules issued thereunder, or of any directive, restriction and, or suspension imposed, or of any other request or order made by the competent authority pursuant to the provisions of 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 of 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 of such financial institution, any measures as it may deem appropriate aimed specifically at ending observed breaches or the causes of such breaches. (1C) The competent authority shall possess all powers and

adequate resources necessary for the performance of its duties and shall guarantee independence from economic bodies and avoid conflicts of interest.

FINANCIAL INSTITUTIONS

Provided that financial institutions may, without prejudice to article 10, decide to grant more favourable terms to their customers.

Art. 13A

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(1) involving administrative penalties or restrictions on the exercise of 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(2) and the European Passport Rights for Financial Institutions Regulations shall be without prejudice to the obligations of the Financial Intelligence Analysis Unit established in terms of the Prevention of Money Laundering Act and the obligations of those authorities in other Member States which, under Directive (EU) 2015/849 and Regulation (EU) 2015/ 847, in particular under Article 48(1) of Directive (EU) 2015/849 and Article 22(1) of Regulation (EU) 2015/847, are responsible for supervising or monitoring compliance with the requirements laid down in those instruments.

S.L. 376.07.

Art. 14

Power of competent authority to require information.

Amended by:

XVII. 2002.213;

II. 2010.8, 23;

X. 2011.56;

XXVI.2019.49;

LXXI.2021.72.

FINANCIAL INSTITUTIONS (c) a holding company of a subsidiary of that financial institution; (d) a controller of that financial institution; (e) a qualifying shareholder of that financial institution; or (f) an agent appointed in terms of article 8A.

Art. 15

Amended by:

XVII. 2002.214.

XXVI.2019.50.

FINANCIAL INSTITUTIONS time and place as the inspector or inspectors may require; and, or (c) otherwise to give to the inspector or inspectors all assistance in connection with the investigation which he is reasonably able to give, and the inspector or inspectors concerned may retain copies of or extracts from, any documents produced to them under paragraph (a).

Right of entry.

Substituted by:

XXVI.2019.51.

Art. 16

Any officer, employee or agent of the competent authority, or an inspector appointed under article 15(1), may on producing evidence of 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 of obtaining the information or documents required by that notice, or otherwise for the purpose of the investigation, and of exercising any of the powers conferred by the said articles.

Provided that where an entry as is mentioned in this article involves premises that are occupied for the purpose 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 not take place between nine in the evening and five in the morning.

Art. 16A

Where the competent authority has reasonable grounds for suspecting that a person has contravened or has failed to comply with any of the provisions of 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 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 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.