premises occupied by a person on whom a notice has been served under sub-article (1), for the purpose of obtaining the information or the documents required by the notice, asking the questions referred to in paragraph (c) of sub-article (1) and, or exercising the powers conferred by sub-article (2).
\n
(4)No person shall without any lawful excuse fail to comply with a requirement imposed on him under this article or intentionally obstruct a person in the exercise of the rights conferred by sub-article
\n
(3).
\n
(5)A statement made by a person in compliance with a requirement imposed by virtue of this article may be used as evidence against him.
\n
Suspected breaches.
\n
Added by:
\n
XXVI.2019.52.
\n
FINANCIAL INSTITUTIONS Obstruction.
\n
Added by:
\n
XXVI.2019.53.
\n
Art. 16B
\n
16B. No person who knows or suspects that an investigation is being or is likely to be carried out under this Act, or an investigation is being or is likely to be carried out into the suspected commission of any breach under this Act and any regulations and, or Rules issued thereunder may falsify, conceal, destroy or otherwise dispose of, or cause or permit the falsification, concealment, destruction or disposal of documents that he knows or suspects are, or would be relevant to such an investigation, unless he proves that he had no intention of concealing facts disclosed by such documents from persons carrying out such an investigation.
\n
Power of the competent authority to take control of financial institutions.
\n
Amended by:
\n
XVII. 2002.215;
\n
II. 2010.24.
\n
Substituted by:
\n
XXVI.2019.54.
\n
Art. 17
\n
(1)If, whether from any report made under article 14 or 15 or otherwise, it appears to the competent authority that any of the circumstances indicated in article 6(1) apply, the competent authority may, without prejudice to the powers of the said authority to impose restrictions, or to withdraw or suspend a licence or a registration under the provisions of article 6(1): (a) require the financial institution forthwith to take such steps as the competent authority may consider necessary to remedy or rectify the matter; (b) appoint a competent person to advise the financial institution in the proper conduct of its business; (c) appoint a competent person to take charge of the assets of the financial institution or any portion of them for the purpose of safeguarding the interests of the integrity of the financial system in Malta; (d) appoint a competent person to take over the business of the financial institution, either to carry on that business, or to carry out such other function or functions in respect of such business or part thereof, as the competent authority may direct; (e) require the financial institution to wind up its business or to wind up its business in Malta; (f) appoint a competent person to act as liquidator for the purpose of winding up the affairs of the financial institution; and, or (g) determine the remuneration to be paid by the financial institution to any competent person appointed under this sub-article.
\n
(2)Upon receipt of a report or information otherwise received as is mentioned in sub-article (1), the competent authority shall inform the Central Bank.
\n
(3)Where a competent person is appointed by the competent authority: (a) under sub-article (1)(b), the financial institution shall act in accordance with the advice given by such person, unless and until the competent authority otherwise directs;
\n
FINANCIAL INSTITUTIONS (b) under sub-article (1)(c), the financial institution shall deliver to such person all the assets of which he is placed in charge, and all the powers, functions and duties of the financial institution in respect of those assets, whether exercisable by the company in the general meeting or by the board of directors, or by any other person, including the legal and judicial representation of the financial institution, shall be exercisable by and vested in him to the exclusion of the financial institution; and, or (c) under sub-article (1)(d), the financial institution shall submit its business to the control of such person and shall provide him with such facilities as he may require in order to carry on that business, or to carry out the functions assigned to him under that paragraph, and all the powers, functions and duties of the financial institution, whether exercisable by the company in the general meeting or by the board of directors, or by any other person, including the legal and judicial representation of the financial institution in all matters shall be exercisable by and vested in him, to the exclusion of any other person.
\n
(4)Where a person is appointed under sub-article (1)(c) or (d): (a) any function, power or duty exercisable by any other person, including the curator of a bankrupt, or any other person appointed by or under any other law and relating to any assets or business of which the person appointed under either of the paragraphs aforesaid is placed in charge or in control, shall unless or until the competent authority otherwise directs, or an express provision of the law specifically provides otherwise, cease to be so exercisable; (b) the person appointed under either of the paragraphs aforesaid shall in respect of such property, partnerships, firms or other business as the competent authority may specify, and in which the financial institution has an interest, whether directly or indirectly, including any interest arising from advances or loans made, or credit facilities given, or any liability undertaken, have such powers, functions and duties, including legal and judicial representation, as the competent authority may direct, and any such power, function or duty shall be exercisable by and vested in such person, to the exclusion of any other person:
\n
Provided that: (i) the competent authority shall have the power to direct that all or any of the powers, functions or duties aforesaid should be exercisable by any other FINANCIAL INSTITUTIONS person, and in any such case, with effect from such date or dates as the competent authority may specify and unless and until the competent authority otherwise directs, the powers, functions and duties to which the direction of the competent authority applies shall be exercisable by and vested in such other person appointed for the purpose, to the exclusion of all others; (ii) where the competent authority is of the opinion that the financial institution has ceased to have any interest as aforesaid, it shall direct that any powers, functions and duties exercisable under this paragraph shall cease to be so exercisable, but any such direction shall not affect anything done, or omitted to be done by virtue or by reason of any of the aforesaid powers, functions or duties; (iii) the person appointed under either of the paragraphs aforesaid shall have the power to require any other person to provide him with such facilities as he may deem necessary to carry out any of the powers, functions or duties under this article; (iv) the provision of law relating to bankruptcy and in particular Part III of the Commercial Code shall cease to apply to, and shall cease to operate in respect of any property, partnership, firm or other business specified by the competent authority under paragraph (b), unless and until, or except to the extent that the competent authority otherwise directs; and in any such case the person appointed as aforesaid shall, subject to any directions of the competent authority given in the interest of the creditors, act as if those provisions did not exist and as if any declaration of bankruptcy had not been made; (v) any person appointed by the competent authority under any of the provisions of this article shall submit six monthly reports of his activities and annual accounts of all transactions carried out by him in the performance of his functions, audited by an independent auditor, to the Minister who will place such reports and accounts on the Table of the House of Representatives within fifteen days.
\n
(5)Where a person is appointed under sub-article (1)(f), such person shall be the liquidator of the company for all purposes of law to the exclusion of any other person.
\n
(6)The provisions of this article shall have effect FINANCIAL INSTITUTIONS notwithstanding any other provision of any enactment, and notwithstanding any deed, contract, instrument or other document whatsoever.
\n
(7)The foregoing provisions of this article vesting exclusive powers of representation in a person appointed by the competent authority thereunder shall apply also to any act or proceedings commenced or instituted before such representation is vested as aforesaid, and in respect of any such act or proceedings, any other person acting or purporting to act, or in respect of whom action is taken in that capacity shall cease to be a party to and shall be excluded from any such act or proceedings.
\n
(8)No person shall in any way obstruct a person appointed under sub-article (1) in the performance of any of his functions, powers or duties under this article.
\n
ACCOUNTING, STATUTORY AUDIT AND AUDITORS Substituted by:
\n
XXVI.2019.55.
\n
Art. 17A
\n
Directive 86/635/EEC, Directive 2013/34/EU and Regulation (EC) No. 1606/2002 shall, mutatis mutandis, apply to financial institutions.
\n
Accounting and statutory audit.
\n
Added by:
\n
XXVI.2019.56.
\n
(2)Unless exempted under Directive 2013/34/EU and, where applicable, D i r e c t i v e 8 6 / 6 3 5 / E E C , the annual accounts and consolidated accounts of financial institutions shall be audited by statutory auditors or audit firms within the meaning of Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC, as amended from time to time.
\n
(3)Payment institutions and electronic money institutions shall provide to the competent authority separate accounting information for payment services and for the activities referred to in paragraphs 3(a), (b) and (c) of the Second Schedule, that shall be subject to an auditor’s report, as may be stipulated in a Financial Institutions Rule.
\n
(4)The auditor’s report referred to in sub-article (3) shall be prepared, where applicable, by the statutory auditors or an audit firm.
\n
Art. 17B
\n
17B. Every financial institution shall, not later than four months from the closing of its financial year or at any other time as may be authorised in writing by the competent authority: (a) forward to the competent authority, and (b) make available to the public, in paper or in electronic form, a copy of its audited financial statements or consolidated financial Publication of audited financial statements.
\n
Added by:
\n
XXVI.2019.57.
\n
FINANCIAL INSTITUTIONS statements, as may be applicable, drawn up and published in such manner as may be specified in accordance with a Financial Institutions Rule.
\n
Appointment and duties of auditors.
\n
Amended by:
\n
XXV. 1995.434;
\n
XVII. 2002.216;
\n
XVII.2019.58;
\n
LXXI.2021.73.
\n
Art. 18
\n
18.(1) (a) Every financial institution shall each year appoint an approved statutory auditor or audit firm whose duty shall be to audit the annual accounts and consolidated accounts of the financial institution in accordance with article 17A. (b) For the purpose of this article an approved auditor shall be a person who is qualified to be an auditor in accordance with the Companies Act:
\n
Provided that in the case of a financial institution not incorporated in Malta the competent authority may grant exemption from paragraph (b) subject that the same does not materially detract from the main objects of this article.
\n
(2)If a financial institution fails to appoint an auditor under sub-article (1) or, at any time fails to fill any vacancy in the office of an auditor, the competent authority shall have the power to appoint an auditor for that institution and shall fix the remuneration to be paid by that financial institution to such auditor.
\n
(3)A financial institution shall forthwith give written notice to the competent authority: (a) on the appointment of its auditors; (b) if it proposes to give notice to its shareholders to (i) replace its auditors at the expiration of their term of office; (ii) remove its auditors before the expiration of their term of office; (c) if the auditors cease to be auditors of the financial institution for any reason other than those in paragraph (b).
\n
(4)The competent authority may require a financial institution to change its appointed auditors where, in the competent authority’s opinion, such auditors are considered unfit for this appointment, at any time during their term of office.
\n
(5)An auditor shall immediately inform the competent authority in writing if: (a) he resigns; (b) he does not seek to be re-appointed; or (c) he decides to qualify the audit report.
\n
(6)If, in his capacity as an auditor of a financial institution, or due to a direct request by the competent authority under article 14 or 15, an auditor becomes aware of any matter which relates to and may have a serious adverse effect upon the stability and soundness of the financial institution, or a branch or office in Malta of a financial institution not incorporated in Malta, or the integrity of the financial system in Malta, FINANCIAL INSTITUTIONS he shall immediately inform the competent authority through the financial institution’s management, or if circumstances so warrant, inform directly the competent authority. (6A) In his capacity as an auditor of a financial institution, or due to a direct request by the competent authority, an auditor shall promptly notify the competent authority of any fact or decision concerning that financial institution of which that auditor has become aware while carrying out his tasks, that is liable to: (a) constitute a material breach of this Act and of any regulations and, or Rules issued thereunder which set out the licensing or registration conditions, or which specifically govern the activities of financial institutions; (b) affect the ongoing functioning of the financial institution; or (c) lead to refusal to certify the accounts or to the expression of reservations:
\n
Provided that an auditor shall also have the duty to report any fact or decision of which that auditor becomes aware in the course of carrying out his tasks, in an undertaking having close links resulting from a control relationship with the financial institution within which he is carrying out that task:
\n
Provided further that the competent authority may require the replacement of an auditor if that auditor acts in breach of his obligations under this sub-article. (6B) Any disclosure in good faith to the competent authority pursuant to sub-article (6A) shall not constitute a breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision and shall not expose such persons to any liability. Unless there are compelling reasons not to do so, such disclosure shall be made simultaneously to the board of directors of the financial institution.
\n
(7)In so far as the provisions of this article are inconsistent with the provisions of the Companies Act, the provisions of this article shall prevail and the provisions of the said Act shall, to the extent of the inconsistency, not apply to financial institutions.
\n
Art. 19
\n
19.No duty, including professional secrecy, to which: (a) an auditor of a financial institution may be subject shall be regarded as contravened by reason of his communicating in good faith to the competent authority, whether or not in response to a request from it, any information or opinion on a matter of which the auditor has become aware in his capacity as auditor of that institution and that is relevant to any functions of the competent authority under the provisions of this Act, or is required to be communicated by virtue of this Act and, or any regulations or Rules issued thereunder; and Communication by auditors and other persons with the competent authority.
\n
Amended by:
\n
II. 2010.25.
\n
Substituted by:
\n
XXVI.2019.59.
\n
FINANCIAL INSTITUTIONS (b) a person appointed to make a report under article 14 or 15 may be subject shall be regarded as contravened by reason of communicating in good faith to the competent authority any matter which relates to the business or affairs of the financial institution in relation to which the report is made.
\n
CO-OPERATION AND SHARING OF INFORMATION Co-operation and sharing of information.
\n
Amended by:
\n
XVII. 2002.217;
\n
IV. 2003.186;
\n
II. 2010.26;
\n
X. 2011.57;
\n
XXVI.2019.60.
\n
Art. 20
\n
20.(1) Without prejudice to sub-article (1A) and on the basis of international agreements or upon reciprocity agreements, the competent authority may, in the case of a financial institution or branch operating in Malta, which is totally or partially owned by a foreign person, or in the case of a financial institution totally or partially owned by Maltese residents that is operating abroad, share its supervisory duties with an overseas regulatory authority. (1A) The competent authority shall co-operate with European regulatory authorities and, where appropriate with the ECB, the Central Bank and the national central banks of the other Member states, the EBA and other relevant authorities designated under European Union, or national law applicable to payment service providers.
\n
(2)The competent authority may further exchange information with the following: (a) overseas regulatory authorities responsible for the licensing and, or registration, and for the supervision of payment institutions, electronic money institutions and, or account information service providers, solely for their supervisory and regulatory purposes and, or for such other purposes as may be specifically agreed upon with the competent authority; (b) the ECB, other Member States’ central banks and the Central Bank, in their capacity as monetary and oversight authorities and, where appropriate, other public authorities responsible for overseeing payment and settlement systems; (c) other relevant authorities designated under the Payment Services Directive, Directive 2015/849, and other European Union law applicable to payment service providers, such as laws applicable to money laundering and funding of terrorism; and, or (d) the EBA, in its capacity of contributing to the consistent and coherent functioning of supervising mechanisms as referred to in paragraph (a) of Article 1(5) of Regulation (EU) No. 1093/2010.
\n
(3)The competent authority may further, on the basis of international agreements, or upon reciprocity agreements, disclose information to the overseas regulatory authorities, in particular, in the case of infringements or suspected infringements by an agent, a branch, or an entity to which activities are outsourced:
\n
FINANCIAL INSTITUTIONS Provided that the competent authority may exchange information and communicate with other overseas regulatory authorities either upon their request or on its own initiative:
\n
Provided further that in the case of cross-border consumer disputes, the competent authority may use any of its powers under this article and shall co-operate and exchange information for the purpose of investigating and resolving any such disputes.
\n
(4)The competent authority shall notify the relevant European regulatory authority whenever it intends to carry out an on-site inspection in the territory of the latter:
\n
Provided that the competent authority may upon agreement delegate to the relevant European regulatory authority the task of carrying out on-site inspections of the institution concerned.
\n
(5)The competent authority shall further, upon a request in writing, disclose to the ECB and, or to the Central Bank any information in the possession of or accessible to the competent authority that is required for the discharge of the duties of the ECB and, or the Central Bank under the law.
\n
(6)A person appointed under article 14 or article 15 shall be given access to any accounts, returns, or other information with regard to any financial institution which are in the possession of the competent authority.
\n
(7)There shall be meetings held between a financial institution, its appointed auditors and the competent authority on a trilateral or bilateral basis as circumstances may warrant. These meetings may be called by any of the parties concerned but shall always be chaired by the competent authority.
\n
(8)The competent authority and the Central Bank shall periodically discuss matters of mutual interest regarding financial institutions, and they shall at all times afford such co-operation to each other as may be necessary for the discharge of their respective duties.
\n
Art. 20A
\n
20A. (1)Where the competent authority considers that in a particular matter, cross-border co-operation with European regulatory authorities referred to in Articles 26, 28, 29, 30 or 31 of the Payment Services Directive does not comply with the relevant conditions set out in those provisions, it may refer the matter to the EBA and request its assistance in accordance with Article 19 of Regulation (EU) No. 1093/2010.
\n
(2)Where the competent authority has referred the matter to the EBA and requested its assistance in accordance with sub-article (1), or where a European regulatory authority has referred a matter to the EBA and requested its assistance in accordance with Article 27(1) of the Payment Services Directive, it shall defer its decision pending resolution by the EBA under Article 19 of Regulation (EU) No.
\n
1093/2010.
\n
Settlement of disagreements between the competent authority and European regulatory authorities.
\n
Added by:
\n
XXVI.2019.61.
\n
Collaboration with the Central Bank and the Arbiter.
\n
Added by:
\n
XXVI.2019.62.
\n
FINANCIAL INSTITUTIONS
\n
Art. 20B
\n
20B. In ensuring and monitoring effective compliance with the provisions of this Act and any regulations and, or Rules issued thereunder transposing the P a y m e n t S e r v ic e s D ir e c t i ve , the competent authority shall collaborate closely with the Central Bank and with the Arbiter as may be required, in order to ensure that every authority may discharge its respective duties effectively.
\n
APPEALS, REMEDIES, DISQUALIFICATION AND CONFIDENTIALITY Appeals.
\n
Substituted by:
\n
XVII. 2002.218.
\n
Amended by:
\n
XII. 2006.70;
\n
XX. 2013.70.
\n
Substituted by:
\n
XXVI.2019.63.
\n
Art. 21
\n
21.Any person who is aggrieved by a directive, decision and, or measure taken by the competent authority pursuant to the Act and any regulations or Rules issued thereunder, may appeal to the Tribunal within such period and under such conditions as established under the Malta Financial Services Authority Act.
\n
Criminal offences.
\n
Amended by:
\n
XVII. 2002.219;
\n
L.N. 425 of 2007;
\n
II. 2010.8, 27;
\n
XXVI.2019.64.
\n
Art. 22
\n
(1)Any person who: (a) fails to comply with any directive issued by the competent authority under this Act; (b) without reasonable excuse alters, suppresses, conceals, destroys or refuses to produce any document which he is lawfully required to produce by any person under this Act and any regulations and, or Rules issued thereunder; (c) furnishes information or makes a statement, promise or forecast which he knows to be misleading, false or deceptive, or dishonestly conceals any material facts; (d) recklessly furnishes information or recklessly makes (dishonestly or otherwise) a statement, promise or forecast which is misleading, false or deceptive; (e) fails to comply with any lawful order or requirement of the Financial Services Tribunal; or (f) contravenes or fails to comply with any of the provisions of articles 3(1), 3(1A), 9, 16A(4), 16B, 24A(b), 25(2) and (4), shall be guilty of a criminal offence.
\n
(2)Deleted by XXVI.2019.64.
\n
(3)Any person who is knowingly a party to, or procures or aids and abets the commission of any offence under sub-article (1) shall be guilty of an offence and shall be liable to the same penalties as the principal offender.
\n
(4)A person guilty of a criminal offence under the provisions of this article shall be liable on conviction to a fine (multa) not exceeding five hundred thousand euro (€500,000) or to a term of imprisonment not exceeding three years, or to both such fine and imprisonment.
\n
(5)No criminal proceedings for a criminal offence against this Act shall be commenced without the consent of the Attorney General.
\n
FINANCIAL INSTITUTIONS
\n
(6)The provisions of this Act shall not affect any criminal proceedings that may be competent under any other law.
\n
Art. 23
\n
23.(1)Without prejudice to the procedures for the withdrawal, suspension or restriction of a licence or a registration 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 any person fails to comply with any of the conditions imposed in a licence and, or where the competent authority is satisfied that a person’s conduct amounts to a breach of any of the provisions of this Act and of any regulations and, or Rules issued thereunder, the competent authority may, by notice in writing and without recourse to a court hearing, impose on such person an administrative penalty which may not exceed one hundred and fifty thousand euro (€150,000) for each infringement or failure to comply, as the case may be, aimed specifically at ending such breaches or the causes of such breaches.
\n
Administrative penalties and their publication.
\n
Substituted by:
\n
XVII. 2002.220.
\n
Amended by:
\n
II. 2010.28;
\n
X. 2011.58.
\n
Substituted by:
\n
XXVI.2019.65. (1A) Any administrative penalty imposed by the competent authority under sub-article (1) shall be effective, proportionate and dissuasive, and shall be imposed in accordance with this article. (1B) The Minister may, acting on the advice of the competent authority, make regulations as shall be deemed appropriate to provide for the establishment and imposition of administrative penalties and other administrative measures on licence holders or others as may be specified therein.
\n
(2)The imposition by the competent authority of an administrative penalty in terms of this article shall be without prejudice to any other consequence of the act or omission of the offender under civil or criminal law:
\n
Provided that in all cases where the competent authority imposes an administrative penalty in respect of anything done or omitted to be done by any person, and such act or omission also constitutes a criminal offence, no proceedings may be taken or continued against the said person in respect of such criminal offence.
\n
(3)The provisions of article 16(4) of the Malta Financial Services Authority Act shall, mutatis mutandis, apply with reference to a \"notice\" therein being construed as a reference to a notice as referred to in sub-article (1) of this article.
\n
(4)The competent authority may, unless such disclosure would seriously jeopardise the financial markets, or cause disproportionate damage to the parties involved, publish any administrative penalty imposed in terms of this article and, or in terms of this Act:
\n
Provided that in cases where, in terms of article 21, an appeal has been filed by the person on whom such administrative penalty or penalties have been imposed, the competent authority shall, without FINANCIAL INSTITUTIONS undue delay, also publish on its official website and through any other means it considers appropriate, information on the status of the appeal and the outcome thereof.
\n
Disqualification of officers.
\n
Amended by:
\n
II. 2010.29;
\n
XXVI.2019.66.
\n
Art. 24
\n
No person: (a) who has been adjudged bankrupt, or has made a composition with his creditors, or has been an officer of a financial institution which has had its licence or registration withdrawn under article 6(1) and who has not been exempted in writing by the competent authority from the provision of this article; or (b) who is interdicted or incapacitated or who has been involved in money laundering or found guilty of a crime affecting public trust, theft, fraud, extortion or of knowingly receiving property obtained by theft or fraud, shall act or continue to act as an officer of a financial institution.
\n
Duties of officers.
\n
Added by:
\n
XXVI.2019.67.
\n
Art. 24A
\n
24A. Every officer of a financial institution shall take all reasonable steps: (a) to secure compliance by the financial institution with all of the provisions of this Act and any regulations and, or Rules issued thereunder, and with the conditions of its licence or registration; and (b) Confidentiality.
\n
Amended by:
\n
XVII. 2002.221;
\n
II. 2010.30;
\n
X. 2011.59;
\n
XXVI.2019.68;
\n
LXXI.2021.74. to ensure that no incorrect information is provided to the competent authority either wilfully or as the result of gross negligence.
\n
Art. 25
\n
25.(1) Nothing in this Act or any regulations and Rules issued thereunder shall authorise the competent authority to enquire or cause an enquiry to be made in a financial institution into the affairs of any individual customer of a financial institution except (a) for the purpose of ensuring compliance with any of the provisions of this Act; or (b) where it is believed that the customer’s exposure could contribute a threat to the integrity of the country’s financial system.
\n
(2)No person, including past and present officers of a financial institution or of a branch thereof, and agents of a financial institution, shall disclose any information relating to the affairs of that institution or of a customer of that institution which he has acquired in the performance of his duties or in the exercise of his functions under this Act and any regulations and, or Rules issued thereunder except: (a) when authorised to do so under any of the provisions of this Act; (b) for the purpose of the performance of his duties or in the exercise of his functions; (c) when lawfully required to do so by any court or under FINANCIAL INSTITUTIONS a provision of any law.
\n
(3)Where an officer of a financial institution has reason to believe that a transaction or a proposed transaction could involve money laundering, or the funding of terrorism, he shall act in compliance with the reporting and other obligations set out in any anti-money laundering and combating the funding of terrorism legislation and such disclosure shall not constitute a breach of confidentiality.
\n
(4)Without prejudice to the provisions of article 20, persons who work or who have worked for the competent authority, as well as experts acting on behalf of the competent authority, without prejudice to cases falling within the ambit of criminal law, are bound by the duty of professional secrecy. The said persons and experts shall not disclose information obtained from financial institutions in the course of carrying out supervisory and other duties and which is governed by the duty of professional secrecy, unless such disclosure of information be done in summary or collective form, so as not to enable the identity of the financial institution, to whom such information relates, to be ascertained:
\n
Provided that the said officers, auditors or experts may divulge such information, for the purpose of the performance of their duties, or the exercise of their functions, or when lawfully required to do so by any court or under a provision of any law.
\n
(5)Notwithstanding the provisions of any other law, a financial institution may, if circumstances so warrant, communicate any information which is in its possession and which relates to the affairs of a customer, to other members of the group of which that financial institution forms part.
\n
(6)For the purposes of sub-article (5), the term \"group\" shall include any body corporate registered or operating in Malta or in a foreign jurisdiction and forming part of the group, and that is further licensed or otherwise authorised under the laws of Malta or of that jurisdiction to carry out any activity equivalent to the business of banking, or of the issuing of electronic money, or any of the activities referred to in the First Schedule annexed to the Banking Act.
\n
(7)Exchange of information on mutual or connected customers between the financial institution, its holding company or its subsidiaries where a credit facility has been or may be granted to that customer shall not constitute a breach of confidentiality.
\n
(8)Without prejudice to the provisions of article 20, any exchange of information between the competent authority and any European regulatory authority, the ECB, the Central Bank, national central banks of other Member States, the EBA or any other relevant authorities designated under European Union or national law applicable to payment services providers in accordance with article 20(1A) and (2) shall, in order to ensure the protection of individual and business rights, also be subject to the obligation of professional secrecy.
\n
(9)The provisions of sub-articles (4) and (8) shall be applied taking into account, mutatis mutandis, Articles 53 to 61 of the CRD.
\n
Substituted by:
\n
II. 2010.31;
\n
XXVI.2019.69.
\n
Investigation of complaints by the Consumer Complaints Manager.
\n
Substituted by:
\n
II. 2010.32;
\n
X. 2011.60.
\n
Data protection.
\n
Added by:
\n
XXVI.2019.71.
\n
FINANCIAL INSTITUTIONS DATA PROTECTION
\n
Art. 26
\n
26.Deleted by XXVI.2019.70.
\n
Art. 26A
\n
26A. (1) Financial institutions may, when necessary to safeguard the prevention, investigation and detection of payment fraud, process personal data.
\n
(2)The provision of information to individuals about the processing of personal data and the processing of such personal data and any other processing of data for the purposes of this Act and any regulations and, or Rules issued thereunder, shall be carried out in accordance with any applicable data protection legislation.
\n
(3)Financial institutions shall only access, process and retain personal data necessary for the provision of their services with the explicit consent of those making use of their services.
\n
Added by:
\n
II. 2010.33.
\n
MISCELLANEOUS Objective.
\n
Substituted by:
\n
II. 2010.34;
\n
X. 2011.61;
\n
XXVI.2019.71.
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Art. 27
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27.The objective of this Act is, in part, to implement the provisions of the Payment Services Directive, in particular Titles I, II,
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Chapter 4 of Title IV, Articles 95, 96, 100, 103 and 107 in part,
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Articles 109, 111 and 115, and the Annexes thereof and of the Electronic Money Directive and shall be interpreted and applied accordingly.
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Art. 28
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(1)Payment institutions that have been granted a licence to provide payment services as referred to in paragraph (7) of the Annex of Directive 2007/64/EC shall retain that licence for the provision of those payment services which are considered to be payment services as referred to in paragraph 2(c) of the Second Schedule where, by 13 January 2020, the competent authority has evidence that the requirements set out in paragraph (c) of Articles 7 and 9 of the Payment Services Directive are satisfied.
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Transitory provisions.
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Added by:
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XVII.2019.73
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(2)Legal persons that, before 12 January 2016, have performed in Malta activities of payment initiation service providers and account information service providers, shall, until eighteen months after the date of entry into force of the regulatory technical standards referred to in Article 98 of the Payment Services Directive, not be prohibited from continuing to perform such activities in Malta in accordance with FINANCIAL INSTITUTIONS the applicable regulatory framework.
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(3)Until individual account servicing payment service providers comply with the regulatory technical standards referred to in sub-article (2), account servicing payment service providers shall not block or obstruct the use of payment initiation services or account information services for the account that they are servicing.
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(4)Financial institutions in possession of a licence on the entry into force of this Act are required to include a statement that the financial institution is licensed or registered, as applicable, by the competent authority, together with the address of the competent authority in any form or medium of marketing activity or communication disseminated to the public, by any other means considered appropriate within three months after the entry into force of this article.
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FINANCIAL INSTITUTIONS FIRST SCHEDULE (Article 2) Substituted by:
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II. 2010.35;
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X. 2011.62;
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XXVI.2019.74.
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ACTIVITIES OF FINANCIAL INSTITUTIONS 1.
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Lending (including personal credits, mortgage credits, factoring with or without recourse, financing of commercial transactions including forfaiting);
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2.
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Financial leasing;
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3.
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Venture or risk capital;
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4.
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Payment services set out in the Second Schedule;
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5.
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Issuing and administering other means of payment (travellers cheques and bankers’ drafts and similar instruments) in so far as this activity is not covered by point 4 above;
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6.
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Guarantees and commitments;
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7.
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Trading for own account or for account of customers in: (a) money market instruments (cheques, bills, Certificates of deposit and similar instruments); (b) foreign exchange; (c) financial futures and options; (d) exchange and interest rate instruments; (e) transferable securities;
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8.
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Underwriting share issues and participation in such issues;
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9.
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Money broking;
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10.
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Issuing of electronic money as defined in the Third Schedule.
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FINANCIAL INSTITUTIONS SECOND SCHEDULE FINANCIAL INSTITUTIONS CARRYING OUT PAYMENT SERVICES Added by:
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II. 2010.36.
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Amended by:
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X. 2011.63;
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XXVI.2019.75;
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LXXI.2021.75.
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Objective The purpose of this Schedule is to set out the regulatory framework under which payment services as referred to in the First Schedule, may be carried out.
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Interpretation 1.
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Deleted by XXVI.2019.75.
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List of Activities 2.
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The following activities shall be considered as payment services: (a) services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account; (b) services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account; (c) execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider: (i) execution of direct debits, including one-off direct debits; (ii) execution of payment transactions through a payment card or a similar device; (iii) execution of credit transfers, including standing orders; (d) execution of payment transactions where the funds are covered by a credit line for a payment service user: (i) execution of direct debits, including one-off direct debits; (ii) execution of payment transactions through a payment card or a similar device; (iii) execution of credit transfers, including standing orders; (e) issuing of payment instruments and, or acquiring of payment transactions; (f) money remittance; (g) payment initiation services; and (h) account information services.
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3.
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Apart from the provision of payment services, payment institutions may engage in the following activities: (a) The provision of operational and closely related ancillary services such FINANCIAL INSTITUTIONS as ensuring execution of payment transactions, foreign exchange services strictly in relation to payment services, safekeeping activities, and storage and processing of data; (b) The operation of payment systems, without prejudice to Article 35 of the Payment Services Directive as transposed in a directive issued by the Central Bank under the Central Bank of Malta Act; (c) Without prejudice to any applicable European Union or national law, and without prejudice to the provisions of article 5(6), business activities other than the provision of payment services; (d) Payment institutions may grant credit related to payment services referred to in paragraph (2)(d) or (e) of this Schedule only if the following requirements are met: (i) the credit is ancillary and granted exclusively in connection with the execution of a transaction; (ii) notwithstanding national rules on providing credit by credit cards, the credit granted in connection with a payment and executed with the act shall be repaid within a short period which shall in no case exceed twelve months; (iii) such credit is not granted from the funds received or held for the purpose of executing a payment transaction; and (iv) the own funds of the payment institution are at all times and, to the satisfaction of the competent authority, appropriate in view of the overall amount of credit granted.
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4.
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When payment institutions engage in the provision of one or more payment services, they may only hold payment accounts used exclusively for payment transactions.
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5.
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Any funds received by payment institutions from payment service users with a view to the provision of payment services shall not constitute a deposit or other repayable funds within the meaning of article 2 of the Banking Act, or electronic money within the meaning of article 2.
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FINANCIAL INSTITUTIONS Added by:
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X. 2011.64.
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Amended by:
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XXVI.2019.76;
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LXXI.2021.76.
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THIRD SCHEDULE (Article 2) FINANCIAL INSTITUTIONS ISSUING ELECTRONIC MONEY Objective The purpose of this Schedule is to set out the activities that may be undertaken by financial institutions that issue electronic money in terms of this Act.
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Interpretation 1.
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Deleted by XXVI.2019.76.
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Activities 2.
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In addition to issuing electronic money, electronic money institutions may also engage in any of the following activities: (a) the provision of payment services listed in paragraph 2 of the Second Schedule; (b) the granting of credit related to payment services referred to in paragraph 2(d) or (e) of the Second Schedule, where the conditions laid down in paragraph 3(d) of the Second Schedule are met; (c) the provision of operational services and closely related ancillary services in respect of the issuing of electronic money or to the provision of payment services referred to in point (a); (d) the operation of payment systems as defined in the Second Schedule; (e) business activities other than the issuance of electronic money, having regard to the applicable law regulating such activities.
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Credit referred to in point (b) above shall not be granted from the funds received in exchange of electronic money and held in accordance with safeguarding requirements prescribed.