📄 Legal text
[ CAP. 637.
CROWDFUNDING SERVICE PROVIDERS
CHAPTER 637
CROWDFUNDING SERVICE PROVIDERS ACT
AN ACT to provide for the establishment of a framework for
crowdfunding service providers for business and the requirements for
the provision of crowdfunding services, for the organisation,
authorisation and supervision of crowdfunding service providers, for
the operation of crowdfunding platforms as well as for transparency
and marketing communications in relation to the provision of
crowdfunding services in the European Union.
14th July, 2023
ACT XXV of 2023, as amended by Act XI of 2025.
ARRANGEMENT OF THE ACT
Part I
Part II
Part III
Part IV
Part V
Part VI
Preliminary
Authorisation Requirements
Ongoing Obligations
Regulatory and Investigatory Powers
Cooperation with Other Authorities
Appeals, Sanctions and Confidentiality
Articles
1-4
5 - 11
12 - 15
16 - 26
27 - 30
31 - 34
PART I
PRELIMINARY
1.
(1)
The short title of this Act is the Crowdfunding
Service Providers Act.
Short title,
applicability and
purpose.
(2) The applicability and purpose of this Act is to
implement the relevant provisions of the ECSP Regulation as herein
defined, and they shall be interpreted and applied accordingly.
2.
requires:
(1)
In this Act, unless the context otherwise
Interpretation.
"admitted instruments for crowdfunding purposes" shall
have the same meaning as that assigned to it in paragraph (n)
of Article 2(1) of the ECSP Regulation;
"client" shall have the same meaning as that assigned to
it in paragraph (g) of Article 2(1) of the ECSP Regulation;
"competent authority" means the Malta Financial
Services Authority established by the Malta Financial Services
Authority Act;
Cap. 330.
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"crowdfunding offer" shall have the same meaning as
that assigned to it in paragraph (f) of Article 2(1) of the ECSP
Regulation;
"crowdfunding platform" shall have the same meaning
as that assigned to it in paragraph (d) of Article 2(1) of the
ECSP Regulation;
"crowdfunding project" shall have the same meaning as
that assigned to it in paragraph (l) of Article 2(1) of the ECSP
Regulation;
"crowdfunding service provider" shall have the same
meaning as that assigned to it in paragraph (e) of Article 2(1)
of the ECSP Regulation;
"crowdfunding service" shall have the same meaning as
that assigned to it in paragraph (a) of Article 2(1) of the ECSP
Regulation;
"ECSP Regulation" means Regulation (EU) 2020/1503
of the European Parliament and of the Council of 7 October
2020 on European crowdfunding service providers for
business, and amending Regulation (EU) 2017/1129 and
Directive (EU) 2019/1937, 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;
"ESMA" means the European Securities and Markets
Authority, established by Regulation (EU) No 1095/2010 of
the European Parliament and of the Council of 24 November
2010;
"European regulatory authority" means the body or
bodies designated by a Member State or EEA State other than
Malta in accordance with Article 29 of the ECSP Regulation to
carry out the functions and duties provided for in the ECSP
Regulation;
"individual portfolio management of loans" shall have
the same meaning as that assigned to it in paragraph (c) of
Article 2(1) of the ECSP Regulation;
"investor" shall have the same meaning as that assigned
to it in paragraph (i) of Article 2(1) of the ECSP Regulation;
"loan" shall have the same meaning as that assigned to it
in paragraph (b) of Article 2(1) of the ECSP Regulation;
"management body" means the body or bodies of a
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licence holder which are appointed in accordance with national
law and are empowered to set the strategy, objectives and
overall direction of the licence holder, and oversee and
monitor management decision making, and includes the
persons who effectively direct the business of the licence
holder;
"marketing communications" shall have the same
meaning as that assigned to it in paragraph (o) of Article 2(1)
of the ECSP Regulation;
"the Minister" means the Minister responsible for the
regulation of financial services;
"overseas regulatory authority" means an authority in a
country or territory outside Malta that is not a Member State or
EEA State which exercises any regulatory or supervisory
function in relation to financial services corresponding to a
function of the competent authority as defined in the Malta
Financial Services Authority Act;
"project owner" shall have the same meaning as that
assigned to it in paragraph (h) of Article 2(1) of the ECSP
Regulation;
"qualifying shareholding" means a direct or indirect
holding in a company which represents ten per centum (10%)
or more of the share capital or of the voting rights referred to
in Articles 9 and 10 of Directive 2004/109/EC of the European
Parliament and of the Council of the 15 December 2004 on the
harmonization 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 taking into account the conditions regarding the
aggregation thereof laid in that Directive, or which makes it
possible to exercise a significant influence over the
management of the company in which that holding subsists,
and "qualifying shareholder" shall be construed accordingly;
"Regulation (EU) No 1095/2010" means Regulation
(EU) No 1095/2010 of the European Parliament and of the
Council of 24 November 2010 establishing a European
Supervisory Authority (European Securities and Markets
Authority), amending Decision No 716/2009/EC and repealing
Commission Decision 2009/77/EC, 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;
"Rules" means Rules issued by the competent authority
Cap. 330.
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in accordance with this Act;
"transferable securities" shall have the same meaning as
that assigned to it in paragraph (m) of Article 2(1) of the ECSP
Regulation;
Cap. 252.
"working days" means days which shall not include
Saturdays and the days referred to in the National Holidays
and other Public Holidays Act.
(2) Words and expressions used in this Act which are also
used in the ECSP Regulation but which are not defined herein, shall
have the same meaning as that assigned to them in the ECSP
Regulation.
(3) In this Act and in any regulations made hereunder, if
there is any conflict between the English and the Maltese texts, the
English text shall prevail.
Applicability.
Amended by:
XI.2025.45.
3.
The provisions of this Act and any regulations or Rules
issued thereunder shall not apply to:
(a)
crowdfunding services that are provided to
project owners that are consumers, as defined in point (a) of
Article 3 of 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;
(b)
other services related to a crowdfunding service
and that are provided in accordance with national law;
(c)
crowdfunding offers with a consideration of
more than five million euro (€5,000,000), which shall be
calculated over a period of twelve (12) months as the sum of:
(i)
the total consideration of offers of
transferable securities and admitted instruments for
crowdfunding purposes and amounts raised by means of
loans through a crowdfunding platform by a particular
project owner; and
(ii) the total consideration of offers to the
public of transferable securities made by the project
owner referred to in sub-paragraph (i) in its capacity as
an offeror pursuant to the exemption under Article 1(3)
or Article 3(2) of Regulation (EU) 2017/1129 of the
European Parliament and of the Council of 14 June 2017
on the prospectus to be published when securities are
offered to the public or admitted to trading on a
regulated market, and repealing Directive 2003/71/EC.
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4.
(1)
The competent authority shall carry out its
functions under this Act and, in particular, shall ensure compliance
with the provisions of the ECSP Regulation, this Act and any
regulations and Rules issued thereunder.
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Competent
authority.
(2) The competent authority shall also carry out the
functions and duties as competent authority for all purposes of the
ECSP Regulation.
PART II
AUTHORISATION REQUIREMENTS
5.
(1)
Without prejudice to Article 18 of the ECSP
Regulation, no crowdfunding services shall be provided in Malta
unless they are provided by a legal person which is duly authorised by
the competent authority or any European regulatory authority as a
crowdfunding services provider.
Authorisation as a
crowdfunding
service provider.
(2) No legal person established in Malta shall provide, or
hold itself out as providing, crowdfunding services unless it is duly
authorised by the competent authority as a crowdfunding services
provider.
(3) Notwithstanding anything contained in any other law, a
legal person shall not require any authorisation, including a licence
under the Banking Act, any exemption or any dispensation in
connection with the provision of crowdfunding services in the
following situations:
Cap. 371.
(a)
for project owners that in respect of loans
facilitated by the crowdfunding service provider accept funds
from investors; or
(b)
for investors that grant loans to project owners
facilitated by the crowdfunding service provider:
Provided that this sub-article shall not apply where a
crowdfunding service provider, a project owner or an investor is
authorised as a credit institution in accordance with Article 8 of
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 and investment firms,
amending Directive 2002/87/EC and repealing Directives 2006/48/
EC and 2006/49/EC.
6.
(1)
A legal person established in Malta intending to
provide crowdfunding services shall apply to the competent authority
for authorisation as a crowdfunding service provider.
(2) The application referred to in sub-article (1) shall
contain all the information set out in Article 12(2) of the ECSP
Regulation.
Application for
authorisation.
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(3) The competent authority shall, within twenty-five (25)
working days of receipt of the application referred to in sub-article
(1), assess whether that application is complete by verifying that the
information referred to in sub-article (2) has been submitted. Where
the application is not complete, the competent authority shall set a
deadline by which the prospective crowdfunding service provider
shall provide the missing information.
(4) Where an application referred to in sub-article (1)
remains incomplete after the deadline referred to in sub-article (3),
the competent authority may refuse to review the application and, in
the event of such refusal, shall return the submitted documents to the
prospective crowdfunding service provider.
(5) Where an application referred to in sub-article (1) is
complete, the competent authority shall immediately notify the
prospective crowdfunding service provider thereof.
(6) The competent authority shall, within three (3) months
from the date of receipt of a complete application, assess whether the
prospective crowdfunding service provider complies with the
requirements set out in the ECSP Regulation, and in this Act and any
regulations and Rules issued thereunder, and shall adopt a fully
reasoned decision granting or refusing to grant authorisation as a
crowdfunding service provider:
Provided that the assessment to be carried out in terms
of this sub-article shall take into account the nature, scale and
complexity of the crowdfunding services that the prospective
crowdfunding service provider intends to provide.
(7) The competent authority shall notify the prospective
crowdfunding service provider of its decision to grant or refuse to
grant authorisation as a crowdfunding service provider within three
(3) working days of the date of the said decision.
(8) In granting an authorisation under this article, the
competent authority may subject a crowdfunding service provider to
such conditions as it may deem appropriate and having granted such
an authorisation, it may, from time to time, vary or revoke any
condition so imposed or impose new conditions.
(9) The competent authority shall establish a register of all
holders of an authorisation as a crowdfunding service provider which
shall be publicly available. This register shall also specify the
crowdfunding services which every crowdfunding service provider is
authorised to provide and shall be updated on a regular basis.
Scope of
authorisation.
7.
(1)
An authorisation as a crowdfunding service
provider granted by the competent authority in terms of article 6 shall
specify the crowdfunding services which the crowdfunding service
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provider is authorised to provide.
(2) A crowdfunding service provider intending to extend its
business to additional crowdfunding services not foreseen at the time
of the authorisation granted to it under article 6 shall submit a request
for the extension of its authorisation to the competent authority by
complementing and updating the information referred to in article
6(2):
Provided that a request for the extension of an
authorisation made in terms of this sub-article shall be processed in
accordance with Article 12(4) to (11) of the ECSP Regulation.
8.
(1)
The competent authority may refuse to grant
authorisation as a crowdfunding service provider if there are
objective and demonstrable grounds for believing that the
management body of the prospective crowdfunding service provider
may pose a threat to its effective, sound and prudent management and
business continuity, and to the adequate consideration of the interest
of its clients and the integrity of the market.
Refusal of
authorisation.
(2) Without prejudice to sub-article (1), the competent
authority shall not grant an authorisation as a crowdfunding service
provider unless:
(a)
it is satisfied that the applicant complies with the
requirements set out in the ECSP Regulation, and in this Act
and any regulations and Rules issued thereunder;
(b)
it is satisfied that the applicant and its qualifying
shareholders, members, directors and officers are fit and
proper persons to provide crowdfunding services;
(c)
without prejudice to paragraph (b), it is satisfied
that the members of the management body of the applicant are
of sufficiently good repute, possess sufficient knowledge,
skills and experience and commit sufficient time to perform
their functions as such with the applicant; and
(d)
the applicant has its registered office and, or its
head office in Malta.
9.
(1)
The competent authority may at any time
withdraw an authorisation granted under article 6 if:
(a)
the crowdfunding service provider has not used
its authorisation within eighteen (18) months of the date of
granting of the authorisation;
(b)
the crowdfunding service provider has expressly
renounced its authorisation;
Withdrawal of
authorisation.
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(c)
the crowdfunding service provider has not
provided crowdfunding services for nine (9) successive
months and is also no longer involved in the administration of
existing contracts that are the result of initial matching of
business funding interests through the use of its crowdfunding
platform;
(d)
the crowdfunding service provider has obtained
its authorisation by irregular means, including making false
statements in its application for authorisation;
(e)
the crowdfunding service provider no longer
meets the conditions under which the authorisation was
granted or in any other circumstances where the competent
authority would have been precluded from issuing an
authorisation, or entitled to refuse to grant such authorisation,
under the ECSP Regulation or this Act;
(f)
the crowdfunding service provider has seriously
infringed any provisions of the ECSP Regulation, this Act and,
or any regulations or Rules issued thereunder;
(g)
the competent authority has been furnished by or
on behalf of the crowdfunding service provider with
information which is false, inaccurate or misleading;
(h)
the competent authority considers it desirable to
withdraw the authorisation of the crowdfunding service
provider for the protection of investors and the general public,
and the reputation of Malta taking into account Malta’s
international commitments; and, or
(i)
the crowdfunding service provider is either
declared bankrupt, or goes into liquidation, or makes a
composition with its creditors, or is otherwise dissolved.
(2) Without prejudice to sub-article (1), the competent
authority may at any time withdraw an authorisation granted under
article 6:
Cap. 376.
(a)
where the crowdfunding service provider is also
a payment service provider as defined in article 2(1) of the
Financial Institutions Act and it, or its managers, employees or
third parties acting on its behalf, have infringed the provisions
of 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 transposed
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in national law, in respect of money laundering or terrorist
financing; or
(b)
where the crowdfunding service provider or a
third party acting on its behalf has its licence allowing for the
provision of payment services as defined in article 2(1) of the
Financial Institutions Act or investment services as defined in
article 2(1) of the Investment Services Act has been withdrawn
or cancelled, as applicable, and that crowdfunding service
provider or third party has failed to remedy the situation within
forty (40) calendar days.
Cap. 376.
Cap. 370.
10.
Notification of
proposed refusal,
variation, or
withdrawal of an
authorisation.
(1)
Where the competent authority proposes to:
(a)
refuse an application for authorisation as a
crowdfunding service provider or to withdraw the
authorisation of a crowdfunding service provider; or
(b)
vary any condition to which the licence is
subject or to impose a condition thereon,
it shall give the prospective crowdfunding service provider or the
crowdfunding service provider, as applicable, notice in writing of its
intention to do so, while setting out the reasons for the decision it
proposes to take.
(2) Every notice given under sub-article (1) shall state that
the recipient of the notice may, within such reasonable period after
the service thereof as may be stated in the notice, make
representations in writing to the competent authority giving reasons
why the proposed decision should not be taken, and the competent
authority shall consider any representation so made before arriving at
a final decision.
(3) Subject to the provisions of article 6, the competent
authority shall as soon as practicable notify its final decision in
writing to any of the persons to whom notice is to be given under subarticle (1).
11. (1)
Where a crowdfunding service provider
authorised under this Act intends to provide crowdfunding services in
a Member State or EEA State other than Malta, it shall submit to the
competent authority the following information:
(a)
a list of the Member States and, or EEA States in
which the crowdfunding service provider intends to provide
crowdfunding services;
(b)
the identity of the natural and legal persons
responsible for the provision of the crowdfunding services in
those Member States and, or EEA States;
Cross-border
provision of
crowdfunding
services.
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(c)
the starting date of the intended provision of the
crowdfunding services by the crowdfunding service provider;
and
(d)
a list of any other activities provided by the
crowdfunding service provider not covered by the ECSP
Regulation.
(2) The competent authority shall, within ten (10) working
days of receipt of the information referred to in sub-article (1),
communicate that information to the European regulatory authority
of the Member States and, or EEA States in which the crowdfunding
service provider intends to provide crowdfunding services as referred
to in sub-article (1).
(3) The competent authority shall thereafter inform without
delay the crowdfunding service provider of the communication
referred to in sub-article (2).
PART III
ONGOING OBLIGATIONS
Changes in
information.
12. A crowdfunding service provider, or any person having
responsibility for the day to day administration or management of
such crowdfunding service provider, shall provide the competent
authority with details of any changes in the information provided
under the ECSP Regulation, this Act, or any regulations or Rules
issued thereunder as soon as such crowdfunding service provider or
such person becomes aware of such changes.
Responsibility for
the key investment
information sheet.
13. (1)
The project owner or the members of its
administrative, management or supervisory bodies, as the case may
be, shall be responsible for the information to be provided in the key
investment information sheet in terms of Article 23 of the ECSP
Regulation and the translation of the said information.
(2) Without prejudice to the generality of sub-article (1), the
persons referred to in the said sub-article shall ensure that:
(a)
the information to be provided in the key
investment information sheet is not false, misleading or
inaccurate; and
(b)
the key investment information sheet does not
omit key information needed to aid investors when
considering whether to finance the crowdfunding project.
Responsibility for
the key investment
information sheet
at platform level.
14. (1)
The crowdfunding service provider shall be
responsible for the information to be provided in the key investment
information sheet at platform level in terms of Article 24 of the ECSP
Regulation and the translation of the said information.
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(2) Without prejudice to the generality of sub-article (1), the
persons referred to in the said sub-article shall ensure that:
(a)
the information to be provided in the key
investment information sheet is not false, misleading or
inaccurate; and
(b)
the key investment information sheet at platform
level does not omit key information needed to aid investors
when considering whether to invest through individual
portfolio management of loans.
15. Where a crowdfunding service provider disseminates, in
terms of Article 27 of the ECSP Regulation, marketing
communications about its services, it shall comply with relevant
requirements as may be specified in Rules issued for these purposes.
Marketing
communica-tions.
PART IV
REGULATORY AND INVESTIGATORY POWERS
16. (1)
The Minister, acting on the advice of the
competent authority, may make regulations to give effect to the
provisions of this Act, and without prejudice to the generality of the
foregoing may, by such regulations, in particular, do any of the
following:
(a)
provide for and regulate the payment by any
person or body, as the case may be, of authorisation or other
fees and such other charges payable to the competent authority
in respect of any matter provided for, by or under this Act or
any regulations made under this article, as may be prescribed;
(b)
exempt any person, service or activity from any
one or more of the provisions of this Act, subject to such
variations, additions, adaptations and modifications as may be
prescribed and subject to such conditions or other
requirements, including other forms of authorisation and
notification procedures, as may be prescribed;
(c)
transpose, implement and give effect to the
provisions and requirements of the ECSP Regulation;
(d)
transpose, implement and give effect to the
provisions and requirements of European Union Directives,
European Union 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 to authorised persons and
others as may be specified therein; regulations made under this
paragraph, and strictly related to transposition or
Minister’s power
to make
regulations.
Amended by:
XI.2025.46.
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implementation as aforesaid, may provide that any provision
of this Act or of any other law shall not apply to matters falling
under the regulations, and that in so far as any of the
provisions of the regulations are inconsistent with the
provisions of this Act or of any other law, such provisions in
any such regulations shall prevail;
(e)
assign powers and functions to the competent
authority for the purposes of this Act;
(f)
to provide for the exercise of powers and the
performance of functions assigned to the competent authority
under this Act;
(g)
provide for any matter relating to the operation
of a contingency fund which may be established by a
crowdfunding service provider for its activity related to the
individual portfolio management of loans;
(h)
prescribed;
prescribe anything that is to be or which may be
(i)
provide for and regulate the payment by any
person of authorisation or other fees and such other charges
payable to the competent authority in respect of any matter
provided for, by or under the ECSP Regulation, this Act or any
regulations made or Rules issued thereunder, 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 the ECSP
Regulation, this Act or any regulations made or Rules issued
thereunder, as may be prescribed;
(j)
provide for the establishment and imposition of
administrative penalties and other administrative measures on
crowdfunding service providers or others as may be specified
therein;
(k)
prescribe that a breach of any regulations made
under this Act may amount to a criminal offence as may be
specified, and such regulations may impose punishments in
respect of any breach, consisting of a fine (multa) not
exceeding five hundred thousand euro (€500,000) or
imprisonment for a term not exceeding three (3) years or both
such fine and imprisonment in the case of a natural person; and
a fine (multa) not exceeding eight hundred thousand euro
(€800,000) in the case of a legal person; and a higher fine
(multa) may be imposed on such natural or legal person, as the
case may be, where deemed necessary or appropriate for any
breach or failure of compliance with any EU Directive or EU
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Regulation or with any regulations made under this article to
transpose or to give effect to any EU Directive or EU
Regulation; and
(l)
provide for any matter incidental to or connected
with any of the above.
(2) Regulations made under this article may be made
subject to such exemptions or conditions as may be specified therein,
may make different provisions for different cases, circumstances or
purposes and may also grant to the competent authority such powers
of adaptation of the regulations as may also be so specified.
(3) Where regulations have been made in terms of this
article, the competent authority may issue Rules for the better
carrying out of, and implementation of the provisions of the
regulations.
(4) Regulations made under this Act and any amendment or
revocation of such regulations, may be published in the English
language only.
(5) The exercise of any of the powers assigned under this
article shall be subject to any obligations or rights arising from
Malta’s international commitments.
17. (1)
The competent authority may, from time to time,
issue and publish Rules which shall be binding on all persons
authorised by it or falling under its regulatory or supervisory
functions and others as may be specified therein.
(2) Without prejudice to the generality of sub-article (1),
Rules issued by the competent authority may:
(a)
lay down additional requirements and conditions
in relation to persons authorised by it, seeking its approval, or
falling under the regulatory or supervisory functions of the
competent authority, their activities, the conduct of their
business, their relations with customers, the public and other
parties, their responsibilities to the competent authority,
reporting requirements, financial and other resources, and
related requirements, and any other matters as the competent
authority may consider appropriate;
(b)
provide for the statements and notices that shall
be made or given for any purposes in regard to which the
competent authority exercises supervisory or regulatory
functions, and the form and contents thereof;
(c)
prescribe the information that such persons are
to submit to the competent authority;
Power to issue
Rules.
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(d)
transpose, implement and give effect to the
provisions and requirements of the ECSP Regulation;
(e)
transpose, implement and give effect to the
provisions and requirements of European Union Directives,
European Union 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 to authorised persons and
others as may be specified therein; and, or
(f)
regulate any matter that is incidental to or
connected with any of the matters mentioned above as the
competent authority may consider appropriate in the
performance of its functions.
(3) Rules may be made subject to such exemptions or
conditions as may be specified therein, may make different provision
for different cases, circumstances or purposes and may grant to the
competent authority such powers of adaptation of the Rules, as may
also be so specified.
Powers of the
competent
authority.
Amended by:
XI.2025.47.
18. (1)
Without prejudice to any other powers conferred
to it by this Act or any other law, the competent authority shall have
the following powers:
(a)
to suspend a crowdfunding offer for a maximum
of ten (10) consecutive working days on any single occasion
where there are reasonable grounds for suspecting that any of
the provisions of the ECSP Regulation, this Act and any
regulations or Rules issued thereunder have been infringed;
(b)
to
prohibit
or
suspend
marketing
communications, or to require a crowdfunding service
provider or a third party designated to perform functions in
relation to the provision of crowdfunding services to cease or
suspend marketing communications, for a maximum of ten
(10) consecutive working days on any single occasion where
there are reasonable grounds for believing that any of the
provisions of the ECSP Regulation, this Act and any
regulations or Rules issued thereunder have been infringed;
(c)
to prohibit a crowdfunding offer where the
competent authority finds that any of the provisions of the
ECSP Regulation, this Act or any regulations made or Rules
issued thereunder have been infringed or where there are
reasonable grounds for suspecting that they would be infringed;
(d)
to suspend, or to require a crowdfunding service
provider to suspend, the provision of crowdfunding services
CROWDFUNDING SERVICE PROVIDERS
[ CAP. 637.
for a maximum of ten (10) consecutive working days on any
single occasion where there are reasonable grounds for
believing that any of the provisions of the ECSP Regulation,
this Act and any regulations or Rules issued thereunder have
been infringed;
(e)
to prohibit the provision of crowdfunding
services where the competent authority finds that any of the
provisions of the ECSP Regulation, this Act and any
regulations or Rules issued thereunder have been infringed;
(f)
to make public the fact that a crowdfunding
service provider or a third party designated to perform
functions in relation to the provision of crowdfunding services
is failing to comply with its obligations;
(g)
to disclose, or to require a crowdfunding service
provider or a third party designated to perform functions in
relation to the provision of crowdfunding services to disclose,
all material information which may have an effect on the
provision of the crowdfunding service in order to ensure
investor protection or the smooth operation of the market;
(h)
to suspend, or to require a crowdfunding service
provider or a third party designated to perform functions in
relation to the provision of crowdfunding services to suspend,
the provision of crowdfunding services where the competent
authority considers that the crowdfunding service provider’s
situation is such that the provision of the crowdfunding service
would be detrimental to investors’ interests;
(i)
to transfer existing contracts to another
crowdfunding service provider in cases where a crowdfunding
service provider’s authorisation is withdrawn in accordance
with article 9(1)(c), subject to the agreement of the clients and
the receiving crowdfunding service provider:
Provided that the crowdfunding service provider
to which the existing contracts are transferred in accordance
with this paragraph shall be authorised by the competent
authority to provide crowdfunding services; and, or
(j)
to make an application to the court for the
dissolution and winding up by the court of a crowdfunding
service provider where it appears to the competent authority
that a crowdfunding service provider should be dissolved and
wound up by the court for the reason set out in article
214(2)(b)(iii) of the Companies Act, and where the court
accedes to the application the relevant provisions of the
Companies Act in relation to the dissolution and winding up
by the court and any other applicable provisions of any other
Cap. 386.
15
16
[ CAP. 637.
CROWDFUNDING SERVICE PROVIDERS
law shall apply.
(2) Any measures adopted in exercise of the powers of the
competent authority under this article shall be proportionate, duly
justified and taken in accordance with article 24.
Power to require
information.
19. (1)
writing, require:
The competent authority may, by notice in
(i)
any person who is or was providing, or who
appears to be or to have been providing crowdfunding
services, and third parties designated to perform functions in
relation to the provision of crowdfunding services, and the
natural or legal persons that control them or are controlled by
them;
(ii)
the auditors and managers of crowdfunding
service providers and third parties designated to perform
functions in relation to the provision of crowdfunding
services; and, or
(iii)
any other person who appears to be in possession
of relevant information,
to do all or any of the following:
(a)
to furnish to the competent authority, at such
time and place and in such form as it may specify, such
information and documentation as it may require, including
the power to require existing telephone and existing data
traffic records;
(b)
to furnish to the competent authority any
information or documentation as it may require verified in
such manner as it may specify;
(c)
to attend before the competent authority, or
before a person appointed by it, at such time and place as it
may specify, to answer questions and provide such information
and documentation as it may require;
(d)
to give the competent authority any assistance
which it may require and which that person is reasonably able
to give.
(2) A natural or legal person making the information
available to the competent authority in accordance with this article
shall not be considered to be infringing any restriction on disclosure
of information imposed by contract or by any legislative, regulatory
or administrative provision, and shall not be subject to liability of any
kind related to the provision of such information.
CROWDFUNDING SERVICE PROVIDERS
[ CAP. 637.
17
(3) The competent authority may take copies of any
documents furnished, provided or to which it has access under this
article.
(4) Where the person required to provide information or
documentation under this article does not have the relevant
information or documentation, he shall disclose to the competent
authority where, to the best of his knowledge, that information or
documentation is found, and the competent authority may require any
person, whether indicated as aforesaid or not, who appears to it to be
in possession of that information or documentation, to provide it.
(5) A statement made and documentation provided in
pursuance of any requirement under this article may be used in
evidence against the person making the statement or providing the
documentation as well as against any person to whom they relate.
(6) The provisions of this article shall not apply to
information or documentation which is privileged in accordance with
the provisions of article 642(1) of the Criminal Code.
Cap. 9.
(7) Where the competent authority has appointed a person
under sub-article (1)(c), such person shall, for the purposes of
carrying out his functions under his appointment, have all the powers
conferred on the competent authority by this article and a
requirement imposed by him shall be deemed to be and have the same
force and effect as a requirement of the competent authority.
20. (1)
The competent authority may, whenever it
deems it necessary or expedient, appoint an inspector to investigate
and report on the affairs of any persons referred to in article 19(1)(i)
to (iii).
(2)
An inspector appointed under sub-article (1):
(a)
may, if he thinks it necessary or expedient for the
purposes of an investigation, investigate the affairs of any
person mentioned in sub-article (1);
(b)
shall have and may exercise all the powers
conferred on the competent authority by article 18, and any
requirement made by him shall be deemed to be and have the
same force and effect as a requirement of the competent
authority;
(c)
may, and if so directed by the competent
authority shall, make interim reports and on the conclusion of
his investigation shall make a final report to the competent
authority.
(3) In appointing an inspector under sub-article (1), the
competent authority may direct that the investigation shall be carried
Power to appoint
inspectors.
18
[ CAP. 637.
CROWDFUNDING SERVICE PROVIDERS
out within such time and shall be confined to such specific or general
matters as the competent authority may deem fit.
Cap. 281.
(4) For the purposes of this article, inspectors may include
an advocate, a person authorised to carry on the profession of
accountant or auditor in terms of the Accountancy Profession Act, or
a person considered by the competent authority as possessing suitable
expertise to exercise such function.
(5) The competent authority shall have the power to order
that all expenses of, and incidental to, an investigation carried out
pursuant to this article be paid by the person referred to in sub-article
(1).
Right of entry.
21. (1)
Any officer, employee or agent of the competent
authority, on producing, if required, evidence of his authority, shall
have the power to enter any premises occupied by a person on whom
a notice has been served in terms of article 19 or whose affairs are
being investigated in terms of article 20, for the purpose of obtaining
therefrom the information or documents required by that notice, or
otherwise for the purpose of carrying out on-site inspections or
investigations, and of exercising any of the powers conferred by the
said articles.
(2) Where any officer, employee or agent of the competent
authority has cause to believe that if such notice as is referred to in
sub-article (1) were served, it would not be complied with or that any
documents to which it could relate would be removed, tampered with
or destroyed, such officer, employee or agent shall have the power, on
producing, if required, evidence of his authority, to enter any
premises referred to in sub-article (1) for the purpose of obtaining
therefrom any information or documents specified in the authority,
being information or documents that could have been required under
such notice as is referred to in sub-article (1).
(3) For the purposes of any action taken under the
provisions of this article, the competent authority may request the
assistance of the Commissioner of Police, who may for such purpose
exercise such powers as are vested in him by law.
Power to issue
directives.
22. (1)
Without prejudice to any other powers conferred
to it by this Act or any other law, the competent authority may,
whenever it deems it necessary, give by notice in writing, such
directives as it may deem appropriate in the circumstances; and any
person to whom, or to which the notice is given shall obey, comply
with and otherwise give effect to any such directive within the time
and in the manner stated in the directive or subsequent directives:
Provided that the competent authority may give any
such directive even where a licence holder, for whatever reason,
ceases to hold a licence granted in terms of this Act:
CROWDFUNDING SERVICE PROVIDERS
[ CAP. 637.
19
Provided further that any directive given in terms of this
article shall, unless the competent authority otherwise directs,
continue to apply even when a licence holder, for whatever reason,
ceases to hold a licence granted in terms of this Act.
(2) The power to issue directives under this article shall also
include the power to vary, alter, add to or withdraw any directive, as
well as the power to issue subsequent new directives.
(3) Where the competent authority is satisfied that the
circumstances so warrant, it may at any time make public any
directive it has given in accordance with this article.
23. (1)
The competent authority may impose
administrative penalties and other administrative measures as
mentioned in sub-article (2), where it considers that:
(a)
a person’s conduct amounts to an infringement
of any of the provisions of the ECSP Regulation, this Act or
any regulations or Rules issued thereunder; or
(b)
a person has contravened or failed to comply
with any condition, obligation, requirement or directives made
or given by the competent authority under any of the
provisions of the ECSP Regulation, this Act or any regulations
or Rules issued thereunder, including failure to co-operate
with an investigation or an inspection or any request made by
the competent authority under article 19.
(2) The competent authority shall have the power to impose
the following administrative penalties and other administrative
measures for the infringements indicated in sub-article (1):
(a)
a public statement indicating the natural or legal
person responsible for the infringement, and the nature of such
infringement;
(b)
an order requiring the natural or legal person to
cease the conduct constituting the infringement and to desist
from a repetition of that conduct;
(c)
a ban preventing any member of the
management body of the legal person responsible for the
infringement, or any other natural person held responsible for
the infringement, from exercising management functions in
crowdfunding service providers;
(d)
administrative penalties which shall not exceed
twice the amount of the benefit derived from the infringement
where that benefit can be determined, even if it exceeds the
maximum amounts set out in paragraph (e);
Administrative
penalties and other
measures.
20
[ CAP. 637.
CROWDFUNDING SERVICE PROVIDERS
(e)
in the case of a legal person, administrative
penalties which shall not exceed five hundred thousand euro
(€500,000), or of up to five per centum (5%) of the total
annual turnover of that legal person according to the last
available financial statements approved by the management
body:
Provided that where the legal person is a parent
undertaking or a subsidiary of a parent undertaking which is
required to prepare consolidated financial statements in
accordance with 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, the relevant total annual turnover shall be the total
annual turnover or the corresponding type of income in
accordance with the relevant Union law in the area of
accounting according to the last available consolidated
financial statements approved by the management body of the
ultimate parent undertaking;
(f)
in the case of a natural person, administrative
penalties which shall not exceed five hundred thousand euro
(€500,000).
(3) Administrative penalties that may be imposed by the
competent authority in accordance with this article, may be imposed
in the form of a fixed penalty, a daily penalty, or both.
(4) Administrative penalties and other administrative
measures taken by the competent authority in terms of this article
shall be effective, proportionate, dissuasive and duly justified.
Cap. 330.
(5) The provisions of article 16(4) of the Malta Financial
Services Authority Act shall apply mutatis mutandis with respect to
any administrative penalty imposed by the competent authority under
this article.
(6) Without prejudice to the provisions of this article, where
obligations imposed in terms of the ECSP Regulation, this Act or any
regulations or Rules issued thereunder, apply to a legal person, in the
event of an infringement of any provision thereof, administrative
penalties and other measures may also be imposed, subject to the
conditions laid down in national law, on the members of the
administrative, management or supervisory bodies of the legal entity
concerned, and on other individuals who are responsible for the
infringement under national law.
(7)
The imposition by the competent authority of an
CROWDFUNDING SERVICE PROVIDERS
[ CAP. 637.
21
administrative penalty or any other administrative measure in terms
of this article shall be without prejudice to any other consequence
emanating from the act or omission of the offender in terms of civil
or criminal law:
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.
24. In the case of administrative penalties or other measures
imposed by the competent authority in accordance with the
provisions of this Act, the competent authority shall take into account
the extent to which the infringement is intentional or results from
negligence and all other relevant circumstances, including, where
appropriate:
(a)
Relevant
circumstances.
the gravity and the duration of the infringement;
(b)
the degree of responsibility of the natural or
legal person responsible for the infringement;
(c)
the financial strength of the natural or legal
person responsible for the infringement, as indicated by the
total turnover of the responsible legal person or the annual
income and net assets of the responsible natural person;
(d)
the importance of profits gained or losses
avoided by the natural or legal person responsible for the
infringement, insofar as these can be determined;
(e)
the losses for third parties caused by the
infringement, insofar as these can be determined;
(f)
the level of cooperation of the natural or legal
person responsible for the infringement with the competent
authority, without prejudice to the need to ensure
disgorgement of profits gained or losses avoided by that
person;
(g)
previous infringements by the natural or legal
person responsible for the infringement; and
(h)
interests.
the impact of the infringement on investors’
25. (1)
If the competent authority proposes to impose an
administrative penalty or any other measure on any person under
article 23, it shall give such person a notice in writing of its intention
to do so, setting out the reasons for the decision it proposes to take.
Notice of
administrative
penalties and other
measures.
22
[ CAP. 637.
CROWDFUNDING SERVICE PROVIDERS
(2) Every notice given under sub-article (1) shall specify
that the recipient of the notice may, within such reasonable period
after the service thereof, as may be specified in the notice, make
representations in writing to the competent authority giving reasons
why the proposed decision should not be taken, and the competent
authority shall consider any representation so made before arriving at
a final decision.
(3) The competent authority shall as soon as practicable,
notify its final decision in writing to any person to whom notice is to
be given under sub-article (1).
Publication of
decisions.
Amended by:
XI.2025.48.
26. (1)
The competent authority shall publish any
decision imposing an administrative penalty or any other measure, in
accordance with the provisions of the ECSP Regulation, this Act or
any regulations or Rules issued thereunder, on its website
immediately after the person subject to that decision has been
informed of that decision.
(2) The information published pursuant to sub-article (1)
shall specify the type and nature of the breach, the identity of the
person subject to the decision and any other information which the
competent authority deems relevant.
(3) The provisions of sub-articles (1) and (2) shall not apply
to decisions of the competent authority imposing measures that are of
an investigatory nature.
(4) Where the competent authority considers, following a
case-by-case assessment, that the publication of the identity of the
legal person subject to the decision, or the identity or personal data of
a natural person, would be disproportionate, or where such
publication may jeopardise an ongoing investigation, the competent
authority shall:
(a)
defer the publication of the decision to impose a
penalty or a measure until the moment where the reasons for
non publication cease to exist;
(b)
publish the decision to impose a penalty or a
measure on an anonymous basis in a manner which is in
conformity with national law, where such anonymous
publication ensures an effective protection of the personal data
concerned:
Provided that, in this case, the publication of the
relevant data may be deferred for a reasonable period where it
is foreseen that within that period the reasons for anonymous
publication shall cease to exist;
(c)
not publish the decision to impose a penalty or
CROWDFUNDING SERVICE PROVIDERS
[ CAP. 637.
23
measure in the event that the options laid down in paragraphs
(a) and (b) are considered to be insufficient to ensure the
proportionality of the publication of such a decision with
regard to measures which are deemed to be of a minor nature.
(5) Where the decision is subject to an appeal before a
national judicial, administrative or other authority, the competent
authority shall also publish immediately on its website such
information and any subsequent information on the outcome of such
an appeal. Any decision annulling a decision of the competent
authority to impose an administrative penalty or any other
administrative measure shall also be published.
(6) Any decision that is published in accordance with this
article shall remain accessible on the website of the competent
authority for a period of at least five (5) years after its publication:
Provided that personal data contained in any such
decision shall be retained on the website of the competent authority
only for the period which is necessary, in accordance with the
applicable data protection legislation.
PART V
COOPERATION WITH OTHER AUTHORITIES
27. (1)
The competent authority shall act as the contact
point in terms of and for the purposes of Article 29(2) of the ECSP
Regulation.
(2) The competent authority shall cooperate with other
European regulatory authorities whenever necessary for the purpose
of carrying out its duties and exercising its powers under the ECSP
Regulation. It shall render the necessary assistance to other European
regulatory authorities, in particular by exchanging information and
cooperating in any investigatory, supervisory or enforcement activity.
(3) A European regulatory authority may request
information from the competent authority, in which case the
competent authority shall, without undue delay, provide the requested
information required for the purposes of the ECSP Regulation:
Provided that if the competent authority is not able to
supply the required information immediately, it shall notify the
requesting European regulatory authority of the reasons.
(4) A European regulatory authority may request the
cooperation of the competent authority in carrying out its supervisory
functions or for an on-site verification or in an investigation, in which
case the competent authority shall, within the framework of its
powers:
(a)
carry out the on-site inspection or investigation
Cooperation with
European
regulatory
authorities.
24
[ CAP. 637.
CROWDFUNDING SERVICE PROVIDERS
itself;
(b)
allow the European regulatory authority which
submitted the request to participate in an on-site inspection or
investigation;
(c)
allow the European regulatory authority which
submitted the request to carry out the on-site inspection or
investigation itself;
(d)
appoint auditors or experts to carry out the onsite inspection or investigation; or
(e)
share specific tasks related to supervisory
activities with other competent authorities.
(5) Notwithstanding the foregoing provisions, the
competent authority may refuse to act on a request for information or
a request to cooperate with an investigation made by a European
regulatory authority in any of the following circumstances:
(a)
where complying with the request is likely to
adversely affect its own investigation, enforcement activities
or a criminal investigation;
(b)
where judicial proceedings have already been
initiated in respect of the same actions and against the same
natural or legal persons before the authorities of Malta; or
(c)
where a final judgment has already been
delivered in relation to such natural or legal persons for the
same actions in Malta.
(6) Where the competent authority finds that any of the
requirements under the ECSP Regulation have not been satisfied or
has reason to believe that to be the case, it shall inform the European
regulatory authority of the entity or entities suspected of such
infringement of its findings in a detailed manner.
Precautionary
measures.
28. (1)
Where a crowdfunding service provider provides
crowdfunding services in Malta, the competent authority shall, where
it has clear and demonstrable grounds for believing that irregularities
have been committed by the crowdfunding service provider or by
third parties designated to perform functions in relation to the
provision of crowdfunding services or that the crowdfunding service
provider or third parties have infringed their obligations under the
ECSP Regulation, notify the European regulatory authority which
granted authorisation to the crowdfunding service provider and
ESMA of such irregularities or infringements.
(2) Where, despite the measures taken by the European
regulatory authority referred to in sub-article (1), the crowdfunding
CROWDFUNDING SERVICE PROVIDERS
[ CAP. 637.
25
service provider or third party designated to perform functions in
relation to the provision of crowdfunding services persists in
infringing the ECSP Regulation, the competent authority shall, after
informing the said European regulatory authority and ESMA, take all
appropriate measures in order to protect investors and shall inform
the European Commission and ESMA of such measures without
undue delay.
29. (1)
The competent authority shall cooperate with
ESMA for the purposes of the ECSP Regulation in accordance with
Regulation (EU) No 1095/2010.
Cooperation with
ESMA.
(2) In the case of an on-site inspection or investigation with
cross-border effect, the competent authority may request ESMA to
coordinate the inspection or investigation, as the case may be.
(3) The competent authority shall without delay provide
ESMA with all information necessary to carry out its duties, in
accordance with Article 35 of Regulation (EU) No 1095/2010.
30. Where a crowdfunding service provider engages in
activities other than crowdfunding services, the competent authority
shall cooperate with the authorities responsible for overseeing such
other activities as provided for in the relevant European Union
legislation or national law, as applicable.
Cooperation with
other authorities.
PART VI
APPEALS, SANCTIONS AND CONFIDENTIALITY
31. (1)
In this article the Financial Services Tribunal
means the Tribunal established under article 21 of the Malta
Financial Services Authority Act.
Appeals.
Cap. 330.
(2) Any person who is aggrieved by a decision of the
competent authority under the ECSP Regulation or this Act, or any
regulations or Rules issued thereunder, may appeal against such
decision to the Tribunal within such period and under such conditions
as are established under article 21 of the Malta Financial Services
Authority Act.
Cap. 330.
(3) Without prejudice to sub-article (2), any person who is
aggrieved by the competent authority’s failure to take a decision in
respect of an application for authorisation to act as a crowdfunding
service provider which contains all the information required under
the provisions in force within six (6) months of its submission, may
appeal against such failure to decide to the Tribunal within such
period and under such conditions as are established in terms of article
21 of the Malta Financial Services Authority Act.
Cap. 330.
(4) An appeal against a decision of the competent authority
shall not suspend the operation of that decision:
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CROWDFUNDING SERVICE PROVIDERS
Provided that a decision of the competent authority to
withdraw the authorisation of a crowdfunding service provider shall
not become operative until the expiration of the period within which
an appeal lies under this article and, if an appeal is filed within such
period, the decision shall become operative on the date of the
decision of the Tribunal dismissing the appeal or on the date on
which the appeal is abandoned.
Cap. 330.
(5) Subject to the provisions of this article, the provisions of
article 21 of the Malta Financial Services Authority Act shall apply
mutatis mutandis to appeals that may be brought before the Tribunal
under this article.
Offences.
Amended by:
XI.2025.49.
32. (1)
Any person who contravenes or fails to comply
with any of the provisions of articles 5(1), 5(2), 19(1), 19(4), 22(1) or
34(1), or of article 19(1) or 19(4) as applied by article 20, or
contravenes or fails to comply with any condition, obligation,
requirement, directive or order made or given under any of the
provisions of the ECSP Regulation or this Act, or under any
regulations made under this Act, shall be guilty of an offence.
(2) Any person who for the purposes of, or pursuant to, any
of the provisions of the ECSP Regulation, …
AI explanation based on the official legal text. Indicative, not a substitute for legal advice.