EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 18 May 2011 
on various amendments to the Central Bank of Malta Act 
(CON/2011/43) 
 Introduction and legal basis
 
On 18 April 2011, the European Central Bank (ECB) received a request from the Central Bank of Malta 
(hereinafter ‘CBM’) for an opinion on draft amendments to the Central Bank of Malta Act1 (hereinafter 
the ‘draft amendments’). 
The ECB’s competence to deliver an  opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third, four th and fifth indents of Article 2(1) of Council 
Decision 98/415/EC of 29 June 1998  on the consultation of the E CB by national authorities regarding 
draft legislative provisions2, as the draft amendments concern the Central Bank of Malta, statistics and 
payment systems. In accordance with  the first sentence of Article 17.5 of the Rules of Procedure of the 
ECB, the Governing Council has adopted this opinion. 
 1.  Purpose of the draft amendments 
1.1 According to the consultation request recei ved from the CBM, the Central Bank of Malta Act 
(hereinafter the ‘CBM Act’) is being amended primarily to better regulate the collection of 
information, to allocate a general enabling power  to the CBM to regulate payments and payment 
services and to appoint the CBM as the competen t authority in terms of Regulation (EC) 
No 924/2009 of the European Parliament and of  the Council of 16 September 2009 on cross-border 
payments in the Community and repealing Regulation (EC) No 2560/2001
3. Other amendments 
relate to the authenticity and fitness checking of euro banknotes and coins. 
1.2 In that context, the draft amendments also include three enabling provisions empowering the CBM 
to issue, amend or revoke directives (a) in the c ontext of payment services (article 34A(1)); (b) on 
limitations on cash payments (article 43A); a nd (c) on the authenticity and fitness checking of 
currency notes and coins (article 50A). 
                                                 
1  Cap. 2014 of the Laws of Malta. 
2 OJ L 189, 3.7.1998, p. 42.  
3 OJ L 266, 9.10.2009, p. 11. 
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2 1.3 The draft amendments also propose deleting ar ticle 24 of the CBM Act on the collection of 
statistical information and propose a new article  23 on the collection of statistical and other 
information which will reorganise, update and merge articles 23 and 24. 
1.4 Finally, the draft amendments also fine-tune definitions, include refe rences to the Treaty of Lisbon, 
reorganise provisions and delete unnecessary articles. 
 2. General observations 2.1 The ECB welcomes the proposed insertion of a new article 18 into the CBM Act on the transfer of 
data or information. The ECB encourages measu res promoting the exchange and transfer of 
information, including information subject to confidentiality and professional secrecy 
requirements, between the key public authorities in th e financial markets, as well as the sharing of 
such information with decision-making bodies. In  this regard, the ECB welcomes the aim of 
ensuring the transferability without any restriction or  limitation of data or information within the 
CBM and/or between the CBM and other persons or entities. 
2.2 Without prejudice to the specific observations in  Section 3 below, the ECB however questions the 
need to include both a general provision on th e CBM’s powers to issue, amend and revoke 
directives and separate individual enabling provisi ons conferring such powers on the CBM with 
regard to specific areas. 
 3.  Statistics 3.1 The ECB welcomes the proposed new article 23 on the collection of statistical and other 
information since it also clarifies further the dut ies of the CBM in the field of statistics and 
encompasses the collection of statistical and other information in order to assist the ECB in the 
performance of the ESCB’s tasks.  
3.2 The ECB also notes the proposed deletion of the re ference to ‘reporting agent’ and the detailed and 
exhaustive definition thereof in article 23(3) and the subsequent amendment of article 23(1), now 
referring to the duty of ‘any person or entity which is licensed, authorised or registered by a competent authority, any branch of a foreign legal person, or any other person or entity, as may be determined by the CBM’ to provide the CBM with an y statistical and other information that may be 
necessary for it to carry out its tasks. The ECB acknowledges the need for this draft amendment, 
since article 23(1) will be worded in more genera l terms, providing a broader definition and a wider 
scope of applicability.  
 
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3 4. Monetary policy 
Article 18 on monetary policy is deleted. Amongst others, it conferre d sole authority and responsibility 
within the CBM on the Governor to take decisions a nd perform any function or duty or to exercise any 
power relating to monetary policy and referred to the establishment of the Monetary Policy Advisory 
Committee. The ECB understands that the CBM has reta ined its powers to organise itself internally and 
that the deletion of article 18 does not in any way inte rfere with the possibility for the Governor to receive 
advice on matters relating to monetary policy at his request. 
 5. Payment systems 5.1 The ECB notes the draft amendments in article 34( 2) of the CBM Act, notably subsections (a) and 
(b) which refer to the right of the CBM to termin ate, close, suspend or revoke a payment system. 
While welcoming the draft amendments, the ECB cons iders that they should clarify further that 
these two proposed amendments apply exclusively to domestic payment systems and therefore recommends modifying them accordingly.  
5.2 The ECB notes the draft amendment of article 34( 7) and specifically the definition of ‘payment 
system’ or ‘system’ which is a direct rendering of  the definition provided by Directive 98/26/EC of 
the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and 
securities settlement systems
4. However, the definition of ‘participant’ in the first indent is 
inconsistent with the analogous definition in Ar ticle 2(f) of Directive 98/26/EC (as amended by 
Directive 2009/44/EC5), according to which a participan t means an institution, a central 
counterparty, a settlement agent, a clearing house or a system operator, and an indirect participant may only be considered a participant if it is wa rranted on the grounds of systemic risk and on 
condition that the indirect participant is known to  the system. The ECB takes the view that this 
could create some ambiguity, since both definitions should reflect Directive 98/26/EC if they are intended to transpose it. The wording of the first indent of article 34(7) of the draft amendments 
needs to be revised accordingly, in order to foster maximum transparency and legal certainty. 
Moreover, the ECB also recommends, in order to en sure consistency and greater clarity, including 
references to the applicable Union legal acts.  
 6. Payment services In the context of payment services, the ECB welc omes the proposed insertion of a new article 34A on 
payment services. By virtue of the draft article 34A(2 ), the CBM is appointed as competent authority for 
the purposes of Article 9 of Regulation (EC) No 924/2009 and will be responsible for monitoring 
compliance and taking all necessary measures to ensu re compliance. Article 34A(1) empowers the CBM 
                                                 
4  OJ L 166, 11.6.1998, p. 45. 
5  OJ L 146, 10.6.2009, p. 37. 
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4 to issue, amend or revoke directives on the provisi on of payment services and to impose limitations on 
payments through the said directives. The ECB welcom es this new enabling provision, but also takes the 
view that this indent should clearly specify that such  initiatives should be taken in line with the applicable 
Union legislation.   
 7. Currency matters 7.1 As regards the draft insertion of a ne w article 43A on limitations on cash payments,  while noting 
that the draft amendment does not include any refe rence to justifications based on public reasons, 
the ECB refers to recital 19 of Council Regul ation (EC) No 974/98 of 3 May 1998 on the 
introduction of the euro
6. The ECB is of the view that the wording of the new article 43A leaves 
some room for interpretation and restrictions on cash payments that would not necessarily be 
justifiable on the basis of public reasons. It theref ore suggests further recons idering this article’s 
wording to ensure that any limitation on cash paymen ts is justified by public reasons and complies 
with the general principle of proportionality  with regard to the objectives pursued. 
7.2 In the context of currency matters, reference is  also made to the draft amendments concerning 
articles 50 and 50A. These amendments are linked to the implementation of Decision ECB/2010/14 of 16 September 2010 on the authenticity and fitness checking and recirculation of euro banknotes
7 
and of Regulation (EU) No 1210/2010 of the European Parliament and of the Council of 15 December 2010 concerning authentication of euro  coins and handling of euro coins unfit for 
circulation
8 and are welcomed by the ECB.   
7.3 Nevertheless the ECB has concerns about th e definition of ‘professional cash handler’ in 
Section 50(6) of the draft amendments, which is derived from the definition in Article 6(1) of 
Council Regulation (EC) No 1338/2001 of 28 Ju ne 2001 laying down measures necessary for the 
protection of the euro against counterfeiting9, but restricts the scope of the definition. On the 
contrary, by virtue of Section 5 of CBM Di rective No 10, which implements Decision 
ECB/2010/1410, the said Directive ‘applies to cash handlers as referred to in Article 6 of Council 
Regulation (EC) No 1338/2001 of 28 June 2001 layi ng down measures necessary for the protection 
of the euro against counterfeiting’. Consequently th e definitions appear to be contradictory, which 
can give rise to ambiguity. The ECB questions th e need, if at all, to distinguish between 
‘professional cash handler’ in one legal act and ‘cas h handler’ in another. The ECB is moreover of 
the view that the proposed definition of ‘professi onal cash handler’ in the CBM Act, which departs 
                                                 
6  OJ L 139, 11.5.1998, p. 1. 
7  OJ L 267, 9.10.2010, p. 1. 
8  OJ L 339, 22.12.2010, p. 1. 
9  OJ L 181, 4.7.2001, p. 6. Article 6 has been amended by Regulation (EC) No 44/2009 (OJ L 17, 22.1.2009, p. 1). 
10  CBM Directive No 10 was the subject of ECB Opinion CON/2010/90. All ECB opinions are available on the ECB’s 
website at www.ecb.europa.eu.  
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5 from the definition of ‘cash handler’ in CBM Direct ive No 10, should be revisited, particularly 
since articles 50 and 50A of the CBM Act and CBM Di rective No 10 all relate to the same matter.  
 8. Administrative penalties 
The ECB notes the amendments to article 56 and propo sed transfer to the CBM of the power to issue 
regulations providing for administrative penalties, currently vested in the Minister.  
The ECB also notes the proposed deletion of the last proviso of the former version of article 56(1) 
according to which the Minister (who, following th e entry into force of the amendments, would be 
replaced by the CBM) may not issue regulations providi ng for penalties or sanctions where regulations 
providing for similar penalties or sanctions have be en adopted by the ECB under the Treaties or the 
Statute. In this regard, the ECB takes the view that  this proviso should be reinserted into article 56, 
thereby clearly and unequivocally recognisi ng the ECB’s power to impose sanctions.   
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 18 May 2011. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET