A 1376
I assent.
(L.S.) GEORGE VELLA
President
2nd August, 2019
ACT No. XXVI of 2019
AN ACT to amend various financial services laws. 
BE IT ENACTED by the President, by and with the advice and
consent of the House of Represent atives, in this present Parlia ment
assembled, and by the authority of the same, as follows:
Short title. 1. The short title of this Act is  the Various Financial Services
Laws (Amendment) Act, 2019.
PART I
AMENDMENTS TO THE BANKING ACT
Amendments to 
the Banking Act. 
Cap. 371.2. This Part amends the Banking Act and it shall be read and
construed as one with the Banking Act, hereinafter in this Part  referred
to as "the principal Act".
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Amendment of 
article 2 of the 
principal Act. 3. Sub-article (1) of article 2 of the principal Act shall be
amended as follows:
(a) immediately before the definition "Additional Tier 1
instruments" there shall be added the following new definitions :
Cap. 376." "account information service" shall have the same
meaning as that assigned to it under article 2(1) of the
Financial Institutions Act;
Cap. 376."account information service p rovider" shall have the
same meaning as that assigned to it under article 2(1) of the
Financial Institutions Act;
Cap. 376."account servicing payment service provider" shall
have the same meaning as tha t assigned to it under article
2(1) of the Financial  Institutions Act;";
(b) immediately after the definition "Additional Tier 1
instruments" there shall be added the following new definition:
Cap. 555." "Arbiter" means the Arbiter for Financial Services
appointed under article 14 of the Arbiter for Financial
Services Act;";
(c) immediately after the definition "EEA State " t h e r e
shall be added the following new definition:
Cap. 376." "electronic money institution" shall have the same
meaning as that assigned to it under article 2(1) of theFinancial Institutions Act;";
(d) immediately after the definition "own funds" there
shall be added the following new definition:
" "PAD" means Directive 2014/92/EU of the
European Parliament and of the Council of 23 July 2014 on
the comparability of fees related to payment accounts,
payment account switching and access to payment
accounts with basic features, a s may be amended from time
to time and including any implementing measures,
implementing technical standa rds, regulatory technical
standards and similar measur es that have been or may be
issued thereunder;"; and
(e) immediately after the definition "parent undertaking"
there shall be added the following new definitions:
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Cap. 376 ." "payment account" shall have the same meaning as
that assigned to it under article 2(1) of the Financial
Institutions Act;
Cap. 376."payment initiation serv ice" shall have the same
meaning as that assigned to i t under article 2(1) of the
Financial Institutions Act;
Cap. 376."payment initiation servic e provider" shall have the
same meaning as that assigned t o it under article 2(1) of the
Financial Institutions Act;
Cap. 376."payment institution" shall have the same meaning as
that assigned to it under article 2(1) of the Financial
Institutions Act;
Cap. 376."payment service" means any business activity set
out in the Second Schedule to the Financial InstitutionsAct;
Cap. 376."Payment Services Directive" means Directive (EU)
2015/2366 of the European Parli ament and of the Council
of 25 November 2015 on payment services in the internal
market, amending Directives 2002/65/EC, 2009/110/EC
and 2013/36/EU and Regulat ion (EU) No 1093/2010, and
repealing Directive 2007/64/EC, as may be amended from
time to time, and includes any implementing measures,
implementing technical standards, regulatory technical
standards and similar measures that have been or may be
issued thereunder;
"payment service user" shall have the same meaning
as that assigned to it under article 2(1) of the FinancialInstitutions Act;".
Amendment of 
article 3 of the principal Act.4. Sub-article (1) of article 3 of  t h e  p r i n c i p a l  A c t  s h a l l  b e
amended as follows:
(a) in paragraph (e) thereof, for the words "or EU
Regulation." there shall be substituted the words "or EU
Regulation;"; and
(b) immediately after paragraph (e) thereof, as amended,
there shall be added the following new paragraphs:
"(f) transpose, implement and, or give effect to the
requirements of the PAD, and in so doing may also
establish or maintai n measures alternative to those referred
to in Article 10(2) to (6) of the PAD, provided that:
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(i) it is clearly in the interest of the
consumer;
(ii) there is no additional burden for the
consumer; and
(iii) the switching as defined in Article 2(18)
of the PAD is completed within, as a maximum, the
same overall time-frame as that indicated in Article
10(2) to (6) of the PAD;
(g) set up a specific mechanism to ensure that
consumers who do not have a payment account as defined
in Article 2(3) of the PAD in their territory, and who havebeen denied access to such a payment account for which a
fee is charged by credit institutions, will have effectiveaccess to a payment account with basic features in terms ofthe PAD, free of charge;
(h) regulate products and services offered by credit
institutions.".
Amendment of 
article 4 of the principal Act.5. Article 4 of the principal Act shall be amended as follows:
(a) in sub-article (7) thereof, for the words "may make,
amend or revoke Banking Rules as may be required for the
purpose of implementing any guidelines, recommendations and
individual decisions issued by the EBA under Articles 16, 17(3)
and 18(3) of Regulation (EU) No . 1093/2010." there shall be
substituted the words "may issue, amend or revoke Banking
Rules for the purpose of implementing any guidelines,
recommendations, decisions, opi nions or any other instrument
issued by the EBA, as may be required."; 
(b) in sub-article (8) thereof, for the words "may make,
amend or revoke Banking Rules as may be required for the
purpose of implementing a ny opinions and recommendations
issued by the ECB under Articles 127(4) and 132(1) of the
Treaty on the Functioni ng of the European U nion." there shall b e
substituted the words "may issue, amend or revoke BankingRules for the purpose of implementing any guidelines,recommendations, decisions, opi nions or any other instrument
issued by the ECB, as may be required.".
Amendment of 
article 7 of the 
principal Act.6. In sub-article (3) of article 7 of the principal Act, for the
words "if it refuses an applica tion it shall inform the applicant, in
writing, of the reasons for the refusal." there shall be substituted the
words "if it refuses an applica tion it shall inform the applicant, in
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writing, of the reasons for the refusal within the time-frames referred
to in sub-article (2).". 
Amendment of 
article 9 of the principal Act.7. In sub-article (5) of article 9 of the principal Act, for the
words "shall specify a period in  which" there shall be substitu ted the
words "shall specify a period, being a period not less than for ty-eight
hours and not longer than thirty calendar days, in which".
Amendment of 
article 17B of 
the principal Act.8. Sub-article (4) of article 17B o f the principal Act shall be
deleted. 
Amendment of 
article 19A of 
the principal Act.9. Article 19A of the principal Act shall be amended as follows:
(a) sub-article (1) thereof shall be substituted by the
following:
"(1) Where a credit institution intends to outsource
its material services or activi ties, it shall first inform the
competent authority accordingly."; and
(b) in sub-article (2) thereof, for the words "the
recognition of the outsourcing service provider" there shall be
substituted the words "the infor mation to be submitted regardin g
the outsourcing service provider".
Addition of 
articles 19B, 19C and 19D to 
the principal 
Act.10. Immediately after article 19A of the principal Act there shall
be added the followi ng new articles:
"Access to 
accounts maintained with a 
credit institution.19B. (1) Credit institutions shall grant payment
institutions, electronic m oney institutions and account
information service providers access to a credit
institution’s payment account services on an objective,non-discriminatory and proportionate basis.
(2) The access referred to in sub-article (1) shall
be sufficiently extensive as to allow payment
institutions, electronic m oney institutions and account
information service providers to provide payment
services in an unhindered and efficient manner.
(3) In the event that a credit institution does not
allow a payment institution, an electronic money
institution, or an account information service provider,
to have access to the credit institution’s paymentaccount services, such institution shall provide the
competent authority with d uly motivated reasons for
any such rejection.
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(4) The competent authority shall, in case of an
event as referred to in sub-ar ticle (3), notify the Central
Bank of said event together with the reasons provided
by the credit institution, without undue delay.
Management of 
operational and 
security risks.19C. (1) Credit institutions shall establish a
framework with appropriate  mitigation measures and
control mechanisms to manage the operational and
security risks, relating to the payment services they
provide. As part of that framework, credit institutions
shall establish and maintain effective incident
management procedures, inc luding for the detection
and classification of major operational and security
incidents.
(2) Credit institutions shall provide to the Central
Bank on an annual ba sis or at shorter intervals, as may
be determined by the com petent authority in co-
operation with the Central Bank, an updated andcomprehensive assessment of the operational and
security risks relating to the payment services they
provide and on the adequacy of the mitigation measuresand control mechanisms implemented in response to
those risks.
(3) The competent authority shall co-operate with
the Central Bank in the assessment and processing of
documents referred to in sub-article (2).
(4) The competent authority may issue, amend or
revoke Banking Rules as may be required in order tobetter implement the prov isions of this article.
Incident reporting. 19D. (1) In case of a major operational or security
incident as referred to in a rticle 19C and where Malta is
the home Member State, c redit institutions shall,
without undue delay, notify  the Central Bank. Upon
receipt of such notificati on, the Central Bank shall
promptly notify the competent authority.
(2) Where the incident has or may have an impact
on the financial interests of its payment service users,the credit institution concerned shall, without unduedelay, inform its payment se rvice users of the incident
and of all the measures that t hey can take to mitigate the
adverse effects of the incident.
(3) Upon receipt of the not ification referred to in
sub-article (1), the Central Bank shall, in co-operationwith the competent author ity, assess the relevance of
the incident to the relevant authorities in Malta, andnotify any such authorities accordingly.
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Amendment of 
article 23 of the 
principal Act.11. In the marginal note to article 23 of the principal Act, for th e
words "Suspected offences" there shall be substituted the words
"Suspected breaches.".
Amendment of 
article 24 of the 
principal Act.12. In paragraph (b) of article 24 of the principal Act, for the
words "into the suspected commission of any offence under this Act,"
there shall be substituted the words "into the suspected commis sion of
any breach under this Act,".
Amendment of 
article 25 of the principal Act.13. Immediately after the second proviso of sub-article (9) of
article 25 of the principal Act there shall be added the following new
sub-articles:
"(9A) The competent authority shall communicate to the
EBA the names of the authorities or bodies that may receiveinformation as described i n sub-articles (8) and (9).
(9B) In order to implement sub-article (9), the authorities
or bodies referred to in sub-article (8), shall communicate to the
competent authority which disclosed the information, the namesand responsibilities of the persons to whom it is to be sent.".(4) The competent authority shall, in co-operation
with the Central Bank, co-operate with the EBA and theECB for the purposes of assessing  the relevance of the
incident and informing other relevant European Unionand national authorities in accordance with Article96(2) of the Payment Services Directive.
(5) Where the competent authority receives a
notification of a major opera tional or security incident
in accordance with sub-article (1), it shall whereappropriate, upon the basis of that notification and in
co-operation with the Central Bank, take all the
necessary measures to protect the immediate safety ofthe financial system.
(6) Credit institutions shall, at least on an annual
basis, provide to the Centra l Bank statistical data on
fraud relating to differ ent means of payment.
(7) The competent authority may issue, amend or
revoke any Banking Rules as may be required to betterimplement the provisions of this article.
Cap. 376. (8) For the purposes of this article, the terms
"home Member State" and "host Member State" shallhave the same meaning as that assigned to them under
article 2(1) of the Finan cial Institutions Act.".
VERŻJONI ELETTRONIKA
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Deletion of 
article 29 of the 
principal Act.14. Sub-article (8) of article 29 o f  t h e  p r i n c i p a l  A c t  s h a l l  b e
deleted. 
Amendment of article 30 of the 
principal Act.15. Paragraph (b) of article 30 of the principal Act shall be
substituted by the following:
"(b) make available to the public, in paper or in electronic for m,".
Amendment of 
article 34 of the 
principal Act.16. Article 34 of the principal Act shall be amended as follows:
(a) the first proviso of sub-article (4) thereof shall be
substituted by the following:
"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, only in summary and collective form as
specified in sub-article (4), or when lawfully required to do
so, by any court or under a provision of any law:";
(b) sub-article (8) thereof, shall be substituted by the
following:
"(8) The competent authority, when processing
personal data for the purposes of the Act and anyregulations and, or Banking Rules issued thereunder, shall
do so in accordance with any a pplicable legislation on data
protection.".
Addition of 
article 34A to 
the principal Act.17. Immediately after article 34 of the principal Act, as amended,
there shall be added the  following new article:
"Data protection. 34A. (1) Credit instituti ons may, when necessary
to safeguard the prevention, investigation and detection
of payment fraud, process personal data.
(2) The provision of information to individuals
about the processing of personal data, the processing of
such personal data and any o ther processing of personal
data for the purposes of this Act and any regulationsand, or Rules issued thereunder shall be carried out inaccordance with any applicable data protection
legislation. 
(3) Unless otherwise permitted under other
provisions of this Act and u nder applicable legislation,
credit institutions shall only  access, process and retain
personal data necessary for the provision of theirservices with the explicit consent of those making use
of their services.".
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Addition of 
articles 37 and 
38 to the 
principal Act.18. Immediately after article 36 of the principal Act there shall be
added the following new articles:
PART II
AMENDMENTS TO THE FINA NCIAL INSTITUTIONS ACT
Amendments to the Financial 
Institutions Act. 
Cap. 376.19. This Part amends the Financial Institutions Act and it shall be
read and construed as one with the Financial Institutions Act,
hereinafter in this Part referred to as "the principal Act".
Substitution of 
article 2 of the 
principal Act.20. Article 2 of the principal Act shall be substituted by the
following:"Complaints.
Cap. 378.
Cap. 555.37. Any complaints made by any person making
use of a payment service provided by a credit institution
or by other interested third parties, including consumer
associations within the meaning of the Consumer
Affairs Act, in relation to any alleged infringements of
the provisions of this Act transposing the PaymentServices Directive by a credit institution licensed in
terms of this Act, or an agent or a branch established inMalta under the right of establishment of a credit
institution in another Member State, shall be submitted
to the Arbiter in terms of the Arbiter for FinancialServices Act.
Transitory 
provisions relating 
to the Payment 
Services Directive.38. (1) Credit institutions that, before 12 January
2016, have performed in Malta activities of payment
initiation service provider s and account information
service providers shall not u ntil eighteen months after
the date of entry into force of the regulatory technicalstandards referred to in Article 98 of the Payment
Services Directive, be pr ohibited from continuing to
perform such activities in Malta in accordance with the
currently applicable regulatory framework.
(2) Until credit institutions acting as account
servicing payment service providers comply with the
regulatory technical standards referred to in Article 98of the Payment Services Directive, such credit
institutions shall not block or obstruct the use of
payment initiation services or account informationservices for the accounts that they are servicing.".
"
Interpretation. 2. (1) In this Act, unless the context otherwise
requires:
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"account information service" means an
online service to provide consolidated
information on one or more payment accounts
held by the payment service user with either
another payment service provider or with morethan one payment service provider;
"account information service provider"
means a payment service provider that has been
registered in accordance with this Act or that
holds an equivalent reg istration in another
country in terms of the Payment ServicesDirective to provide s olely account information
services;
 "account servicing payment service
provider" means a paym ent service provider
providing and maintaining a payment account fora payer;
 "acquiring of payment transactions" means
a payment service provided by a payment serviceprovider contracting with a payee to accept and
process payment transactions that result in a
transfer of funds to the payee;
"agent" means a person who acts on behalf
of a financial institution in providing thoseservices listed under the First Schedule, other
than issuing electronic money;
 
Cap. 555."Arbiter" means the Arbiter for Financial
Services appointed under article 14 of the Arbiter
for Financial Services Act;
 "authentication" means a procedure which
allows the payment service provider to verify theidentity of a payment service user or the validity
o f  t h e  u s e  o f  a  s p e c i f i c payment instrument,
including the use of the user’s personalised
security credentials;
"average outstanding electronic money"
means the average total amount of financial
liabilities related to the electronic money in issue
at the end of each calendar day over the precedingsix calendar months, ca lculated on the first
calendar day of each calendar month, and appliedfor that calendar month;
 "body corporate" means a body of persons
having a legal personality distinct from that of its
members;
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"branch" means a place of business other
than the head office which is a part of a financial
institution not having a legal personality and
which carries out directly some or all of thetransactions as licensed or registered, inherent inthe business of a financi al institution; all the
places of business set up in Malta by a financialinstitution with a head office in another MemberState shall be regarded as a single branch;
 
Cap. 204."Central Bank" means the Central Bank of
Malta as defined by the Central Bank of Malta
Act;
"close links" shall have the same meaning
as that assigned to it in paragraph (38) of Article4(1) of the CRR;
  "Commission Delegated Regulation (EU)
No. 241/2014" means Commission Delegated
Regulation (EU) No. 241/2014 of 7 January 2014
supplementing Regulation (EU) No. 575/2013 ofthe European Parliament and of the Council with
regard to regulatory technical standards for Own
Funds requirements for institutions, as may beamended from time to time;
 "Common Equity Tier 1 capital" shall have
the same meaning as that assigned to it in Article
50 of the CRR;
Cap. 386."company" means a limited liability
company constituted in Malta in accordance with
the Companies Act or any law which may from
time to time be in force;
Cap. 330."competent authority " means the Malta
Financial Services Authority established by the
Malta Financial Services Authority Act;
Cap. 204."consumer" means a natural person who in
payment service contracts covered by the
provisions of the Payment Services Directive, astransposed in directives issued by the Central
Bank under the Central Bank of Malta Act, is
acting for purposes other than his or her trade,business or profession;
 "control" in relation to a body corporate
means the power to determine in any manner the
financial and operating policies of the body
corporate;
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 "controller" means a person who alone or
together with others exercises control in relation
to a body corporate;
 "CRD" means Directive 2013/36/EU of the
European Parliament and of the Council of 26
June 2013 on access to the activity of credit
institutions and the prudential supervision ofcredit institutions and investment firms,
amending Directive 2002/87/EC and repealing
Directives 2006/48/EC and 2006/49/EC, as may
be amended from time to time , and includes any
implementing measures, implementing technical
standards, regulatory technical standards and
similar measures that have been or may be issued
thereunder;
 "credit facility" means the lending of a sum
of money by way of an advance, overdraft orloan, or any other line of credit, including
discounting of bills of exchange and promissory
notes, guarantees, indemnities, acceptances, billsof exchange endorsed pour aval  and financial
leasing;
Cap. 371."credit institution" shall have the same
meaning as that assigned to it in the Banking Act;
 "credit transfer" mean s a payment service
for crediting a payee’s payment account with apayment transaction or a series of paymenttransactions from a payer’s payment account by
the payment service provider that holds the
payer’s payment account, based on an instructiongiven by the payer;
 "CRR" means Regulation (EU) No. 575/
2013 of the European Parliament and of the
Council of 26 June 2013 on prudential
requirements for credit institutions andinvestment firms and amending Regulation (EU)
No. 648/2012, as may be amended from time to
time, and includes any implementing measures,implementing technical standards, regulatory
technical standards and similar measures that
have been or may be issued thereunder;
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 "digital content" means goods or services
which are produced and supplied in digital form,
the use or consumption of which is restricted to a
technical device and that do not include in any
way the use or consumption of physical goods orservices;
"Directive 86/635/EEC"  means Council
Directive 86/635/EEC of 8 December 1986 on the
annual accounts and consolidated accounts of
banks and other financial institutions, as amended
from time to time, and includes any implementing
measures, implementing technical standards,
regulatory technical standards and similar
measures that have been or may be issued
thereunder;
 "Directive 2002/21/EC" means Directive
2002/21/EC of the European Parliament and ofthe Council of 7 March 2002 on a common
regulatory framework for electronic
communications networks and services, as maybe amended from time to time, and includes any
implementing measures, implementing technical
standards, regulatory technical standards and
similar measures that ha ve been or may be issued
thereunder;
 "Directive 2004/39/EC" means Directive
2004/39/EC of the European Parliament and ofthe Council of 21 April 2004 on markets infinancial instruments amending Council
Directives 85/611/EEC and 93/6/EEC and
Directive  2000/12/EC of the EuropeanParliament and of the Council and repealing
Council Directive 93/22/EEC, as may be
amended from time to time, and includes anyimplementing measures, implementing technical
standards, regulatory technical standards and
similar measures that ha ve been or may be issued
thereunder;
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 "Directive 2008/48/EC" means Directive
2008/48/EC of the European Parliament and of
the Council of 23 April 2008 on credit agreements
for consumers and repealing Council Directive
87/102/EEC, as amended from time to time, andincludes any implementing measures,
implementing technical standards, regulatory
technical standards and similar measures that
have been or may be issued thereunder;
"Directive 2013/34/EU" means Directive
2013/34/EU of the European Parliament and ofthe Council of 26 June 2013 on the annualfinancial statements, consolidated financial
statements and related reports of certain types of
undertakings, amending Directive 2006/43/EC ofthe European Parliament and of the Council and
repealing Council Directives 78/660/EEC and 83/
349/EEC, as may be amended from time to time,and includes any implementing measures,
implementing technical standards, regulatory
technical standards and similar measures that
have been or may be issued thereunder;
  "Directive (EU) 2015/849" means
Directive (EU) 2015/849 of the European
Parliament and of the  Council of 20 May 2015 on
the prevention of the use of the financial system
for the purposes of mone y laundering or terrorist
financing, amending Re gulation (EU) No. 648/
2012 of the European Parliament and of theCouncil, and repealing Directive 2005/60/EC of
the European Parliament and of the Council andCommission Directive 2006/70/EC, as amended
from time to time, and includes any implementing
measures, implementing technical standards,
regulatory technical standards and similar
measures that have been or may be issued
thereunder;
"director" includes an individual occupying
the position of director of  a company, by whatever
name he may be called, empowered to carry out
substantially the same functions in relation to the
direction of the company as those carried out by a
director; and in respect of a company registered orincorporated outside Mal ta, includes a member of
VERŻJONI ELETTRONIKA
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 a local board or agent or representative of that
company;
  "direct debit" means a  payment service for
debiting a payer’s payment account, where a
payment transaction is initiated by the payee on
the basis of the consent given by the payer to the
payee, to the payee’s payment service provider, orto the payer’s own paym ent service provider;
 "EBA" means the European Banking
Authority established by Regulation (EU) No.
1093/2010 of the European Parliament and of theCouncil of 24 November 2010 establishing a
European Supervisory Authority (European
Banking Authority), amending Decision No. 716/2009/EC and repealing Commission Decision
2009/78/EC, as may be amended from time to
time;
"EEA State" means a State which is a
contracting party to the agreement on theEuropean Economic Area signed at Oporto on the
2nd May, 1992 as amended by the Protocol signed
at Brussels on the 17th March, 1993, and asamended by any subsequent acts;
 "electronic communications network"
means a network as defined in paragraph (a) of
Article 2 of Directive 2002/21/EC;
"electronic communicat ions service" means
a service as defined in paragraph (c) of Article 2
of Directive 2002/21/EC;
"electronic money" m eans electronically,
including magnetically, stored monetary value asrepresented by a claim on the issuer which is
issued on receipt of funds for the purpose of
making payment transactions and that is acceptedby a person other than the financial institutions
that issued the electronic money;
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 "Electronic Money Directive" means
Directive 2009/110/EC of the European
Parliament and of the Council of 16 September
2009 on the taking up, pursuit and prudential
supervision of the busin ess of electronic money
institutions amending Directives 2005/60/EC and
2006/48/EC and repealing Directive 2000/46/EC,
as may be amended from time to time, andincludes any implem enting measures,
implementing technical standards, regulatorytechnical standards and similar measures that
have been or may be issued thereunder;
 "electronic money in stitution" means a
financial institution that has been licensed inaccordance with this Act and authorised to issueelectronic money or that holds an equivalent
authorisation in another country in terms of the
Electronic Money Directive to issue electronicmoney;
"equity release financial products" means
products consisting of equity release credit
agreements where the creditor:
(a) grants on loan a lump sum,
periodic payments or other forms of credit
disbursement in return for a sum derivingfrom the future sale of a residential
immovable property or a right relating to
residential immovable property; and
(b) will not seek repayment of the
credit until the occurrence of the death of theconsumer or his move to long-term care or
any one or more other specified life events of
the consumer as may be defined by thecompetent authority, unless the consumer
breaches his contractual obligations which
allows the creditor to terminate the creditagreement: 
Provided that the creditor cannot
commence proceedings, judicial or
otherwise, for the sale or other transfer of the
property securing the equity release financial
product for a period of at least thirty six (36)
months from the death of the consumer or his
move to long-term care:
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Provided further that, in the case
of a move into long-term care, the creditor
and the consumer may agree to retain the
equity release financial product even after
the lapse of such thirty six (36) monthperiod, for so long as such agreement
subsists, until the death of the consumer;
and any such other product as may be defined as an
equity release financial product by the competent
authority from time to time;
"European regulatory authority" means a
body that is in another Member State and is
empowered by law or regulation to supervise
payment institutions, electronic moneyinstitutions and, or account information service
providers;
 "European right" means the right of
establishment and, or t he freedom to provide
services;
 "financial institution" means any person
who regularly or habitually undertakes the
carrying out of any activ ity listed in the First
Schedule for the account and at the risk of theperson carrying out the  activity and who is
licensed or registered under this Act:
Provided that any person offering
equity release financial products shall be
considered a financial institution irrespective of
whether such equity release financial products areoffered on a regular or habi tual basis, or otherwise;
"Financial Institutions Rules" means a Rule
issued by the competent authority to regulate
financial institutions in terms of the powers under
this Act, and "Rule" shall be read accordingly;
Cap. 330."Financial Services Tribunal" or "Tribunal"
means the Financial Services Tribunal established
under the Malta Financial Services Authority Act;
 "framework contract" means a payment
service contract which governs the future
execution of individual and successive payment
transactions and that may contain the obligationand conditions for set ting up a payment account;
VERŻJONI ELETTRONIKA
A 1393
Cap. 373."funding of terrorism" has the same
meaning as that assigned to it by the Prevention of
Money Laundering Act, as may be amended from
time to time;
 "funds" means banknotes and coins,
scriptural money and electronic money;
 "group" means a group of undertakings
which are linked to each other by a relationship
referred to in Article 22(1) , (2) or (7) of Directive
2013/34/EU or undertakings as defined inArticles 4, 5, 6 and 7 of Commission DelegatedRegulation (EU) No. 241/2014 that are linked to
each other by a relationshi p referred to in Article
10(1) or in Article 113(6) or (7) of the CRR;
Cap. 386."holding company" or "parent company"
has the same meaning as t hat assigned to the term
"parent company" in the Companies Act;
 "home Member State" means either of the
following:
(a) the Member State in which the
registered office of the payment serviceprovider is situated; or
(b) if the payment service provider
has no registered office under its national
law, the Member State in which its headoffice is situated;
"host Member State" means the Member
State other than the home Member State in which
a payment service provider has an agent or a
branch, or provides payment services;
 "initial capital" means paid up capital and
reserves as defined in a Financial InstitutionsRule;
"issuing of payment instruments" means a
payment service by a payment service provider
contracting to provide a payer with a payment
instrument to initiate and process the payer’spayment transactions;
"licence" means a licence granted under this
Act to provide any of the activities listed in the
First Schedule;
"Member State" means a Member State of
the European Union and includes an EEA State;
VERŻJONI ELETTRONIKA
A 1394
"the Minister" means the Minister
responsible for the regulation of Financial
Services;
Cap. 373."money laundering" has the same meaning
as that assigned to it by the Prevention of Money
Laundering Act, as may be amended from time to
time;
"money remittance"  means a payment
service where funds are received from a payer
without any payment accounts being created in
the name of the payer or the payee, for the solepurpose of transferring a corresponding amount to
a payee or to another payment service provider
acting on behalf of the payee and, or where suchfunds are received on behalf of and made
available to the payee;
"officer", in relation to a company, includes
a director, partner, manager or company secretary
or any person effectively acting in such capacitywhether formally appointed or not;
"outsourcing" means the  use of a third party
(the outsourcing service provider) by a financial
institution to perform activities and, or
operational functions that would normally beundertaken by the financial institution;
"outsourcing service provider" means a
supplier of goods, services or facilities, and which
may be an affiliated entity within a corporate
group or an entity that is external to the group;
"overseas regulatory authority" means an
authority that in a country or territory outsideMalta exercises any function corresponding to the
functions of the competent authority under this
Act;
"own funds" means funds as defined in
paragraph 118 of Article 4(1) of the CRR where atleast 75% of the Tier 1 capital is in the form of
Common Equity Tier 1 capital as referred to in
Article 50 of that Regulation and Tier 2 capital isequal to or less than one t hird of Tier 1 capital; 
VERŻJONI ELETTRONIKA
A 1395
"PAD" means Directive 2014/92/EU of the
European Parliament and of the Council of 23
July 2014 on the comparability of fees related to
payment accounts, payment account switching
and access to payment accounts with basicfeatures, as may be amended from time to time
and including any implementing measures,
implementing technical standards, regulatorytechnical standards and similar measures that
have been or may be issued thereunder;
"payee" means a pers on who is the intended
recipient of funds that have been the subject of apayment transaction;
"payer" means a person who holds a
payment account and allows a payment order
from that payment account or where there is no
payment account, a person who gives a paymentorder;
"payment account" means an account held
in the name of one or more payment service users
which is used for the execution of payment
transactions;
"payment initiation service" means a
service to initiate a payment order at the requestof the payment service user with respect to a
payment account held at another payment service
provider;
"payment initiation service provider" means
a payment service provider that has been licensedunder this Act or that holds an equivalent
authorisation in another country in terms of the
Payment Services Directive to provide paymentinitiation services;
"payment institution" means a company that
has been licensed in accordance with this Act or
that holds an equivalent  authorisation in another
country in terms of the Payment Services
Directive to provide and execute payment
services throughout the European Union;
"payment instrument" means any
personalised device and, or set of procedures
agreed between the payment service user and thepayment service provider and used in order to
initiate a payment order;
VERŻJONI ELETTRONIKA
A 1396
"payment order" means an instruction by a
payer or payee to his payment service provider
requesting the execution of a payment
transaction;
"payment service" means any business
activity set out in paragraph 2 of the Second
Schedule;
"Payment Services Directive" means
Directive (EU) 2015/2366 of the European
Parliament and of the Council of 25 November
2015 on payment services i n the internal market,
amending Directives 2002/65/EC, 2009/110/EC
and 2013/36/EU and Regulation (EU) No. 1093/
2010, and repealing Di rective 2007/64/EC, as
may be amended from time to time and includes
any implementing measures, implementing
technical standards, regulatory technicalstandards and similar measures that have been or
may be issued thereunder;
"payment service provider" means:
Cap. 371.(a) credit institutions, including
branches thereof as defined in article 2(1) ofthe Banking Act where such branches are
located in the European Union, irrespectiveof whether the head offices of those
branches are located within the European
Union or, in accordance with Article 47 ofthe CRD and national law, if they are
located outside the European Union; 
(b) electronic money institutions,
being companies that have been granted
authorisation under Titl e II of the Electronic
Money Directive to issue electronic money,
including branches thereof, in accordance
with Article 8 of that Directive and nationallaw, where such branches are located within
the European Union and their head offices
are located outside the European Union, inso far as the payment services provided by
those branches are linked to the issuance of
electronic money;
(c) post office giro institutions that
are entitled under national law of any
Member State to provide payment services;
(d) payment institutions; 
VERŻJONI ELETTRONIKA
A 1397
(e) account information service
providers;
(f) the ECB and national central
banks when not acting in their capacity as
monetary authority or other public
authorities; or
(g) Member States or their regional
or local authorities wh en not acting in their
capacity as public  authorities;
"payment service user" means a person
making use of a payment service in the capacityof payer, payee or both;
"payment system" means a funds transfer
system with formal and standardised
arrangements and common rules for theprocessing, clearing and, or settlement of
payment transactions;
"payment transaction" means an act,
initiated by the payer or on his behalf by the
payee, of placing, tran sferring, or withdrawing
funds, irrespective of any underlying obligations
between the payer and the payee;
"personalised security  credentials" means
personalised features provided by the payment
service provider to a payment service user for thepurposes of authentication;
"qualifying shareholding" shall have the
same meaning as that assigned to it in paragraph
(36) of Article 4(1) of the CRR:
Provided that, in determining whether
the criteria for a quali fying shareholding are
fulfilled, the voting rights referred to in Articles 9
and 10 of Directive 2004/109/EC of the European
Parliament and of the Council of 15 December
2004 on the harmonisation of transparencyrequirements in relati on to information about
issuers whose securities are admitted to trading ona regulated market and amending Directive 2001/34/EC, and the conditions regarding aggregation
thereof set out in Articl e 12(4) and (5) of that
Directive, shall be taken into account: 
VERŻJONI ELETTRONIKA
A 1398
Provided further that, in determining
whether the criteria for  a qualifying shareholding
are fulfilled, the competent authority shall not
take into account voting rights or shares which
investment firms or credit institutions may hold asa result of providing the underwriting of financial
instruments or placing of f inancial instruments on
a firm commitment basis in terms of paragraph 6
of Section A of Annex 1 to Directive 2004/39/EC,
provided that those right s are not exercised or
otherwise used to intervene in the management ofthe issuer and are disposed of within one year of
acquisition;
Cap. 386."reconstruction" has the same meaning as
that assigned to it by the Companies Act;
"registration" means a registration granted
under this Act to provide solely accountinformation services in terms of this Act;
"Regulation (EC) No. 1606/2002" means
Regulation (EC) No. 1606/2002 of the European
Parliament and of the Council of 19 July 2002 on
the application of international accountingstandards, as may be amended from time to time,
and includes any implementing measures,
implementing technical standards, regulatory
technical standards and similar measures that
have been or may be issued thereunder;
"Regulation (EU) No. 1093/2010" means
Regulation (EU) No. 1093/2010 of the European
Parliament and of the Council of 24 November2010, establishing a European Supervisory
Authority (European Banking Authority),
amending Decision No. 716/2009/EC andrepealing Commission D ecision 2009/78/EC, as
may be amended from time to time, and includesany implementing meas ures, implementing
technical standards, regulatory technical
standards and similar measures that have been or
may be issued thereunder;
Cap. 386."subsidiary" shall have the same meaning as
that assigned to "subsidiary undertaking" in theCompanies Act;
"third country" means a country that is not a
Member State or an EEA State;
VERŻJONI ELETTRONIKA
A 1399
Substitution of 
the heading 
‘Licensing 
Requirements’ of the principal 
Act.21. Immediately after article 2 of t he principal Act, the heading
"LICENSING REQUIREMENTS" of the principal Act shall be
substituted by the following:
"LICENSING AND REGISTRATION REQUIRE-
MENTS.".
Substitution of 
article 3 of the 
principal Act.  22. Article 3 of the principal Act shall be substituted by the
following:"Tier 1 capital" shall have the same
meaning as that assigned to in Article 25 of the
CRR;
"Tier 2 capital" shall have the same
meaning as that assigned to it in Article 71 of the
CRR;
"trade bills" means bills of exchange and
promissory notes.
(2) In case of any conflict  between the English and
the Maltese texts of this Act, the English text shall
prevail.
S.L. 378.12.(3) The provisions of this Act shall be without
prejudice to the provisions of Directive 2008/48/EC as
transposed in the Consumer Credit Regulations, other
relevant European Union law or national measures
regarding conditions for gra nting credit to consumers
not harmonised by the Payment Services Directive thatcomply with European Union Law.".
"
Activities carried 
out by financial 
institutions.3. (1) No activities listed under the First
Schedule of this Act, other than account information
services, shall be transacted regularly or habitually, in
or from Malta, except b y a company that is in
possession of a licence granted under this Act by the
competent authority:
Provided that the activities listed under the
First Schedule of this Act, other than account
information services, may also be transacted in or from
Malta, by a legal person that is in possession of anauthorisation granted by another Member State under
the Payment Services Directive or the Electronic
Money Directive, in exercise of its European rights andin accordance with the provisions of the Payment
Services Directive and the El ectronic Money Directive. 
VERŻJONI ELETTRONIKA
A 1400
(1A) No account information services shall be
transacted regularly or habitually in or from Malta,
except by a natural person or a company in possession
of a registration granted under this Act by the
competent authority:
Provided that account i nformation services
may also be transacted in or  from Malta, by a natural or
legal person in possession of a registration granted by
another Member State under the Payment Services
Directive, in exercise of its European rights and in
accordance with the provisi ons of the Payment Services
Directive:
Provided further that a financial institution
licensed in terms of article 4(1) shall not require a
registration in accordance with this sub-article, in order
to provide account information services.
(2) For the purposes of sub-article (1) and subject
to the provisions of sub-article (3), a person shall not be
deemed to be a financial institution by reason of the factthat the person either:
(a) belongs to a group and provides any
of the activities listed in the First Schedule,
except for activities 4 and, or 10 thereof, to
companies which are not banks or financialinstitutions and that be long to the same group; 
(b) is an undertaking and provides any of
the activities listed in the First Schedule, except
for activities 4 and, or 10 thereof, to other
undertakings, which are not banks or financialinstitutions, and all such undertakings are
controlled directly or indirectly by the same
person; 
(c) is an undertaking and provides any of
the activities listed in the First Schedule, except
for activities 4 and, or 10 thereof, to a person
which is not a bank or financial institution, that
directly or indirectly controls it; or
(d) draws and issues trade bills in the
normal course of business under hire purchaseagreements, or under sales on credit where trade
bills are drawn in respect of the price due:
Provided that for the purposes of this
sub-article, a person shall be deemed to control an
undertaking if such person:
VERŻJONI ELETTRONIKA
A 1401
Cap. 386.(i) is a "parent company" as defined
in article 2(2)(a) of the Companies Act; or
(ii) has all of the following
characteristics:
(aa) power over the
undertaking, based on the current
ability to direct the relevant activities
which significantly affect returns;
(bb) exposure, or right to
variable returns from its involvement
with the undertaking; and
(cc) the ability to use its power
over the undertaking to affect the
amount of the person’s returns.
For the purposes of this sub-article:
"person" means a natural person or an
undertaking; and
"undertaking" means a body corporate or
incorporate which carries on a trade or business.
(2A) Sub-article (1) shall not apply to persons that
carry out any of the following activities:
(a) payment transactions effected
exclusively in cash directly by the payer to thepayee, without any inter mediary intervention;
(b) payment transactions effected by the
payer to the payee thr ough a commercial agent
authorised by means of an agreement to negotiate
or conclude the sale or purchase of goods or
services, exclusively on behalf of the payer or the
payee; 
(c) professional physical transport of
banknotes and coins, including their collection,processing and delivery;
(d) payment transactions consisting of the
non-professional cash co llection and delivery
within the framework of a non-profit or charitable
activity;
(e) services where cash is provided by the
payee to the payer as part of a paymenttransaction following an e xplicit request by the
payment service user just prior to the execution ofthe payment transacti on, by means of a payment
for the purchase of goods or services;
VERŻJONI ELETTRONIKA
A 1402
(f) cash-to-cash currency exchange
operations, where the funds are not held on a
payment account;
(g) payment transactions based on any of
the following documents drawn on the payment
service provider with the scope of placing funds
at the disposal of the payee:
(i) paper cheques governed by the
Geneva Convention of 19 March 1931
providing a uniform law for cheques;
(ii) paper cheques similar to those
referred to in sub-paragraph (i) and
governed by the laws of Member States thatare not a party to the Geneva Convention of
19 March 1931 providing a uniform law for
cheques;
(iii) paper-based drafts in accordance
with the Geneva Convention of 7 June 1930providing a uniform law for bills of
exchange and promissory notes;
(iv) paper-based drafts similar to
those referred to in sub-paragraph (iii) and
governed by the laws of Member States thatare not party to the Geneva Convention of 7
June 1930 providing a uniform law for bills
of exchange and promissory notes; 
(v) paper-based vouchers;
(vi) paper-based travellers’ cheques;
(vii) paper-based postal money
orders as defined by the Universal Postal
Union;
Cap. 204.(h) payment transactions carried out
within a payment or securities settlement system
between settlem ent agents, central counter-
parties, clearing houses and, or central banks and
other participants of the system and payment
service providers, without prejudice to Article 35of the Payment Services Directive, as transposed
in directives issued by the Central Bank under the
Central Bank of Malta Act; 
VERŻJONI ELETTRONIKA
A 1403
(i) payment transactions related to
securities asset servi cing including dividends,
income or other distribu tions, redemption or sale
carried out by persons referred to in paragraph
(h), by investment firms , credit institutions,
collective investment undertakings, or asset
management companies  providing investment
services and, or any other entities allowed to havethe custody of financial instruments;
(j) services provided by technical service
providers that support the provision of paymentservices, without them entering at any time intopossession of the funds to be transferred,
including processing and st orage of data, trust and
privacy protection services, data and entity
authentication, informat ion technology (IT) and
communication network provision, provision andmaintenance of terminals and devices used forpayment services, with the exclusion of payment
initiation services a nd account information
services;
(k) services based on specific payment
instruments that can be used only in a limited
way, provided they meet one of the following
conditions:
(i) instruments allowing the holder
to acquire goods or services only in the
premises of the issuer, or within a limitednetwork of service pr oviders under a direct
commercial agreement with a professionalissuer;
(ii) instruments that can be used
only to acquire a very limited range ofgoods or services;
(iii) instruments valid only in a
single Member Sate provided at the request
of an undertaking or a public sector entity
and regulated by a national or regionalpublic authority for specific social or tax
purposes, to acquire specific goods or
services from suppliers having acommercial agreement with the issuer:
VERŻJONI ELETTRONIKA
A 1404
Provided that service providers
carrying out either of the activities referred
to in sub-paragraphs (i) and (ii) or both, for
which the total value of payment
transactions executed over the precedingtwelve months exceeds the amount of one
million euro (€1,000,000), shall send an
annual notification to the competentauthority containing a description of the
services offered, specifying under which
exclusion referred to in sub-paragraphs (i)
and (ii) the activity is considered to be
carried out:
Provided further that, on the
basis of such a notification, the competentauthority shall take a duly motivated
decision on the basis of criteria referred to
in this paragraph where the activity does notqualify as a limited network, and shall
inform the service provider accordingly;
(l) payment transactions by a provider of
electronic communication networks or services,
provided in addition to e lectronic communication
services for a subscriber to the network orservice:
(i) for purchase of digital content
and voice-based services regardless of the
device used for the purchase orconsumption of the digital content and
charged to the related bill; or
(ii) performed from or by means of
an electronic device and charged to the
related bill within the framework of acharitable activity, o r for the purchase of
tickets:
Provided that the value of any
single payment transaction referred to insub-paragraphs (i) and (ii) does not exceedfifty euro (€50), and:
- the cumulative value of
payment transa ctions for an individual
subscriber does not exceed threehundred euro (€300) per month; or
VERŻJONI ELETTRONIKA
A 1405
- where a subscriber pre-funds
its account with the provider of the
electronic communications network or
service, the cumulative value of
payment transactio ns does not exceed
three hundred euro (€300) per month:
Provided further that service
providers carrying out a n activity referred to
in this paragraph shall send a notification tothe competent authority and provide the
competent authority with an annual audit
opinion, testifying that t he activity complies
with the limits set  out in this paragraph;
(m) payment transactions carried out
between payment service providers, their agents
or branches for their own account;
(n) payment transactions and related
services between a parent undertaking and its
subsidiary, or between subsidiaries of the sameparent undertaking, wit hout any intermediary
intervention by a payment service provider, otherthan an undertaking belong ing to the same group;
and, or
(o) cash withdrawal services offered by
means of ATM by providers, acting on behalf of
one or more card issuers, that are not a party to
the framework contract with the customerwithdrawing money from a payment account, on
condition that those pr oviders do not conduct
other payment services as referred to in the
Second Schedule:
Cap. 204.Provided that any person providing
such cash withdrawal service shall abide by any
requirements, as may be s pecified in a directive
issued by the Central Bank under the Central
Bank of Malta Act, transposing Article 3(o) of the
Payment Services Directive.
(3) In the event of reasonable doubt as to whether
an activity constitutes the business of a financial
institution, or whether the  business of a financial
institution is being transact ed or otherwise in or from
Malta by any person, the matt er shall be conclusively
determined by the competent authority.
VERŻJONI ELETTRONIKA
A 1406
Substitution of 
article 3A of the principal Act.23. Article 3A of the principal Act  shall be substituted by the
following:(3A) (a)  A person that is neither a payment
service provider, nor is explicitly excluded from the
scope of this Act, shall be prohibited from providing
payment services.
(b) Notwithstanding paragraph (a)
of this sub-article, the competent authority shall
inform the EBA of the services notified pursuantto paragraphs (k) and (l) of sub-article (2A),
stating under which exclusion the activity is
carried out.
(c) The description of the activity notified
under paragraphs (k) and (l) of sub-article (2A)
shall be made publicly available in the public
register referred to in article 8D and the electroniccentral register developed, operated and
maintained by the EBA in accordance with
Article 15 of the Payment Services Directive.
(4) The granting of a licence or registration, as
applicable, shall be subject to an annual fee as thecompetent authority may determine from time to time.
Cap. 371.(5) A licensed or registered financial institution
may not take deposits or other repayable funds from the
public within the meaning of the Banking Act.
Cap. 371. 
Cap. 370.(6) Where a person is already licensed under the
Banking Act or the Investment Services Act to carry
out an activity listed in the  First Schedule, such person
shall not require a licence or registration for such an
activity under this Act." .
"Exemption for 
financial leasing of 
ships and aircrafts.3A. (1) Notwithstanding th e provisions of article
3, any entity, whether established or operating in Malta
or otherwise, carrying out  the activity of financial
leasing in or from Malta, an d all related transactions
involving:
Cap. 503.(a) an aircraft registered or to be
registered in the National Aircraft Register asdefined in the Aircraft Registration Act orregistered in any other jurisdiction whatsoever
and any aircraft engine; or
VERŻJONI ELETTRONIKA
A 1407
Substitution of 
article 4 of the principal Act.24. Article 4 of the principal Act shall be substituted by theCap. 234.(b) a ship registered or to be registered in
the register as defined in the Merchant Shipping
Act or registered in any other jurisdiction
whatsoever, 
shall not require a licence fr om the competent authority
for the purposes of this Act, where:
(i) such entity is owned and
controlled, or is a subsidiary of, or
exclusively funded by; and
(ii) any relevant financial leasing
transaction, or the rel evant underlying asset,
being an aircraft, an aircraft engine, or aship, is exclusively financed by persons orentities as described in Annex II to
Directive 2014/65/EU of the European
Parliament and of the Council of 15 May2014 on markets in financial instruments, or
persons or entities who are recognised as
eligible counter-parties in accordance withArticle 30 of such D irective 2014/65/EU:
Provided that in the
interpretation and application of sub-
paragraphs (i) and (ii) and in order to ensure
compliance with their requirements, wherethe ownership of such entity as described in
sub-paragraph (i), or of the entity financing
the transaction indicated in sub-paragraph(ii), or its underlying assets is vested in a
trustee, or is otherwise held by another
intermediary on a fiduciary basis, thecriteria described in Annex II of Directive
2014/65/EU shall apply by reference to the
beneficial interests involved, and not to thesaid trustee or  intermediary.
(2) The provisions of this article shall only apply
to an entity where the business of such entity is limited
to the financial leasing of aircrafts, aircraft engines, or
ships as described in sub-article (1) and to activities thatare ancillary thereto, to the exclusion of other types of
assets and activities otherwise falling within the
purposes of this Act.".
VERŻJONI ELETTRONIKA
A 1408
following:
"Application for a 
licence or a 
registration.4. (1) Any company with the intention of
transacting, regularly or habitually, activities listed
under the First Schedule of t his Act in or from Malta,
other than account information services, shall beforeregularly or habitually transacting any such activities,apply in writing to the competent authority for a
licence under this Act:
Provided that a legal person that is in
possession of an authorisation granted by another
Member State under the Payment Services Directive or
the Electronic Money Directive, may exercise its
European rights in accorda nce with the provisions of
the Payment Services Dir ective and the Electronic
Money Directive. 
(1A) Any natural pers on or company with the
intention of transacting, regularly or habitually, accountinformation services shall, before regularly orhabitually transacting any such services, apply in
writing to the competent authority for a registration
under this Act:
Provided that a natural or legal person that is in
possession of a registration granted by another Member
State under the Payment Services Directive, may
exercise its European rights in accordance with the
provisions of the Payment Services Directive. 
(2) All applications for a licence or registration, as
applicable, shall be in such form and accompanied bysuch information and shall conform to such conditions
as shall be prescribed from time to time by any
Financial Institutions Rule, and an application may onlybe withdrawn by written noti ce given to the competent
authority at a time before the licence or registrationbeing applied for has been granted or refused.
(3) The competent authority shall have the power
to require any person to provide such information as itshall deem necessary, for the purposes of determining
an application for a licenc e or a registration, as
applicable.
VERŻJONI ELETTRONIKA
A 1409
Substitution of 
article 5 of the 
principal Act.25. Article 5 of the principal Act shall be substituted by the
following:(4) The competent authority shall only grant a
licence or a registration if t he information and evidence
accompanying the application complies with all the
requirements set out in the Financial Institutions Rule
referred to in sub-article (2) and if the competentauthority’s overall assessment is favourable, after
having scrutinised the application.
(5) The competent authority may, where relevant,
before granting a licence or a registration, consult the
Central Bank or other relevant public authorities.
(6) A licence to provide payment services or to
issue electronic m oney and a registration to provide
account information services, shall be valid in all
Member States and shall allow the payment institution,the electronic money institution, or the account
information service provider concerned, to provide the
services that are covered by the licence or registrationthroughout the European Union, pursuant to a European
right.".
"
Granting of a 
licence or a 
registration.5. (1) No company shall be granted a licence in
terms of this Act unless:
(a) its initial capital whether in euro or in
any other currency acceptable to the competent
authority are equal to such amount, as may beestablished by the competent authority in any
Financial Institutions Rule and as may be
appropriate for the activities to be undertaken bythe applicant;
(b) there are at least two individuals, or any
other number of individuals as may be otherwisedetermined by the competent authority, who willeffectively direct the business of the financial
institution from Malta;
VERŻJONI ELETTRONIKA
A 1410
(c) the competent authority is satisfied that
the company has sound and prudent management
and has robust governance arrangements that
i n c l u d e  a  c l e a r  o r g a n i s a t i onal structure with well
defined, transparent and consistent lines of
responsibility, effective procedures to identify,
manage, monitor and report the risks to which it is
or might be exposed, and ad equate internal control
mechanisms, including sound administrative and
accounting procedures:
Provided that such arrangements,
procedures and mechanisms shall be
comprehensive and proportionate to the nature,
scale and complexity of the services provided by
the company, as may be determined by thecompetent authority from  time to time and, or as
may be specified by a Financial Institutions Rule;
(d) the competent authority is satisfied that
taking into account the need to ensure the soundand prudent management of the company,shareholders having a qualifying holding,
controllers and all persons who will effectively
direct the business of the  financial institution are
suitable persons to ensure its sound and prudent
management;
(e) the competent author ity is satisfied that,
where there are close links between the company
and another person or persons, such links do notprevent it from the effective exercise of its
supervisory functions;
(f) the competent authority is satisfied that
where there are close links between the company
and another person or persons, the laws, regulationsor administrative provisions of a third country
governing one or more persons with which the
company has close links, or difficulties involved inthe enforcement of thos e laws, regulations or
administrative provisi ons, do not prevent the
effective exercise of its  supervisory functions; and
(g) it satisfies any ot her conditions for the
granting of a licence, as may be specified in aFinancial Institutions Rule:
VERŻJONI ELETTRONIKA
A 1411
Provided that the company shall, after
being licensed under this Act, inform the competent
authority forthwith of any change in circumstances
concerning the application and shall be further
required to provide the competent authority withinformation necessary to monitor compliance with
the conditions referred to in this sub-article on a
continuous basis.
(1A) No natural person or company shall be granted a
registration to carry out a ccount information services
unless:
(a) the competent authority is satisfied,
where applicable, that qualifying shareholders,
controllers and all pers ons who effectively direct
the business of the account information service
provider are suitable per sons to ensure its sound
and prudent management;
(b) the competent authority is satisfied that
the natural person or company has sound and
prudent management and has robust governance
arrangements that include a clear organisational
structure with well defined, transparent andconsistent lines of res ponsibility, effective
procedures to identify, manage, monitor and reportthe risks to which it is or might be exposed, andadequate internal control mechanisms, including
sound administrative and accounting procedures:
Provided that such arrangements,
procedures and mechanisms shall be
comprehensive and proportionate to the nature,scale and complexity of the services provided by
the natural person or company, as may be
determined by the competent authority from time totime and, or as may be specified by a Financial
Institutions Rule;
(c) the competent authority is satisfied that
where there are close links between the natural
persons or the company and another person orpersons, such links do not prevent it from the
effective exercise of its supervisory functions;
VERŻJONI ELETTRONIKA
A 1412
(d) the competent authority is satisfied that
where there are close links between the natural
person or the company and another person or
persons, the laws, regulations or administrative
provisions of a third country governing one or morepersons with which the company has close links, or
difficulties involved in the enforcement of those
laws, regulations or administrative provisions, donot prevent the effective exercise of its supervisory
functions; and
(e) the natural person or company satisfies
any other conditions for the granting of a
r e g i s t r a t i o n  a s  m a y  b e  s p e c i f i e d  i n  a  F i n a n c i a l
Institutions Rule:
Provided that the natural person or
company shall, after bei ng registered under this
Act, inform the competen t authority forthwith of
any change in circumstances concerning theapplication, and shall be f urther required to provide
the competent authority with information necessary
to monitor compliance with the conditions referredto in this sub-article on a continuous basis.
Cap. 204.(1B) A natural person or a company who applies for a
licence or a registration as applicable in terms of this
article, to provide payment initiation services and, oraccount information services, shall as a condition for the
granting of its licence or registration, as applicable, also
be required to hold a prof essional indemnity insurance
covering the territories in which it offers services, or
some other comparable guarant ee against liability. With
respect to an applicant who intends to provide payment
initiation services, the requ ired professional indemnity
insurance or other c omparable guarantee against liability,
shall be required to ensure that it can cover its liabilitiesas specified in Articles 73, 89, 90 and 92 of the Payment
Services Directive, as transposed in directives issued by
the Central Bank under the Central Bank of Malta Act.With respect to an applicant who intends to provide
account information services, the required professional
indemnity insurance or oth er comparabl e guarantee
against its liability shall be required vis-à-vis the account
servicing payment service provider or the payment
service user resulting from the unauthorised or fraudulent
access to, or the unauthorised or fraudulent use of
payment account information:
VERŻJONI ELETTRONIKA
A 1413
Provided that the amount of the professional
indemnity insurance or ot her comparable guarantee
referred to in this sub-article shall be calculated in
accordance with the method as may be established in a
Financial Institutions Rule:
Provided further that any information required
by the competent authority in order to calculate theamount of the professional indemnity insurance or other
comparable guarantee required in terms of this sub-article
shall be provided to the competent authority in terms of a
Financial Institutions Rule.
(1C) Financial institutions required to hold a
professional indemnity insurance or other comparable
guarantee in accordance with sub-article (1B) shallreview, and if necessary recalculate, the minimum
monetary amount of their professional indemnity
insurance or other comparable guarantee at least on anannual basis and as may be established in a Financial
Institutions Rule.
(2) The competent authority shall determine each
application for a licence or a  registration within three
months of receipt of the appli cation or, in the event that
the application does not com ply with article 4(2) or
additional information is re quired, within three months of
compliance with the said sub- article or the submission of
the information required, as the case may be, whicheveris the later.
(3) The competent authority may grant or refuse to
grant a licence or a registrati on applied for under this Act,
and where it refuses an appli cation, it shall inform the
applicant in writi ng with the reasons f or the refusal.
(4) (a) In granting a licence or a registration, the
competent authority may subject a financial institution tosuch conditions as it may deem appropriate and having
granted a licence, it may, from time to time, vary orrevoke any condition so imposed or impose new
conditions.
(b) For the better carrying out of the
provisions of this Act, the c ompetent authority may, from
time to time, issue and publish Financial Institutions
Rules in terms of article 13. 
VERŻJONI ELETTRONIKA
A 1414
Substitution of 
article 5A of the 
principal Act.26. Article 5A of the principal Act  shall be substituted by the
following:(5) Where the competent authority for any reason
fails to determine an application for a licence or a
registration within the time prescribed under sub-article
(2), such fact shall be deemed to constitute a refusal to
grant a licence or a regis tration, as applicable.
(6) Where a licensed or registered financial
institution provides any of the services referred to in theFirst Schedule and at the same time intends to engage in
activities other than those listed in the First Schedule, it
shall not do so without the pri or consent of the competent
authority. The competent authority may require theestablishment of a separate entity for the carrying out ofthe business for which the fin ancial institution is licensed
or registered, where the activities in which the financialinstitution is engaged or inte nds to engage and that are
not listed in the First Sche dule, impair or are likely to
impair, either the financial soundness of the financialinstitution or the ability of the competent authority to
monitor the financial instit ution’s compliance with all
obligations set out in this Act and any regulations and, orRules issued thereunder.
(7) A financial institution licensed or registered in
Malta shall have its head office and its registered office inMalta and shall carry out at least part of its licensable
and, or registrable activities in Malta:
Provided that where a registered account
information service provider  is a natural person, such a
natural person shall have its contact address in Malta.".
"
Own funds. 5A. (1) Without prejudice to the minimum level
of the capital requirements as may be set out in a
Financial Institutions Rule,  the own funds of a financial
institution, other than an a ccount information service
provider, shall not fall below the amount of initialcapital as may be set out in a Financial Institutions
Rule, or the amount of own funds as calculated inaccordance with a Financial Institutions Rule issued by
the competent authority, whichever is the higher.
VERŻJONI ELETTRONIKA
A 1415
Amendment of 
article 6 of the 
principal Act.27. Article 6 of the principal Act shall be amended as follows:
(a) the marginal note thereof shall be substituted by the
following:
"Restriction, suspension and withdrawal of a licence
or a registration.";(2) Notwithstanding the initial capital
requirements, financial instit utions providing any of the
services listed in the Second or the Third Schedule,
except for payment initia tion services and account
information services, shall hold at all times own funds
calculated in accordance with one or more, where
applicable, of the methods as may be set out in aFinancial Institutions Rule.
(2A) Where a payment institution or an electronic
money institution belongs to the same group as another
payment institution, electroni c money institution, credit
institution, investment  firm, asset management
company or insurance undert aking, or where a payment
institution or an electronic money institution carries out
activities other than providing payment services orissuing electronic money, as applicable, the multiple
use of elements eligible for own funds shall be
prohibited.
(2B) In the event that the conditions set out in
Article 7 of the CRR are s atisfied, the competent
authority may choose not to apply sub-article (2) to
payment institutions or electronic money institutions
that are included in the con solidated supervision of the
parent credit institutions pursuant to the CRD.
(3) Where the amount of own funds of a financial
institution, other than an account information service
provider, falls below the amount established under sub-
articles (1) and (2), the competent authority shallrequire the financial institu tion to take the necessary
measures to restore the le vel of own funds within such
period as the competent authority may determine:
Provided that if the level of own funds of a
financial institution, other than an account information
service provider, is not resto red within the determined
period, the competent authority may, in addition to thepower to impose an administra tive penalty, exercise any
of the powers granted to it under the provisions of
article 6.".
VERŻJONI ELETTRONIKA
A 1416
(b) sub-article (1) thereof shall be substituted by the
following: 
"(1) The competent authority may withdraw,
suspend or restrict a licence or registration issued to a
financial institution where:
(a) the financial institution expressly renounces the
licence or registration;
(b) the financial institution does not commence
business pursuant to the licence or registration as
applicable, within twelve months of its issue, or any later
date as may be specified by the competent authority, or hasceased to engage in business for more than six months, or
for such other period of time as may be determined by the
competent authority;
(c) (i) the financial institution has obtained the
licence or registration through false statements or any otherirregular means; or 
(ii) where any document or information
accompanying an application for a licence or a registrationor any information given in conne ction therewith is false in
any material pa rticular; or 
(iii) where the financial institution conceals
from, or fails to notify or submit to the competentauthority, any document or information or change therein,
which it was its duty to reveal or notify under this Act and
any regulations and, or Rules issued thereunder;
(d) the financial institution no longer fulfils the
conditions required for the granting of the licence or
registration, or any conditions stipulated in any FinancialInstitutions Rule, or fails to inform the competent authority
on major developments in this respect;
(e) the financial institution is declared bankrupt or
goes into liquidation, or enters into a composition with itscreditors or is otherwise dissolved;
(f) the financial institution has ceased to operate as
a result of a merger with another financial institution;
(g) the financial institution is a branch of an
institution incorporated out side Malta, and the overseas
VERŻJONI ELETTRONIKA
A 1417
regulatory authority in the country of incorporation
withdrew the authorisation or r egistration of the institution;
(h) the financial institution would constitute a
threat to the stability of the  payment system by continuing
its payment services or electronic money;
(i) the financial institution fails or is likely to fail
to comply with any of the provisions of this Act and anyregulations or Financial In stitutions Rules issued
thereunder or with the conditi ons under which the licence
or registration is granted or any directive as may be issued
by the Authority;
(j) the financial institution has insufficient assets
to cover its liabilities; or
(k) the competent authority considers that, by
reason of the manner in which the financial institution is
conducting or proposes to conduct its affairs, or for any
other reason, these would constitute a thr eat to the stability
or integrity of the f inancial system.";
(c) sub-article (2) thereof shall be substituted by the
following: 
"(2) Where the competent authority withdraws,
suspends or restricts a licen ce or registration, it shall
inform the financial institution of the reasons for thewithdrawal, suspension or res triction of the licence or
registration.";
(d) sub-article (3) thereof shall be deleted; 
(e) sub-article (4) thereof shall be substituted by the
following: 
"(4) Restrictions of a licence or a registration issued
to a financial institution, that  are imposed by the competent
authority pursuant to sub-article (1), shall be suchrestrictions as the competent authority shall considerappropriate for the proper compliance by the financial
institution with the provisions of this Act and any
regulations and, or Rules issu ed thereunder, in addition to
the conditions, if any, of its licence or registration and the
protection of the integrity of the country’s financial system,
and may include:
VERŻJONI ELETTRONIKA
A 1418
(a) the requirement that the financial
institution be prohibited from undertaking any
transaction or transactions o r any activity listed in the
First Schedule; or 
(b) the requirement that the financial
institution be permitted t o undertake any transaction
or transactions or any activity listed in the First
Schedule only upon such ter ms and conditions, as the
competent authority may prescribe.";
(f) immediately after sub-article (5) thereof there shall
be added the following new sub-article: 
"(5A) Where the competent authority varies or
removes any restrictions imposed  under this article, it shall
inform the financial institution of the reasons for the
variation or removal of any such restrictions.";
(g) sub-article (6) thereof shall be substituted by the
following:
"(6) A licence granted to a branch of an institution
incorporated outside Malta may only be withdrawn afterconsultation with the overseas  regulatory authority of the
country of incorporation, unless the competent authority
d e c i d e s  t h a t  t h e  m a t t e r  i s  u r g e n t ,  o r  t h a t  t h e r e  a r e
circumstances which make  such prior consultation
inappropriate.";
(h) sub-article (7) thereof shall be substituted by the
following:
"(7) Upon the restriction or withdrawal of a licence
or a registration of a financial institution incorporated inMalta, the competent authority shall inform the overseasregulatory authorities of the country in which the financial
institution or its subsidiaries are carrying on any activity
under the First Schedule or any other activity as thecompetent authority may deem complementary to the
institution’s activities in Malta.";
(i) sub-article (8) thereof shall be substituted by the
following:
"(8) Where the competent authority is satisfied that
the circumstances so warrant, it may at any time make
VERŻJONI ELETTRONIKA
A 1419
public any restriction impos ed under this article.";
(j) immediately after sub-article (8) thereof there shall
be added the following new sub-article:
"(9) The competent authority shall publish any
withdrawal or suspension of a licence or registration,
including those in the public register referred to in article8D, and in the electronic central register developed,
operated and maintained by the EBA in accordance with
Article 15 of the Payment Services Directive.". 
Substitution of 
article 7 of the 
principal Act.28. Article 7 of the principal Act shall be substituted by the
following:
"Notification of 
any variation, restriction, suspension or 
withdrawal of a 
licence or registration.7. (1) Where the compe tent authority proposes:
(a) to vary any condition to which the
licence or registration is subject, or to impose a
condition thereon; or
(b) to withdraw, suspend or restrict, a
licence or registration or to vary any restrictionthereon, 
it shall serve written notice of its intention on thefinancial institution and shall specify the grounds upon
which the competent authority intends to take suchaction.
(2) Every notice given under sub-article (1) shall
state that the financial institution concerned may, within
such reasonable period after service thereof as may be
stated in the notice, being a period of not less than
forty-eight hours and not more than thirty days, make
representations in writing to the competent authority
giving reasons why such action should not be taken,
and the competent authority  shall consider any such
representations before arriving to a final decision.
(3) Unless the competent authority considers that
the matter is urgent, it shall not impose or vary any
restriction or con dition, or withdraw or suspend a
licence or a registration be fore the expiry of the period
as set out in sub-article (2).
(4) The competent authority shall, as soon as
practicable, notify its final  decision in writing to any
financial institutions to whom notice has been served
under sub-article (1).".
VERŻJONI ELETTRONIKA
A 1420
Substitution of 
article 7A of the principal Act.29. Article 7A of the principal Act  shall be substituted by the
following:
Addition of 
articles 7B and 
7C to the principal Act.30. Immediately after article 7A of the principal Act, as
substituted, there s hall be added the following new articles:"Changes in 
information.7A. A financial institution licensed or registered
under this Act shall provide  the competent authority
with particulars of any changes in the information
provided under this Act a nd any regulations and, or
Rules issued thereunder, as soon as such financial
institution becomes aware of such change.".
"Power to issue 
directives. 
Cap. 330.7B. (1) Without prejudice to any of the powers
conferred under this Act, the competent authority may,
in order to carry out the functions and duties prescribedby the Malta Financial Services Authority Act and by
this Act and any regulatio ns and, or Rules issued
thereunder, whenever it deems necessary, give by
notice in writing such directives as it may deem
appropriate in the circumstances.
(2) Any person to whom a notice is given in
accordance with sub-article (1) shall comply therewith
and give effect to any such directive within the time and
in the manner stated in the directive.
(3) The power to give directives under this article
shall include the power to vary, alter, add or withdraw
any directive, as well as the power to issue new orfurther directives.
(4) Where the competent authority is satisfied that
the circumstances so warrant, it may at any time make
public any directive it has given under any of the
provisions of this article.
Information to be 
provided to 
customers or potential 
customers.7C. A financial institution licensed or registered
under this Act shall provide its customers or potential
customers, including in any form or medium of
marketing activity or commun ication disseminated to
the public by means of all types of media, with a
statement of the fact that the financial institution is
licensed or registered, as applicable, by the competentauthority, together with the address of the competentauthority.".
VERŻJONI ELETTRONIKA
A 1421
Substitution of 
the heading ‘Obligations of 
Licence Holders 
and Others’ of the principal 
Act.31. Immediately after article 7C of the principal Act, as added,
the heading "OBLIGATIONS OF LICENCE HOLDERS AND
OTHERS" of the principal Act shall be substituted by the following: 
"OBLIGATIONS OF FINANCIAL AND OTHER
INSTITUTIONS" .
Amendment of 
article 8 of the 
principal Act.32. Article 8 of the principal Act shall be amended as follows:
(a) the marginal note thereof shall be substituted by the
following:
"Opening of branches and subsidiaries.";
(b) sub-article (1) thereof shall be substituted by the
following: 
"(1) A financial institution, other than those
exercising a European right, shall inform the competent
authority in writing, before opening a new branch in
Malta.";
(c) sub-article (2) thereof shall be substituted by the
following: 
"(2) A financial institution intending to open a
branch or an office outside  Malta to provide any of the
activities listed in the First Schedule, with the exception ofactivities 4 or 10 thereof, and a financial institution
intending to open a branch or office in a third country in
order to provide any of the act ivities listed in the First
Schedule, shall require the prior written approval of the
competent authority.";
(d) immediately after sub-article (2) thereof there shall
be added the following new sub-articles:
"(2A) A financial institution intending to provide the
activities listed in the Second or Third Schedules in
another Member State in exercise of a European right,
shall inform the competent authority in accordance with
the procedure set out in Ar ticle 28 of the Payment
Services Directive.
Opening of 
subsidiaries.(2B) A financial institution intending to set up or
acquire a subsidiary in or outside Malta shall require
the prior written approval of the competent authority.";
VERŻJONI ELETTRONIKA
A 1422
(e) sub-articles (3) to (6) thereof shall be deleted;
(f) immediately after sub-article (6) thereof there shall
be added the following new sub-article: 
Substitution of 
article 8A of the 
principal Act.33. Article 8A of the principal Act  shall be substituted by the
following:"Information to 
customers and 
potential customers.(7) Financial institutions shall ensure that
branches acting on their beha lf inform their customers
and potential customers of this fact.".
"Agency 
distribution 
arrangements.8A. (1) A financial institution intending to
provide any of the activities referred to in the Schedules
to this Act through an agent or, in the case of anelectronic money institution intending to appoint a
distributor to distribute or  redeem electronic money,
shall communicate the following information to the
competent authority:
(a) the name and address of the agent and,
or distributor;
(b) a description of the internal control
mechanisms that will be used by the agent in
order to comply with the obligations in relation to
money laundering and the funding of terrorismunder any anti-money laundering and combating
the funding of terrorism legislation; 
(c) the identity of directors and persons
responsible for the manag ement of the agent to be
used in the provision of the activities referred to
in the Schedules to this Act, and for agents other
than payment service providers, evidence that
they are fit and proper persons;
(d) the activities referred to in the
Schedules to this Act that are carried out by the
financial institution and for which the agent is
mandated; and
(e) where applicable, the unique
identification code or number of the agent ordistributor:
Provided that a person who is
appointed as agent of a financial institution shall
only act as agent in respec t of those activities for
which the financial institution to which he will act
as agent, is licensed or registered under this Act.
VERŻJONI ELETTRONIKA
A 1423
(1A) In the event of material changes to the
particulars communicated to the competent authority at
the initial notification pursuant to paragraph (b) of sub-
article (1), the financial institution concerned shall
provide the competent authority with the updatedinformation without delay.
(2) An electronic money in stitution shall not issue
electronic money through agents:
Provided that an electronic money institution
may, subject to such conditions as may be establishedby the competent authority, distribute and redeemelectronic money through agents and, or distributors.
(3) The competent authority may subject the
person who will be appointed as agent to any of the
obligations imposed on the financial institution under
this Act.
(4) The competent authority shall, within two
months of receipt of the information referred to in sub-
article (1), communicate to the financial institution
whether the agent has been entered in the publicregister referred to in article 8D:
Provided that, if the competent authority is not
satisfied that the informati on provided is correct, it
shall take further action to verify the information before
entering the agent in the register:
Provided further that, if after taking action to
verify the information, the competent authority is not
satisfied that the information provided pursuant to sub-article (1) is correct, it shall refuse to enter the agent in
the public register referred to in article 8D and shall
inform the financial institution without undue delay.
(4A) An agent may only commence providing the
relevant activities upon e ntry in the public register
referred to in article 8D.
(4B) Where a payment institution or an electronic
money institution intends t o provide payment services
in another Member State by engaging an agent or
establishing a branch, it shall also follow theprocedures set out in Article 28 of the Payment
Services Directive.
VERŻJONI ELETTRONIKA
A 1424
Substitution of 
article 8B of the principal Act.34. Article 8B of the principal Act shall be substituted by the
following:(5) Where a financial institution licensed or
holding an equivalent authorisation in another Member
State carries out the activities listed in any of the
Schedules in Malta through a branch or by engaging an
agent or distributor, the financial institution shall followthe procedures established in any Financial Institutions
Rule:
Provided that if the competent authority has
reasonable grounds to suspect that, through such
branch, agent or distribut or, money laundering or the
funding of terrorism is being or has been committed orattempted, or that the engagement of such branch oragent could increase the risk of money laundering or
the funding of terrorism, it shall inform the Member
State in which the financial institution is established,and may refuse to register the branch or agent, or may
withdraw the registration of the branch or agent.
(6) Financial institutions shall, without undue
delay and in accordance with the procedure provided
for in sub-articles (4) and (4A), communicate to the
competent authority any ch anges regarding the use of
agents or distributors, inc luding additiona l agents or
distributors.
(7) A financial institution intending to provide its
activities through an agent  in a third country shall
require the prior written approval of the competent
authority.
Information to 
customers and 
potential customers .(8) Financial institutions shall ensure that agents
or distributors acting on their behalf inform their
customers and potential customers of this fact.".
"Outsourcing of 
operational 
functions.8B. (1) Where a financial institution intends to
outsource operational functions  of its services it shall
inform the competent authority accordingly:
Provided that the outsourcing of important
operational functions, including IT systems, shall not
be undertaken in such a way as to impair materially thequality of the financial institution’s internal control and
the competent authority’s ability to monitor and retrace
the financial institution’s  compliance with all of the
obligations established in this Act and any regulations
and, or Rules made thereunder.
VERŻJONI ELETTRONIKA
A 1425
Substitution of 
article 8C of the 
principal Act.35. Article 8C of the principal Ac t shall be substituted by the(2) For the purpose of sub-article (1), an
operational function shall be regarded as important if a
defect or failure in its performance would materially
impair the continuing compliance of a financial
institution with the requirements of its licence orregistration, its other obligations under this Act or any
regulations and, or Rules issued thereunder, its financial
performance, or the soundness or continuity of itsservices:
Provided that financi al institutions that
outsource important operationa l functions shall comply
with the following conditions:
(a) the outsourcing shall not result in the
delegation by senior management of itsresponsibility;
(b) the relationship and obligations of the
financial institution towards any person making
use of its services under this Act and any
regulations and, or Rules issued thereunder shallnot be altered;
(c) the conditions with which the
financial institution must  comply with in order to
be licensed and remain so in accordance with thisAct and any of the regulations and, or Rulesissued thereunder shall not be undermined; and
(d) none of the other conditions subject to
which the financial institution’s licence or
registration was grante d shall be removed or
modified.
(2A) Financial institutions shall, without undue
delay, communicate to the competent authority any
changes regarding the use of e ntities to which activities
are outsourced.
(3) The competent authority may issue a Financial
Institutions Rule, laying do wn the requirements for
outsourcing service providers  and the provision of such
outsourced services.".
VERŻJONI ELETTRONIKA
A 1426
following:
Substitution of 
article 8D of the principal Act.36. Article 8D of the principal Act  shall be substituted by the
following:"Liability. 8C. (1) Where financial institutions rely on
third parties for the performance of operational
functions, those financial institutions shall take
reasonable steps to ensure that the requirements of this
Act and any regulations and, or Rules issuedthereunder are complied with.
(2) Financial institutions s hall remain fully liable
for any acts of their employees, or any agent, branch orentity to whom or to which activities may have beenoutsourced."
.
"Public register. 8D. (1) The competent authority shall establish
and maintain a public regi ster in which the following
are entered:
(a) financial institutions licensed or
registered in terms of this Act;
(b) agents of financial institutions in
Malta or in another Member State;
(c) branches of financial institutions,
established in or outside Malta, if those branchesprovide services in another Member State;
(d) branches in Malta of payment
institutions authorised in another Member State;
(e) branches in Malta of account
information service providers authorised inanother Member State;
(f) account information service providers
registered under this Act exercising their
European right to provide services in another
Member State;
(g) account information service providers
authorised in another Member State exercising
their European right to pr ovide services in Malta;
(h) the institutions referred to in
paragraphs (4) to (23) of Article 2(5) of the CRD
that are entitled under national law to providepayment services;
(i) branches in Malta  of electronic money
institutions authorised in another Member State;
VERŻJONI ELETTRONIKA
A 1427
(j) payment institutions and electronic
money institutions licensed under this Act
exercising their European right to provide
services in another Member State;
(k) payment institutions and electronic
money institutions authorised in another Member
State exercising their European right to provideservices in Malta;
(l) service providers carrying out services
based on specific payment instruments that can beused only in a limited way, provided they satisfyany of the following conditions:
(i) instruments allowing the holder
to acquire goods or services only in the
premises of the issuer, or within a limited
network of service providers under directcommercial agreement with a professional
issuer;
(ii) instruments that can be used
only to acquire a very limited range of
goods or services; and
(m) service providers carrying out
payment transactions by a provider of electroniccommunication networks or services provided in
addition to electronic communication services for
a subscriber to the network or service:
(i) for the purchase of digital
content and voice-based services, regardless
of the device used for the purchase or
consumption of the digital content and
charged to the related bill; or
(ii) performed from or by means of
an electronic device and charged to therelated bill within the framework of a
charitable activity, or for the purchase of
tickets.
(2) The register referred to in sub-article (1) shall
identify the services for which the financial institutionis licensed or registered and it shall be publicly
available for consultati on, accessible online and
updated without delay.
(3) Payment institutions shall be listed in the
register separately from a ccount information service
providers.
VERŻJONI ELETTRONIKA
A 1428
Substitution of 
article 8E of the 
principal Act.37. Article 8E of the principal Act shall be substituted by the
following:
Substitution of 
article 8F of the 
principal Act.38. Article 8F of the principal Act  shall be substituted by the
following:
Addition of article 8G to the 
principal Act.39. Immediately after article 8F  of the principal Act, as(4) The competent authority shall enter in the
public register any withdrawal of a licence or
registration.
(5) The competent authority shall notify the EBA
of the reasons for the wit hdrawal of any licence or
registration.
(6) The competent authority shall, without delay,
notify the EBA of the infor mation entered in the public
register.
(7) The competent authority shall be responsible
for the accuracy of the in formation specified in sub-
article (6) and for keeping that information updated.".
"Opening of 
branches having 
their head office outside the 
European Union.8E. (1) In the assessment of an application for
the opening of a branch by an electronic money
institution having its head office outside the European
Union, the competent authority may not apply
provisions which result in  more favourab le treatment
than that accorded to an electronic money institution
having its head office within the European Union.
(2) The competent authority shall notify the
European Commission of all authorisations for
branches of electronic money institutions having their
head office outside the European Union as stated insub-article (1)."
.
"Issuance and 
redeemability of 
electronic money.8F. (1) Electronic money in stitutions shall issue
electronic money at par value on the receipt of funds.
(2) Upon request by the electronic money holder,
electronic money instituti ons shall redeem at any
moment and at par value the monetary value of the
electronic money held without delay.
(3) For the better carrying out of the provisions of
this article and to better transpose the provisions of the
Electronic Money Directive, the competent authority
may, from time to time, issue, amend or revokeFinancial Institutions Rules  that shall be binding on
electronic money institutio ns as specified therein.".
VERŻJONI ELETTRONIKA
A 1429
substituted, there shall be added the following new article:
Substitution of 
article 9 of the 
principal Act.40. Article 9 of the principal Act shall be substituted by the
following:"Record-keeping. 8G. Without prejudice to any anti-money
laundering or combating the funding of terrorism
legislation, or other rele vant European Union Law,
financial institutions other than account informationservice providers, shall keep all appropriate records forthe purposes of this Act an d any regulations and, or
Rules issued thereunder for at least five years."
.
"Notification of new 
or variation in 
participation or 
control.9. (1) If:
(a) any person takes or intends to take any
action to acquire or dispos e, directly or indirectly,
of a qualifying shareholding in a financial
institution, or to further increase or reduce,
directly or indirectly, such qualifying
shareholding so that the proportion of the votingrights, or of the share capital held by that person
in that financial institution reaches, exceeds or
falls below twenty per centum, thirty per centumor fifty per centum, or so that the financial
institution becomes or ceases to be the subsidiary
of such person; or
(b) any financial institution takes or
intends to take action to  sell or dispose of its
business or any significant part thereof, merge
with any other company, undergo any
reconstruction or vary its nominal or issued sharecapital, or effect any material change in voting
rights,
without obtaining the prior a pproval of the competent au-
thority or, if after having obtained such approval it subse-
quently appears to the competent authority that any of these actions, or the influence exercised by the person 
who intends to take such action, is operating or is likely to operate to the detriment  of the prudent and sound man-
agement of the financial institution, without prejudice to the provisions of article 22, the competent authority shall express its opposition and shal l have the power to take ap-
propriate measures t o rectify the situation. 
(1A) The appropriate measures referred to in sub-
article (1) may include: 
VERŻJONI ELETTRONIKA
A 1430
(i) restraining the person or
financial institution from taking or
continuing the action; 
(ii) declaring the action to be null
and void; 
(iii) requiring the person or financial
institution to take such steps as may be
necessary to restore the position existing
immediately before the  action was taken;
(iv) restraining the person or
financial institution from exercising any
rights which the action would, if lawful,
have conferred upon them, including theright to receive any payment or to exercise
any voting rights attached to the shares
acquired;
(v) restraining the person or
financial institution from taking any similaraction, or any other action within the
categories set out in paragraphs (a) and (b)
of sub-article (1); and, or
(vi) suspending the exercise of the
voting rights attached to the shares held bythe shareholders or members of the
financial inst itution in question.
(2) If as a result of an acquisition of shares in a
financial institution, the financial institution in which a
person proposes to acquire  the shareholding would
become a subsidiary or be subject to the control of the
person acquiring those shares, it shall be within the
discretion of the competent authority to considerwhether any request made by such person for the
approval of the compete nt authority under the
provisions of this article cons titutes a request to apply
for a licence to conduct the business of a financialinstitution under the provisions of this Act and any
regulations and, or Rules issued thereunder.
Cap. 345.(3) Sub-article (1) shall apply whether or not any
of the relevant shares are listed on a regulated market interms of the Financial Markets Act, or on an equivalent
market in a third country.
VERŻJONI ELETTRONIKA
A 1431
Substitution of 
article 10A of 
the principal Act.41. Article 10A of the principal Act shall be substituted by the(4) (a) Where a person intends to take any
action as set out in sub-article (1)(a) or (b), such person
shall notify the competent authority in writing of any
such decision in advance, indicating the size of the
intended shareholding and providing any relevantinformation as and in the m anner that the competent
authority may, by a Financial Institutions Rule, require,
including the form in which such notification shall bemade and the criteria adopted by the competent
authority in determining whether such person is a
suitable person. 
(b) Where the qualifying shareholding is
acquired despite the oppos ition of the competent
authority, the said author ity shall, regardless of any
other administrative pena lty or other supervisory
measure that may be adopted, provide for thesuspension of the exercise of the voting rights of the
acquirer, the nullity of the votes cast, or the possibility
of annulling those votes.
(c) Where a person fails to comply with the
obligation to provide prior information in accordance
with paragraph (a) of this sub-article, the competent
authority shall have the power to take appropriatemeasures in accordance with sub-article (1A).
(5) (a) A financial instit ution shall notify to the
competent authority, in writing, the full particulars of
any person who is proposed to become a controller or
director of the financial institution or any person who isproposed to cease to be a controller or director of the
financial institution.
(b) If the competent authority is of the
opinion that any person who is or is proposed to
become a controller or director  of a financial institution
is not a suitable person to be a controller or director, the
competent authority may make an order requiring such
a person to cease to be a controller or director, orrestraining such a person f rom becoming a controller or
director.
The competent authority may also issue, amend or
revoke any Financial Institutions Rule as may berequired in order to better implement the provisions ofthis article.".
VERŻJONI ELETTRONIKA
A 1432
following:
Substitution of 
article 10B of 
the principal 
Act.42. Article 10B of the principal Act shall be substituted by the
following:
Substitution of article 11 of the principal Act. 43. Article 11 of the principal Act  shall be substituted by the
following:"Prohibition of 
interest.10A. The granting of interes t or of any other benefit
related to the length of time during which an electronic
money institution holds electronic money shall be
prohibited.".
"Safeguarding 
requirements.10B. (1) A payment instit ution providing payment
services as referred to in paragraphs 2(a) to (f) of the
Second Schedule and an electronic money institution
shall safeguard all funds received from any person
making use of its services, or received through another
payment service provider f or the execution of payment
transactions, or in exchange for electronic money thathas been issued.
(2) For the better carrying out of the provisions of
this Act on safeguarding re quirements, the competent
authority may, from time to time, issue, amend or
revoke any Financial Institutions Rule which shall be
binding on financial institutions as specified therein.".
"
Financial 
institutions unable 
to meet obligations.11. Notwithstanding any investigation provided
for in this Act:
(a) where a financial institution considers
that it has failed to comply with, or that it is likely
to fail to comply with any of the provisions of this
Act and any regulations and, or FinancialInstitutions Rules issued  thereunder, or with the
conditions under which the licence or registrationwas granted, it shall forthwith inform thecompetent authority and the Central Bank in
writing;
(b) where the competent authority
becomes aware that a financial institution has
failed to comply with, or that it is likely to fail tocomply with any of the provisions of this Act and
any regulations and, or Financial Institutions
Rules issued thereunder, or with the conditionsunder which the licence or registration was
granted, it shall forthwith inform the Central
Bank in writing;
VERŻJONI ELETTRONIKA
A 1433
Addition of 
article 11A to 
the principal Act.44. Immediately after article 11  of the principal Act, as
substituted, there shall be added the following new article:
Addition of article 11B to 
the principal 
Act.45. Immediately after article 11A  of the principal Act, as added,
there shall be added the  following new article:(c) where the Central Bank becomes
aware that a financial institution has failed to
comply with, or that it is likely to fail to comply
with, any of the provisions of this Act and any
regulations and, or Finan cial Institutions Rules
issued thereunder, or w ith the conditions under
which the licence or registration was granted, itshall forthwith inform the competent authority inwriting.".
"
Management of 
operational and 
security risks.11A. (1) Payment institutions, electronic
money institutions and acc ount information service
providers shall establish a framework with appropriate
mitigation measures and control mechanisms to
manage the operational and security risks relating to
the payment services they provide. As part of thatframework, payment instit utions, electronic money
institutions and account infor mation service providers,
shall establish and maintain effective incidentmanagement procedures, including for the detection
and classification of major operational and security
incidents.
(2) Payment institutions, electronic money
institutions and account information service providersshall provide to the Central Bank, on an annual basis or
at shorter intervals as may be determined by the
competent authority in co-operation with the CentralBank, an updated and compre hensive assessment of the
operational and security risks relating to the paymentservices they provide, and on the adequacy of the
mitigation measures an d control mechanisms
implemented in response to those risks.
(3) The competent authority shall co-operate with
the Central Bank in the assessment and processing of
documents referred to in sub-article (2).
(4) The competent authority may issue, amend or
revoke Financial Institutions Rules as may be required
in order to better implement the provisions of this
article.".
VERŻJONI ELETTRONIKA
A 1434
Substitution of 
article 12 of the 
principal Act.46. A r t i c l e  1 2  o f  t h e  p r i n c i p a l  A c t  shall be substituted by the"Incident 
reporting.11B. (1) In the case of a major operational or
security incident and wher e Malta is the home Member
State, payment institutions, electronic money
institutions and account information service providers
shall notify the Central Bank, without undue delay.Upon receipt of such notification, the Central Bank
shall promptly notify the competent authority.
(2) Where the incident has or may have an impact
on the financial interests of its payment service users,
the payment institution, electronic money institution or
the account information service provider concerned
shall, without undue delay, inform its payment service
users of the incident and of all measures that they can
take to mitigate the advers e effects of the incident.
(3) Upon receipt of the notification referred to in
sub-article (1), the Central Bank shall, in co-operation
with the competent authority, assess the relevance of
the incident to the relevant authorities in Malta, and
notify any such authorities accordingly.
(4) The competent authority shall, in cooperation
with the Central Bank, cooperate with the EBA and the
ECB for the purpose of asse ssing the relevance of the
incident to other relevant European Union and national
authorities in accordance with Article 96(2) of the
Payment Services Directive.
(5) Where the competent authority receives a
notification of a major opera tional or security incident
in accordance with sub-article (1), it shall, where
appropriate upon the basis of that notification and in
cooperation with the Central Bank, take all of thenecessary measures to protect the immediate safety of
the financial system.
(6) Payment institutions, electronic money
institutions and account information service providers
shall, at least on an annual basis, provide to the CentralBank statistical data on fraud relating to different
means of payment.
(7) The competent authority may issue, amend or
revoke any Financial Institutions Rule, as may be
required, in order to better implement the provisions ofthis article.".
VERŻJONI ELETTRONIKA
A 1435
following:
"Powers and duties 
of the Minister.12. (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) amend any of the Schedules to this Act;
(b) exempt any person from any one or
more provisions of this Act, including anexemption from requiring a licence or a
registration under this Act, subject to such
variations, additions, adaptations andmodifications as may be p rescribed and subject to
such conditions or other requirements, includingother forms of authoris ation and notification
procedures, as may be prescribed;
(c) transpose, implement and give effect to
the requirements of the Electronic Money
Directive and the Payment Services Directive:
Provided that, when any of the options
referred to in Article 107(1) of the Payment
Services Directive are made use of, the Ministershall inform the European Commission of the use
of any such options as well as of any subsequent
changes thereof;
(d)  transpose, implement and give effect
to the provisions, require ments, obligations and
commitments relating to t he regulation of payment
institutions and electr onic money institutions
arising out of member ship in, affiliation or
relationship with inter national or regional
organisations, or groupings  of countries, or arising
out of any treaty, convention or other internationalagreement whether bilateral, regional or
multilateral to which Malta is a party; 
Cap. 16.(e) provide that any other law or any
provision thereof, shall not apply to matters falling
under the regulations and in particular, mayexempt activities as may be designated from the
application of any article or provision of the Civil
Code;
VERŻJONI ELETTRONIKA
A 1436
(f) transpose, implement and, or give
effect to the requirements of the PAD, and in so
doing may also establish or maintain measures
alternative to those referred to in Article 10(2) to
(6) of the PAD:
Provided that:
(i) it is clearly in the interest of the
consumer;
(ii) there is no additional burden for
the consumer; and
(iii) the switching as defined in
Article 2(18) of the PAD is completedwithin, as a maximum, the same overall time
frame as that indicated in Article 10(2) to (6)
of the PAD;
(g) set up a specific mechanism to ensure
that consumers who do not  have a payment account
as defined in Article 2(3) of the PAD in their
territory, and who have been denied access to such
a payment account for which a fee is charged bycredit institutions, will have effective access to a
payment account with basic features in terms of the
PAD, free of charge; 
(h) transpose, implement and, or give
effect to the provisions and requirements ofDirectives, Regulations and any other legislative
measures of the European Union requiring
transposition and, or implementation as they maybe amended from time to time, including any
implementing measures that have been or may be
issued thereunder and relating, but not limited tolicence holders as may be specified therein; any
such regulations strictly related to transposition or
implementation as aforesaid, may containprovisions which are inconsistent with the
provisions of this Act or a ny other law, and for this
purpose may provide that any provision in this Act
or in any other law shall not apply to matters
falling under the regulations and in case of such
inconsistency, the provisions in any suchregulations shall prevail;
(i) regulate products and services offered
by financial institutions.
VERŻJONI ELETTRONIKA
A 1437
Amendment of 
article 13 of the 
principal Act.47. Article 13 of the principal Act shall be amended as follows:
(a) sub-article (1) thereof shall be substituted by the
following: 
"(1) It shall be the duty of the competent authority
to carry out the functions assigned to it by this Act and any
regulations and, or Rules issu ed thereunder and to ensure
that financial institutions ca rrying out business in or from
Malta comply with this Act, any regulations and, or Rules
issued thereunder and with the  conditions of their licence
or registration. In carrying out such functions, thecompetent authority shall ensure that the controls exercisedfor checking continued compliance in terms of this Act,
and any regulations and, or Rules issued thereunder are
proportionate, adequate and responsive to the risks towhich financial institutions are exposed. The said functions
consist, inter alia , of the following:
(a) to require the financial institution, in
terms of article 14, to provide any informationneeded to monitor compliance specifying the purpose
of the request as appropria te and the time limit by
which the information is to be provided;
(b) to carry out on-site inspections at the
financial institution, at a ny agent or branch thereof
providing services under the responsibility of thefinancial institution, or  at any entity to which
activities are outsourced;
(c) to withdraw, suspend or restrict any
licence or registration pursuant to article 6; and
(d) to issue non-bindi ng recommendations(2) Regulations made under this article may be
made subject to such exemptions or conditions as may bespecified therein, may make different provisions for
different cases, circumstan ces or purposes and may give
to the competent authority such powers of adaptation of
the regulations as may be specified.
(3) Where regulations have been issued in terms of
this article the competent a uthority may issue, amend or
revoke any Financial Instit utions Rule within the
meaning of this Act to better carry out and implement the
provisions of the regulations.".
VERŻJONI ELETTRONIKA
A 1438
and guidelines, Rules within the meaning of this
article and binding administ rative provisions in terms
of this Act and any regulations and, or Rules issued
thereunder."; 
(b) immediately after sub-article (1) thereof there shall
be added the following new sub-articles: 
"(1A) Notwithstanding the requirements of
article 5A(1), (2A) and (2) and Articles 7 and 9 of thePayment Services Directive, the competent authority
may take steps as referred to in sub-article (1) to
ensure sufficient capital for the activities carried outby a financial institution and, or to ensure compliance
with Article 5(1B), in particular where the activities of
a financial institution other than those listed in theSchedules impair or are likely to impair the financial
soundness of the financial institution concerned.
Cap. 330.(1B) Without prejudice to the procedures for the
withdrawal of a licence or a registration, or to article
22, or to national provisions of criminal law and to anyother power granted to the competent authority under
the provisions of this Act and any regulations and, or
Rules issued thereunder or under the provisions of the
Malta Financial Services Authority Act, where the
competent authority is satisfied that a financial
institution’s conduct amounts  to a breach of any of the
provisions of this Act or any regulations and, or Rules
issued thereunder, or of any directive, restriction and, or
suspension imposed, or of an y other request or order
made by the competent authority pursuant to the
provisions of this Act or any regulations and, or Rules
issued thereunder, or the Malta Financial ServicesAuthority Act, or a licence condition, or a condition
required for the granting of a licence or a registration;
the competent authority may adopt or impose on any
such financial institution and, or on those who
effectively control the business of such financial
institution, any measures as it may deem appropriateaimed specifically at ending  observed breaches or the
causes of such breaches.
(1C) The competent authority shall possess all
powers and adequate resources necessary for theperformance of its duties and shall guarantee
independence from economic bodies and avoid
conflicts of interest.";
VERŻJONI ELETTRONIKA
A 1439
(c) sub-article (2) thereof shall be substituted by the
following: 
"(2) The competent authority may issue, amend or
revoke any Financial Institutions Rule as may be required
for carrying into effect any of  the provisions of this Act
and any regulations and, or Financial Institution Rules
issued thereunder. The said Ru les may establish additional
requirements and conditions in relation to activities offinancial institutions, the conduct of their business, their
relations with customers, the public and other parties, their
responsibilities to the competent authority, reportingrequirements and any other matters, as the competent
authority may consid er appropriate.";
(d) immediately after sub-article (2) thereof there shall
be added the following new sub-articles: 
"(2A) The competent authority may issue, amend or
revoke any Financial Institutions Rule as may be required
for the purpose of implementing any guidelines,
recommendations, decisions , opinions or any other
instrument issued by the EBA, as may be required.
(2B) A Financial Institutions Rule shall be binding
on financial institutions and others as may be specified
therein.";
(e) sub-article (3) thereof shall be substituted by the
following: 
"(3) A Financial Institutions Rule and any
amendment or revocation th ereof shall be officially
communicated to all financial institutions and thecompetent authority shall make copies thereof available tothe public, upon request.";
(f) sub-article (5) thereof shall be deleted;
(g) immediately after sub-article (5) thereof there shall
be added the following new sub-articles: 
"(6) The competent authority shall, as soon as
possible, notify the European Commission that it has beendesignated in part, to ensure and monitor the effective
compliance with the Payment  Services Directive. The
competent authority shall inform the European
VERŻJONI ELETTRONIKA
A 1440
Commission of the provisions  of the Payment Services
Directive for which it is responsible. The competent
authority that has been designated in part, to ensure andmonitor effective compliance with the Payment Services
Directive, shall immediately notify the European
Commission of any subsequent change concerning itsdesignation and competence.
(7) Nothing in this Act shall be taken to imply that
the competent authority is required to superv ise activities
of financial institutions other  than for the provision of the
services listed in the Schedules to this Act.
(8) The powers, functions and duties conferred
upon the competent authority in this Act and anyregulations and, or Rules issued thereunder transposingTitle II of the Payment Services Directive, shall be vested
in the competent authority wh en the competent authority is
the home Member State.
(9) The competent author ity shall ensure that
financial institutions do not  derogate to the detriment of
their customers, from the provisions of this Act and any
regulations and, or Rules issued thereunder, except where
explicitly provided for therein:
Provided that financial institutions may,
without prejudice to article 10, decide to grant morefavourable terms to their customers.".
Addition of 
article 13A to 
the principal 
Act.48. Immediately after article 13 of the principal Act, as amended,
there shall be added the following new article:
Amendment of 
article 14 of the 
principal Act.49. Article 14 of the principal Ac t shall amended as follows:
(a) sub-article (1) thereof shall be substituted by the
following: "Reasons and 
communication.
S.L. 376.05.13A. Any measure taken by the competent authority,
or by the competent author ity in collaboration with the
Central Bank as applicable, pursuant to the European
Passport Rights for Financi al Institutions Regulations
and article 23(1) involving administrative penalties or
restrictions on the exercise of a European right shall beproperly justified and communicated to the paymentinstitution, the electronic money institution or the
account information service provider concerned.".
VERŻJONI ELETTRONIKA
A 1441
"(1) A financial institut ion shall submit to the
competent authority such inf ormation and documentation
as the competent authority may require either on a periodic
and, or on an ad hoc  basis, in the discharge of its duties
under this Act and any regulations and, or Rules issuedthereunder or any other law, and the competent authoritymay enquire into and ask for clarification of any
information submitted.";
(b) sub-article (2) thereof shall be substituted by the
following:
"(2) All periodic information and documentation
required under sub-article (1) shall be submitted in such
form and at such periods as the competent authority mayfrom time to time prescribe by any Financial Institutions
Rules and, or at such periods as the competent authority
may require in writing.";
(c) sub-article (3) thereof shall be deleted;
(d) sub-article (4) thereof shall be substituted by the
following:
"(4) The provisions of this ar ticle shall also apply to
all branches, agencies or offices in Malta of a financialinstitution which are not incorporated in Malta.";
(e) sub-article (5) thereof shall be substituted by the
following:
"(5) A financial institut ion shall submit to the
Central Bank such information as the said Bank may
require in the discharge of its duties and the Central Bank
may enquire into and ask for clarifications on any
information so submitted.";
(f) sub-article (6) thereof shall be substituted by the
following:
"(6) The competent authority may, by notice in
writing, require a financial institution or any of its officers
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 mayspecify, such information and documentation as it
may require and of such description as may be so
VERŻJONI ELETTRONIKA
A 1442
specified in the notice;
(b) to furnish to the competent authority any
information or documentati on aforesaid verified in
such manner as it may specify; and, or  
(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 information and documentation as thecompetent authority may reasonably require, for the
performance of its functions under this Act and any
regulations and, or Rul es issued thereunder.";
(g) sub-article (7) thereof shall be substituted by the
following:
"(7) The competent authority may retain copies of
any documents submitted in t erms of this article.".
Amendment of 
article 15 of the 
principal Act.50. Article 15 of the principal Act shall be amended as follows:
(a) sub-article (1) thereof shall be substituted by the
following:
"(1) The competent authority may, whenever it
deems necessary or expedient, appoint an inspector or
inspectors to investigate and report on the affairs, nature,
conduct or state of a financial institution’s business or any
particular aspect of it, or to report on the ownership or
control of the finan cial institution.";
(b) immediately after sub-article (3) thereof the
following new sub-articles shall be added:
"(4) Any investigation bei ng carried out pursuant to
sub-articles (1) and (2) shall be notified in writing to theperson under investigation.
(5) It shall be the duty of every person who is or
was an officer, employee, agent, or auditor of a personunder investigation in terms o f this Act and any regulations
and, or Rules issued thereunder,  or any person appointed to
draw up a report in respect of that person under this Actand any regulations and, or R ules issued thereunder and
any person who has a qualifying shareholding in, or is a
controller the said person under investigation:
VERŻJONI ELETTRONIKA
A 1443
(a) to produce to the inspector or inspectors
appointed under sub-article (1), within such time and
at such place as may be required by the inspector orinspectors concerned, all the documents relating to
the person under investigation which are in his
custody or power;
(b) to attend before the inspector or
inspectors at such time and place as the inspector orinspectors may require; and, or
(c) otherwise to give to the inspector or
inspectors all assistance in connection with theinvestigation which he is reasonably able to give, and
the inspector or inspectors concerned may retain
copies of or extracts from, any documents producedto them under paragraph (a).
(6) An inspector exercising powers by virtue of an
appointment under this article  shall, if so required, produce
evidence of his authority.
(7) No person shall:
(a) without any lawful excuse fail to produce
any document which it is his duty to produce under
sub-article (5);
(b) without any lawful e xcuse fail to attend
before an inspector or inspectors appointed undersub-article (1), when required to do so; or
(c) without any lawful excuse fail to answer
any question which is put to him by an inspector orinspectors appointed under sub-article (1) with
respect to any person who is under investigation.
(8) A statement made by a person in compliance
with a requirement imposed by virtue of this article may be
used as evidence against him.".
Substitution of 
article 16 of the 
principal Act.51. Article 16 of the principal Act shall be substituted by the
following:
VERŻJONI ELETTRONIKA
A 1444
Addition of 
article 16A to the principal 
Act.52. Immediately after article 16 of the principal Act, as
substituted, there  shall be added the following new article:"Right of entry. 16. (1) Any officer, employee or agent of the
competent authority, or an inspector appointed under
article 15(1), may on pr oducing evidence of his
authority, if required to do so, enter into premisesoccupied by a person on whom a notice has been servedunder article 14, or w hose affairs are being investigated
under article 15, for the purpose of obtaining theinformation or documents required by that notice, or
otherwise for the purpose of the investigation, and of
exercising any of the powers conferred by the saidarticles.
(2) Where any officer, employee or agent of the
competent authority, or an  inspector appointed under
article 15(1), has reasonable cause to believe that ifsuch notice as is referred to in sub-article (1) wereserved it would not be complied with, or that any
documents to which it could relate would be removed,
tampered with or destroyed, such person may onproducing evidence of his authority, if required to do
so, enter into any premises referred to in sub-article (1)
for the purpose of obtaining any information ordocuments 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 arevested in him for the prevention of criminal offences
and the enforceme nt of law and order:
Provided that where an entry as is mentioned
in this article involves premises that are occupied for
the purpose of habitation, such entry shall be carriedout in the presence of an officer of the Police of a rank
not below that of inspector  and shall not take place
between nine in the evening and five in the morning."
.
VERŻJONI ELETTRONIKA
A 1445
"Suspected 
breaches.16A. (1) Where the competent authority has
reasonable grounds for suspecting that a person has
contravened or has failed to comply with any of the
provisions of this Act and a ny regulations and, or Rules
issued thereunder, it may, b y notice in writing, require
that person or any other person:
(a) to provide at such place as may be
specified in the notice, and either forthwith or at
such time as may be so specified, suchinformation as it may r easonably require for the
purpose of investigating the suspectedcontravention or failure to comply;
(b) to produce, at such place as may be
specified in the notice, and either forthwith or atsuch time as may be so specified, such documents
or documents of such description as may be
specified therein, which it may reasonably require
for that purpose; and, or
(c) to attend at such place and time as
may be specified in the notice and answer
questions relevant for de termining whether such a
contravention or failure to comply has occurred.
(2) The competent authority or their duly
authorised officer, employee or agent may retain copies
of or extracts from any do cuments submitted in terms
of this article.
(3) Any officer, employee or agent of the
competent authority may between five o’clock in themorning and nine o’clock a t night, on producing, if
required, evidence of his authority, enter into any
premises occupied by a per son 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).
(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 (3).
(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.".
VERŻJONI ELETTRONIKA
A 1446
Addition of 
article 16B to the principal 
Act.53. Immediately after article 16A a s added to the principal Act
there shall be added the following new article: 
Substitution of 
article 17 of the 
principal Act.54. A r t i c l e  1 7  o f  t h e  p r i n c i p a l  A c t  shall be substituted by the
following:"Obstruction. 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 suspec ted commission of any breach
under this Act and any regulations and, or Rules issuedthereunder 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.".
"
Power of the 
competent 
authority to take 
control of financial 
institutions.17. (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 authoritymay, without prejudice to the powers of the said
authority to impose restrictions, or to withdraw or
suspend a licence or a registration under the provisionsof 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 ofits 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;
VERŻJONI ELETTRONIKA
A 1447
(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 finan cial institution; and, or
(g) determine the remuneration to be paid
by the financial institution to any competent
person appointed under this sub-article.
(2) Upon receipt of a report or information
otherwise received as is men tioned in sub-article (1),
the competent authority shall inform the Central Bank. 
(3) Where a competent person is appointed by the
competent authority:
(a) under sub-article (1)(b), the financial
institution shall act in a ccordance with the advice
given by such person, unless and until thecompetent authority otherwise directs;
(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 financialinstitution in respect of those assets, whether
exercisable by the company in the general
meeting or by the board of directors, or by anyother person, including the legal and judicial
representation of the finan cial 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 suchfacilities as he may requi re 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 financialinstitution, whether exercisable by the company
in the general meeting or by the board of
directors, or by any other person, including thelegal 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.
(4) Where a person is appointed under sub-article
(1)(c) or (d):
VERŻJONI ELETTRONIKA
A 1448
(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 personappointed under either of the paragraphs aforesaid
is placed in charge or in control, shall unless or
until the competent authority otherwise directs, oran 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:
Provided that:
(i) the competent authority shall
have the power to direct that all or any ofthe powers, functions or duties aforesaidshould be exercisable by any other person,
and in any such case, with effect from such
date or dates as the competent authoritymay specify and unless and until the
competent authority otherwise directs, the
powers, functions and duties to which thedirection 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;
VERŻJONI ELETTRONIKA
A 1449
(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 shallcease to be so exercisable, but any such
direction shall not a ffect 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 toprovide him with such facilities as he may
deem necessary to carry out any of thepowers, functions or duties under this
article;
Cap. 13.(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 comp etent authority under
paragraph (b), unless and until, or except to
the extent that the competent authority
otherwise directs; and in any such case theperson appointed as aforesaid shall, subject
to any directions of the competent authority
given in the interest of the creditors, act as ifthose 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 theprovisions of this article shall submit six
monthly reports of his activities and annual
accounts of all transactions carried out byhim in the performance of his functions,
audited by an independent auditor, to the
Minister who will pla ce such reports and
accounts on the Table of the House of
Representatives within fifteen days.
VERŻJONI ELETTRONIKA
A 1450
Substitution of 
the heading 
‘Auditors’ of 
the principal Act.55. Immediately after article 17 of t he principal Act, the heading
"AUDITORS" shall be subs tituted by the following: 
"ACCOUNTING, STATUTORY AUDIT AND
AUDITORS".
Addition of 
article 17A to 
the principal Act.56. Immediately after article 17 a nd the subsequent heading of the
principal Act, as substituted, there shall be added the followi ng new
article.(5) Where a person is ap pointed 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.
(6) The provisions of this article shall have effect
notwithstanding any other provision of any enactment,and notwithstanding any deed, contract, instrument orother document whatsoever.
(7) The foregoing provisions  of this article vesting
exclusive powers of representation in a personappointed by the competent authority thereunder shallapply 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 anysuch act or proceedings.
(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.".
"
Accounting and 
statutory audit.17A. (1) Directive 86/635/EEC, Directive 2013/
34/EU and Regulation (EC) No. 1606/2002 shall,mutatis mutandis,  apply to financial institutions.
(2) Unless exempted under Directive 2013/34/EU
and, where applicable, Directive 86/635/EEC, the
annual accounts and consolid ated accounts of financial
institutions shall be audited by statutory auditors or
audit firms within the m eaning of Directive 2006/43/EC
of the European Parliament and of the Council of 17May 2006 on statutory audi ts 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. 
VERŻJONI ELETTRONIKA
A 1451
Addition of 
article 17B to the principal 
Act.57. Immediately after article 17A, as added to the principal Act,
there shall be added the  following new article:
Amendment of 
article 18 of the principal Act.58. Article 18 of the principal Act shall be amended as follows:
(a) sub-article (1)(a) thereof shall be substituted by the
following:
"(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) sub-article (6) thereof shall be substituted by the
following:
"(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(3) Payment institutions and electronic money
institutions shall provide to the competent authority
separate accounting inform ation for payment services
and for the activities referred  to in paragraphs 3(a), (b)
and (c) of the Second Schedule, that shall be subject toan auditor’s report, as may be stipulated in a Financial
Institutions Rule.
(4) The auditor’s report referred to in sub-article
(3) shall be prepared, where  applicable, by the statutory
auditors or an audit firm.".
"
Publication of 
audited financial 
statements.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 a uthorised 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 statements, as may be applicable,
drawn up and published in such manner as may be
specified in accordance with a Financial Institutions
Rule.".
VERŻJONI ELETTRONIKA
A 1452
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, he shall
immediately inform the competent authority through the
financial institution’s manage ment, or if circumstances so
warrant, inform directly t he competent authority.";
(c) immediately after sub-articl e (6), as substituted, there
shall be added the follo wing new sub-articles:
"(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 competentauthority of any fact or deci sion concerning that financial
institution of which that auditor has become aware whilecarrying out his tasks, that is liable to:
(a) constitute a material breach of this Act
and of any regulations and, or Rules issuedthereunder which set out the licensing or registrationconditions, or which specifi cally 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:
Provided that an auditor shall also have
the duty to report any fact or decision of which thatauditor becomes aware in the course of carrying outhis tasks, in an undertaking having close links
resulting from a control relationship with the
financial institution within which he is carrying outthat task.
(6B) Any disclosure in good faith to the competent
authority pursuant to sub-articl e (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 todo so, such disclosure shall be  made simultaneously to the
board of directors of the financial institution.
VERŻJONI ELETTRONIKA
A 1453
Substitution of 
article 19 of the 
principal Act.59. Article 19 of the principal Act shall be substituted by the
following:
Amendment of article 20 of the 
principal Act.60. Article 20 of the principal Act shall be amended as follows:
(a) sub-article (1) thereof shall be substituted by the
following:
(b) immediately after sub-article (1) thereof there shall
be added the following new sub-article:
"(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"Communication 
by auditors and 
other persons with the competent 
authority.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 tothe competent authority, whether or not in
response to a request from it, any information or
opinion on a matter of which the auditor hasbecome aware in his cap acity as auditor of that
institution and that is re levant to any functions of
the competent authority under the provisions ofthis Act, or is required to be communicated by
virtue of this Act and, or any regulations or Rules
issued thereunder; and
(b) a person appointed to make a report
under article 14 or 15 may be subject shall beregarded as contra vened by reason of
communicating in good faith to the competentauthority any matter which relates to the businessor affairs of the financial institution in relation to
which the report is made.".
"(1) Without prejudice to sub-article (1A) and on
the basis of international agreements or uponreciprocity agreements, the competent authority may, in
the case of a financial instit ution or branch operating in
Malta, which is totally or partially owned by a foreignperson, or in the case of a f inancial institution totally or
partially owned by Maltese re sidents that is operating
abroad, share its supervisory duties with an overseasregulatory authority.";
VERŻJONI ELETTRONIKA
A 1454
relevant authorities designa ted under European Union, or
national law applicable to pa yment service providers.";
(c) sub-article (2) thereof shall be substituted by the
following:
"(2) The competent authority may further exchange
information with the following:
(a) overseas regulatory authorities
responsible for the licensi ng and, or registration, and
for the supervision of payme nt institutions, electronic
money institutions and, or account information
service providers, solely for their supervisory andregulatory 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 asmonetary and oversight authorities and, whereappropriate, other public a uthorities 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 applicableto money laundering and funding of terrorism; and,
or
(d) the EBA, in its capac ity of contributing to
the consistent and coherent functioning ofsupervising mechanisms as referred to in paragraph
(a) of Article 1(5) of Regulation (EU) No. 1093/2010.
(d) sub-article (4) thereof shall be substituted by the
following:
"(4) The competent authority shall notify the
relevant European regulatory authority whenever it intendsto carry out an on-site inspection in the territory of thelatter:
Provided that the competent authority may
upon agreement delegate to the relevant European
VERŻJONI ELETTRONIKA
A 1455
regulatory authority the tas k of carrying out on-site
inspections of the institution concerned.";
(e) sub-article (5) thereof shall be substituted by the
following:
"(5) The competent authority shall further,
upon a request in writing, disclose to the ECB and, or
to the Central Bank any info rmation in the possession
of or accessible to the com petent authority that is
required for the discharge of the duties of the ECB
and, or the Central Bank under the law.".
Addition of 
article 20A to 
the principal 
Act.61. Immediately after article 20 of the principal Act there shall be
added the following new article:
Addition of 
article 20B to 
the principal Act.62. Immediately after article 20A o f the principal Act, as added,
there shall be added the  following new article:
Substitution of article 21 of the 
principal Act.63. Article 21 of the principal Act shall be substituted with the
following:"Settlement of 
disagreements between the 
competent authority and 
European 
regulatory authorities.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 Directiv e 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.
(2) Where the competent authority has referred the
matter to the EBA and re quested its assistance in
accordance with sub-article (1), or where a Europeanregulatory authority has referred a matter to the EBAand requested its assistance in accordance with Article
27(1) of the Payment Services  Directive, it shall defer
its decision pending resolution by the EBA underArticle 19 of Regulat ion (EU) No. 1093/2010.". 
"
Collaboration 
with the Central 
Bank and the Arbiter.20B.  In ensuring and monitoring effective
compliance with the provisions of this Act and any
regulations and, or Rules issued thereundertransposing the Payment Services Directive, the
competent authority shall collaborate closely with theCentral Bank and with the Arbiter as may be required,in order to ensure that every authority may discharge
its respective duties effectively.".
VERŻJONI ELETTRONIKA
A 1456
Amendment of 
article 22 of the 
principal Act.64. Article 22 of the principal Act shall be amended as follows:
(a) the marginal note thereof shall be substituted by the
following:
"Criminal offences.";
(b) sub-article (1) thereof shall be substituted by the
following: 
"(1) Any person who:
(a) fails to comply with any directive issued
by the competent aut hority under this Act;
(b) without reasonable excuse alters,
suppresses, conceals, destr oys or refuses to produce
any document which he i s 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 bemisleading, 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 Finan cial 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), "
Appeals. 
Cap. 330.21. Any person who is aggrieved by a directive,
decision and, or measure taken by the competent
authority pursuant to the A ct and any regulations or
Rules issued thereunder, may appeal to the Tribunalwithin such period and under such conditions asestablished under the Malta Financial Services
Authority Act.".
VERŻJONI ELETTRONIKA
A 1457
shall be guilty of a criminal offence.";
(c) sub-article (2) thereof shall be deleted;
(d) sub-article (4) thereof shall be substituted by the
following: 
"(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 exceedingthree years, or to both such fine and imprisonment.";
(e) sub-article (5) thereof shall be substituted by the
following: 
"(5) No criminal proceedings for a criminal offence
against this Act shall be commenced without the consent ofthe Attorney General.".
Substitution of 
article 23 of the principal Act.65. Article 23 of the principal Act shall be substituted by the
following:
"Administrative 
penalties and their publication.
Cap. 330.23. (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 theprovisions of this Act and any regulations and, or
Rules issued there under, 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 amountsto 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 notexceed one hundred and fifty thousand euro
(€150,000) for each infringement or failure to comply,
as the case may be, aimed specifically at ending suchbreaches or the causes of such breaches.
(1A) Any administrative penalty imposed by the
competent authority under sub-article (1) shall be
effective, proportionate and dissuasive, and shall beimposed in accordance with this article.
VERŻJONI ELETTRONIKA
A 1458
Amendment of 
article 24 of the 
principal Act.66. Paragraph (a) of article 24 of  t h e  p r i n c i p a l  A c t  s h a l l  b e
substituted by the following:
"24. 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(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 asmay be specified therein.
(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:
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 criminaloffence, no proceedings may be taken or continued
against the said person in respect of such criminal
offence.
Cap. 330.(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 toin sub-article (1) of this article.
(4) The competent authority may, unless such
disclosure would seriously  jeopardise the financial
markets, or cause dispr oportionate damage to the
parties involved, publish an y administrative penalty
imposed in terms of this arti cle and, or in terms of this
Act:
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 competen t authority shall, without
undue delay, also publish on its official website and
through any other means it considers appropriate,
information on the status o f the appeal a nd the outcome
thereof.".
VERŻJONI ELETTRONIKA
A 1459
been exempted in writing by the competent authority from
the provision of this article; or".
Addition of 
article 24A to the 
principal Act.67. Immediately after article 24 of the principal Act, as amended,
there shall be added the  following new article:
Amendment of 
article 25 of the principal Act.68. Article 25 of the principal Act shall be amended as follows:
(a) sub-article (2) thereof shall be substituted by the
following:
"(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 informationrelating 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 Actand 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 exerc ise of his functions;
(c) when lawfully required to do so by any
court or under a provision of any law.";
(b) sub-article (3) thereof shall be substituted by the
following:
"(3) Where an officer of a financial institution has
reason to believe that a transaction or a proposedtransaction could involve money laundering, or the fundingof terrorism, he shall act in compliance with the reporting
and other obligations set out in any anti-money launderingand combating the funding of terrorism legislation and
such disclosure shall not constitute a breach of"
Duties of officers. 24A. Every officer of a financial institution shall
take all reasonable steps:
(a) to secure compliance by the financial
institution with all of th e provisions of this Act and
any regulations and, or R ules issued thereunder, and
with the conditions of its licence or registration; and
(b)  to ensure that no incorrect information is
provided to the competent authority either wilfully oras the result of gross negligence.".
VERŻJONI ELETTRONIKA
A 1460
confidentiality.";
(c)  sub-article (4) thereof shall be substituted by the
following:
"(4) Without prejudice to t he provisions of article
20, persons who work or who have worked for the
competent authority, as well a s 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 supe rvisory and other duties and
which is governed by the duty of professional secrecy,
unless such disclosure of inf ormation be done in summary
or collective form, so as not t o enable the identity of the
financial institution, to whom such information relates, tobe ascertained:
Provided that the said officers, auditors or
experts may divulge such information, for the purpose ofthe performance of their duties, or the exercise of their
functions, or when lawfully required to do so by any courtor under a provision of any law.";
(d) sub-article (5) thereof shall be substituted by the
following:
"(5) Notwithstanding the provisions of any other
law, a financial institution may, if circumstances sowarrant, communicate any information which is in itspossession and which relates to the affairs of a customer, to
other members of the group of which that financial
institution forms part.";
(e) sub-article (6) thereof shall be substituted by the
following:
Cap. 371."(6) For the purposes of sub-article (5), the term
"group" shall include any body corporate registered oroperating in Malta or in a foreign jurisdiction and formingpart 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 ofbanking, or of the issuing of electronic money, or any of
the activities referred to in the Schedule to the Banking
Act.";
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A 1461
(f)  immediately after s ub-article (7) thereof the
following new sub-articles shall be added:
"(8) Without prejudice to the provisions of article
20, any exchange of information between the competent
authority and any European re gulatory 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 subjectto the obligation of professional secrecy.
(9) The provisions of sub-articles (4) and (8) shall
be applied taking into account, mutatis mutandis , Articles
53 to 61 of the CRD.".
Substitution of 
the heading 
‘Consumer Complaints’ of 
the principal 
Act.69. Immediately after article 25 of the principal Act, the heading
"CONSUMER COMPLAINTS" of the principal Act shall be
substituted by the following heading:
"DATA PROTECTION".
Deletion of 
article 26 of the principal Act.70. Article 26 of the princip al Act shall be deleted.
Addition of 
article 26A to 
the principal Act.71. Immediately after article 26 of the principal Act, as deleted,
there shall be added the  following new article:
Substitution of article 27 of the principal Act. 72. Article 27 of the principal Act shall be substituted by the"Data protection. 26A.  (1) Financial institutions may, when
necessary to safeguard the pre vention, investigation and
detection of payment fraud, process personal data.
(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 becarried out in accordance with any applicable data
protection legislation.
(3) Financial institutions shall only access, process
and retain personal data necessary for the provision of
their services with the explicit consent of those makinguse of their services.".
VERŻJONI ELETTRONIKA
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following:
Addition of 
article 28 to the 
principal Act.73. Immediately after article 27 of the principal Act there shall be
added the following new article:"Objective. 27. The objective of this Act is, in part, to
implement the provisions of the Payment Services
Directive, in particular Titles I, II, Chapter 4 of Title IV,
Articles 95, 96, 100, 103 an d 107 in part, Articles 109,
111 and 115, and the Annexes thereof and of theElectronic Money Directive and shall be interpreted and
applied accordingly.".
"
Transitory 
provisions.28. (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, thecompetent authority has evidence that the requirementsset out in paragraph (c) of Articles 7 and 9 of the
Payment Services Directive are satisfied.
(2) Legal persons that, before 12 January 2016,
have performed in Malta activities of payment initiation
service providers and account information serviceproviders, shall, until eighteen months after the date of
entry into force of the regulatory technical standards
referred to in Article 98 of the Payment ServicesDirective, not be prohibited from continuing to perform
such activities in Malta in accordance with the
applicable regulatory framework.
(3) Until individual account servicing payment
service providers comply with the regulatory technical
standards referred to in sub-article (2), account
servicing payment service pr oviders shall not block or
obstruct the use of payment initiation services or
account information services for the account that they
are servicing.
VERŻJONI ELETTRONIKA
A 1463
Amendment of 
the First 
Schedule to the 
principal Act.74. The First Schedule to the principal Act shall be amended as
follows:
(a) in item (1) thereof, for the words "commercial
transactions including forfeiting);" there shall be substituted the
words "commercial transactio ns including f orfaiting);";
(b) in item (4) thereof, for the words "Payment services
as defined" there shall be substituted the words "Paymentservices set out";
(c) in item (7)(e) thereof, for the words "transferable
instruments" there shall be subs tituted the words "transferable
securities".
Amendment of 
the Second 
Schedule to the 
principal Act.75. The Second Schedule annexed to  the principal Act shall be
amended as follows:
(a) the objective thereof shall be substituted by the
following:
(b) paragraph (1) there of shall be deleted;
(c) paragraph (2) thereof shall be substituted by the
following: (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 a pplicable, by the competent
authority, together with the address of the competent
authority in any form or medium of marketing activity
or communication dissemina ted to the public, by any
other means considered a ppropriate within three
months after the entry int o force of this article.".
"Objective. The purpose of this Schedule is to set out the
regulatory framework under which payment services as
referred to in the First Sch edule, may be carried out.";
"List of Activities. 2. The following activitie s shall be considered as
payment services:
(a) services enabling cash to be placed on
a payment account as well as all the operationsrequired for operating a payment account;
VERŻJONI ELETTRONIKA
A 1464
(d) paragraph (3) thereof shall be substituted by the
following: (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 withanother payment service provider:
(i) execution of direct debits,
including one-off direct debits;
(ii) execution of payment
transactions through a payment card or asimilar device;
(iii) execution of credit transfers,
including standing orders;
(d) execution of payment transactions
where the funds are covered by a credit line for apayment 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.";
"3. 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 as ensuring
execution of payment transactions, foreign
exchange services strictly in relation to paymentservices, safekeeping act ivities, and storage and
processing of data;
VERŻJONI ELETTRONIKA
A 1465
(e) immediately after paragra ph (3) thereof there shall be
added the following new paragraphs:Cap. 204.(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 withoutprejudice 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 (1)(d) or (e) of  this Schedule only if the
following require ments 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 c ards, the credit granted
in connection with a payment and executed withthe act shall be repaid within a short period whichshall in no case exc eed 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 ofthe overall amount of credit granted.";
"4. When payment institutions engage in the
provision of one or more payment services, they mayonly hold payment accounts used exclusively forpayment transactions.
Cap. 371.5. 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.".
VERŻJONI ELETTRONIKA
A 1466
Amendment of 
the Third Schedule to the 
principal Act.76. Paragraph (1) of the Third Sche dule to the principal Act shall
be deleted.
PART III
AMENDMENTS TO THE MALTA FINANCIAL 
SERVICES AUTHORITY ACT
Amendments to the Malta 
Financial Services 
Authority Act. 
Cap. 330.77. This Part amends the Malta Fin ancial Services Authority Act
and it shall be read and construed as one with the Malta Financ ial
Services Authority Act, hereinaft er in this Part referred to as  "the
principal Act".
Addition of article 2A to the principal Act. 78. Immediately after article 2 of t he principal Act there shall be
added the following new article: 
"2A. In this Act and in any regulations made thereunder, if
there is any conflict between the English and Maltese texts, th e
English text shall prevail.".
Amendment of article 3 of the 
principal Act.79. Immediately after sub-article (2 ) of article 3 of the principa l
Act there shall be added the following new sub-articles:
Amendment of 
article 4 of the principal Act.80. Immediately after paragraph (g) of sub-article (1) of article  4
of the principal Act there shall be added the following new paragraph:
"(gA) to provide and foster further training, knowledge and
education on all mat ters relating to fin ancial services;".
Amendment of 
article 7 of the 
principal Act.81. In sub-article (1) of article 7 of the principal Act, the wor ds
"but in no case not less frequent ly" shall be substituted by th e words
"but in any case not less frequently".
Amendment of article 16 of the 
principal Act.82. Article 16 of the principal Act shall be amended as follows:
(a) paragraph (b) of sub-article (2) thereof shall be
substituted by the following: 
"(b) issue a directive in writing requiring a person to
do or to refrain from doing any act, including such
prohibitions, restrictions and conditions as may be
specified in the directive; a nd any person to whom or to"(3) Save as expressly provided for in this Act or in
any other Act administered by the Authority, theAuthority shall act independently and shall not seek or
take instructions from any other body or person.
Cap. 174.(4) The provisions of article 72 of the Financial
Administration and Audit Act shall not apply to the
Authority.".
VERŻJONI ELETTRONIKA
A 1467
which the notice is given shall obey, comply with and
otherwise give effec t to any such directive within the time
and in the manner stated in the directive;";
(b) immediately after paragraph (b) of sub-article (2)
there shall be added the following new paragraph:
"(c) appoint a qualified person or otherwise require
a person to appoint a qualified person, whenever it deems itnecessary or expedient, to carry out such tasks under such
terms and conditions as the Au thority may direct. All fees
and expenses to be charged by the qualified person inrelation to, or incidental to s uch appointment, shall be paid
by the person in relation to whom the qualified person is
appointed, unless determined otherwise by the Authority.
The Authority may issue Rules or guidelines laying downthe procedures and requirements relating to such
appointment; and such Rules may also lay down the
powers, duties and obligati ons of the qualified person.";
(c) immediately after sub-article (2) thereof, as
amended, there shall be added the following new sub-article:
"(2A) (a) Without prejudice to the powers
conferred to the Authority under this Act or any other law,
the Authority may appoint a ski lled person to assist it in the
fulfilment of any of its functions under this Act or any
other law. 
(b) Where a skilled p erson is appointed in
terms of this sub-article,  the following provisions
shall apply:
(i) any person appointed as a skilled
person shall be a person who, in the opinion ofthe Executive Committee, possesses the
expertise necessary to provide the assistance
required by the Authority in terms of hisappointment;
(ii) the person in relation to whom the
skilled person is appoin ted shall co-operate
with the skilled person and provide any
information and docu mentation, as may be
required, by such skilled person in thefulfilment of his appointment;
VERŻJONI ELETTRONIKA
A 1468
(iii) where such skilled person is
appointed in relation to a particular person, the
Authority may require such person to pay allfees and expenses charged by the skilled
person;
(iv) the Authority may require the
skilled person, inter alia , to provide it with a
report relating to the assistance provided to the
Authority in terms of his appointment; and
(v) a report drawn up by the skilled
person in terms of sub-paragraph (iv) andendorsed by the Authority in writing, shall for
all purposes have the same effect as a document
drawn up by the Authority:
Provided that where a skilled person
is appointed to draw up an independent report,this provision shall not  apply with respect to
such independent report.".
PART IV
AMENDMENTS TO THE FINANCIAL MARKETS ACT
Amendments to 
the Financial Markets Act. 
Cap. 345.83. This Part amends the Financial Markets Act, and it shall be rea d
and construed as one with the Financial Markets Act, hereinafte r in this
Part referred to as "the principal Act".
Addition of article 20A to 
the principal Act.84. Immediately after article 20 of  the principal Act, there shall
be added the follo wing new article:
"Power to issue 
directives.20A. (1) Without prejudice to any of the powers
conferred on it under this Act, the Listing Authority
may, whenever it deems it necessary, give by notice inwriting, such directives as it may deem appropriate in
the circumstances; and a ny person to whom or to which
the notice is given shall obey, comply with and
otherwise give effect to an y such directive within the
time and in the manner stated in the directive orsubsequent directives.
(2) The power to issue directives under this article
shall include the power to vary, alter, add to orwithdraw any directive, as well as the power to issue
subsequent new directives.
VERŻJONI ELETTRONIKA
A 1469
Amendment of 
article 42 of the 
principal Act.85. In sub-article (1) of article 42 of the principal Act, the wor ds
"under articles 4(11), 16(9), 17(3), 18(6), 20(4), 27A" shall b e
substituted by the words "under ar ticles 4(11), 16(9), 17(3), 1 8(6),
20(4), 20A(4), 27A".
PART V
AMENDMENTS TO TH E COMPANIES ACT
Amendments to 
the Companies 
Act. Cap. 386.86. This Part amends the Companies Act, and it shall be read and
construed as one with the Companies Act, hereinafter in this Pa rt
referred to as "the principal Act".
Amendment of article 180 of 
the principal 
Act.87. In sub-article (2) of article 180 of the principal Act, the w ords
"not be required to be sent to a debenture holder who is not en titled to
receive notices of general meeti ngs." shall be substituted by the words:
"not be required to be sent to: 
(a) a debenture holder who is not entitled to
receive notices of general meetings; and 
(b) members of a company who have been duly
given notice of a general mee ting of the company at which
the company’s annual accounts shall be laid in accordance
with article 181, and where the company has made
available to its members an electronic copy of such annual
accounts, either on its website or otherwise, and has
informed its members accordingly:
Provided that the company shall provide a
printed copy of such annual accounts to any member uponwritten request.".(3) Where the Listing Authority is satisfied that
the circumstances so warrant, it may at any time makepublic any directive it has given under any of the
provisions of this article.
(4) Any person to whom or to which a directive is
given under this article  may appeal against such
directive to the Tribunal in accordance with Part VI of
this Act.".
VERŻJONI ELETTRONIKA
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Passed by the House of Representatives at Sitting No. 248 of th e
10th July, 2019.
ANĠLU FARRUGIA
Speaker
RAYMOND SCICLUNA
Clerk of the House of Representatives
VERŻJONI ELETTRONIKA
VERŻJONI ELETTRONIKA
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