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Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 20,774, 27 ta’ Jannar , 2022
Taqsima  B
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L.N. 24 of 2022
INVESTMENT SERVICES ACT
(CAP. 370)
Supervisory Consolidation (Investment Firms Directive) 
Regulations, 2022
IN EXERCISE of the powers conferred by article 12 of the
Investment Services Act, the Minister responsible for the regulation of
Financial Services, acting on the advice of the Malta Financial
Services Authority, has made the following regulations:
Citation, scope 
and 
commencement.1. (1) The title of these regulations is the Supervisory
Consolidation (Investment Firms Directive) Regulations, 2022.
(2) The scope of these regulations is to transpose Articles 46,
47, 48, 49, and 55 of Directive (EU) 2019/2034 of the European
Parliament and of the Council of 27 November 2019 on the pruden tial
supervision of investment firms and amending Directives 2002/87 /EC,
2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU.
(3) These regulations shall come into force on such date as the
Minister may by notice in the Gazette establish.
Interpretation. 2. (1) In these regulations, unless the context otherwise
requires -
Cap. 370. "the Act" the Investment Services Act;
"ancillary services undertaking" shall have the same
meaning as that assigned to it in point (1) of Article 3 of the  IFR;
 "consolidated basis" shall have the same meaning as that
assigned to it in point (12) of Article 4(1) of the IFR;
"consolidated situation" shall have the same meaning as
that assigned to it in point (11) of Article 4(1) of the IFR;
Cap. 330. "the competent authority" m eans the Malta Financial
Services Authority established by article 3 of the Malta Financ ial
Services Authority Act;
"consolidating supervisor" sh all have the same meaning as
that assigned to it in point (41) of Article 4(1) of the CRR;
"CRD" means Directive 2013/36/EU of the European
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Parliament and of the Council of 26 June 2013 on access to the
activity of credit institutions and the prudential supervision of
credit institutions, amending Directive 2002/87/EC andrepealing Directives 2006/48/EC and 2006/49/EC, as amended
from time to time, and includes any implementing measures that
have been or may be issued thereunder;
"CRR" means Regulation (EU) No 575/2013 of the
European Parliament and of the Council of 26 June 2013 onprudential requirements for credit institutions and amending
Regulation (EU) No 648/2012, as amended from time to time,
and includes any implementing measures that have been or maybe issued thereunder;
"EBA" means the European Banking Authority as
established by Regulation (EU) No 1093/2010;
"EEA" means a State which is a contracting party to the
Agreement on the European Economic Area signed at Oporto onthe 2nd May, 1992 as amended by the protocol signed at Brusselson the 17th March, 1993 and as amended by any subsequent Act;
"ESRB" means the European Systemic Risk Board
established by Regulation (EU) No 1092/2010;
"EU investment firm" means a firm as defined in point (1)
of Article 4(1) of MIFID;
"European regulatory authority" means an authority which
is situated in a country or territory outside Malta that is a
Member State and is empowered by law or regulation to
supervise investment firms;
"financial holding company" shall have the same meaning
as that assigned to it in point (20) of Article 4(1) of the CRR ;
"financial institution" shall have the same meaning as that
assigned to it in point (14) of Article 4(1) of the IFR:
"home Member State" shall have the same meaning as that
assigned to it in point (55)(a) of Article 4(1) of the MIFID;
"host Member State" shall have the same meaning as that
assigned to it in point (56) of Article 4(1) of the MIFID ;
"investment firm" means a person who holds an investment
services licence issued by the competent authority under theInvestment Services Act and which is subject to the requirement s
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of the IFD and IFR;
"Member State" means a Member State of the European
Union and includes an EEA State;
"mixed financial holding company" shall have the same
meaning as that assigned to it in point (40) of Article 4(1) of the
IFR;
"parent financial holding company in a Member State"
shall have the same meaning as that assigned to it in point (30 ) of
Article 4(1) of the CRR;
''parent institution in Malta" means an institution in Malta
which has an institution or a financial institution as a subsid iary
or which holds a participation in such an institution or financ ial
institution, and which is not itself a subsidiary of anotherinstitution authorised in Malta, or of a financial holdingcompany or mixed financial holding company set up in Malta;
"parent mixed financial holding company in a Member
State" shall have the same meani ng as that assigned to it in po int
(32) of Article 4(1) of the CRR;
"parent undertaking" shall have the same meaning as that
assigned to it in point (42) of Article 4(1) of the IFR;
"participation" shall have the same meaning as that
assigned to it in point (35) of Article 4(1) of the CRR;
"Rules" means Rules for investment firms issued by the
competent authority in terms of the Investment Services Act;
"subsidiary" shall have the same meaning as that assigned
to it in point (51) of Article 4(1) of the IFR;
"third country" means a country that is not a Member State;
"third country regulatory authority" means an authority
which is in a country or territory that is not a Member State and
is empowered by law or regulation to supervise investment
firms.
(2) Words and expressions in these regulations shall have the
same meaning as that assigned to them in the Act.
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Responsibility 
of the 
competent authority for 
consolidated 
supervision.3. (1)  The competent authority shall exercise supervision
on a consolidated basis:
(a) where the parent undertaking is a parent institution in
Malta or an EU parent institution, licensed in terms of the Act;
(b) where the parent of an investment firm licensed in
terms of the Act is a parent financial holding company or a
parent mixed financial holding company in a Member State or an
EU parent financial holding company or an EU parent mixedfinancial holding company;
(c) where investment firms authorised in two or more
Member States, and one of the investment firms is an investmentfirm licensed in terms of the Act, have as their parent the sam e
parent financial holding company, the same parent mixedfinancial holding company in a Member State, the same EUparent financial holding company or the same EU parent mixed
financial holding company established in Malta;
(d) where investment firms authorised in two or more
Member States, one of which is Malta, have as their parent morethan one financial holding company or mixed financial holding
company with head offices in different Member States, one ofwhich is Malta and the investment firm which is licensed in
Malta has the largest balance sheet total; 
(e) where the parent financial holding company or parent
mixed financial holding company is established in a MemberState other than Malta and it has more than one investment firm
authorised in the European Union other than the Member Statewhere the financial holding company is set up, one of which is
licensed in Malta, and the investment firm licensed in Malta ha s
the largest balance sheet total. That investment firm shall beconsidered to be controlled by an EU parent financial holding
company or an EU parent mixed financial holding company.
(2) In particular cases, the competent authority may, by
common agreement with other European regulatory authorities, wa ive
the criteria referred to in sub-regulation (1)(c), (d) and (e) if their
application would be inappropriate, taking into account the investment
firms and the relative importance of their activities in different
countries, and appoint a European regulatory authority to exerc ise
supervision on a consolidated bas is. In these cases, before tak ing its
decision, the competent authority shall give the EU parent inst itution,
EU parent financial holding company, EU parent mixed financialholding company or the institution with the largest balance she et total,
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as appropriate, an opportunity t o state its opinion on that decision. The
competent authority shall notify the Commission and the EBA of any
such agreement.
(3) Where appropriate, the competent authority may exercise
supervision on a consolidated basis where subsidiaries of an
investment firm group headed by an investment firm authorised in aMember State, parent investment holding company authorised in a
Member State, or parent mixed financial holding company authori sed
in a Member State, are located in a third country. 
(4) Where appropriate, the competent authority may exercise
supervision on a consolidated basis to facilitate the exercise of the
tasks referred to in this regulation and to ensure co-ordination and co-operation with relevant third‐country supervisory authorities i n
particular where this is needed for the purpose of applying poi nt (c) of
the first sub-paragraph of Article 23(1) and Article 23(2) of t he IFR to
exchange and update relevant information on the margin model wi th
the supervisory authorities of  the qualifying central counterpa rties
(QCCPs).
 Functions of 
the competent 
authority with 
respect to 
supervision on a 
consolidated 
basis.4 . (1) In addition to the obligations imposed by the
provisions of the Act and any regulations or Rules made thereun der
transposing the requirements of the IFD, and by the IFR, the
competent authority acting as consolidating supervisor, shall carry out
the following tasks:
(a) those referred to in regulation 5;
(b) the co-ordination of information requests where this
is necessary for facilitating s upervision on a consolidated bas is,
in accordance with Article 7 of the IFR;
(c) the co-ordination of information requests, in cases
where several competent authorities of investment firms that ar e
part of the same group need to request either from the competen t
authority of a clearing member’s home Member State or from the
competent authority of the qualifying central counterpartiesinformation relating to the margin model and parameters used fo r
the calculation of the margin requirement of the relevantinvestment firms;
(d) the exchange of information between all competent
authorities and with the EBA i n accordance with Article 21 of
Regulation (EU) No 1093/2010 and with the ESMA inaccordance with Article 21 of Regulation (EU) No 1095/2010;
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(e) reaching an agreement on the voluntary delegation
between competent authorities of tasks and responsibilities,
where appropriate;
(f) increasing the efficiency of supervision by seeking to
avoid the unnecessary duplication of supervisory requirements. 
Notifications in 
emergency situations.
Cap. 330. 5. Where an emergency situation, including a situation as
described in article 18 of Regulation (EU) No 1093/2010 or a si tuation
of adverse developments in markets arises, which potentially
jeopardises the market liquidity and the stability of the financial
system in any of the Member States where entities of a group have
been authorised and where the competent authority is the consol idating
supervisor, it shall, subject to confidentiality requirements i n the Malta
Financial Services Authority Act and any other applicable law, alert as
soon as is practicable the EBA, ESRB and any relevant competent
authorities and it shall communicate to the said authorities al l the
information that is essential for the pursuance of their tasks.
Establishment 
of the colleges 
of supervisors 
by the consolidating supervisor.6. (1) Where the competent authority is the consolidating
supervisor, it shall establish a college of supervisors and ens ure that
the following are members of the college of supervisors:
(a) the competent authorities responsible for the
supervision of subsidiaries of an investment firm group headed
by an EU investment firm, EU parent investment holdingcompany or EU parent mixed financial holding company;
(b) where appropriate, third‐country supervisory
authorities, subject to confidentiality requirements that areequivalent in the opinion of all competent authorities to the
requirements laid down in Section 2 of Chapter I of Title IV of
the IFD. 
(2) Where the competent authority is the consolidating
supervisor in terms of these regulations, it shall establish and managethe colleges of supervisors based on written arrangements refer red to
in regulation 6, determined after consultation with European
regulatory authorities and third country regulatory authorities
concerned. 
(3) Where the competent authority is the consolidating
supervisor, it shall chair the meetings of the college and shall decidewhich European regulatory authorities and third country regulat ory
authorities, where relevant, participate in a meeting or in an activity of
the college. The decision shall take into account the relevance of the
supervisory activity to be planne d or co-ordinated for those au thorities,
and in particular, the potential impact on the stability of the financial
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system in the Member States concerned and, in particular, in
emergency situations, based on the information available at the
relevant time and the obligations referred to in regulation 14( 6) and
(7). 
(4) The competent authority, as consolidating supervisor, shall
keep all members of the college fully informed, in advance, of the
organisation of the meetings of the college, about the main issues to be
discussed and the activities to be considered and shall also keep all the
members of the college fully informed, in a timely manner, of the
actions taken in those meetings or the measures carried out. 
(5) In the case of disagreement between the competent
authorities on the functioning of the supervisory colleges, thecompetent authority may refer the matter to the EBA and request  its
assistance in accordance with Art icle 19 of Regulation (EU) No 1093/
2010. 
Co-operation 
with other 
authorities.7. (1) The competent authority shall co-operate closely with
the competent authorities listed in regulation 6(1) and shall
communicate on request all relevant information and shall
communicate on its own initiative all relevant information.
(2) For the purpose of sub-regulation (1) relevant information
shall include, in particular, the following items:
(a) identification of the  investment group’s legal
structure and the governance structure including organisational
structure, covering all regulated entities, non-regulated entities,
non-regulated subsidiaries, and the parent undertakings, and of
the competent authorities of the regulated entities in theinvestment firm group;
(b) procedures for the collection of information from the
investment firms in a group and the verification of that
information;
(c) any adverse developments  in investment firms or in
other entities of a group, which could seriously affect theinvestment firms; 
(d) significant penalties and exceptional measures taken
by the competent authority in accordance with the IFD; and
(e) the imposition of a specific own funds requirement
under Article 39 of the IFD.
(3) The competent authority shall consult with European
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regulatory authorities concerned before taking a decision that may be
important for other competent authorities’ supervisory tasks:
(a) changes in the shareholder, organisational or
management structure of investment firms in the group, whichrequire the approval or authorisation of the competent authority;
and
S.L. 370.15.(b) significant penalties or exceptional measures taken by
the competent authority, including  the imposition of a specific
own funds requirement under the Investment Services Act
(Supervisory Review) Regulations, and specific own funds
requirements imposed in accordance with Article 39 of the IFD:
Provided that the competent authority shall always consult
the consolidating supervisor for the purposes of paragraph (b) and may
decide not to consult European regulatory authorities in cases ofurgency or where such consultation could jeopardise the effectiveness
of its decision. In such cases, the competent authority shall, without
delay, inform the European regulatory authorities after taking itsdecision.
(4) The competent authority may refer to the EBA any of the
following situations: 
(a) where a European regulatory authority has not
communicated essential information;
(b) where a request for co-operation, in particular to
exchange relevant information, has been rejected or has not bee n
acted upon within a reasonable time.
Third country 
consolidated supervision.8. (1) Where an investment firm licensed in terms of the
Act, the parent undertaking of which is an investment firm or a
financial holding company or mixed financial holding company, thehead office of which is established in a third country, is not subject to
consolidated supervision, the competent authorit y shall assess whether
the investment firm is subject to consolidated supervision by a  third
country regulatory authority which is equivalent to that govern ed by
the principles laid down in this regulation and the requirements of PartOne of the IFR.
(2) Where the assessment referred to in sub-regulation (1)
concludes that no such equivalent supervision applies, the competentauthority shall apply appropriate supervisory techniques whichachieve the objectives of supervision in accordance with Articl es 7 or
8 of the IFR. Those supervisory techniques shall be decided by the
competent authority which would be the group supervisor had theB 219
parent undertaking been established in the Union, after consulting the
other competent authorities involved. Any measures taken pursua nt to
this paragraph shall be notified to the other competent authori ties
involved, to the EBA and to the Commission.
(3) The competent authority which would be the group
supervisor had the parent undertaking been established in a Mem ber
State may, in particular, require the establishment of an investmentholding company or mixed financial holding company in a Member
State and apply Articles 7 or 8 of the IFR to that investment holding
company or mixed financial holding company.
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parent undertaking been established in the Union, after consulting the
other competent authorities involved. Any measures taken pursua nt to
this paragraph shall be notified to the other competent authori ties
involved, to the EBA and to the Commission.
(3) The competent authority which would be the group
supervisor had the parent undertaking been established in a Mem ber
State may, in particular, require the establishment of an investmentholding company or mixed financial holding company in a Member
State and apply Articles 7 or 8 of the IFR to that investment holding
company or mixed financial holding company.
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________________________________________________________________________________________________________________________
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