A 1040
I assent.
(L.S.) MARIE -LOUISE
COLEIRO PRECA
President
22nd December, 2017
ACT No. XXXI of 2017
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 Representatives, in this present Parliament
assembled, and by the authority of the same as follows:-
Short title and 
commencement.1. (1) The short title of this Act is the Various Financial
Services Laws (A mendment) Act, 2017.
(2) Paragraphs (a), (b), (d), (e), (g), (h), (i), (k), (l), (m) , (o),
(p), (q), (s), (t), (u), (w), (z) and (aa) of article 16, articles 19, 21, 22,
23, 24, 25, 35, 36, 38, 39 of Par t II; and all of Part III, wit h the
exception of the definition "Conduct of Business Rules" in arti cle
44(a)(vii) and the definition "Minister" in article 44(a)(xx), articles47(a)(i), 47(b), 47(d) , and articles 48, 51(c), 51(d), articles  53, 54,
55(b)(ii), 61, 62, 63(a)(i), 64 and 65 of this Act, shall come into force
on such date as the Minister for Finance may by notice in the G azette
establish, and different dates may be so established for differ ent
provisions and different purposes thereof. 
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PART I
AMENDMENTS TO THE MALT A FINANCIAL SERVICES 
AUTHORITY ACT
Amendments to 
the Malta 
Financial 
Services Authority Act.
Cap. 330. 2. This Part amends and shall be read and construed as one
with the Malta Financial Services Authority Act, hereinafter in  this
Part referred to as "the principal Act". 
Amendment of 
article 2 of the principal Act.3. Article 2 of the principal Act shall be amended as follows:
(a) immediately before the definition "Authority" there
shall be added the following new definition:
" "Audit Committee" means the Committee
established by article 12A;";
(b) immediately after the definition "institution", there
shall be added the following new definition:
" "internal audit" means an independent, objective
assurance and consulting activity designed to add value
and improve the operations of the Authority;";
(c) immediately after the new definition "internal audit"
there shall be added the following new definition:
" "MiFID" means Directive 2014/65/EU of the
European Parliament and of the Council of 15 May 2014on markets in financial instruments and amendingDirective 2002/92/EC and Directive 2011/61/EU, as
amended from time to time, and includes any
implementing measures that have been or may be issued
thereunder;"; and
(d) the definition "Minister" shall be substituted as
follows:
" "Minister" means the Minister responsible for the
regulation of Financial Services;". 
Addition of new 
article to the principal Act.4. Immediately after article 12 of the principal Act, there shall
be added the following new article:
''Audit Committee. 12A. (1) It shall be the function of the Audit
Committee to:
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(a) determine whether the governance,
controls and risk management processes of the
Authority in implementing agreed policies and
strategies across the activities of the Authority
are adequate, effective and functioning;
(b) determine the Internal Audit Unit’s
remit and role;
(c) evaluate the performance of the
Internal Audit Unit set out under article 12B;
(d) carry out such other functions as may
be assigned to it by the Board of Governors.
(2)  In carrying out its functions the Audit
Committee shall have all powers necessary to enable it
to perform its functions pr operly, and the provisions of
sub-articles (4) and (5) of article 12B shall, mutatis
mutandis , apply to the Audit Committee.
(3) In carrying out its functions under sub-
article (1)(b), the Audit Co mmittee shall consult the
Director General and the Chief Operations Officer
regarding new tasks and the processes appliedthroughout the activities of the Authority to ensure full
coverage of the activitie s of the Authority by the
Internal Audit Unit. In so far as its functions under
sub-article (1)(c) are concerned, the Audit Committee
shall take into consideration the internal audit plan and
any audit quality assurance assessment reports.
(4) The Audit Committee shall be composed of
a Chairman and two other members appointed by theBoard of Governors, for such term, being a period of
not more than three years, as may be specified in the
letter of appointment, and shall be eligible forreappointment; and shall receive such remuneration as
the Authority may from time to time, determine.
(5) The Authority shall consult the Audit
Committee before appointing one or more suitable
officers to perform the functions of Director andDeputy Director within the Internal Audit Unit.
(6) The Audit Committee shall report to the
Board of Governors on the pr ogress made in its area of
competence and on the progress made by the InternalAudit Unit.
(7) The Audit Committee shall be independent
of the Board of Governors, and shall act independently
of it.
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Addition of new 
article to the principal Act.5.  Immediately after article 12A of the principal Act, there
shall be added the following new article:(8)  The Audit Committee shall designate one
of the officers of the Authority as its Secretary for such
period and under such terms as the Board of
Governors shall deem appropriate.
(9)  The provisions of article 7 shall, as far as
applicable, mutatis mutandis  apply to the meetings of
the Audit Committee, and the provisions of paragraphs
(a), (b), (d) and (e) of article 6(6) shall, as far as
applicable, mutatis mutandis  apply to the office of the
Chairman and the members of such Committee.''.
''Internal Audit 
Unit.12B. (1) It shall be the function of the Internal
Audit Unit to examine, evaluate and report upon theadequacy and effectiveness of the governance, internal
control and risk management processes of theAuthority. To this effect, in addition to any other
objectives that may be assigned to it by the Board of
Governors or the Audit Committee within the purposesof this article, the Internal Audit Unit shall determine
that:
(a) adequate internal controls are in
place and operating effectively and efficiently;
(b) risks are appropriately identified and
managed;
(c) interaction with the various units of
the Authority occurs as needed;
(d) financial, managerial and operating
information is accurate, reliable, integral and
timely;
(e) the actions of officers and employees
of the Authority are in compliance with the
policies and procedures of the Authority, and
applicable laws and regulations;
(f) resources are acquired economically,
used efficiently, and adequately protected;
(g) plans and objectives of the Authority
are achieved or are being implemented asplanned;
(h) quality and continuous improvement
are fostered in the control processes of the
Authority;
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Amendment of 
article 16 of the principal Act.6. Article 16 of the principal Act shall be amended as
follows:
(a) in sub-article (2) thereof, for the words ''The
Authority may:'' there shall be substituted the words ''The
Authority may , for the better ca rrying out of the provisions of
this Act or any other Act administered by it, from time to
time:''; and
(b) paragraph (a) of sub-article (2) thereof shall be
substituted by the following:
''(a)  issue and publish Rules regulating the
procedures and duties of pers ons licensed or authorised
by it, or falling under its regulatory or supervisory
functions. Such Rules may:
(i) lay down additional requirements and
conditions in relation to activities of such persons,the conduct of their busin ess, their relations with
customers, the public and other parties, their(i) significant regulatory issues
impacting on the Authority are recognised and
addressed appropriately.
(2) The Internal Audit Unit shall be composed
of the Director of the Unit, and any number of
employees as may be required in order to carry out its
functions properly.
(3) In carrying out its functions, the Internal
Audit Unit shall, as appropriate, apply international
best practice guidance and standards and shall adhere
to internationally accepted principles of ethics forinternal auditors.
(4) For the better performance of its functions,
the Internal Audit Unit may audit all parts of the
Authority, and shall have full, complete unrestricted
access to any records, files, physical properties,electronic data, and personnel of the Authority
relevant to the performance of an audit.
(5) Officers or employees of the Authority shall
fully cooperate with the Internal Audit Unit in the
exercise of its functions.
(6) The Internal Audit Unit shall report to the
Audit Committee on the progress made in its area ofcompetence.''.
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responsibilities to the Authority , reporting
requirements, financial resources, capital adequacy
and related requirements, and any other matters asthe Authority may consider appropriate;
(ii) provide for the returns, statements and
notices to be made or giv en for any purposes in
regard to which the Authority exercises supervisory
or regulatory functions under this Act or any other
Act, and the form and contents thereof; and
(iii) prescribe the infor mation that such persons
are to submit to the Authority:
Provided that such Rules shall be binding on
all licence holders and others as may be specifiedtherein;''.
Addition of new 
article to the principal Act.7. Immediately after article 16 of the principal Act, there
shall be added the following new article:
Amendment of article 20E of the principal 
Act.8. Article 20E of the principal Act shall be renumbered as
article 20F.''Criminal 
sanctions and 
criminal investigations 
concerning 
breaches of provisions 
transposing 
MiFID.16A. (1) The Authority shall, on an annual
basis, contact the office of the Attorney General and
the Commissioner of Police and seek information
about any criminal sanctions imposed for any breachesof any provisions of any Act or regulations transposing
MiFID. The office of the Attorney General and the
Commissioner of Police shall co-operate with theAuthority and shall, where relevant, send the
Authority a copy of the final judgement in relation to
any criminal sanctions imposed. The Authority shallsubmit such copy of the final judgement to the
European Securities and Markets Authority (ESMA).
(2) The Authority shall, on an annual basis,
contact the office of the Attorney General and the
Commissioner of Police and ask for anonymised and
aggregated data regarding all criminal investigations
undertaken and all criminal sanctions imposed for anybreaches of any provisions of any Act or regulations
transposing MiFID. The Authority shall forward such
information to the European Securities and MarketsAuthority (ESMA).''.
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Addition of new 
article 20E to 
the principal Act.9. Immediately after article 20D of the principal Act there
shall be added the following new article 20E:
"Transparency of securities financing transactions and of 
re-use, and 
benchmarks".20E.  The Minister may, acting on the advice of
the Authority, make regulations for the following
purposes:
(a) to implement and, or give effect to:
(i) the requirements of Regulation
(EU) 2016/1011 of the European
Parliament and of the Council of 8 June
2016 on indices used as benchmarks infinancial instruments and financial
contracts or to measure the performance
of investment funds and amendingDirectives 2008/48/EC and 2014/17/EU
and Regulation (EU) No. 596/2014, and
to otherwise regulate the supervision ofsupervised entities within the meaning of
Regulation (EU) 2016/1011; and
(ii) the requirements of Regulation
(EU) 2015/2365 of the EuropeanParliament and of the Council of 25November 2015 on transparency of
securities financing transactions and of
re-use and amending Regulation (EU)No. 648/2012, and to otherwise regulate
the supervision of financial
counterparties and non-financialcounterparties within the meaning of
Regulation (EU) 2015/2365;
(b) where regulations have been made in
terms of this article, the Authority may issue
Rules for the better carrying out of, and to better
implement, the provisions of the regulations;
(c) to establish and impose
administrative penalties and other administrative
measures as may be specified therein for thepurposes of implementing Regulation (EU)
2016/1011 and Regulation (EU) No 2015/2365
and to provide for appeals therefrom to theFinancial Services Tribunal.".
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PART II
AMENDMENTS TO THE TRUSTS AND TRUSTEES ACT
Amendments to 
the Trusts and 
Trustees Act.Cap. 331.10. This Part amends the Trusts and Trustees Act, and it shall be
read and construed as one with the Trusts and Trustees Act, hereinafter
in this Part referred to as ''the principal Act''.
Amendment of 
article 2 of the 
principal Act.11. Sub-article (1) of article 2 of the principal Act shall be
amended as follows:
(a)  the definition "Minister" shall be substituted as
follows:
" "Minister" means the Minister responsible for the
regulation of Financial Services;"; and
(b) the first definition of ''resident in Malta'' shall be
deleted.
Amendment of 
article 43 of the 
principal Act.12. Article 43 of the principal Act shall be amended as
follows:
(a)  in sub-article (1) thereof, for the words ''any person,
resident or operating in or from Malta,'' there shall be
substituted the words ''any person operating in or from Malta,'';
(b) in sub-article (4) thereof:
(i) in sub-paragraph (a) of paragraph (i) thereof,
for the words "its objects include", there shall besubstituted the words "its objects are limited to:";
(ii) in sub-paragraph (i) of p aragraph (i) thereof, for
the words "an approved jurisdiction;", there shall besubstituted the words "an approved jurisdiction:";
(iii)  immediately after sub-paragraph (i) of
paragraph (i) thereof, as amended, there shall be addedthe following new proviso:
Cap. 529."Provided that, notwithstanding the
provisions of paragraphs (a) and (b), personsauthorised in terms of sub-article (1) may act
as company service providers as defined in
the Company Service Providers Act, subjectto any rules or regulations which may be
applicable under this Act;"; and
VERŻJONI ELETTRONIKA
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(iv) in sub-paragraph (a) of paragraph (ii) thereof,
the words "is resident or" shall be deleted;
(c) in sub-article (12) thereof, the words "resident or"
shall be deleted; 
(d) in sub-article (13) thereof:
(i) in sub-paragraph (a) of paragraph (i) thereof,
for the words "its objects include", there shall be
substituted the words "its objects are limited to";
(ii) in sub-paragra ph (i) of paragraph (i) thereof, for
the words "an approved jurisidiction;", there shall be
substituted the words "an approved jurisdiction:";
(iii) immediately after sub-paragraph (i) of
paragraph (i) thereof, as am ended, there shall be added
the following new proviso: 
(iv)  in sub-paragraph (a) of paragraph (ii) thereof,
for the words "is resident or operating" there shall besubstituted the word "operates";
(e) in sub-article (15) thereof:
(i) in sub-paragraph (a) thereof of paragraph (i)
thereof, for the words "its objects include", there shall besubstituted the words "its objects are limited to";
(ii) in sub-paragraph (g) of paragraph (i) thereof,
for the words "an approved jurisdiction", there shall besubstituted the words "an approved jurisdiction:";
(iii) immediately after sub-paragraph (g) of
paragraph (i) thereof, there shall be added the followingCap. 529."Provided that notwithstanding the
provisions of paragraphs (a) and (b),persons authorised in terms of sub-article(1) may act as company service providers as
defined in the Company Service ProvidersAct, subject to any rules or regulationswhich may be applicable under this Act;";
and
VERŻJONI ELETTRONIKA
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new proviso:
(iv) in sub-paragraph (a) of paragraph (ii) thereof,
for the words "is resident or operating" there shall be
substituted the word "operates".
Amendment of 
article 51 of the principal Act.13. Article 51 of the principal Act shall be amended as
follows:
(a) the marginal note thereof shall be substituted by the
following:
''Offences and administrative sanctions.''; and
(b) sub-article (7) thereof shall be substituted by the
following new sub-article:
"(7) (a) Without prejudice to any other powers
assigned to the Authority in terms of this Act, where a
trustee, or a director of a trustee company or any other
person entrusted with the management and
administration thereof, or any other person havingobligations with respect to the trustee, contravenes or
fails to comply with any of the conditions imposed in an
authorisation issued under article 43, or the conditionsimposed in article 43A, or the  conditions imposed by the
Authority upon registration in accordance with article
43B, and, or where the Authority is satisfied that the
trustee’s or the person’s conduct amounts to a breach of
any provisions of the Act, regulations or rules issuedthereunder, or of any directive, obligations or other
requirement made or given by the Authority, including
failure to cooperate in an investigation, the Authoritymay by notice in writing and without recourse to a court
hearing, impose an administrative penalty which may
not exceed one hundred and fifty thousand euro(€150,000) for each infringement or failure to comply, as
the case may be.
(b) Administrative penalties or other measuresCap. 529."Provided that notwithstanding the provisions
of paragraphs (a) and (b), persons authorised in
terms of sub-article (1) may act as company service
providers as defined in the Company Service
Providers Act, subject to any rules or regulationswhich may be applicable under this Act."; and
VERŻJONI ELETTRONIKA
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that may be imposed by the Authority on a trustee or
any of the persons referred to in paragraph (a) as may
be specified, may be imposed in the form of a fixedpenalty, a daily penalty, or both.
(c) The imposition by the Authority of an
administrative penalty in terms of this sub-articleshall 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
Authority imposes an administrative penalty inrespect of anything done or omitted to be done by
any person and such act or omission also constitutes
a criminal offence, no proceedings may be taken orcontinued against the said person in respect of such
criminal offence.
Amendment of 
article 55 of the 
principal Act.14. Sub-article (2) of article 55 of the principal Act shall be
amended as follows:
(a)  in paragraph (e) thereof, for the words "to make any
order under this Act," there shall be substituted the words "to
issue a directive under this Act;"; and
(b)  immediately after paragraph (e) thereof, as
amended, there shall be added the following new paragraph:
''(f) to impose an administrative penalty in terms of
article 51(7),".
PART III
AMENDMENTS TO THE FINANCIAL MARKETS ACT
Amendments to 
the Financial Markets Act.
Cap. 345.15. This Part amends and shall be read and construed as one
with the Financial Markets Act, hereinafter in this Part referred to as
"the principal Act". Cap. 330.(d) The provisions of article 16(8) of the Malta
Financial Services Authority Act shall apply mutatis
mutandis  to any administrative or disciplinary
sanction or measure, of whatever type, including
administrative penalties, reprimands or warnings,
imposed or decided by the Authority under this Act,
and any regulations or rul es made thereunder.".
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Amendment of 
article 2 of the 
principal Act.16. Sub-article (1) of article 2 of the principal Act shall be
amended as follows:
(a) immediately before the definition "bye-laws", there
shall be added the following new definition:
'' "APA" or "approved publication arrangement"
means a person authorised under MiFID to provide the
service of publishing trade reports on behalf of
investment firms pursuant to Articles 20 and 21 ofMiFIR;";
(b) immediately after the new definition " "APA" or
"approved publication arrangement" " there shall be added thefollowing new definition:
" "ARM" or "approved re porting mechanism" means
a person authorised under MiFID to provide the serviceof reporting details of transactions to the competent
authority or to European regulatory authorities, as the
case may be, or to ESMA on behalf of investmentfirms;";
(c) for the definition "cen tral securities depository"
there shall be substituted the following:
" "central securities depository" or "CSD" shall mean
a legal person that operates a securities settlementsystem as referred to in point (3) of Section A of theAnnex to the CSDR and pr ovides at least one of the
following core services listed in Section A of the saidAnnex:
(i)  initial recording of securities in a book-entry
system (‘notary service’);
(ii) providing and maintaining securities
accounts at the top tier level (‘central maintenanceservice’);";
(d)  immediately after the new definition " "central
securities depository" or "CSD"" there shall be added thefollowing new definition:
" "certificates" means those securities which are
negotiable on the capital market and which in case of arepayment of investment by the issuer are ranked aboveshares but below unsecured bond instruments and other
VERŻJONI ELETTRONIKA
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similar instruments;";
(e) immediately after the definition "CRAR" there shall
be added the following new definition:
" "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 theprudential supervision of credit institutions and
investment firms, amending Directive 2002/87/EC and
repealing 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 issuedthereunder;";
(f) immediately after the new definition "CRD" there
shall be added the following new definition:
" "CSDR" means Regulation (EU) No. 909/2014 of
the European Parliament and of the Council of the 23July 2014 on improving securities settlement in theEuropean Union and on central securities depositories
and amending Directives 98/26/EC and MiFID and
Regulation (EU) No. 236/2012, as may be amendedfrom time to time, and includes any implementing
measures that have been or may be issued thereunder;";
(g)  immediately after the new definition "CSDR" there
shall be added the following new definition:
" "CTP" or "consolidated tape provider" means a
person authorised under MiFID to provide the service of
collecting trade reports for financial instruments listed inArticles 6, 7, 10, 12, 13, 20 and 21 of MiFIR from
regulated markets, MTFs, OTFs and APAs andconsolidating them into a continuous electronic live data
stream providing price and volume data per financial
instrument;";
(h) immediately after the new definition " "CTP" or
"consolidated tape provider" " there shall be added thefollowing new definition:
" "data reporting services provider" means an APA, a
CTP or an ARM;";
(i) immediately after the new definition "data reporting
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services provider" there shall be added the following new
definition:
" "dealing on own account" means trading against
proprietary capital resulting in the conclusion oftransactions in one or more financial instruments;";
(j) immediately after the new definition "dealing on
own account" there shall be added the following new definition:
" "dematerialised form" means the fact that financial
instruments exist only as book entry records;";
(k) immediately after the definition "derivatives" there
shall be added the following new definition:
" "Directive 95/46/EC" mean s Directive 95/46/EC of
the European Parliament and of the Council of 24
October 1995 on the protection of individuals withregard to the processing of personal data and on the free
movement of such data, as amended from time to time,
and includes any implementing measures that have beenor may be issued thereunder;";
(l) immediately after the new definition "Directive 95/
46/EC" there shall be added the following new definition:
" "Directive 2003/87/EC" means Directive 2003/87/
EC of the European Parliament and of the Council of 13October 2003 establishing a scheme for greenhouse gasemission allowance trading within the Community and
amending Council Directive 96/61/EC, as amended from
time to time, and includes any implementing measuresthat have been or may be issued thereunder;";
(m) immediately after the new definition "Directive
2003/87/EC", there shall be added the following new definition:
" "Directive 2013/34/EU" means Directive 2013/34/
EU of the European Parliament and of the Council of 26June 2013 on the annual financial statements,consolidated financial statements and related reports of
certain types of undertakings, amending Directive 2006/
43/EC of the European Parliament and of the Counciland repealing Council Directives 78/660/EEC and 83/
349/EEC as may be amended from time to time, and
includes any implementing measures that have been or
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may be issued thereunder;"; 
(n) the definition "designated financial instruments"
shall be deleted;
(o)  immediately after the definition "European
regulatory authority" there shall be added the following new
definition:
" "exchange-traded fund" means a fund of which at
least one unit or share class is traded throughout the dayon at least one trading venue and with at least one
market maker which takes action to ensure that the price
of its units or shares on the trading venue does not varysignificantly from its net  asset value and, where
applicable, from its indicative net asset value;";
(p) immediately after the definition "Financial Market
Rules", there shall be added the following new definition:
" "home Member State" means, in the case of a
regulated market, the Member State or EEA State inwhich the regulated market is registered or, if under the
law of that Member State or EEA State it has no
registered office, the Member State or EEA State inwhich the head office of the regulated market is
situated;";
(q) immediately after the new definition "home Member
State", there shall be added the following new definition:
" "host Member State" means the Member State or
EEA State in which a re gulated market provides
appropriate arrangements so as to facilitate access totrading on its system by remote members or participants
established in that same Member State or EEA State;";
(r) immediately after the new definition "host Member
State", there shall be added the following new definition:
" "immobilisation" means the act of concentrating
location of physical securities in a CSD in a way that
enables subsequent transfers to be made by book-
entry;";
(s)  immediately after the definition " "listed financial
instruments" or "quoted financial instruments" " there shall beadded the following new definition:
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" "MAD" means Directive 2014/57/EU of the
European Parliament and of the Council of 16 April
2014 on criminal sanctions for market abuse (marketabuse directive), as amended from time to time, and
includes any implementing measures that have been or
may be issued thereunder;";
(t) immediately after the new definition "MAD" there
shall be added the following new definition:
" "management body" means the body or bodies of a
market operator which are appointed in accordance withMaltese law, which are empowered to set the entity’sstrategy, objectives and ove rall direction, and which
oversee and monitor management decision-making andinclude persons who effectively direct the business ofthe entity;";
(u) immediately after the new definition "management
body" there shall be added the following new definition:
" "MAR" means Regulation (EU) No. 596/2014 of
the European Parliament and of the Council of 16 April2014 on market abuse (market abuse regulation) andrepealing Directive 2003/6/EC of the European
Parliament and of the Council and Commission
Directives 2003/124/EC, 2003/125/EC and 2004/72/EC,as amended from time to time, and includes any
implementing measures that have been or may be issued
thereunder;"; 
(v) for the definition "Minister" there shall be
substituted the following:
" "Minister" means the Minister responsible for the
regulation of Financial Services;";
(w)  for the definition "multilateral system" there shall
be substituted the following:
" "multilateral system" m eans any system or facility
in which multiple third-party buying and selling tradinginterests in financial instruments are able to interact inthe system;";
(x) the definition "overseas central securities
depository" shall be deleted;
VERŻJONI ELETTRONIKA
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(y) the definition "recognised jurisdiction" shall be
deleted;
(z) immediately after the definition "regulated market"
there shall be added the following new definition:
" "Regulation (EU) No. 1095/2010" means
Regulation (EU) No. 1095/2010 of the European
Parliament and of the Council of 24 November 2010
establishing a European Supervisory Authority
(European Securities and Markets Authority), amending
Decision No. 716/2009/EC and repealing Commission
Decision 2009/77/EC as amended from time to time, andincludes any implementing measures that have been or
may be issued hereunder;"; 
(aa) immediately after the new definition "Regulation
(EU) No. 1095/2010" there shall be added the following newdefinition:
" "Regulation (EU) No. 1308/2013" means
Regulation (EU) No. 1308/2013 of the EuropeanParliament and of the Council of 17 December 2013
establishing a common organisation of the markets inagricultural products and repealing Council Regulations
(EEC) No. 922/72, (EEC) No. 234/79, (EC) No. 1037/
2001 and (EC) No. 1234/2007, as amended from time totime, and includes any implementing measures that have
been or may be issued thereunder;"; and
(bb) immediately after the definition "Takeover Bids
Directive", there shall be added the following new definition:
" "third-country CSD" means any legal entity
established in a third country that provides a similar
service to the core service referred to in point (3) of
Section A of the Annex to the CSDR and performs at
least one other core service listed in Section A of theAnnex;".
Amendment of 
article 3 of the 
principal Act.17. Article 3 of the principal Act shall be amended as follows: 
(a) the current article shall be re-numbered as sub-article (1)
thereof; 
(b) immediately after sub-article (1) thereof, as
renumbered, there shall be inserted the following: 
VERŻJONI ELETTRONIKA
A 1057
"(2) Regulations made under this article may
impose:
(a) administrative penalties which may not
exceed one hundred and fifty thousand euro
(€150,000) for each infringement or failure to
comply, as the case may be;
(b) punishments or other  penalties in respect of
any contravention or failure to comply not exceedinga fine ( multa ) of four hundred and sixty six thousand
euro (€466,000) or to a term of imprisonment notexceeding four years, or to both such fine andimprisonment;
(c) administrative penalties higher than one
hundred and fifty thousand euro (€150,000) and fineshigher than four hundred and sixty six thousand euro
(€466,000), where deemed necessary or appropriate
for any contravention of  or failure of compliance
with any EU Directive or EU Regulation or of any
regulations made under this article to transpose or to
give effect to any EU Directive or EU Regulation.
(3) Regulations made unde r this article may also
prescribe penalties and fines as provided for in sub-article (2)(c), for any breach of any provision of the Actor for any breach of any Financial Market Rules,
transposing and, or implementing any EU Directive or
EU Regulation.".
Amendment of 
article 4 of the principal Act.18. In paragraph (d) of sub-article (1) of article 4 of the
principal Act, for the words "th e Directive" there shall be substituted
the word "MiFID".
Amendment of 
article 4A of the 
principal Act.19. For article 4A of the principal Act there shall be
substituted the following:
Amendment of article 4C of the principal Act. 20.  Sub-article (1) of article 4C of the principal Act shall be
amended as follows: "Applicable law when Malta is the 
home Member 
State.4A.  Without prejudice to any relevant
provisions of MAR or of MAD, the public law
governing the trading conducted under the systems ofthe regulated market shall be that of Malta when
Malta is the home Member State of the regulated
market.".
VERŻJONI ELETTRONIKA
A 1058
(a) in paragraph (ii) thereof, for the words "European
Community Law" there shall be substituted the words "Union
Law"; and 
(b) in paragraph (iii) thereof, for the words "European
Community Law" there shall be substituted the words "UnionLaw".
Addition of new 
articles to the 
principal Act.21. Immediately after article 4C of the principal Act there shall
be inserted the following new articles: 
"Rights of a market operator. 4D. A market operator shall be entitled to
exercise the rights that correspond to the regulated
market that it manages by virtue of MiFID.
Limitation on 
market operators.4E. Market operators shall not execute client
orders against proprietary capital, or engage in
matched principal trading on any of the regulated
markets they operate.
System resilience, 
circuit breakers and electronic trading.4F. (1) A regulated market shall have in place
effective systems, procedures and arrangements to
ensure its trading systems are resilient, have sufficientcapacity to deal with peak order and message volumes,
are able to ensure orderly trading under conditions of
severe market stress, are fully tested to ensure suchconditions are met and are subject to effective business
continuity arrangements to ensure continuity of its
services if there is any failure of its trading systems.
(2) A regulated market shall have in place:
(a) written agreements with all
investment firms pursuing a market makingstrategy on the regulated market;
(b) schemes to ensure that a sufficient
number of investment firms participate in such
agreements which require them to post firm
quotes at competitive prices with the result ofproviding liquidity to the market on a regular and
predictable basis, where such a requirement is
appropriate to the nature and scale of the tradingon that regulated market.
(3) The written agreement referred to in sub-
article (2) shall at least specify:
(a) the obligations of the investment firm
in relation to the provision of liquidity and where
applicable any other obligation arising from
participation in the scheme referred to in sub-article (2)(b);
VERŻJONI ELETTRONIKA
A 1059
(b) any incentives in terms of rebates or
otherwise offered by the regulated market to an
investment firm so as to provide liquidity to the
market on a regular and predictable basis and,
where applicable, any other rights accruing to theinvestment firm as a result of participation in the
scheme referred to in sub-article (2)(b).
(4) A regulated market shall monitor and
enforce compliance by investment firms with the
requirements of such binding written agreements. The
regulated market shall inform the competent authority
about the content of the bi nding written agreement and
shall, upon request, provide all further information to
the competent authority necessary to enable the
competent authority to satisfy itself of compliance bythe regulated market with s ub-article (3) and this sub-
article.
(5) A regulated market shall have in place
effective systems, procedures and arrangements toreject orders that exceed pre-determined volume andprice thresholds or are clearly erroneous.
(6) A regulated market shall be able to
temporarily halt or constrain trading if there is a
significant price movement in a financial instrument
on that market or a related market during a shortperiod and, in exceptional cases, to be able to cancel,
vary or correct any transaction. A regulated market
shall ensure that the parameters for halting trading areappropriately calibrated in a way which takes into
account the liquidity of differ ent asset classes and sub-
classes, the nature of the market model and types of
users and is sufficient to avoid significant disruptions
to the orderliness of trading.
(7) A regulated market shall report the
parameters for halting trading and any material
changes to those parameters to the competent authorityin a consistent and comparable manner. The competent
authority shall in turn report them to ESMA.
VERŻJONI ELETTRONIKA
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(8) Where a regulated market which is material
in terms of liquidity in that financial instrument halts
trading, in any Member State or EEA State including
Malta, that trading venue shall have the necessary
systems and procedures in pl ace to ensure that it will
notify the competent author ity or European regulatory
authorities, as the case may be, in order for them tocoordinate a market-wide response and determinewhether it is appropriate to halt trading on other
venues on which the financial instrument is traded
until trading resumes on the original market.
(9) A regulated market shall have in place
effective systems, procedures and arrangements,
including requiring members or participants to carry
out appropriate testing of algorithms and providingenvironments to facilitate such testing, to ensure that
algorithmic trading systems cannot create or
contribute to disorderly trading conditions on themarket and to manage any disorderly trading
conditions which do aris e from such algorithmic
trading systems, including systems to limit the ratio of
unexecuted orders to transactions that may be entered
into the system by a member or participant, to be able
to slow down the flow of orders if there is a risk of itssystem capacity being reached and to limit and enforce
the minimum tick size that may be executed on the
market.
(10)  A regulated market that permits direct
electronic access shall have i n place effective systems
procedures and arrangements to ensure that members
or participants are only permitted to provide such
services if they are investment firms authorised underMiFID or credit institutions authorised under the CRD,
that appropriate criteria are set and applied regarding
the suitability of persons to whom such access may beprovided and that the member or participant retains
responsibility for orders and trades executed using that
service in relation to the requirements of MiFID.
(11) A regulated market shall also set
appropriate standards regarding risk controls andthresholds on trading through such access and be able
to distinguish and, if necessary, stop orders or trading
by a person using direct electronic access separatelyfrom other orders or trading by the member or
participant.
VERŻJONI ELETTRONIKA
A 1061
(12)  A regulated market shall have
arrangements in place to s uspend or terminate the
provision of direct electr onic access by a member or
participant to a client in the case of non-compliance
with sub-articles (10) and (11).
(13)  A regulated market shall ensure that its
rules on co-location services are transparent, fair andnon-discriminatory.
(14)  A regulated market shall ensure that its fee
structures including execution fees, ancillary fees andany rebates are transparent, fair and non-discriminatory and that they do not create incentives to
place, modify or cancel orders or to execute
transactions in a way which contributes to disorderlytrading conditions or market abuse. In particular, a
regulated market shall impose market making
obligations in individual shar es or a suitable basket of
shares in exchange for any rebates that are granted. 
(15)  A regulated market shall be allowed to
adjust its fees for cancelled orders according to the
length of time for which the  order was maintained and
to calibrate the fees to each financial instrument to
which they apply.
(16)  A regulated market may be allowed to
impose a higher fee for placing an order that is
subsequently cancelled than an order which is
executed and to impose a higher fee on participantsplacing a high ratio of cancelled orders to executed
orders and on those operating a high-frequency
algorithmic trading technique in order to reflect theadditional burden on system capacity.
(17)  A regulated market shall be able to
identify, by means of flagging from members or
participants, orders generated by algorithmic trading,
the different algorithms used  for the creation of orders
and the relevant persons ini tiating those orders. That
information shall be available to the competentauthority and European regulatory authorities uponrequest.
(18)  Upon request by the competent authority, a
regulated market shall make  available thereto, data
relating to the order book or give the competentauthority access to the order book so that it is able to
monitor trading.
VERŻJONI ELETTRONIKA
A 1062
Amendment of 
article 8 of the 
principal Act.22. Article 8 of the principal Act shall be amended as follows:
(a)  in paragraph (e) of sub-article (2) thereof, for the
words "authorisation was granted," there shall be substituted the
words "authorisation was granted, or";
(b) immediately after paragraph (e) of sub-article (2)
thereof, as amended, there shall be inserted the following:
"(f) has seriously and systematically infringed the
provisions adopted pursuant to MiFID or MiFIR,".
Amendment of 
article 10A of 
the principal Act.23. Sub-article (2) of article 10A of the principal Act shall be
deleted and the remaining provisions shall be renumbered as art icle
10A.
 Amendment of 
article 10B of the principal Act.24. For article 10B of the principal Act there shall be
substituted the following:Tick sizes. 4G. (1) Regulated markets shall adopt tick
size regimes in shares, depositary receipts, exchange-
traded funds, certificates and other similar financial
instruments and in any other financial instrument for
which regulatory technical standards are developed byESMA.
(2)  The tick size regimes referred to in sub-
article (1) shall:
(a) be calibrated to reflect the liquidity
profile of the financial instrument in differentmarkets and the average bid-ask spread, takinginto account the desirability of enabling
reasonably stable prices without unduly
constraining further narrowing of spreads;
(b) adapt the tick size for each financial
instrument appropriately.
Synchronisation of 
business clocks.4H. All trading venues and their members or
participants shall synchronise  the business clocks they
use to record the date and time of any reportable
event.".
"Competent 
authority to 
draw up list 
when it is home Member 
State of a 
regulated market.10B. (1) The competent authority shall
draw up a list of the regulated markets registered
in Malta and shall forward that list to the other
Member States, EEA States and ESMA. Asimilar communication shall be effected in
respect of each change to that list.
VERŻJONI ELETTRONIKA
A 1063
Amendment of 
article 17 of the principal Act.25.  Sub-article (1) of article 17 of the principal Act shall be
amended as follows:
(a) paragraph (b) thereof shall be amended as follows:
(i) for the words "the market operator of the
regulated market may suspend"  there shall be substituted
the words "the market operator operating a regulated
market, an MTF or an OTF may suspend";
(ii) for the words "with the bye-laws of the
regulated market unless" there shall be substituted thewords "with the bye-laws of the regulated market, MTF
or OTF unless";  and 
(iii) for the words "market operator of a regulated
market that suspends or removes" there shall besubstituted the words "market operator operating a
regulated market, MTF or OTF that suspends orremoves"; and
(b) immediately after paragraph (c) thereof, there shall
be inserted the following new paragraphs:
"(d) A market operator operating an MTF or an OTF
that suspends or removes from trading a financialinstrument shall also suspend or remove the derivativesas referred to in points (4) to (10) of Section C of Annex
I to MiFID that relate or are referenced to that financial
instrument where necessary to support the objectives of
the suspension or removal of the underlying financial
instrument. The market operator operating an MTF or anOTF shall make public its decision on the suspension or
removal of the financial instrument and of any related
derivatives and communicate the relevant decisions tothe competent authority. 
(e) The competent authority shall require other
regulated markets, other MTFs, other OTFs andsystematic internalisers, which fall under its jurisdiction
and trade the same financial instrument or derivatives as
referred to in points (4) to (10) of Section C of Annex I(2) Market operators shall communicate,
on a regular basis, the list of the members orparticipants of the regulated market to the
competent authority of t he regulated market.".
VERŻJONI ELETTRONIKA
A 1064
to MiFID that relate or are referenced to that financial
instrument, to also suspend or remove that financial
instrument or derivatives from trading, where thesuspension or removal is due to suspected market abuse,
a take-over bid or the non-disclosure of inside
information about the issuer or financial instrumentinfringing Articles 7 and 17 of Regulation (EU) No. 596/
2014 except where such suspension or removal could
cause significant damage to the investors’ interests or
the orderly functioning of the market. 
(f) The competent authority shall immediately
make public and communicate to ESMA and theEuropean regulatory author ities of the other Member
States or EEA States such a decision.
(g) Where the competent authority receives a
notification from a European regulatory authority of
another Member State or EEA State, it shall require thatregulated markets, othe r MTFs, other OTFs and
systematic internalisers, which fall under its jurisdictionand trade the same financial instrument or derivativesreferred to in points (4) to (10) of Section C of Annex I
to MiFID that relate or are referenced to that financial
instrument, also suspend or remove that financialinstrument or derivatives from trading, where the
suspension or removal is due to suspected market abuse,
a take-over bid or the non-disclosure of insideinformation about the issuer or financial instrument
infringing Articles 7 and 17 of Regulation (EU) No. 596/
2014 except where such suspension or removal couldcause significant damage to the investors’ interests or
the orderly functioning of the market.
(h) The competent authority shall communicate its
decision to ESMA and other European regulatoryauthorities, including an explanation if the decision was
not to suspend or remove from trading the financialinstrument or derivatives as referred to in points (4) to
(10) of Section C of Annex I to MiFID that relate or are
referenced to that financial instrument.
(i) Paragraphs (d) to (j) shall also apply when the
suspension from trading of financial instrument or
derivatives as referred to in points (4) to (10) of Section
C of Annex I to MiFID that relate or are referenced to
that financial instrument is lifted.
VERŻJONI ELETTRONIKA
A 1065
(j) The notification procedure referred to in
paragraphs (d) to (i) shall also apply in the case where
the decision to suspend or remove from trading afinancial instrument or derivatives as referred to in
points (4) to (10) of Section C of Annex I to MiFID that
relate or are referenced to that financial instrument istaken by the competent authority.".
Amendment of 
article 24 of the 
principal Act.26. Article 24 of the principal Act shall be amended as
follows:
(a) in sub-article (1) thereof:
(i) for the words "No person shall operate a central
securities depository or" there shall be substituted the
words "No person shall establish and operate a central
securities depository in Malta or"; and
(ii) for the words "under this Part." there shall be
substituted the words "under this Part, in terms of theCSDR:" and immediately thereaf ter there shall be added
the following new provisos:
"Provided that a CSD authorised in Malta and
wishing to provide the servi ces referred to in points 1
and 2 of Section A of the Annex to the CSDR, within
the territory of a Member Sta te or an EEA State, may do
so in accordance with Article 23 of the CSDR:
Provided further that a CSD, authorised in a
Member State or an EEA State and wishing to provide
the services referred to in points 1 and 2 of Section A ofthe Annex to the CSDR, within the territory of Malta,
may do so in accordance with Article 23 of the CSDR:
Provided further that a third-country CSD may
provide services referred to  in the Annex to the CSDR
within the territory of Malta, in accordance with Article
25 of the CSDR.";
(b) in sub-article (2) thereof, for the words "Any body
corporate or unincorporate may apply in writing to thecompetent authority for an authorisation under this Part,
authorizing it to act" there shall be substituted the words "An y
legal person may apply in writing to the competent authority fo r
an authorisation under this Part in terms of the CSDR,authorizing it to act"; and
VERŻJONI ELETTRONIKA
A 1066
(c) in sub-article (3) thereof, immediately after the
words "will be in a position to comply" there shall be added th e
words "with the applicable re quirements laid down under the
CSDR and". 
Addition of new 
article 24A to 
the principal 
Act.27. Immediately after article 24 of the principal Act, there
shall be added the following new article 24A:
Amendment of 
article 25 of the 
principal Act.28. Article 25 of the principal Act shall be amended as
follows:
(a) sub-article (2) thereof shall be amended as follows:
(i) for the words "in accordance with this Part"
there shall be substituted the words "in accordance with
this Part, in terms of the CSDR,"; and
(ii) for the words "the provisions of the Act," there
shall be substituted the words "the provisions of theCSDR as well as the provisions of the Act,"; and
(b) sub-article (5) thereof shall be deleted.
Amendment of 
article 26 of the principal Act.29. For article 26 of the principal A ct there shall be substituted
the following:
Amendment of 
article 27 of the 
principal Act.30. Article 27 of the principa l Act shall be amended as
follows:
(a)  sub-article (2) thereof shall be amended as follows:
(i) in paragraph (a) thereof, immediately after the
words "to satisfy the requi rements for authorisation"
there shall be added the words "under the CSDR or";"Designation of the competent 
authority.24A.  The Malta Financi al Services Authority
established by the Malta Financial Services
Authority Act shall be t he designated competent
authority in Malta for the purposes of
implementing the relevant provisions of the CSDR,
and any reference to the competent authority shallbe read and construed accordingly.".
"Functions of a 
central 
securities 
depository.26. Without prejudice to any other power or
function conferred on it by law or regulation, the
functions of a central securities depository shall
include the services listed in the Annex to theCSDR.".
VERŻJONI ELETTRONIKA
A 1067
(ii)  in paragraph (b) thereof:
a. immediately after the words "any other
obligation imposed on it by or under" there shall be
added the words "the CSDR or"; and
b.  immediately after the words "or Financial
Market Rules made hereunder", there shall be added
the words "or has seriously or systematically
infringed the requirements laid down in the CSDR or,
where applicable, in MiFID or MiFIR";
(iii) in paragraph (c) thereof:
a. for the words "authorisation within twelve
months", there shall be substituted the words
"authorisation during  twelve months"; and
b. for the words "or has not operated for the
preceding six months;", th ere shall be substituted the
words "or has provided no services or performed no
activity during the pr eceding six months;";
(iv)  in paragraph (d) thereof, for the words "other
irregular means;" there shall be substituted the words"other unlawful means;";
(v) in paragraph (e) thereof, for the words
"authorisation was granted." there shall be substitutedthe words "authorisation was granted and has not taken
remedial actions requested  by the competent authority
within a set time frame."; and
(b) sub-article (5) thereof shall be deleted.
Addition of new 
article 27A to 
the principal Act. 31. Immediately after article 27 of the principal Act, there
shall be added the following new article 27A:
"Right of appeal. 27A. A right of appeal b efore the Financial
Services Tribunal in accordance with Part VI of
this Act shall lie:
(a) where no decision is taken, within six
months of its submission, in respect of an
application for authorisation to act as a central
securities depository which contains all the
information required under the provisions in
force;
VERŻJONI ELETTRONIKA
A 1068
Deletion of 
article 28 of the 
principal Act.32. Article 28 of the principal Act shall be deleted.
Amendment of article 30 of the 
principal Act.33. Article 30 of the principal Act shall be amended as
follows:
(a) in sub-article (1) thereof:
(i) in paragraph (e) thereof, for the words
"dematerialised or uncertificated form" there shall be
substituted the words "dematerialised form or
represented in book-entry form as immobilisation"; and
(ii) paragraph (i) thereof shall be deleted;
(b) in sub-article (2) thereof, for the words "or classes of
financial instruments, overseas central securities depositoriesand", there shall be substituted the words "or classes of financial
instruments and";
(c) immediately after sub-article (2) thereof, there shall
be inserted the following: 
"(3) Regulations made under this article may impose
administrative penalties and fines higher than one
hundred and fifty thousand euro (€150,000), where
deemed necessary or appropriate for any contravention
of or failure of compliance with any EU Directive or EU
Regulation or of any regula tions made under this article
to transpose or to give effect to any EU Directive or EU
Regulation.".
Addition of new 
article 31A to 
the principal Act.34. Immediately after article 31 of the principal Act, there(b) where the competent authority refuses
an application for auth orisation to act as a
central securities depository;
(c) where authorisation to act as a central
securities depository is revoked by the
competent authority in terms of article 27 of this
Act.".
VERŻJONI ELETTRONIKA
A 1069
shall be added the following new article 31A:
Amendment of 
article 32 of the principal Act.35.  For paragraph (v) of sub-article (1) of article 32 of the
principal Act there shall be substituted the following: 
 "(v)  any auditor of a trading venue or data reporting service s
provider who appears to be in possession of relevant information;". 
Amendment of 
article 37 of the 
principal Act.36. Article 37 of the principal Act shall be amended as
follows:
 (a) in sub-article (1) thereof, for the words "sub-article
(1) of Article 56 of the Directive.", there shall be substituted the
words "sub-article (1) of Article 79 of MiFID.";
(b) for sub-article (2) thereof, there shall be substituted
the following:
"(2) The competent authority shall cooperate with
other European regulatory authorities whenevernecessary for the purpose of carrying out its duties underMiFID and, or MiFIR. It shall render the necessary
assistance to other European regulatory authorities, in
particular by exchanging information and cooperating inany investigatory or supervisory function. In terms of
MiFID and, or MiFIR, the competent authority may use
its powers for the purposes of cooperation even in caseswhere the conduct under investigation does not
constitute an infringement of any provisions of this Act,
regulations or Financial Market Rules issued thereunder:
Provided that the competent authority may, at
its own discretion, also cooperate with other Europeanregulatory authorities with respect to facilitating therecovery of fines.";
(c)  sub-article (3) thereof shall be amended as follows:"CSDR to 
prevail in case of any 
inconsistency.31A. This Part shall be read and construed
in accordance with the C SDR and, insofar as the
provisions of this Part of this Act and any rules
made thereunder are inconsistent with theprovisions of the CSDR, the provisions of the
CSDR shall prevail and the provisions of this
Part of this Act and any rules made thereunder
shall not apply to the extent of the
inconsistency.".
VERŻJONI ELETTRONIKA
A 1070
(i) for the words "Article 56 of the Directive",
there shall be substituted  the words "Article 79 of
MiFID"; and 
(ii) for the words "pursuant to the Directive.", there
shall be substituted the words "pursuant to MiFIR or
MiFID.";
(d) in paragraph (a) of sub-article (7) thereof, for the
words "within the meaning of t he Directive;", there shall be
substituted the words "within the meaning of MiFID;"; 
 (e) sub-article (8) thereof shall be amended as follows:
 (i) for the words "the provisions of the Directive",
there shall be substituted the words "the provisions of
MiFID or MiFIR"; and
(ii) for the words "it shall notify this in as specific a
manner as possible to the contact point in the otherMember State or EEA State.", there shall be substituted
the words "it shall notify the European regulatoryauthority of the other Member State or EEA State and
ESMA in as specific a manner as possible.";
 (f) Sub-article (10) thereof shall be amended as
follows:
(i) for the words "the provisions of the Directive",
there shall be substituted the words "the provisions of
MiFID or MiFIR"; and
(ii) for the words "notifying European
regulatory authority", there  shall be substituted the
words "notifying European regulatory authority and
ESMA";
(g) immediately after sub-article (11) thereof, there
shall be added the following new sub-articles:
"(12) In relation to emission allowances, the
competent authority shall cooperate with public bodies
competent for the oversight of spot and auction markets
and the European regulatory authorities, registry
administrators and other public bodies charged with thesupervision of compliance under Directive 2003/87/EC
in order to ensure that they can acquire a consolidated
overview of emission allowances markets.
VERŻJONI ELETTRONIKA
A 1071
(13)  In relation to agricultural commodity
derivatives, the competent authority shall report to and
cooperate with public bodies competent for theoversight, administration and regulation of physical
agricultural markets under Regulation (EU) No. 1308/
2013.
(14) The competent authorit y shall consult with the
European regulatory author ity of the Member State or
EEA State responsible for the supervision of credit
institutions or insurance undertakings prior to granting
an authorisation to a market operator which is:
(a)  a subsidiary of a credit institution or
insurance undertaking authorised in the Union; or
(b)  a subsidiary of the parent undertaking of a
credit institution or insurance undertaking authorised
in the Union; or
(c) controlled by the same person, whether
natural or legal, who controls a credit institution orinsurance undertaking authorised in the Union.
(15)  The competent authority and the European
regulatory authorities referred to in sub-article (14) shallin particular consult each other when assessing the
suitability of the shareholders or members and thereputation and experience of persons who effectively
direct the business involved in the management of
another entity of the same group. They shall exchangeall information regarding the suitability of shareholders
or members and the reputation and experience of persons
who effectively direct the business that is of relevance tothe other European regulatory authorities involved, for
the granting of an authorisation as well as for the
ongoing assessment of compliance with operatingconditions.
(16)  Where Malta is the host Member State of a
regulated market and the competent authority has clearand demonstrable grounds for believing that such
regulated market infringes the obligations arising from
the provisions adopted pursuan t to MiFID, it shall refer
those findings to the European regulatory authority of
the home Member State of the regulated market.
VERŻJONI ELETTRONIKA
A 1072
(17)  Where, despite the measures taken by the
European regulatory authority of the home Member
State or because such measures prove inadequate, thatregulated market persists in acting in a manner that is
clearly prejudicial to the interests of Maltese investors or
the orderly functioning of markets, the competentauthority shall, after informing the European regulatory
authority of the home Member State, take all the
appropriate measures needed in order to protect
investors and the proper functioning of the markets,
which shall include the possibility of preventing thatregulated market from making their arrangements
available to remote members or participants established
in Malta. The competent authority may refer the matterto ESMA which may act in accordance with the powers
conferred on it under Article 19 of Regulation (EU) No.
1095/2010. 
(18)  Any measure adopted pursuant to sub-article
(16) involving sanctions or restrictions on the activitiesof a regulated market shall be properly justified andcommunicated to the regulated market concerned.".
Amendment of 
article 37B of 
the principal Act.37. In article 37B of the principal Act, for the words "article
56(1) of the Directive" there shall be substituted the words "Article
79(1) of MiFID". 
Amendment of 
article 37C of 
the principal 
Act.38. Immediately after sub-article (4) of article 37C of the
principal Act, there shall be added the following new sub-artic le:
"(5) The competent authority may also conclude
cooperation agreements providing for the exchange of
information with overseas regulatory authorities, bodies
and natural or legal persons responsible for one or more
of the following: 
(a) the supervision of credit institutions, other
financial institutions, insurance undertakings and thesupervision of financial markets; 
(b) the liquidation and bankruptcy of investment
firms and other similar procedures;
(c)  the carrying out of statutory audits of the
accounts of investment firms and other financial
institutions, credit institutions and insurance
undertakings, in the performance of their supervisoryfunctions, or which administer compensation
VERŻJONI ELETTRONIKA
A 1073
schemes, in the performance of their functions; 
(d)  oversight of the bodies involved in the
liquidation and bankruptcy of investment firms and
other similar procedures; 
(e) oversight of persons charged with carrying
out statutory audits of the accounts of insuranceundertakings, credit institutions, investment firms
and other financial institutions; 
(f) oversight of persons active on emission
allowance markets for the purpose of ensuring a
consolidated overview of financial and spot markets; 
(g)  oversight of persons active on agricultural
commodity derivatives markets for the purpose ofensuring a consolidated overview of financial andspot markets.". 
Addition of 
article 37D to 
the principal Act.39. Immediately after article 37C of the principal Act, there
shall be inserted the following new article: 
Amendment of article 39A of 
the principal 
Act.40. Sub-article (1) of article 39A of the principal Act shall be
amended as follows:
(a) for the words "other than Part III thereof,", there
shall be substituted the words "other than Part III or Part IV
thereof,";
 (b) the words "adopted in the implementation of the
Directive" shall be deleted. 
Amendment of 
article 42 of the principal Act.41. For sub-article (1) of  article 42 of the principal Act, there
shall be substituted the following:
"(1)  The Tribunal shall have the exclusive competence"Binding mediation. 37D.   The competent authority may refer
to ESMA situations where a request relating to
one of the following has been rejected or has not
been acted upon within a reasonable time: 
(a) to exchange information as provided
for in article 37; or
(b) to carry out a supervisory activity, an
on-the-spot verification, or an investigation, asprovided for in article 37A.".
VERŻJONI ELETTRONIKA
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to determine all appeals as may be referred to it under articles
4(11), 16(9), 17(3), 18(6), 20(4), 27A, 33(6) and 39A or under
any regulations made by the Minister under articles 3 and 49.".
Amendment of 
article 49 of the 
principal Act.42. Article 49 of the principal Act shall be amended as
follows:
(a) for paragraph (e) of sub-article (1) thereof, there
shall be substituted the following:
"(e) to transpose, implement and give effect to the
provisions and requirements of Directives, Regulations
and any other legislative measures of the European
Union requiring transposition and, or implementation, asthey may be amended from time to time, including any
implementing measures that have been or may be issued
thereunder and including th ose relating to licence
holders, credit rating agencies, regulated markets,
commodities markets, central counterparties, central
securities depositaries, market making, short selling,transactions in OTC derivatives, trade repositories and,
or the admissibility to listing of financial instruments
thereon and others as may be specified therein or to anyother matter falling within the terms of this Act;
regulations made under this paragraph, and strictly
related to transposition or implementation as aforesaid,may provide that any provision of this Act or of any
other law shall not apply to matters falling under the
regulations, and that in so far as any of the provisions ofthe regulations are inconsistent with the provisions of
this Act or of any other law, such provisions in any such
regulations shall prevail;".
(b) immediately after sub-article (2) thereof, there shall
be added the following new sub-articles:
"(2A) Regulations made under this article may
impose:
(a) administrative penalties which may not
exceed one hundred and fifty thousand euro
(€150,000) for each infringement or failure to
comply, as the case may be;
(b)  punishments or other penalties in respect of
any contravention or failure to comply notexceeding a fine ( multa ) of four hundred and sixty-
VERŻJONI ELETTRONIKA
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six thousand euro (€466,000) or to a term of
imprisonment not exceeding four years, or to both
such fine and imprisonment;
(c) administrative penalties and fines higher
than one hundred and fifty  thousand euro (€150,000),
and fines higher than f our hundred and sixty-six
thousand euro (€466,000),  where deemed necessary
or appropriate for any cont ravention of or failure of
compliance with any EU Dir ective or EU Regulation
or of any regulations made under this article totranspose or to give effect to any EU Directive or EURegulation.
(2B) Regulations made under this article may
prescribe penalties and fines as provided for in sub-article (2A)(c), for any breach of any provision of the
Act or for any breach of any Financial Market Rules,
transposing and, or implementing any EU Directive or
EU Regulation.".
PART IV
AMENDMENTS TO THE INVESTMENT SERVICES ACT
Amendments to 
the Investment 
Services Act.Cap. 370.43. This Part amends and shall be read and construed as one
with the Investment Services Act, hereinafter in this Part refe rred to
as "the principal Act".
Amendment of article 2 of the 
principal Act.44. Article 2 of the principal Act shall be amended as
follows:
(a) sub-article (1) thereof shall be amended as follows:
(i) immediately before the definition "AIFM
Directive" there shall be added the following new
definition: 
" "agricultural commodity derivatives" means
derivative contracts relating to products listed inArticle 1 of, and Annex I, Parts I to XX and XXIV/1
to, Regulation (EU) No. 1308/2013;";
(ii) immediately after the definition "AIFM
Directive" there shall be added the following newdefinition:
" "ancillary services" means any of the services
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listed within the Third Schedule;";
(iii)  immediately after the definition "the BRRD"
there shall be added the following new definition:
" "certificates" means those securities which are
negotiable on the capital market and which in case of
a repayment of investment by the issuer are rankedabove shares but below uns ecured bond instruments
and other similar instruments;";
(iv) immediately after the new definition
"certificates" there shall  be added the following new
definition:
" "client" means any natu ral or legal person to
whom an investment services licence holder providesinvestment or anc illary services;";
(v) immediately after the new definition "client"
there shall be added the following new definition:
" "close links" means a situation in which two or
more natural or legal persons are linked by:
(i) participation in the form of
ownership, direct or by way of control, of20% or more of the voting rights or capital of
an undertaking;
(ii)  "control" which means the
relationship between a  parent undertaking
and a subsidiary , in all the cases referred to in
Article 22(1) and (2) of Directive 2013/34/
EU, or a similar rela tionship between any
natural or legal person and an undertaking,
any subsidiary undertaking of a subsidiaryundertaking also being considered to be a
subsidiary of the pare nt undertaking which
is at the head of those undertakings;
(iii) a permanent link of both or all of
them to the same person by a control
relationship;";
(vi) immediately after the definition "collective
investment scheme licence", there shall be added thefollowing new definition:
VERŻJONI ELETTRONIKA
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" "commodity derivatives " shall have the same
meaning as that given to the term by Article 2 of the
MiFIR;"; 
(vii) immediately after the definition "competent
authority", there shall be  added the following new
definition:
" "Conduct of Business Rules" refers to Rules
issued by the competent authority under variousarticles of this Act;";
(viii) immediately after the definition "the CRD"
there shall be added the following new definition:
" "credit institution" m eans a credit institution as
defined in point (1) of Article 4(1) of the CRR;";
(ix)  immediately after the definition "the CRR"
there shall be added the following new definition:
" "derivatives" means t hose securities giving the
right to acquire or sell any transferable security orgiving rise to a cash settlement determined by
reference to transferabl e securities, currencies,
interest rates or yields, commodities or other indices
or measures; and referred to in paragraphs 4 to 10 ofthe Second Schedule;";
(x) immediately after the new definition
"derivatives" there shall be added the following newdefinition:
" "Directive 2013/34/EU" means Directive 2013/
34/EU of the European Parliament and of theCouncil of 26 June 2013 on the annual financial
statements, consolidated financial statements andrelated reports of certain types of undertakings, as
may be amended from time to time;";
(xi)  in the definition "European investment firm"
for the words "MiFID Directive" there shall besubstituted the word "MiFID";
(xii) in the definition "European regulatory
authority" for the words "Article 48 of the MiFIDDirective" there shall be sub stituted the words "Article
67 of the MiFID";
VERŻJONI ELETTRONIKA
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(xiii) immediately after the definition "exempted
person" there shall be added the following new
definition:
" "home Member State or EEA State" means:
(a) where the European investment firm
is a natural person, the Member State or EEA
State in which the head office of that personis situated; or
(b)  where the European investment
firm is a legal person, the Member State or
EEA State in which its registered office issituated; or
(c) where the European investment firm
has, under its national law no registeredoffice, the Member State or EEA State in
which its head office is situated;";
(xiv) immediately after the new definition "home
Member State or EEA State", there shall be added thefollowing new definition:
" "host Member State or EEA State" means the
Member State or EEA State, other than the homeMember State or EEA State, in which an investment
services licence holder has a branch or providesinvestment services and, or activities;";
(xv) the definition "investment advertisement" shall
be substituted as follows:
" "investment advertisement" means any form or
medium of marketing activity or communicationdisseminated to the public by means of all types ofmedia, other than a prospectus, which promotes the
purchase or procurement of an investment service or
instrument;"; 
(xvi) in the definition "i nvestment service", for the
words "any services falling wi thin the First Schedule",
there shall be substituted t he words "any service and
activity falling within the First Schedule";
(xvii) immediately after the definition "management
body" there shall be added the following new
VERŻJONI ELETTRONIKA
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definition:
" "market operator" means a person or persons
who manages and, or operates the business of a
regulated market and may be the regulated market
itself;";
(xviii) for the definitio n "MiFID Directive" there
shall be substituted the following:
" "MiFID" means Direc tive 2014/65/EU of the
European Parliament and of the Council of 15 May2014 on markets in financial instruments and
amending Directive 2002/92 /EC and Directive 2011/
61/EU, as amended from time to time, and includes
any implementing measures that have been or may
be issued thereunder;"; 
(xix) immediately after th e definition "MiFID", as
substituted, there shall be added the following newdefinition:
" "MiFIR" means Regulation (EU) No. 600/
2014 of the European Parliament and of the Councilof 15 May 2014 on markets in financial instruments
and amending Regulatio n (EU) No. 648/2012, as
may be amended from time t o time, and includes any
implementing measures, implementing technicalstandards, regulatory techni cal standards, guidelines
and similar measures that h ave been or may be issued
thereunder;
(xx) the definition "Minister" shall be substituted by
the following:
" "Minister" means the Minister responsible for
the regulation of Financial Services;";
(xxi) immediately after the definition "Minister"
there shall be added the  following new definition:
" "multilateral system" means any system or
facility in which multiple third-party buying andselling trading interests in  financial instruments are
able to interact in the system;";
(xxii) immediately afte r the new definition
"multilateral system", there s hall be added the following
VERŻJONI ELETTRONIKA
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new definition:
" "multilateral trading facility" or "MTF" means
a multilateral system, operated by an investment
services licence holder or a market operator, which
brings together multiple  third-party buying and
selling interests in instruments - in the system and inaccordance with non-discre tionary rules - in a way
that results in a contract i n accordance with Title II of
MiFID;";
(xxiii) immediately after the new definition
" "multilateral trading facility" or "MTF" " there shallbe added the following new definition:
" "organised trading facility" or "OTF" means a
multilateral system which is not a regulated marketor an MTF and in which multiple third-party
buying and selling interests in bonds, structured
finance products, emission allowances or derivatives
are able to interact in the system in a way that results
in a contract in accordance with Title II of MiFID;"; 
(xxiv) immediately after the definition "overseas
regulatory authority" there shall be added thefollowing new definition:
" "parent undertaking" means a parent
undertaking within the meaning of Article 2(9) and22 of Directive 2013/34/EU;" 
(xxv) in the proviso to the definition "qualifying
shareholding", for the words "MiFID Directive", thereshall be substituted the word "MiFID";
(xxvi) immediately after the definition "Regulation
(EU) No. 1095/2010" there sh all be added the following
new definition:
" "Regulation (EU) No. 1227/2011" means
Regulation (EU) No. 1227/2011 of the EuropeanParliament and of the Counc il of 25 October 2011 on
wholesale energy market integrity and
transparency;";
(xxvii) immediately after the new definition
"Regulation (EU) No. 1227/ 2011" there shall be added
VERŻJONI ELETTRONIKA
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the following new definition:
" "Regulation (EU) No. 648/2012" means
Regulation (EU) No. 648/2012 of the European
Parliament and of the Co uncil of 4 July 2012 on OTC
derivatives, central counterparties and traderepositories, as may be amended from time to time,and includes any implementing measures,
implementing technical standards, regulatory
technical standards, guidelines and similar measures
that have been or may be issued thereunder;";
(xxviii) immediately after the new definition
"Regulation (EU) No. 648/2012 " there shall be added the
following new definition:
" "Regulation (EU) No. 1308/2013" means
Regulation (EU) No. 1 308/2013 of the European
Parliament and of the Council of 17 December 2013
establishing a common organisation of the markets inagricultural products and repealing Council
Regulations (EEC) No. 922/72, (EEC) No. 234/79,
(EC) No. 1037/2001 and (EC) No. 1234/2007;";
(xxix) immediately after the new definition
"Regulation (EU) No. 1308/ 2013", there shall be added
the following new definition:
" "Solvency II Directive" means Directive 2009/
138/EC of the European  Parliament and of the
Council of 25 November 2009 on the taking-up andpursuit of the business of Insurance and Reinsurance,
as amended from time to time, and includes any
implementing measures that have been or may beissued thereunder;";
(xxx) immediately after the new definition "Solvency
II Directive" there shall be  added the following new
definition:
" "structured finance products" means those
securities created to securitise and transfer credit riskassociated with a pool of fin ancial assets entitling the
security holder to receive regular payments thatdepend on the cash flow from the underlying
assets;";
VERŻJONI ELETTRONIKA
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(xxxi) immediately after th e definition "subsidiary"
there shall be added the following new definition:
" "third country" means a country which is not
a Member State or an EEA State;";
(xxxii) immediately after the new definition "third
country" there shall be added the following new
definition:
" "trading venue" means a regulated market, an
MTF or an OTF;";
(xxxiii) immediately after the definition "UCITS
Directive" there shall be added the following new
definition:
" "UCITS management company" means a
management company as defined in point (b) ofArticle 2(1) of the UCITS Directive;"; and
(xxxiv) immediately after the definition "Unit" there
shall be added the following new definition: 
" "wholesale energy product" means wholesale
energy products as defined in point (4) of Article 2of Regulation (EU) No. 1227/2011;"; and
(b) in sub-article (3) thereof, for the words "MiFID
Directive" there shall be substituted the words "MiFID, theMiFIR".". 
Amendment of 
article 2A of the principal Act.45. Article 2A of the principal Act shall be amended as
follows:
(a) in sub-article (2) thereof, for the words "the MiFID
Directive" there shall be substituted the words "the MiFID, the
MiFIR"; and
(b) in sub-article (3) thereof, for the words "the MiFID
Directive" there shall be substituted the words "the MiFID, theMiFIR".
Amendment of 
article 3 of the principal Act.46. Sub-article (3) of article 3 of the principal Act shall be
amended as follows:
(a) in paragraph (a) thereof, for the words "an
instrument; or" there shall be substituted the words "an
VERŻJONI ELETTRONIKA
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instrument;";
(b) in paragraph (b) thereof, for the words "in Malta;"
there shall be substituted the words "in Malta; or"; and
(c) immediately after paragraph (b) thereof, there shall
be inserted the following new paragraph: 
"(c) a service falls within the Third Schedule;".
Amendment of 
article 6 of the 
principal Act.47. Article 6 of the principal Act shall be amended as follows:
(a) in sub-article (1) thereof –
(i) in sub-paragraph (i) of paragraph (a) of the
proviso thereto, for the words "observe any Investment
Services Rules and regulations made under this Act andapplicable to him;" there shall be substituted the words
"observe regulations made unde r this Act as well as any
Investment Services Rules and any Conduct of Business
Rules issued by the competent authority made under this
Act and which are applicable to him;";
(ii) immediately after item (c) of sub-paragraph (ii)
of paragraph (a) of the proviso thereto, there shall beadded the following new sub-paragraph (iii):
"(iii) grant an investment  services licence solely
for the provision of an ancillary service;";
(iii)  in paragraph (c) thereof, for the words "in
article 17C." there shall be substituted the words "in
article 17C;"; and
(iv) immediately after paragraph (c) thereof, as
amended, there shall be added the following new
paragraphs:
"(d) grant a licence to an applicant if there are
objective and demonstrable grounds for believingthat the management body of the applicant may pose
a threat to its effective, sound and prudentmanagement and to the adequate consideration of the
interest of its clients and the integrity of the market; 
(e) grant a licence to an applicant unless it is
satisfied that the members of the management bodyof the applicant are of sufficiently good repute,
VERŻJONI ELETTRONIKA
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possess sufficient knowledge, skills and experience
and commit sufficient time to perform their functions
with the applicant;"; 
(b) in paragraph (b) of sub-article (2) thereof, for the
words "For the better carrying out of the provisions of this Ac t,
the competent authority may, from time to time, issue andpublish Investment Service Rules which shall be binding on
licence holders and others as may be specified therein. Such
Investment Service Rules may lay down additional
requirements" there shall be substituted the words "For the
better carrying out of the provisions of this Act, and totranspose, implement and give effect to the provisions and
requirements of Directives, Regulations and other legislative
matters of the European Union requiring transposition orimplementation, the competent authority may, from time to
time, issue and publish Investment Services Rules and Conduct
of Business Rules which shall be binding on licence holders andothers as may be specified therein. Such Investment Service
Rules and Conduct of Business Rules may lay down additional
requirements";
(c) for sub-article (4) thereof, there shall be substituted
the following:
"(4)(a) Every investment services licence shall
specify the investment service which the holder
thereof has been authorised to provide, and shall,
where applicable, cover one or more of the ancillaryservices set out in the Third Schedule;
(b) Every collective investment scheme licence
shall specify the class of collective investmentscheme to which the l icence relates."; and
(d) for sub-article (6) thereof, there shall be substituted
the following:
"(6) Within six months from the date of the
submission of a properly completed application formtogether with the requisite documentation, the competentauthority shall inform an applicant in writing of its
decision whether or not to grant a licence:
Provided that, the competent authority shall
inform a UCITS management company which has
submitted an applic ation for authoris ation of a UCITS or
VERŻJONI ELETTRONIKA
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where applicable a self-managed UCITS, in writing,
within two months of the submission of a complete
application whether or not the collective investmentscheme has been authorised. Where an investment
company has not designated a management company,
this proviso shall not apply and the first paragraph of thissub-article shall apply:
Provided further that the competent authority
shall inform an AIFM in writing within three months of
the submission of a complete application whether or not
authorisation has been granted. The competent authoritymay prolong this period for up to three additional
months where it considers it necessary due to the
specific circumstances of the case and after havingnotified the AIFM accordingly.".
Amendment of 
article 7 of the 
principal Act.48. In paragraph (b) of sub-article (2) of article 7 of the
principal Act, for the words "or of any Investment Services Rules or
regulations made thereunder," there shall be substituted the words "or
regulations made thereunder or of  any applicable Investment Ser vices
Rules or Conduct of Business Rules issued by the competent
authority,". 
Amendment of 
article 10A of 
the principal 
Act.49. For sub-article (6) of article 10A of the principal Act there
shall be substituted the following: 
"(6) The competent authority may extend the interruption
referred to in sub-article (5) up to thirty working days if the
proposed acquirer is: 
(a) a natural or legal person situated or regulated in
countries that are not Member States or EEA States; or
(b) a natural or legal person not subject to
supervision under the MiFID, the UCITS Directive, theCRD or the Solvency Directive.".
Amendment of 
article 11 of the principal Act.50. In sub-article (2) of article 11 of the principal Act, for the
words "issue such Investment Service Rules" there shall be
substituted the words "issue such Conduct of Business Rules", and forthe words "Such Investment Service Rules" there shall be substi tuted
the words "Such Conduct of Business Rules".
Amendment of 
article 12 of the principal Act.51. Article 12 of the principal Act shall be amended as
follows: 
(a) sub-article (1) thereof shall be amended as follows:
VERŻJONI ELETTRONIKA
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(i) paragraph (a) thereof shall be substituted by the
following:
"(a) amend the definitions of "ancillary services",
"collective investment s cheme" and "investment
service" in article 2, as well as the provisions of the
First, Second and Third Schedules;";
 (ii)  in paragraph (k) thereof, for the words "the
MiFID Directive" there shall be substituted the words"the MiFID, the MiFIR";
(iii)  in paragraph (l) thereof, for the words "by the
Authority on investment firms," there shall besubstituted the words "by the competent authority on
investment services licence holders,";
(iv)  in paragraph (m) thereof, for the words "the
MiFID Directive" there shall be substituted the words"the MiFID and the MiFIR"; and
(b)  in sub-article (2C) thereof, for the words
"investment firms" there shall be substituted the words"investment services licence holders";
(c) in sub-article (4) thereof, for the words "may issue
Investment Services Rules within the meaning of article 6 ofthis Act" there shall be substituted the words "may issue
Investment Services Rules and, or Conduct of Business Ruleswithin the meaning of article 6 of this Act";
(d) immediately after sub-article (5) thereof, there shall
be added the following new sub-article:
"(5A) Regulations made under this article may
prescribe administrative penalties and fines as providedfor in sub-article (5)(c), for  any breach of any provision
of this Act or for any breach of any Investment Services
Rules or Conduct of Business Rules, transposing and, or
implementing any EU Directive or EU Regulation.".
Amendment of 
article 15 of the 
principal Act.52. Sub-article (2) of article 15 of the principal Act shall be
amended as follows: 
(a) in paragraph (g) thereof, for the words "the MiFID
Directive" there shall be substituted the words "the MiFID, the
MiFIR";
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(b) in paragraph (h) thereof, for the words "the
Financial Markets Act:" there shall be substituted the words
"the Financial Markets Act;";
(c) immediately after paragraph (h) thereof, there shall
be inserted the following new paragraphs: 
"(i) require the suspension of trading in a financial
instrument; 
(j) request any person to take steps to reduce the
size of the position or exposure; 
(k) limit the ability of any person from entering into
a commodity derivative, including by introducing limits
on the size of a position any person can hold at all times
in accordance with Article 57 of MiFID:".
Amendment of 
article 16A of 
the principal 
Act. 53. Article 16A of the principa l Act shall be amended as
follows:
(a) in sub-article (1) thereof, for the words "regulations
or Investment Services Rules issued thereunder," there shall be
substituted the words "regulations, Investment Services Rules
or Conduct of Business Rules issued thereunder,"; and
(b) in sub-article (4) thereof, for the words "regulations
or Investment Services Rules issued thereunder," there shall besubstituted the words "regulations, Investment Services Rules
or Conduct of Business Rules issued thereunder,".
Amendment of 
article 16B of 
the principal Act.54.  In article 16B of the prin cipal Act, for the words
"Investment Services Rules, or administrative provisions" there  shall
be substituted the words "Investment Services Rules, Conduct of
Business Rules, or administrative provisions".
Amendment of 
article 17 of the 
principal Act.55.  Article 17 of the principal Act shall be amended as
follows:
(a) in sub-article (1) thereof, for the words "Article
56(1) of the MiFID Directive" there shall be substituted the
words "Article 79(1) of the MiFID";
(b) in sub-article (2) thereof:
(i) for the words "the CRD, the MiFID Directive"
there shall be substituted the words "the CRD, the CRR,
the MiFID, the MiFIR";
VERŻJONI ELETTRONIKA
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(ii) for the words "regulations or Investment
Services Rules issued thereunder:" there shall be
substituted the words "regulations, Investment ServicesRules or Conduct of Business Rules issued thereunder:";
and
(iii)  for the words "systemically relevant investment
firms" in the proviso theret o, there shall be substituted
the words "systemically rel evant investment services
licence holders".
 (c) in sub-article (3) thereof:
(i) for the words "Artic le 56(1) of the MiFID
Directive" there shall be substituted the words "Article79(1) of the MiFID"; and 
(ii) for the words "pursuant to the MiFID
Directive." there shall be substituted the words "pursuantto the MiFID and the MiFIR.";
(d) sub-article (7) thereof shall be amended as follows:
(i)  in paragraph (b) thereof, for the words "the
MiFID Directive;" there shall be substituted the words
"the MiFID and the MiFIR;"; and
(ii) in paragraph (f) thereof, for the words "and the
MiFID Directive." there shall be substituted the words"the MiFID and the MiFIR.";
(e) in paragraph (c) of sub-article (8) thereof, for the
words "investment firms" there shall be substituted the words"investment services licence holders";
(f) in sub-article (10) thereof, for the words "the MiFID
Directive" there shall be substituted the words "the MiFID, theMiFIR"; and 
(g) in sub-article (12) thereof, for the words "the MiFID
Directive" there shall be substituted the words "the MiFID, theMiFIR".
Amendment of 
article 17A of 
the principal Act.56. In the proviso to sub-article (1) of article 17A of the
principal Act, for the words "the MiFID Directive" there shall be
substituted the words "the MiFID".
VERŻJONI ELETTRONIKA
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Amendment of 
article 17B of 
the principal Act. 57. In article 17B of the principal Act, for the words "Article
56(1) of the MiFID Directive" t here shall be substituted the words
"Article 79(1) of the MiFID". 
Amendment of 
article 17C of 
the principal Act.58. In paragraph (a) of sub-article (1) of article 17C of the
principal Act, for the words "investment services licence or an
equivalent authorisation" there s hall be substituted the words
"investment services licence or equivalent authorisation or of a
market operator".
Amendment of 
article 17E of 
the principal Act. 59. Article 17E of the principal Act shall be amended as
follows:
(a) in sub-article (1) thereof, for the words "the MiFID
Directive" there shall be substituted the words "the MiFID, the
MiFIR"; and
(b) in sub-article (3) thereof, for the words "the MiFID
Directive" there shall be substituted the words "the MiFID, theMiFIR".
Amendment of 
article 17F of the principal 
Act. 60. Sub-article (2) of article 17F of the principal Act shall be
amended as follows:
(a) in paragraph (v) thereof, for the words "and other
financial institutions." there shall be substituted the words " and
other financial institutions;"; and
(b)  immediately after paragraph (v) thereof, there shall
be inserted the following new paragraphs:
"(vi) overseeing persons active on emission
allowance markets for the purpose of ensuring a
consolidated overview of financial and spot markets; 
(vii) overseeing persons active on agricultural
commodity derivatives markets for the purpose of
ensuring a consolidated overview of financial and spot
markets.".
Amendment of 
article 21 of the principal Act.61. Sub-article (1) of article 21 of the principal Act shall be
amended as follows:
(a) in paragraph (a) thereof, for the words "any
Investment Services Rules and regulations made under it," there
shall be substituted the words "any regulations, Investment
Services Rules and Conduct of Business Rules issued under it",and for the words "Investment S ervices Rules, directive" there
shall be substituted the word s "Investment Services Rules,
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Conduct of Business Rules, directive"; and
(b) in paragraph (b) thereof, for the words "Investment
Services Rules, directive," ther e shall be substituted the words
"Investment Services Rules, Conduct of Business Rules,
directive,".
Amendment of 
article 25 of the principal Act.62. In sub-article (1) of article 25 of the principal Act, for the
words "Investment Services Rules, directive" there shall be
substituted the words "Investme nt Services Rules, Conduct of
Business Rules, directive".
Amendment of 
article 26 of the 
principal Act. 63. Article 26 of the principal Act shall be amended as follows:
(a) in sub-article (1) thereof:
(i) for the words "Investment Services Rules or
regulations made thereunder," there shall be substituted
the words "regulations, Investment Services Rules orConduct of Business Rules made thereunder,"; and
(ii) in the first proviso thereof, for the words "the
MiFID Directive," there shall be substituted the words
"the MiFID, the MiFIR,";
(b) in sub-article (2) thereof, for the words "Article 58
of the MiFID Directive" there s hall be substituted the words
"Article 81 of the MiFID"; and
(c) in sub-article (3) thereof, for the words "under the
MiFID Directive:" there shall be substituted the words "underthe MiFID and the MiFIR:".
Amendment of 
article 27 of the 
principal Act.64. In article 27 of the principal Act, for the words "any
Investment Services Rules or regulations made thereunder," there
shall be substituted the words "any regulations, Investment Services
Rules or Conduct of Business Rules made thereunder,", and for thewords "any functions under this Act, or any Investment Services
Rules or regulations aforesaid" there shall be substituted the words
"any functions under th is Act, regulations, Investment Services  Rules
or Conduct of Business Rules aforesaid".
Amendment of 
article 28 of the 
principal Act65. In article 28 of the principal Act, for the words
"Investment Services Rules or re gulations made thereunder," the re
shall be substituted the words "regulations, Investment Service s Rules
or Conduct of Business Rules made thereunder,".
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Amendment of 
the First 
Schedule to the principal Act.66.  The First Schedule to the principal Act shall be amended
as follows:
(a) in the title thereof, for the word "Services" there shall b e
substituted the word "Investment Services and Activities";
(b) for paragraph 2 thereof, there shall be substituted the
following: 
"2. Execution of orders on behalf of clients
Acting to conclude agreements to buy or sell
one or more instruments on behalf of clients and
includes the conclusion of agreements to sell
instruments issued by an investment services licenceholder or a credit institution at the moment of their
issuance."; and
(c) immediately after paragraph 10 thereof, there shall
be added the following new paragraph: 
"11.  Operation of an Organised Trading Facility 
The operation of an OTF whereby multiple third-
party buying and selling interests in bonds, structuredfinance products, emission allowances or derivatives are
able to interact in the system in a way that results in acontract.".
Amendment of 
the Second 
Schedule to the 
principal Act.67. The Second Schedule to the principal Act shall be amended
as follows:
(a) in paragraph 4 thereof, for the words "yields, or
other derivative instruments," there shall be substituted the
words "yields, emission allowances or other derivative
instruments,";
(b) in paragraph 5 thereof:
(i)  for the words "forward rate agreements" there
shall be substituted the words "forwards"; and 
(ii) for the words "(otherwise than by reason of a
default or other termination event)" there shall besubstituted the words "other than by reason of default or
other termination event;";
(c) in paragraph (6) thereof, for the words "and, or a
VERŻJONI ELETTRONIKA
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Multilateral Trading Facility within the meaning of the First
Schedule;" there shall be substitu ted the words "a Multilateral
Trading Facility, or an Organised Trading Facility, except for
wholesale energy products traded on an Organised Trading
Facility that must be physically settled;";
(d) in paragraph 7 thereof, for the words "other
derivative instruments, having regard to whether, inter alia ,
they are cleared and settled throughout recognised clearing
houses or are subject to regular margin calls." there shall be
substituted the words "other derivative instruments.";
(e) for paragraph 10 thereof, there shall be substituted
the following:
"10.  Options, futures, swaps, forward rate
agreements and any other derivative c ontracts relating to
climatic variables, freight rates or inflation rates or otherofficial economic statistics that must be settled in cash or
may be settled in cash at the option of one of the partiesother than by reason of default or other termination
event, as well as any other derivative contracts relating
to assets, rights, obligati ons, indices and measures not
otherwise mentioned in this Schedule, which have the
characteristics of other derivative financial instruments,
having regard to whether, inter alia , they are traded on a
regulated market, OTF, or an MTF;"; and 
(f) immediately after paragraph 12 thereof, there shall
be inserted the following new paragraph 13:
"13. Emission allowances consisting of any units
recognised for compliance with the requirements ofDirective 2003/87/EC (Emissions Trading Scheme).".
Addition of 
Third Schedule 
to the principal Act.68. Immediately after the Second Schedule to the principal Act
there shall be inserted the following new Third Schedule: 
"Third Schedule
(Article 2)
Ancillary Services
1. Safekeeping and administration of financial instruments
for the account of clients, including custodianship and related
services such as cash, collateral management and excludingmaintaining securities accounts at the top tier level; 
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2. Granting credits or loans to an investor to allow him to
carry out a transaction in one or more financial instruments, where the
firm granting the credit or loan is involved in the transaction ; 
3. Advice to undertakings on capital structure, industrial
strategy and related matters and advice and services relating t o
mergers and the purchase of undertakings; 
4. Foreign exchange services where these are connected to
the provision of investment services; 
5. Investment research and financial analysis or other forms
of general recommendation relatin g to transactions in financial
instruments; 
6. Services related to underwriting; 
7. Investment services and activities as well as ancillary
services of the type included under Section A or B of Annex 1 r elated
to the underlying of the derivatives included under points (5), (6), (7)
and (10) of Section C of MiFID where these are connected to the
provision of investment or ancillary services.".
PART V
AMENDMENTS TO THE BANKING ACT
Amendments to 
the Banking Act.
Cap. 371.69. This part amends and shall be read and construed as one
with the Banking Act, hereinafter in this Part referred to as " the
principal Act".
Amendment of article 2 of the 
principal Act.70. Sub-article (1) of article 2 o f the principal Act shall be
amended as follows:
(a) immediately after th e definition "competent
authority", there shall be added the following new definition:
" "Conduct of Business Rules" means Rules, other
than Banking Rules, which are issued by the competent
authority in terms of article 4;";
(b) immediately after the new definition "Conduct of
Business Rules", there shall be added the following newdefinition:
" "connected person" means a person whose
information is provided to the  bank by, or on behalf of, a
customer of the bank or by, or on behalf of, a person who
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seeks to become a customer of the bank, in connection
with services from the bank requested by such customer,
or by such person seeking to become a customer of thebank, provided that the information is required by the
bank for the purposes of fulfilling a statutory
obligation;"; and
(c) the definition "Minister" shall be substituted as
follows:
" "Minister "	means the Minister responsible for the
regulation of Financial Services;";
(d) immediately after th e definition " "qualifying
holding" or "qualifying sharehol ding" ", there shall be added t he
following new definition:
" "recognised jurisdiction" means:
(a) a Member State and Switzerland;
(b) any country that is a member of the
Organisation for Economic Co-operation and
Development (OECD);
(c) a country that is a signatory of the
International Organisation of SecuritiesCommissions (IOSCO) Multilateral Memorandum of
Understanding;
(d) a country that is a signatory of the
International Association of Insurance Supervisors(IAIS) Multilateral Memorandum of Understanding;
(e) any jurisdiction which is a member of the
Basel Committee on Banking Supervision;
(f) any jurisdiction falling within the
Recommendations on the equivalence of
confidentiality regimes is sued by the EBA from time
to time; or
(g)  any other jurisdiction with whom the
competent authority has signed a Memorandum of
Understanding;".
Amendment of 
article 4 of the principal Act.71. Article 4 of the principal Act shall be amended as follows:
VERŻJONI ELETTRONIKA
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(a) for sub-article (6) thereof there shall be substituted
the following:
"(6)  The competent authority may make, amend or
revoke Banking Rules and Conduct of Business Rules as
may be required for carrying into effect any of the
provisions of this Act and any regulations madethereunder, and to transpose, implement and give effect
to the provisions and requirements of Directives,
Regulations and any other le gislative matters of the
European Union requiring transposition orimplementation."; 
(b) in sub-article (9) thereof, for the words "Banking
Rules shall be binding" there shall be substituted the words"Banking Rules and Conduct of Business Rules shall bebinding"; and
(c) in sub-article (10) thereof, for the words "Banking
Rules" there shall be substituted the words "Banking Rules andConduct of Business Rules".
Amendment of 
article 34 of the 
principal Act.72. Sub-article (6) of article 34 of the principal Act shall be
substituted by the following new sub-article:
Cap. 377.Cap. 9. ''(6) Notwithstanding the provisions of the Professional
Secrecy Act and of article 257 of the Criminal Code, a credit
institution may, where necessary  for the proper carrying out of
its activities or for the fulfilment of its obligations,
communicate any information which is in its possession and
which is related to the affairs of a customer or of a connected
person to:
Cap. 331.
Cap. 370.
Cap. 376.
Cap. 403.(a) other members of the group of companies of
which that institution forms part, which carry out any
activities licensed or authorised by the competent
authority under this Act, the Trusts and Trustees Act, the
Investment Services Act, the Financial Institutions Act
or the Insurance Business Act, or which otherwise carry
out activities equivalent to those activities mentioned in
this paragraph, and which ar e authorised by an overseas
regulatory authority in a recognised jurisdiction; or
(b)  any auditor or expert engaged by the credit
institution to carry out a compliance assessment,
monitoring, auditing or a similar review in relation to
any of the activitie s or risk management processes of the
credit institution or of the group of companies of which
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it forms part in order to assess the credit institution’s
compliance with any statutory obligations relating to the
prevention of money laundering and the funding ofterrorism;
(c) an outsourcing service provider in whose favour
a credit institution has outsourced any of its activities.This shall be without prejudice to article 19A:
Provided that, for the purposes of this sub-
article, any such communication of information shall be
made subject to all proper controls and safeguards, so
that it shall be the responsibility of the credit institutionto ensure that the group comp any member, the auditor or
expert, or the outsourcing service provider, as the casemay be, is subject to equivalent obligations of dataprotection, confidentiality and care as required under
Maltese law and any European Union law, including
Regulation (EU) 2016/679 of the European Parliamentand of the Council of 27 April 2016 on the protection of
natural persons with regard to the processing of personal
data and on the free movement of such data, andrepealing Directive 95/46/EC  (General Data Protection
Regulation):
Provided further that for the purpose of this
article, advertising, marketing or promotion, shall not,
under any circumstances, be considered as necessary for
the proper carrying out of th e activities of a credit
institution or for the fulfilment of its obligations:
Provided further that communication of
information made in terms of paragraphs (a) to (c) shallbe without prejudice to any provision of the Prevention
of Money Laundering and Funding of Terrorism
Regulations.''.
PART VI
AMENDMENTS TO THE COMPANIES ACT
Amendments to 
the Companies 
Act.Cap. 386.73. This Part amends and shall be read and construed as one
with the Companies Act, hereinaf ter in this Part referred to as  "the
principal Act".
Amendment of 
article 2 of the 
principal Act.74. Sub-article (1) of  article 2 of the principal Act shall be
amended as follows:
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(a) immediately after the definition "body corporate"
there shall be added the following new definition:
" "central securities depository" means a legal
person, that operates a securities settlement system and
is authorised to provide at least one other of the
following services:
(i) initial recording of securities in a book-entry
system;
(ii) providing and maintaining securities
accounts at the top tier level;";
(b) the definition "company secretary" shall be substituted
by the following:
" "company secretary" means a person who holds the
office of a company secretary in terms of article 138;";
(c) immediately after the definition "debenture", there
shall be added the following new definition: 
" "dematerialised form" in relation to securities
issued by a company means the form where such
securities exist only as book-entry records;";
(d) immediately after the definition "host Member
State" there shall be added the following new definition:
" "immobilisation" means t he act of concentrating
location of physical certifica tes relating to securities
issued by a company in a cen tral securities depository in
a way which enables subsequent transfers to be made by
book-entry;"; 
(e) immediately after the definition "public-interest
entities" there shall be added the following new definition:
" "recognised jurisdiction" means:
(a) a Member State;
(b) an EEA State;
(c) any country that is a member of the
Organisation for Economic Co-operation and
Development (OECD) established in 1961;
VERŻJONI ELETTRONIKA
A 1098
(d) any country that is a signatory of the IOSCO
Multilateral Memorandum of Understanding; or
Amendment of 
article 69 of the principal Act.75. In paragraph (h) of sub-article (1) of article 69 of the
principal Act, for the words "or secretaries;" there shall be substituted
the words "or secretaries, or where a company secretary is a bo dy
corporate, the name, registration number and registered office of the
body corporate;".
Amendment of 
article 118 of 
the principal 
Act. 76. For sub-article (3) of article 118 of the principal Act, there
shall be substituted the following:
"(3) This article shall not apply to shares or debentures of a
company held or evidenced in a dematerialised form or
represented in book-entry form as immobilisation.".
Amendment of 
article 123 of 
the principal 
Act. 77. Article 123 of the principal Act shall be amended as
follows:
(a)  paragraph (c) of sub-art icle (1) thereof shall be
substituted by the following:
"(c) the date at which any person ceased to be a
member.";
(b) the provisos to sub-article (1) thereof shall be
deleted; and
(c) immediately after sub-article (3) thereof, there shall
be added the following new sub-article:
"(3A) Notwithstanding the pr ovisions of this article,
a company may make arrangeme nts for the register of its
members to be kept in a dematerialised form or
represented in book-entry fo rm as immobilisation with a
central securities depository established in a recognised
jurisdiction:
Provided that the company shall remain
responsible for the proper keeping of the register andshall keep a copy of all entries relating to registeredshareholders held by the central securities depository .".Cap. 345.(e) any other jurisdicti on where the competent
authority, as referred to in the Financial Markets Act,
has a memorandum of understanding covering
securities;".
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Amendment of 
article 124 of 
the principal Act. 78. Immediately after sub-article (3) of article 124 of the
principal Act there sh all be added the following new sub-articl e:
"(3A)  Notwithstanding the provisions of this article, a
company may make arrangements for the register of debentures
to be kept in a dematerialised form or represented in book-entr y
form as immobilisation with a central securities depository
established in a recognised jurisdiction:
Provided that the company shall remain responsible
for the proper keeping of the register and shall keep a copy of  all
entries relating to registered debenture holders held by the
central securities depository .".
Amendment of 
article 138 of the principal 
Act.79. Article 138 of the principal Act shall be amended as
follows:
(a) sub-article (2) thereof shall be amended as follows:
(i) in paragraph (b) thereof, for the words
"company secretary to the company." there shall be
substituted the words "company secretary to the
company;"; and
(ii)  immediately after paragraph (b) thereof, as
amended, there shall be added the following newparagraph:
(b) in sub-article (3) thereof, for the words "the
functions of company secretary." there shall be substituted the
words "the functions of company secretary, or is a bodycorporate as referred to in sub-article (2)(c).";
(c) in sub-article (4) thereof, for the words "appoint
another individual to fill the post" there shall be substituted theCap. 529."(c) have as company secretary a
body corporate, unless such bodycorporate is duly registered as a company
service provider in terms of the CompanyService Providers Act:
Cap. 529.Provided that, for the purposes
of this paragraph, a body corporate which
does not require registration in terms of
article 3(1)(a) and (b) of the CompanyService Providers Act may also act as a
company secretary in terms of this
article.";
VERŻJONI ELETTRONIKA
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words "appoint another individual, or a body corporate as
referred to in sub-article (2)(c), to fill the post"; and 
(d) in sub-article (5) thereof, for the words "they shall
appoint another individual in his stead within fourteen daysfrom the date of his removal." there shall be substituted the
words "they shall appoint another company secretary withinfourteen days from the date of such removal.".
Amendment of 
article 146 of 
the principal 
Act.80.  In sub-article (1) of article 146 of the principal Act, for the
words ''together with the name and residence of any new directo r'' there
shall be substituted the words ''together with the name and res idence or
name, registered office and registration number, as the case ma y be, of
any new director".
Amendment of 
article 425 of 
the principal Act.81. Sub-article (1) of article 425 of the principal Act shall be
amended as follows:
(a) in paragraph (o) thereof, for the words "such
Directives; and" there shall be substituted the words "such
Directives;";
(b) immediately after paragraph (o) thereof, there shall
be added the following new paragraph:
"(oa) provide for the exemption of certain small
undertakings from the provisions of Chapter IX of TitleI of Part V of this Act and from the requirementsimposed by article 179, subject to such conditions and
requirements as may be prescribed; and".
PART VII
AMENDMENTS TO THE COMPANY SERVICE PROVIDERS 
ACT
Amendments to 
the Company 
Service 
Providers Act.Cap. 529.82. This Part amends the Company Service Providers Act, and
it shall be read and construed as one with the Company Service
Providers Act, hereinafter in thi s Part referred to as "the principal
Act''.
Amendment of 
article 2 of the 
principal Act.83. In sub-article (1) of article 2 of the principal Act, the
definition "Minister" shall be substituted as follows:
" "Minister" means the Minister responsible for the
regulation of Financial Services;".
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Amendment of 
article 3 of the 
principal Act.84.  In sub-article (1) of article 3 of the principal Act, the word s
"resident or" shall be deleted.
Amendment of article 5 of the 
principal Act.85. In paragraph (b) of sub-article (1) of article 5 of the princi pal
Act, for the words "such person is resident or operating in Malta;" there
shall be substituted the words "such person is operating in or from
Malta;".
Passed by the House of Representatives at Sitting No. 65 of the
18th December, 2017.
ANĠLU FARRUGIA
Speaker
RAYMOND SCICLUNA
Clerk of the House of Representatives
VERŻJONI ELETTRONIKA
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