BANKING                   [CAP. 371.       1
CHAPTER 371
BANKING ACT
To regulate the business of banking.
15th November, 1994
 ACT XV of 1994  as amended by Acts XXIV , XXV  of 1995 , VI of 2001 ,
XVII of 2002 , IV, IX of 2003 , XIII of 2004 ,XX of 2007  Legal  Notice 425 of
2007;  Acts III,XVII  of 2009 , II of 2010 , II, X of 2011, XX of 2013 , X XXI of
2015 , X, XXXI of 2017 , XLIV of 2018 and XXVI of 2018. and XXVI of 2019 ,
XIII of 2020 , LXXI of 2021 and LXXII of 2021 .
Short title. 1. The short title of this Act is the Banking Act.
Interpretation.
Amended by:
XXIV . 1995.362;XXV . 1995.434;XVII. 2002.157;IX. 2003.76;XIII. 2004.82;XX. 2007.85;XVII. 2009.11;II. 2011.2;X. 2011.37;XX. 2013.54;X. 2015.2;XXI. 2015.19;X. 2017.2;XXXI. 2017.70;XLIV .2018.9;XXVI.2019.3;LXXI.2021.19;
LXXII.2021.29 .2.(1) In this Act, unless the context otherwise requires -
 "account information service" shall have the same meaning as
that assigned to it under article 2(1) of the Financial Institutions
Act;
Cap. 376."account information service provider" shall have the same
meaning as that assigned to it under article 2(1) of the Financial
Institutions Act;
Cap. 376."account servicing payment service provider" shall have the sam e
meaning as that assigned to it under article 2(1) of the Financial
Institutions Act;
"Additional Tier 1 instruments " means capital instruments that meet
the conditions laid down in Article 52(1) of the CRR ;
Cap. 555."Arbiter" means the Arbiter for Financial Services appointed un der
article 14 of the Arbiter for Financial Services Act;
"bank" or "credit institution" shall have the same meaning as t hat
assigned to it in point (1) of Article 4(1) of the CRR ;
"Banking Rule" means a Rule issued by the competent authority
under various articles of this Act;
"binding legal instrument" means any directly applicable
measures, including, but not limited to, any implementing techn ical
standards, regulatory technical standards or similar measures,issued under European Union legislation;
"body corporate" means a body of persons having a legal
personality distinct from that of its members;
"branch" shall have the same meaning as that assigned to it in
 2        CAP. 371. ]                          BANKING
point (17) of Article 4(1) of the CRR ;
"the  BRRD" means Directive 2014/59/EU of the European
Parliament and of the Council of 15 May 2014 establishing aframework for the recovery and resolution of credit institution s and
investment firms and amending Council Directive 82/891/EEC, andDirectives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC,2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and
Regulations (EU) No. 1093/2010 and (EU) No. 648/2012, of the
European Parliament and of the Council, as amended from time totime, and includes any binding legal instruments, guidelines and othe r
measures  that have been or may be issued thereunder;
"business of banking" means the business of a person who as set
out in article 2A accepts deposits of money from the publicwithdrawable or repayable on demand or after a fixed period orafter notice or who borrows or raises money from the public(including the borrowing or raising of money by the issue ofdebentures or debenture stock or other instruments creating oracknowledging indebtedness), in either case for the purpose ofemploying such money in whole or in part by lending to others o r
otherwise investing for the account and at the risk of the pers on
accepting such money;
Cap. 204."Central Bank" means the Central Bank of Malta as defined by
the Central Bank of Malta Act;
"close links" shall have the same meaning as that assigned to i t in
point (38) of Article 4(1) of the CRR ;
"Common Equity Tier 1 instruments" means capital instruments th at
meet the conditions laid down in Article 28(1) to (4), Article 29(1) to
(5) or Article 31(1) of the CRR ;
Cap. 168.
Cap. 386."company" means a limited liability company constituted in
Malta in accordance with the Commercial Partnerships Ordinance*
or the Companies Act, or any law which may from time to time be
in force, or a company registered, licensed or holding an equiv alent
authorisation in another country outside Malta under the laws o f
any country provided that such company, if not constituted inMalta, would qualify to be so registered or licensed under the laws
of Malta;
Cap. 330."competent authority" means the Malta Financial Services
Authority established by the Malta Financial Services Authority Act;
"Conduct of Business Rules" means Rules, other than Banking
Rules, which are issued by the competent authority in terms of article
4;
"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 seeks to become a customer of the bank,  in
connection with services from the bank requested by such custom er, or
by such person seeking to become a customer of the bank, provid ed
that the information is required by the bank for the purposes o f
fulfilling a statutory obligation;
*Repealed by Act XXV of 1995 ( Chapter 386 ).
                                 BANKING                   [CAP. 371.       3
"consolidated basis" shall have the same meaning as that assign ed to
it in point (48) of Article 4(1) of the CRR ;
"consolidating supervisor" shall have the same meaning as that
assigned to it in point (41) of Article 4(1) of the CRR ;
"controller" is a person who, alone or together with others,
exercises control in relation to a body corporate;
S.L. 371.09"covered deposits" means covered deposits as defined in regulat ion
2 of the Depositor Compensation Scheme Regulations ;
"the CRD" means Directive 2013/36/EU of the European
Parliament and of the Council of 26 June 2013 on access to the activity
of credit institutions and the prudential supervision of creditinstitutions, amending 
Directive 2002/87/EC  and repealing Directives
2006/48/EC and 2006/49/EC, as amended from time to time, andincludes any binding legal instruments, guidelines and other me asures
that have been or may be issued thereunder;
"credit facility" means the lending of a sum of money by way of
an advance, overdraft or loan or any other line of credit inclu ding
discounting of bills of exchange and promissory notes, guarante es,
indemnities, acceptances and bills of exchange endorsed pour aval ;
"the 
CRR " means Regulation (EU) No. 575/2013  of the European
Parliament and of the Council of 26 June 2013 on prudentialrequirements for credit institutions and investment firms andamending Regulation (EU) 
No. 648/2012 , as amended from time to
time, and includes any implementing measures that have been ormay be issued thereunder;
"deposit" means a sum of money paid-in on terms under which it
will be repaid, with or without interest or a premium and eithe r on
demand or at a time or in circumstances agreed by or on behalf of
the person making the payment and the person receiving it;
"
Directive 2002/87/EC" means Directive 2002/87/EC of the
European Parliament and of the Council of 16 December 2002 onthe supplementary supervision of credit institutions, insuranceundertakings and investment firms in a financial conglomerate a nd
amending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and of the Council ,
as amended from time to time, and includes any binding legalinstruments, guidelines and other measures that have been or ma y
be issued thereunder;
"
Directive 2004/109/EC" means Directive 2004/109/EC of the
European Parliament and of the Council of 15 December 2004 onthe harmonisation of transparency requirements in relation toinformation about issuers whose securities are admitted to trad ing
on a regulated market and amending Directive 2001/34/EC, asamended from time to time, and includes any binding legalinstruments, guidelines and other measures that have been or may be
issued thereunder;
"
Directive 2009/138/EC" means Directive 2009/138/EC of the
European Parliament and of the Council of 25 November 2009 on
 4        CAP. 371. ]                          BANKING
the taking-up and pursuit of the business of Insurance and
Reinsurance (Solvency II), as amended from time to time, andincludes any binding legal instruments, guidelines and othermeasures that have been or may be issued thereunder;
"
Directive (EU) 2015/849" means Directive (EU) 2015/849 of the
European Parliament and of the Council of 20 May 2015 on theprevention of the use of the financial system for the purposes of money
laundering or terrorist financing, amending Regulation (EU) No 648/
2012 of the European Parliament and of the Council, and repeali ng
Directive 2005/60/EC of the European Parliament and of the Coun cil
and Commission Directive 2006/70/EC, as amended from time totime, and includes any binding legal instruments, guidelines an d other
measures that have been or may be issued thereunder;
"director" includes an individual occupying the position of
director of a company, by whatever name he may be called,empowered to carry out substantially the same functions in rela tion
to the direction of the company as those carried out by a direc tor
and in respect of a company registered, licensed or holding anequivalent authorisation outside Malta includes a member of a l ocal
board or agent or representative of that company:
"Provided that in respect of a financial holding company or a
mixed financial company established outside Malta, "director"shall also include a member of the management body of thefinancial holding company or mixed financial holding company;#
"
Directive (EU) 2019/2034" means Directive (EU) 2019/2034 of
the European Parliament and of the Council of 27 November 2019 on
the prudential supervision of investment firms and amendingDirectives 2002/87/EC, 2009/65/EC, 2011/61/EU, 2013/36/EU, 2014 /
59/EU and 2014/65/EU, as amended from time to time, and include s
any binding legal instruments, guidelines and other measures th at have
been or may be issued thereunder;
"
EBA" means the European Banking Authority established by
Regulation (EU) No 1093/2010;
"EEA State" means a State which is a contracting party to the
agreement on the European Economic Area signed at Oporto on the2nd May, 1992 as amended by the Protocol signed at Brussels onthe 17th March, 1993 and as amended by any subsequent acts;
Cap. 376."electronic money institution" shall have the same meaning as t hat
assigned to it under article 2(1) of the Financial Institutions Act;
S.L. 371.09"eligible deposits" means deposits that are not excluded from
protection pursuant to regulation 9 of the Depositor Compensation
Scheme Regulations , and includes deposits held in an account entitled
to compensate pursuant to regulation 12(5) Depositor Compensation
Scheme Regulations ;
"ESCB central banks" shall have the same meaning as that
assigned to it in point (45) of Article 4(1) of the CRR ;
"ESFS" means European System of Financial Supervision;
                                 BANKING                   [CAP. 371.       5
"ESRB " means the European Systemic Risk Board established by
Regulation (EU) No. 1092/2010 ;
"EU parent financial holding company" shall have the same
meaning as that assigned to it in point (31) of Article 4(1) of  the
CRR ;
"EU parent institution" shall have the same meaning as that
assigned to it in point (29) of Article 4(1) of the CRR ;
"EU parent mixed financial holding company" shall have the
same meaning as that assigned to it in point (33) of Article 4( 1) of
the CRR ;
Cap. 330."European Resolution Authority" means an authority which is
situated in a country or territory outside Malta that is in a M ember
State or an EEA State and which exercises any functioncorresponding to the functions of the Resolution Committee unde r
the 
Malta Financial Services Authority Act and the Recovery and
Resolution Regulations issued thereunder;
"financial holding company" shall have the same meaning as that
assigned to it in point (20) of Article 4(1) of the CRR ;
"financial institution" shall have the same meaning as that
assigned to it in point (26) of Article 4(1) of the CRR ;
"financial instrument" shall have the same meaning as that
assigned to it in point (50) of Article 4(1) of the CRR ;
"financial sector entity" shall have the same meaning as that
assigned to it in point (27) of Article 4(1) of the CRR ;
Cap. 330."Financial Services Tribunal" or "the Tribunal" means the
Financial Services Tribunal established under the Malta Financial
Services Authority Act;
"GDPR" means Regulation (EU) 2016/679 of the European
Parliament and of the Council of 27 April 2016 on the protectio n of
natural persons with regard to the processing of personal data and
on the free movement of such data, and repealing Directive 95/4 6/
EC, as amended from time to time, and includes any binding lega l
instruments, guidelines and other measures that have been or ma y
be issued thereunder;
"group" shall have the same meaning as that assigned to it in
point (138) of Article 4(1) of the CRR ;
Cap. 386."holding company" has the same meaning as is assigned to the
term "parent company" in the Companies Act;
"home Member State" shall have the same meaning as that
assigned to it in point (43) of Article 4(1) of the CRR ;
"host Member State" shall have the same meaning as that
assigned to it in point (44) of Article 4(1) of the CRR ;
"initial capital" shall have the same meaning as that assigned to it
in point (51) of Article 4(1) of the CRR ;
"institution" shall have the same meaning as that assigned to i t in
point (3) of Article 4(1) of the CRR ;
 6        CAP. 371. ]                          BANKING
"insurance undertaking" shall have the same meaning as that
assigned to it in point (5) of Article 4(1) of the CRR ;
"investment firm" shall have the same meaning as that assigned
to it in point (2) of Article 4(1) of the CRR ;
"licence", in relation to the business of banking, means a lice nce
granted in terms of article 5, 6A or 7;
"Malta’s international commitments" means commitments,
responsibilities and obligations arising out of European Union law,
or membership of,  or affiliation to, or relationship with, anyinternational,  global or regional organisations or grouping ofcountries or out of any treaty, convention or other internation al or
reciprocity agreement, however called, whether bilateral ormultilateral, to which Malta or the competent authority is a pa rty;
"management body" means the body or bodies of a financial
holding company or financial holding company established outsid e
Malta, which are appointed in accordance with the law of thejurisdiction in which such a company is established, which areempowered to set the company's strategy, objectives and overalldirection, and which oversee and monitor management decision-making, and include the persons who effectively direct the busi ness
of the company;
"manager" means a person who is placed in charge of the
business or part of the business of a company or otherwise who has
a substantial supervisory role with the power to make policy an d
executive decisions on behalf of the company;
"Member State" means a Member State of the European Union and
includes an EEA State;
"
MiFID" means Directive 2014/65/EU of the European
Parliament and of the Council of 15 May 2014 on markets infinancial instruments and amending Directive 2002/92/EC andDirective 2011/61/EU, as amended from time to time, and include s
any binding legal instruments, guidelines and other measures th at
have been or may be issued thereunder;
"
MiFIR" means Regulation (EU) No. 600/2014 of the European
Parliament and of the Council of 15 May 2014 on markets infinancial instruments and amending Regulation (EU) No 648/2012,as may be amended from time to time, and includes any bindinglegal instruments, guidelines and other measures that have been  or
may be issued thereunder;
"Minister " means the Minister responsible for the regulation of
Financial Services;
"mixed activity holding company" shall have the same meaning as
that assigned to it in point (22) of Article 4(1) of the 
CRR ;
"mixed financial holding company" shall have the same meaning a s
that assigned to it in point (21) of Article 4(1) of the CRR ;
Cap. 373."money laundering" has the same meaning ascribed to it by the
Prevention of Money Laundering Act;
"officer", in relation to a company, includes a director, partn er,
                                 BANKING                   [CAP. 371.       7
manager or company secretary or any person effectively acting i n
such capacity whether formally appointed or not;
"outsourcing" means an arrangement of any form between a credit
institution and an outsourcing service provider by means of whi ch that
outsourcing service provider performs a process, a service or a n
activity that would otherwise be undertaken by the credit insti tution;
"outsourcing service provider" means a third-party entity that is
undertaking an outsourced process, service or activity, or part s thereof,
under an outsourcing arrangement;
"overseas regulatory authority" means an authority which in a
country or territory outside Malta exercises any functioncorresponding to the functions of the competent authority underthis Act;
"own funds" shall have the same meaning as that assigned to it in
point (118) of Article 4(1) of the 
CRR ;
"PAD" means Directive 2014/92/EU of the European Parliament
and of the Council of 23 July 2014 on the comparability of fees  related
to payment accounts, payment account switching and access topayment accounts with basic features, as may be amended from ti me
to time and including and includes any binding legal instrument s,
guidelines and other measures that have been or may be issuedthereunder;
"parent financial holding company" shall have the same meaning as
that assigned to the term "parent financial holding company in a
Member State" in point (30) of Article 4(1) of the 
CRR ;
"parent institution" shall have the same meaning as that assign ed to
the term "parent institution in a Member State" in point (28) o f Article
4(1) of the CRR ;
"parent mixed financial holding company" shall have the same
meaning as that assigned to the term "parent mixed financial ho lding
company in a Member State" in point (32) of Article 4(1) of the  CRR ;
"parent undertaking" shall have the same meaning as that
assigned to it in point (15) of Article 4(1) of the CRR ;
Cap. 376."payment account" shall have the same meaning as that assigned
to it under article 2(1) of the Financial Institutions Act;
Cap. 376."payment initiation service" shall have the same meaning as tha t
assigned to it under article 2(1) of the Financial Institutions Act;
Cap. 376."payment initiation service provider" shall have the same
meaning as that assigned to it under article 2(1) of the Financial
Institutions Act;
Cap. 376."payment institution" shall have the same meaning as that
assigned to it under article 2(1) of the Financial Institutions Act;
Cap. 376."payment service" means any business activity set out in the
Second Schedule to the Financial Institutions Act;
 8        CAP. 371. ]                          BANKING
Cap. 376."Payment Services Directive" means Directive (EU) 2015/2366
of the European Parliament and of the Council of 25 November2015 on payment services in the internal market, amendingDirectives 2002/65/EC, 2009/110/EC and 2013/36/EU andRegulation (EU) No 1093/2010, and repealing Directive 2007/64/EC, as may be amended from time to time, and includes any binding
legal instruments, guidelines and other measures that have been  or
may be issued thereunder;
"payment service user" shall have the same meaning as that
assigned to it under article 2(1) of the 
Financial Institutions Act;
"qualifying holding" or "qualifying shareholding" shall have th e
same meaning as that assigned to it in point (36) of Article 4( 1) of
the CRR ;
"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 Securities Commissions (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 issuedby the 
EBA  from time to time; or
(g)  any other jurisdiction with whom the competent authority
has signed a Memorandum of Understanding;
Cap. 386. "reconstruction" has the same meaning as in the Companies Act;
"Regulation (EU) No. 1092/2010" means Regulation (EU) No.
1092/2010 of the European Parliament and of the Council of 24November 2010 on European Union macro-prudential oversight ofthe financial system and establishing a European Systemic RiskBoard, as amended from time to time, and includes any binding legal
instruments, guidelines and other measures that have been or may be
issued thereunder;
"
Regulation (EU) No. 1093/2010" means Regulation (EU) No.
1093/2010 of the European Parliament and of the Council of 24November 2010 establishing a European Supervisory Authority(European Banking Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/78/EC, as amendedfrom time to time, and includes any binding legal instruments,guidelines and other measures that have been or may be issuedthereunder;
"
Regulation (EU) No. 1094/2010" means Regulation (EU) No.
1094/2010 of the European Parliament and of the Council of 24
                                 BANKING                   [CAP. 371.       9
November 2010 establishing a European Supervisory Authority
(European Insurance and Occupational Pensions Authority),amending Decision No. 716/2009/EC and repealing CommissionDecision 2009/79/EC, as amended from time to time, and includesany binding legal instruments, guidelines and other measures th at
have been or may be issued thereunder;
"
Regulation (EU) No. 1095/2010" means Regulation (EU) No.
1095/2010 of the European Parliament and of the Council of 24November 2010 establishing a European Supervisory Authority(European Securities and Markets Authority), amending DecisionNo. 716/2009/EC and repealing Commission Decision 2009/77/EC,as amended from time to time, and includes any binding legalinstruments, guidelines and other measures that have been or may be
issued thereunder;
"
Regulation (EU) 2019/2033" means Regulation (EU) 2019/2033
of the European Parliament and of  the Council of 27 November 20 19
on the prudential requirements of investment firms and amendingRegulations (EU) No. 1093/2010, (EU) No. 575/2013, (EU) No. 600 /
2014 and (EU) No. 806/2014, as amended from time to time andincludes any binding legal instruments, guidelines and other me asures
that have been or may be issued thereunder;
"reinsurance undertaking" shall have the same meaning as that
assigned to it in point (6) of Article 4(1) of the 
CRR ;
"representative office" means, in relation to a body corporate,
unincorporated body or association formed in accordance with orexisting under the laws of a country outside Malta, premises inMalta from which the business of banking is promoted or assiste d
in any way, and in relation to a body corporate, unincorporatedbody or association formed in accordance with and existing unde r
the laws of Malta, premises outside Malta from which the busine ss
of banking is promoted or assisted in any way;
"resolution authority" means an authority designated by a
Member State in accordance with Article 3 of the 
BRRD ;
S.L. 330.09."resolution entity" shall have the same meaning as that assigne d
to it in regulation 2(1) of the Recovery and Resolution Regulations ;
S.L. 330.09."Resolution Fund" means the resolution financing arrangement
under the Recovery and Resolution Regulations ;
S.L. 330.09."resolution group" shall have the same meaning as that assigned
to it in regulation 2(1) of the Recovery and Resolution Regulations ;
S.L. 371.09 "Scheme" means the Depositor Compensation Scheme established
under regulation 4 of the Depositor Compensation Scheme
Regulations ;
"senior management" means those natural persons who exercise
executive function within a credit institution and who areresponsible, and accountable to the board of directors, for the  day-
to-day management of the credit institution;
"sub-consolidated basis" shall have the same meaning as that
 10        CAP. 371. ]                          BANKING
assigned to it in point (49) of Article 4(1) of the CRR ;
"subsidiary" shall have the same meaning as that assigned to it  in
point (16) of Article 4(1) of the CRR ;
"third country" means a country that is not a Member State;"third-country group" means a group of which the parent
undertaking is established in a third country;
"Tier 2 instruments" means capital instruments or subordinated
loans that meet the conditions laid down in Article 63 of the 
CRR ;
Cap. 330."Third-Country Resolution Authority" means an authority which
is in a country or territory that is not a Member State and isresponsible for carrying out functions comparable or equivalent  to
those of the Resolution Committee under the 
Malta Financial
Services Authority Act and the Recovery and Resolution
Regulations issued thereunder;
"UCITS" means undertakings for collective investment in
transferable securities in terms of Directive 2009/65/EC of the
European Parliament and of the Council of 13 July 2009 on thecoordination of laws, regulations and administrative provisionsrelating to undertakings for collective investment in transfera ble
securities (UCITS) (recast), as amended from time to time,including any implementing measures that have been or may beissued thereunder;
Cap. 252."working days" means days other than Saturdays, Sundays and
the Public Holidays and the National Holidays referred to in th e
National Holidays and Other Public Holidays Act.
(1A)  For the purposes of applying the requirements and
supervisory powers laid down in this Act and any regulations an d
Banking Rules made or issued thereunder transposing the CRD, in
any binding legal instruments issued under the CRD , or in the CRR ,
on a consolidated or sub-consolidated basis in accordance with this
Act and any regulations and Banking Rules made or issued
thereunder transposing the CRD, any binding legal instruments
issued under the CRD, and with the CRR, the terms "institution",
"parent institution", "EU parent institution" and "parentundertaking" shall also include:
(a) financial holding companies and mixed financial
holding companies that have been granted approval inaccordance with article 11B and, or Article 21a of the
CRD ;
(b) designated institutions controlled by an EU parent
financial holding company, an EU parent mixedfinancial holding company, a parent financial holdingcompany in a Member State or a parent mixedfinancial holding company in a Member State wherethe relevant parent is exempted in accordance witharticle 11B(5) and, or Article 21a(4) of the 
CRD
(c) financial holding companies, mixed financial holding
companies or institutions designated pursuant toarticle 29AA(1)(f) and, or Article 21a(6)(d) of the
                                 BANKING                   [CAP. 371.       11
CRD .
(1B) For the purposes of applying the requirements and
supervisory powers laid down in Articles 4(5), 14(2), 14(2A),14(5), 17E, 19(1), 19(3), 20(1), 25(7), 25(10), 30A on aconsolidated or sub-consolidated basis in accordance with this Act
and any regulations and Banking Rules made or issued thereundertransposing the 
CRD, any binding legal instruments issued under
the CRD , and with the CRR , the term "credit institution" shall also
include:
(a) financial holding companies and mixed financial
holding companies that have been granted approval inaccordance with article 11B of this Act and, or Article21a of the 
CRD ;
(b) designated institutions controlled by an EU parent
financial holding company, an EU parent mixedfinancial holding company, a parent financial holdingcompany in a Member State or a parent mixedfinancial holding company in a Member State wherethe relevant parent is exempted in accordance witharticle 11B(5) and, or Article 21a(4) of the 
CRD ;
(c) financial holding companies, mixed financial holding
companies or institutions designated pursuant toarticle 29AA(1)(f) and, or Article 21a(6)(d) of the
CRD .
(1C) Reference to the "approval" of financial holding companies
or mixed financial holding companies in this Act and anyregulations and, or Banking Rules issued thereunder, shall mean  an
approval granted by the competent authority in terms of article  11B
or an approval granted through the joint decision of the compet ent
authority and an overseas regulatory authority in terms of arti cle
11B of this Act and Article 21a of the 
CRD , as the case may be.
(1D) Reference to the "exemption" of financial holding
companies or mixed financial holding companies in this Act andany regulations and, or Banking Rules issued thereunder, shallmean an exemption granted by the competent authority in terms o f
article 11B or an exemption granted through the joint decision of
the competent authority and an overseas regulatory authority interms of article 11B of this Act and Article 21a of the 
CRD, as the
case may be.
(2) The business activities of a credit institution may, besides
the business of banking, include any or all of the additionalactivities listed in the First Schedule as may be determined by  the
competent authority.
(3) The objective of this Act is, in part, to transpose and
implement the relevant provisions of the 
BRRD, the CRD and the
CRR , and shall be interpreted and applied accordingly.
(4) In this Act and in any regulations made thereunder, if there
is any conflict between the English and the Maltese texts, theEnglish text shall prevail.
 12        CAP. 371. ]                          BANKING
Prohibition from 
undertaking the business of banking.
Added by:
X. 2015.3.
Amended by:
LXXI.2021.20.2A. A person that is not a credit institution shall be prohibited
from carrying on the business of taking deposits or other repay able
funds from the public. A person shall be deemed to be acceptingdeposits of money as a regular feature of his business, if, whe ther
as principal or as agent, he advertises or solicits for such de posits,
without regard to the terms and conditions under which suchdeposits are solicited or received and without regard to whethe r
certificates or other instruments are issued in respect of any such
deposits:
Provided that this article shall not apply to the taking of
deposits or other funds repayable by a Member State or by aMember State’s regional or local authorities or by publicinternational bodies of which one or more Member States aremembers or to cases expressly covered by national or EuropeanUnion law, provided that those activities are subject to regula tions
and controls intended to protect depositors and investors:
Provided further that the acceptance of money against any
issue of debentures or debenture stock or other instruments cre ating
or acknowledging indebtedness offered to the public in accordan ce
with any law in force in Malta shall not of itself be deemed toconstitute acceptance of deposits of money for the purposes of this
Act and any regulations made and, or Banking Rules and, or Cond uct
of Business Rules issued thereunder.
Powers and duties 
of the Minister.
Amended by:
XVII. 2002.158;XX. 2007.86;II. 2011.3;X. 2011.38;XX. 2013.55;X. 2015.4;XXI. 2015.20;XXVI.2019.4;XIII.2020.8;LXXI.2021.21.3.(1) The Minister, acting on the advice of the competent
authority, may make, amend or revoke regulations to give effect  to
the provisions of this Act and, without prejudice to the genera lity
of the foregoing may, by such regulations, in particular, do an y of
the following:
(a) transpose, implement and, or give effect to the
requirements of the BRRD , the CRD  and the CRR ;
(b) transpose Directive 2001/24/EC  of the European
Parliament and of the Council of the European Unionof 4 April 2001 on re-organisation and winding-up ofcredit institutions with respect to credit institutionsestablished in Malta and of branches of creditinstitutions established outside Malta, and differentprovisions may be made for different cases or classesof cases, and account shall be taken of Malta’sinternational commitments in this regard. Suchregulations may provide for the implementation ofdetailed re-organisation measures and procedures,including the following matters: the publication andsubmission of information in such language orlanguages and in such newspapers or otherpublications as may be prescribed; the submission ofinformation to creditors, and the manner andprocedure thereof; the notification to creditors and theprocedure for the submission of claims orrepresentations; measures for the protection of therights of creditors and other third parties, includingnetting arrangements; consultation between the
                                 BANKING                   [CAP. 371.       13
competent authority and any other regulatory,
administrative or judicial authorities in Malta andoutside Malta with competence over the winding-up orre-organisation of credit institutions or of branchesthereof; the publication of decisions relating to suchwinding-up or re-organisation procedures; theestablishment of Banking Rules governing theapplicability of the proper or applicable law and otherissues of conflict of laws;
(c) transpose, implement and, or give effect to the provisions
and requirements of Directives, Regulations and anyother legislative measures of the European Unionrequiring transposition and, or implementation, as theymay be amended from time to time, including anyimplementing measures that have been or may be issuedthereunder and relating to licence holders and others asmay be specified therein; any such regulations strictlyrelated to transposition or implementation as aforesaidmay contain provisions which are inconsistent with theprovisions of this Act or of any other law, and for thispurpose may provide that any provision in this Act or inany other law shall not apply to matters falling under theregulations, and in case of such inconsistency, suchprovisions in any such regulations shall prevail;
(d) adopt, where necessary, any Communications issued by
the European Commission;
(e) prescribe that a breach of any regulations made under
this Act may amount to a criminal offence as may bespecified, and such regulations may imposepunishments in respect of any breach, not exceeding afine ( multa ) of two million euro (€2,000,000) or
imprisonment for a term not exceeding three years, orboth such fine and imprisonment, and a higher fine(multa ) may be imposed where deemed necessary or
appropriate for any breach or failure of compliancewith any EU Directive or EU Regulation or with anyregulations made under this article to transpose or togive effect to any EU Directive or EU Regulation;
(f) transpose, implement and, or give effect to the
requirements of the 
PAD, and in so doing may also
establish or maintain measures alternative to thosereferred to in Article 10(2) to (6) of the 
PAD, provided
that:
(i) it is clearly in the interest of the consumer;
(ii) there is no additional burden for the consumer;
and
(iii) the switching as defined in Article 2(18) of the
PAD is completed within, as a maximum, the
same overall time-frame as that indicated in
Article 10(2) to (6) of the PAD;
(g) set up a specific mechanism to ensure that consumers
 14        CAP. 371. ]                          BANKING
who do not have a payment account as defined in
Article 2(3) of the PAD in their territory, and who have
been denied access to such a payment account forwhich a fee is charged by credit institutions, will haveeffective access to a payment account with basicfeatures in terms of the 
PAD, free of charge;
(h) regulate products and services offered by credit
institutions;
(i) transpose, implement and, or give effect to options and
discretions set out in the provisions of Directives,Regulations and any other legislative measures orbinding legal instruments of the European Union, asmay be amended from time to time, and to implementoptions and discretions set out in any guidelines,recommendations, decisions, opinions or any otherinstrument issued by the ECB.
(2) ( a) The Minister may, after consultation with the
competent authority and the Central Bank, if he deemsit expedient in the public interest so to do, by orderpublished in the Gazette declare any day or days to bea bank holiday or holidays.
(b) On any day declared to be a bank holiday under this
article, whether such day is also a public holiday ornot, no bank shall do any business with the publicexcept to the extent allowed by the order.
(c) The Minister may, after consultation with the competent
authority and the Central Bank, if he deems it expedientin the public interest so to do, by regulations or by anorder published in the Gazette, establish the openinghours of banks.
(3) The Minister may, after consultation with the competent
authority and the Central Bank, if he deems it expedient in the  public
interest so to do, by regulations or by an order published in t he Gazette,
ensure that services, that are deemed to be essential for the c ontinuation
of banking business, such as the transportation of money and th e
guarding services, continue to be  provided during a period as s pecified
by the regulations.
Powers and duties 
of the competent authority.
Amended by:
XVII. 2002.159;XX. 2007.85, 87;II. 2011.4;X. 2015.5;XXXI. 2017.71;XXVI.2019.5;LXXI.2021.22.4.(1) It shall be the duty of the competent authority to carry out
the functions and duties prescribed by this Act and any regulat ions
made and Banking Rules and Conduct of Business Rules issuedthereunder, by any binding legal instruments issued under the 
CRD,
and by the CRR, and to ensure that credit institutions licensed under
this Act or carrying out their activities in Malta and financia l holding
companies and mixed financial holding companies of creditinstitutions comply with this Act and any regulations, directiv es,
Banking Rules and Conduct of Business Rules made or issuedthereunder, with any binding legal instruments issued under the  
CRD ,
with the CRR and with the conditions of their licence or approval, as
applicable. In pursuance of that duty the competent authority s hall at
all times afford such co-operation to the Central Bank as the C entral
                                 BANKING                   [CAP. 371.       15
Bank may require in the discharge of its duties.
S.L. 204.06.(2) The competent authority shall be the authority appointed
for the purposes of Ar ticle 131(1) of the CRD and Articles 124 and
164 of the CRR and shall act jointly with the designated authority as
appointed in terms of the Central Bank of Malta Act (Appointment
of Designate Authority to implement Macro-Prudential
Instruments) Regulations .
(3) The competent authority shall notify the European
Commission and the EBA  of its functions and duties.
(4) The competent authority shall, in the exercise of its genera l
duties, duly consider the potential impact of its decisions on the
stability of the financial system in the other Member Statesconcerned and, in particular, in emergency situations, based on  the
information available at the relevant time.
(5) The competent authority shall monitor the activities of
credit institutions, and where applicable, of financial holdingcompanies and mixed financial hol ding companies, so as to asses s
compliance with the requirements of the 
CRR, any binding legal
instruments issued under the CRD, this Act and any regulations made
and Banking Rules and Conduct of Business Rules issued thereund er.
Substituted by:
XXXI. 2017.71.(6) The competent authority may make, amend or revoke Banking
Rules and Conduct of Business Rules as may be required for carr ying
into effect any of the provisions  of this Act and any regulatio ns made
thereunder, and to transpose, implement and give effect to theprovisions and requirements of D irectives, Regulations and any other
legislative matters of the European Union requiring transpositi on or
implementation
(7) The competent authority may issue, amend or revoke
Banking Rules and, or Conduct of Business Rules for the purpose  of
implementing any guidelines, recommendations, decisions, opinio ns
or any other instrument issued by the 
EBA , as may be required.
(8) The competent authority may issue, amend or revoke
Banking Rules for the purpose of implementing any guidelines,recommendations, decisions, opinions or any other instrument is sued
by the ECB, as may be required.
(9) Banking Rules and Conduct of Business Rules shall be
binding on licence holders "and other persons as may be specifi ed
therein.
(10) Banking Rules and Conduct of Business Rules and any
amendment or revocation thereof shall be officially communicate d
to credit institutions and to financial holding companies and m ixed
financial holding companies and the competent authority shall m ake
copies thereof available to the public.
 16        CAP. 371. ]                          BANKING
Supervisory 
practices.
Added by:
II. 2011.5.
Amended by:
XX. 2013.56.Substituted by:X. 2015.6.
Amended by:
LXXI.2021.23.4A. (1) In the exercise of its duties, the competent authority
shall take into account the convergence in respect of superviso ry
tools and supervisory practices in the application of this Act and
any regulations made and Banking Rules issued thereundertransposing the 
CRD, of any binding legal instruments issued under
the CRD , and of the CRR . For that purpose, the competent authority
shall -
(a) as party to the ESFS, cooperate with trust and full
mutual respect, in particular when ensuring the flow ofappropriate and reliable information between thecompetent authority and other parties to the ESFS inaccordance with the principle of sincere cooperationset out in Article 4(3) of the Treaty on EuropeanUnion;
(b) participate in the activities of the 
EBA  and, as
appropriate, in the colleges of supervisors;
(c) make every effort to comply with those guidelines and
recommendations issued by the EBA  in accordance
with Article 16 of Regulation (EU) No. 1093/2010  and
to respond to the warnings and recommendationsissued by the 
ESRB  pursuant to Article 16 of
Regulation (EU) No. 1092/2010 ;
(d) cooperate closely with the ESRB .
(2) The competent authority shall not be inhibited by other
national legislative provisions in the performance of its dutie s as
member of the EBA  and the ESRB , or its duties under the CRD  and
the CRR .
Power to issue 
directives.
Added by:
X. 2015.7.
Amended by:
XLIV .2018.10;LXXI.2021.24.
Cap. 330.4B. (1) Without prejudice to any of the powers conferred on it
in this Act, the competent authority may, whenever it deemsnecessary, give, by notice in writing, such directives as it ma y deem
appropriate in the circumstances in order to carry out the func tions
and duties prescribed by the 
Malta Financial Services Authority
Act, by this Act and any made and Banking Rules and Conduct of
regulations Business Rules issued thereunder, by the CRR and by any
binding legal instruments issued under the CRD :
Provided that, without prejudice to the generality of the
foregoing, the competent authority may give any such directiveeven:
(i) to financial holding companies and mixed financial
holding companies exempted in terms of article11B(5); 
(ii) where a credit institution, financial holding company or
mixed financial holding company ceases to hold a licenceor approval, as the case may be, for whatever reason, orsuch licence or approval, as the case may be, ceases tohave effect:
Provided further that any directive given in terms of this
Act and any regulations made thereunder shall, unless the
competent authority otherwise directs, continue to apply even w hen
                                 BANKING                   [CAP. 371.       17
a credit institution, financial holding company or mixed financ ial
holding company ceases to hold a licence or approval, as the ca se
may be, for whatever reason, or such licence or approval, as th e
case may be, ceases to have effect.
(2) Any person to whom a notice is given in accordance with
sub-article (1) shall obey, comply with and otherwise give effe ct to
any such directive within the time and in the manner stated in the
directive.
(3) The power to give directives under this Act and any
regulations made thereunder shall include the power to vary, al ter,
add to or withdraw any directive, as well as the power to issue  new
or further directives.
(4) Where the competent authority is satisfied that the
circumstances so warrant, it may at any time make public anydirective it has given under any of the provisions of this Act and any
regulations made thereunder.
Functions, powers 
and duties.
Added by:
XXI. 2015.21.Cap. 330.4C. Without prejudice to the functions, powers and duties
assigned to the competent authority by this Act, the competentauthority shall also have the functions, powers and duties assi gned
to it under the 
Malta Financial Services Authority Act and under
any regulations made thereunder for the purposes of transposingthe provisions of the 
BRRD .
Licences for 
banking activities.
Amended by:
XVII. 2002.160;XX. 2007.85, 88;L.N. 425 of 2007;III. 2009.17;XVII. 2009.12;II. 2011.6;X. 2015.8.5.(1) No business of banking shall be transacted in or from
Malta except by a company which is in possession of a licencegranted under this Act by the competent authority.
(2) No credit institution licensed or holding an equivalent
authorisation outside Malta may open a branch, agency orrepresentative office or set up any subsidiary in Malta unless it is in
possession of a licence granted under this Act by the competentauthority:
Provided that a credit institution licensed or holding an
equivalent authorisation in a Member State or EEA state shall b e
entitled to exercise its rights under European Union Law.
(3) In the event of reasonable doubt as to whether the business
of banking or of accepting deposits is or is not being transact ed in
or from Malta by any person, the matter shall be conclusivelydetermined by the competent authority.
(4) The granting of a licence shall be subject to an annual fee
as the competent authority may determine from time to time.
(5) The Minister may, after consulting the competent authority,
establish or recognise other forms of authorisation and notific ation
procedures, subject to such cond itions, additions, adaptations,  and
modifications and exemptions as may be prescribed; and differen t
provisions may be made for different cases or classes of cases,under such terms and conditions as may be prescribed, and accou nt
shall be taken of Malta’s international commitments.
 18        CAP. 371. ]                          BANKING
Application for a 
licence.
Amended by:
XVII. 2002.161;XX. 2007.85;II. 2011.7;XX. 2013.57;X. 2015.9;LXXI.2021.25;
LXXII.2021.2 .6.(1) Any company desirous of commencing the business of
banking in Malta shall, before commencing any such business,apply in writing to the competent authority for a licence under  this
Act:
Provided that the entities listed in the Second Schedule shall
not be required to apply to the competent authority for a licen ce
under this Act, and the provisions of this Act and of any regul ations
made and, or any Banking Rules and, or Conduct of Business Rule s
issued thereunder, and the 
CRR  shall accordingly not apply thereto,
unless otherwise specifically provided for in this Act, or in a ny
regulations made or Banking Rules or Conduct of Business Rulesissued thereunder.
(2) All applications for a licence shall be in such form and
accompanied by such information, including a programme ofoperations setting out the types of business envisaged and thestructural organisation of the credit institution, an indicatio n of the
parent undertakings, financial holding companies and mixed fina ncial
holding companies within the group and a description of thearrangements, processes and mechanisms referred to in article 1 7B,
and shall conform with such requirements as may be prescribed from
time to time by a Banking Rule. Such requirements shall be noti fied
to the 
EBA :
Provided that before a licence is granted or refused, an
application may only be withdrawn by written notice to thecompetent authority.
(3) The competent authority shall have the power to require
any person to provide such infor mation as it shall deem necessa ry
for the purposes of determining an application for a licence or  for
the purposes of determining whether to restrict or withdraw alicence.
(4) The competent authority shall not consider the economic
needs of the market as a criterion when examining an applicatio n
for a licence.
Specific 
requirements for licensing of credit institutions referred to in point (1)(b) of Article 
4(1) of the 
CRR .
Added by:
LXXII.2021.30.
Cap. 370. 6A. (1) Undertakings referred to in point (1)(b) of Article
4(1) of the CRR which have already obtained a licence pursuant to
articles 3, 5 and 6 of the Investment Services Act shall submit  an
application for a licence in accordance with articles 5 and 6, at the
latest on the day when either of the following events takes pla ce:
(a) the average of monthly total assets, calculated over a
period of twelve consecutive months, is equal to orexceeds thirty billion euro (€30,000,000,000); or
                                 BANKING                   [CAP. 371.       19
Cap. 370.(b) the average of monthly total assets calculated over a
period of twelve consecutive months is less than thirtybillion euro (€30,000,000,000), and the undertaking ispart of a group in which the total value of theconsolidated assets of all undertakings in the groupthat individually have total assets of less than thirtybillion euro (€30,000,000,000) and that carry out anyof the activities referred to in paragraphs (3), (4), (6)and (7) of the First Schedule annexed to theInvestment Services Act is equal to or exceeds thirtybillion euro (€30,000,000,000), both calculated as anaverage over a period of twelve consecutive months. 
(2) The undertakings referred to in sub-article (1) may continu e
carrying out the activities referred to in point (1)(b) of Arti cle 4(1) of
the 
CRR  until they obtain the licence referred to in sub-article (1).
(3) Where the competent authority, after receiving the
information in accordance with Article 95a of the MiFID, determ ines
that an undertaking is to be authorised as a credit institution  in
accordance with Articles 5 and 6, it shall notify the undertaki ng. 
(4) Pursuant to sub-article (1), the competent authority shall
ensure that the process is as streamlined as possible and that any
information already pertaining to the competent authority shall  be
taken into account.
Issuing of a 
licence.
Amended by:
XVII. 2002.162;IV . 2003.178;XX. 2007.85, 89;L.N. 425 of 2007;XVII. 2009.13;II. 2011.8;XX. 2013.58;X. 2015.10;XXVI.2019.6;LXXI.2021.26.7.(1) No company shall be granted a licence unless - 
(a) its initial capital amounts to not less than five million
euro (€5,000,000) or an equivalent amount in anothercurrency as may be specified in a Banking Rule:
Provided that the competent authority may, by a
provision contained in a Banking Rule or as requiredthrough a condition in a credit institution’s licence,increase the amount laid down in this paragraph:
Provided further that the initial capital shall comprise
only one or more of the items referred to in Article26(1)(a) to (e) of the 
CRR ;
(b) there are at least two individuals who effectively direct
the business of the company;
(c) the competent authority is notified of the identities of
the shareholders or members whether direct orindirect, that have qualifying holdings and of theamounts of those holdings or, where there are noqualifying holdings, of the twenty largest shareholdersor members:
Provided that in determining whether the criteria for a
qualifying holding are fulfilled, the voting rightsreferred to in Articles 9 and 10 of 
Directive 2004/109/
EC and the conditions regarding aggregation thereof set
out in Article 12(4) and (5) of that Directive, shall be
 20        CAP. 371. ]                          BANKING
taken into account:
Provided further that voting rights or shares which
credit institutions hold as a result of providing the
underwriting of financial instruments or placing offinancial instruments on a firm commitment basisincluded under point (6) of Section A of Annex I to
MiFID  shall not be taken into account, provided that
those rights are not exercised or otherwise used tointervene in the management of the issuer and aredisposed of within one year of acquisition;
(d) the competent authority is satisfied that the
shareholders or members mentioned in paragraph ( c),
controllers and all individuals who will effectivelydirect the business of the credit institution are suitablepersons to ensure its sound and prudent management.
The competent authority shall be satisfied with the
suitability of the individuals who will effectivelydirect the business if the requirements referred to in
article 14(2) and (2A) are met. The competent authority
shall be satisfied of the suitability of the shareholdersor members mentioned in paragraph (c), in accordance
with the criteria set out in article 13A(9). Article 13A(8)
and (10) and article 13B shall apply;
(e) the competent authority is satisfied that, where there
are close links between the company and anotherperson or persons, such links do not through any law,regulation, administrative provision or in any othermanner prevent it from exercising effectivesupervision of the company, once in possession of alicence, under the provisions of this Act and anyregulations made and, or Banking Rules and, or Conductof Business Rules issued thereunder:
Provided that the competent authority shall not grant a
licence where the laws, regulations or administrative
provisions of a third country governing one or morepersons with which the credit institution has closelinks, or difficulties involved in the enforcement ofthose laws, regulations and administrative provisions,prevent the effective exercise of its supervisoryfunctions:
Provided further that in respect of this paragraph ( e),
the credit institution shall inform the competentauthority forthwith of any change in circumstancesconcerning the application of this said paragraph ( e)
and shall further provide the competent authority withthe information necessary to monitor compliance withthe conditions referred to in this paragraph ( e) on a
continuous basis;
(f) the competent authority is satisfied that the
arrangements, processes and mechanisms referred to inarticle 17B enable sound and effective riskmanagement by that credit institution.
                                 BANKING                   [CAP. 371.       21
(2) The competent authority shall determine each application
for a licence within six months of receipt of the application o r, if
the application does not comply with article 6(2) or additionalinformation is required, within six months of compliance with t he
said sub-article or the furnishing of the information as the ca se may
be, whichever be the later. In any event an application shall b e
determined within twelve months of its receipt.
(3) The competent authority shall determine an application by
doing any of the following:
(a) granting a licence without conditions;
(b) granting a licence subject to such conditions as it may
deem appropriate;
(c) refusing to grant a licence:
and if it refuses an application it shall inform the applicant, in writin g,
of the reasons for the refusal within the time-frames referred to in sub-
article (2).
(4) In granting a licence the competent authority may subject it
to such conditions as it may deem appropriate, and having grant ed a
licence it may, from time to time, vary or revoke any condition  so
imposed or impose new conditions.
(5) Where the competent authority for any reason fails to
determine an application for a licence within the time prescrib ed
under sub-article (2), such fact shall be deemed to constitute a
refusal to grant a licence and shall be subject to a right of a ppeal in
accordance with article 10.
(6) A credit institution licensed under this Act shall provide t he
competent authority with particulars of any changes in theinformation provided under this Act as soon as such creditinstitution becomes aware of such change.
(7) A credit institution licensed in terms of this article shall have
its head office  and its registered office in Malta.
(8) The competent authority shall notify the 
EBA  of every licence
issued to a credit institution in terms of the Act and any regulations
or Banking Rules made thereunder.
Right of 
redemption.
Added by:
XVII. 2002.163.
Amended by:
IX. 2003.77;XX. 2007.90;L.N. 425 of 2007.7A. (Deleted by Act II. 201 1.9.).
Prior consultation 
with overseas regulatory authorities.
Added by:
X. 2015.11.
Amended by:
LXXI.2021.27.7B. (1) The competent authority shall, before issuing a licence
to a credit institution, consult the overseas regulatory author ities of
another Member State where the credit institution is -
(a) a subsidiary of a credit institution authorised in that
other Member State;
(b) a subsidiary of the parent undertaking of a credit
institution authorised in that other Member State;
 22        CAP. 371. ]                          BANKING
(c) controlled by the same persons as those who control a
credit institution authorised in that other MemberState.
(2) The competent authority shall, before issuing a licence to a
credit institution, consult the overseas authority that is responsible for
the supervision of insurance undertakings or investment firms i n
the Member State concerned where the credit institution is -
(a) a subsidiary of an insurance undertaking or investment
firm authorised in the European Union;
(b) a subsidiary of the parent undertaking of an insurance
undertaking or investment firm authorised in theEuropean Union;
(c) controlled by the same persons as those who control an
insurance undertaking or investment firm authorised inthe European Union.
(3) The competent authority shall consult with the relevant
overseas authorities referred to in s ub-articles (1) and (2) when
assessing the suitability of the shareholders and the reputatio n and
experience of the directors in terms of article 7(1)( d) involved in
the management of another entity of the same group.
(4) The competent authority shall exchange any information
regarding the suitability of shareholders and the reputation an d
experience of directors which is of relevance for the issuing o f a
licence and for the ongoing assessment of compliance with therelevant overseas authorities referred to  in sub-articles (1) and (2).
Representative 
offices of non-Maltese banks.
Amended by:
XVII. 2002.164;XX. 2007.85, 91;LXXI.2021.28.8.(1) A company licensed or holding an equivalent
authorisation in another country outside Malta which carries on  the
business of banking shall not establish a representative office  in
Malta unless it has given not less than two months’ notice to t he
competent authority that it proposes to establish such an offic e.
Such notice shall -
(a) specify the name it is proposed to use in relation to the
activities of the representative office and the addressof such office;
(b) be accompanied by a certified copy of the
authorisation of the company to conduct the businessof banking in a country other than Malta.
(2) A company mentioned in sub-article (1) having a
representative office in Malta shall likewise notify the compet ent
authority -
(a) at least two months in advance of any proposed change
in name of the representative office;
(b) of any change in its authorisation to conduct the business
of banking in a country other than Malta, no more thantwo months after such change.
(3) The competent authority may, at any time, serve on a
representative office in Malta a notice objecting to the name o r the
proposed name of such office.
                                 BANKING                   [CAP. 371.       23
(4) The competent authority shall not give a notice pursuant to
sub-article (3) unless it considers that the name or proposed n ame
is misleading to the public or otherwise undesirable, and uponreceipt of such notice, the representative office shall not use  the
name to which the competent authority has objected in relation to
activities conducted in Malta.
(5) The competent authority may, by notice in writing, require
any company having a representative office in Malta or which ha s
given notice pursuant to sub-article (1) to provide the compete nt
authority with such information or documents as the competentauthority may reasonably require, and the said company shallcomply with such notice in the period as is reasonably specifie d by
the notice.
(6) A representative office in Malta shall supply the competent
authority with a copy of any document which it is required toprovide to the Registrar of Companies no later than the time bywhich such document must be provided to the said Registrar.
(7) The competent authority may by a Banking Rule provide
that the provisions of articles 20 to 24 shall apply to represe ntative
offices in Malta in the same manner as they apply to creditinstitutions subject to such variations and conditions as may b e
established in the Banking Rule.
(8) The competent authority may by Banking Rule impose on
companies which have established or which propose to establishrepresentative offices in Malta such requirements as the compet ent
authority considers appropriate in connection with those office s
and the activities conducted from them and may impose on suchcompanies such annual fee as may be determined from time to tim e.
(9) The competent authority may, within the two months
referred to in sub-article (1), order a company referred to in the said
sub-article (1) not to establish a representative office in Mal ta and
at any time thereafter order the closure of any representative office
so established.
Withdrawal and 
restriction of a licence.
Amended by:
XVII. 2002.165;
XX. 2007.92;XVII. 2009.14;
II. 2011.10;
XX. 2013.59X. 2015.12;XXVI.2019.7;LXXI.2021.29;
LXXII.2021.31 .9.(1) A licence shall automatically cease to have any effect if
the holder -
(a) renounces the licence; or
(aa)  uses its licence exclusively to engage in the activities
referred to in point (1)(b) of Article 4(1) of the CRR
and has, for a period of five consecutive years, averagetotal assets below the thresholds set out in that Article;
(b) is declared bankrupt or goes into liquidation or change
in its authorisation to conduct the business or isotherwise dissolved; or
(c) has ceased to operate as a result of a merger with
another credit institution; or
(d) in the case of a credit institution licensed or holding an
equivalent authorisation in a third country and whichhas been granted a licence under this Act to open abranch in Malta, has had its authorisation withdrawn
 24        CAP. 371. ]                          BANKING
by the overseas regulatory authority in the third
country within which the credit institution has beenauthorised.
(2) The competent authority may only restrict or withdraw the
licence issued to a credit institution in any of the following cases
where such a credit institution -
(a) does not make use of the licence within twelve
months, expressly renounces the licence or has ceasedto engage in business for more than six months, if noprovision was made for the licence to lapse in suchcases;
(b) has obtained the licence through false statements or
any other irregular means;
(c) no longer fulfils the conditions under which the
licence was issued;
S.L. 371.16(d) no longer meets the prudential requirements set out in
Parts Three, Four or Six of the CRR , except for the
requirements laid down in Articles 92a and 92b of the
CRR , or imposed under regulations 9(1)( a) and 10(1)
and (2) of the  Banking Act (Supervisory Review)
Regulations  or can no longer be relied on to fulfil its
obligations towards its creditors, and, in particular, nolonger provides security for the assets entrusted to itby its depositors;
S.L. 371.05(e) commits one of the breaches referred to in regulation
7(1) of the Administrative Penalties, Measures and
Investigatory Powers Regulations ;
(f) conceals from, or fails to notify to the competent
authority of any document or information or changetherein which it was its duty to reveal or notify underthis Act or any regulations made or any Banking Rules
or Conduct of Business Rules issued thereunder;
(g) fails to comply with any of the provisions of this Act
or any regulations made or Banking Rules issuedthereunder or with the conditions under which thelicence is issued;
(h) has insufficient assets to cover its liabilities;
(i) has suspended payment or is about to suspend
payment.
(3) Restrictions imposed by the competent authority pursuant
to sub-article (2) shall be such restrictions as the competentauthority shall consider appropriate for the proper compliance by
the credit institution with the provisions of this Act and anyregulations made and, or Banking Rules and, or Conduct of Busin ess
Rules issued thereunder and the conditions, if any, of its licence and
for the protection of depositors and may include (without preju dice
to the generality hereof) -
(a) the removal of any officer of the credit institution or
the replacement of any officer by such person as the
                                 BANKING                   [CAP. 371.       25
competent authority may designate;
(b) the requirement for any person who directly or
indirectly possesses a qualifying shareholding in thecredit institution to divest himself of all or part of thatholding;
(c) the requirement for the credit institution to take or
refrain from any action;
(d) the requirement that the credit institution be prohibited
from undertaking any transaction or transactions orany class of business or be permitted to undertake anytransaction or transactions or any class of businessonly upon such terms as the competent authority mayprescribe.
(4) The competent authority shall have the power to vary or
remove any restrictions imposed under this article.
(5) Where the competent authority intends to restrict or
withdraw a licence or to vary any restriction, it shall serve w ritten
notice of its intention on the credit institution; such notice shall
specify the grounds upon which the competent authority intends to
take action and shall specify a period, being a period not less  than
forty-eight hours and not longer than thirty calendar days, in which the
credit institution shall be entitled to make representations to  the
competent authority as to why such action should not be taken.Unless the competent authority decides that the matter is urgen t, it
shall not impose or vary any restriction or withdraw a licencebefore the expiry of such period.
(6) A licence granted for the establishment in Malta of a branch
of a credit institution licensed or holding an equivalentauthorisation in a third country may only be withdrawn afterconsultation with the overseas regulatory authorities of the co untry
within which it has been authorised, unless the competent autho rity
decides that the matter is urgent or that there are circumstanc es
which make such prior consultation inappropriate.
(7) Upon the restriction or withdrawal of a licence of a credit
institution licensed in Malta, the competent authority shall in form
the overseas regulatory authorities of the countries in which t he
credit institution or its subsidiaries are carrying on the busi ness of
banking. The competent authority shall notify the 
EBA of every
withdrawal of a licence together with the reasons for such awithdrawal.
(8) Where the competent authority is satisfied that the
circumstances so warrant, it may at any time make public anyaction it has taken under this article.
 26        CAP. 371. ]                          BANKING
Appeals.
Amended by:
VI. 2001.24.Substituted by:XVII. 2002.166.
Amended by:
XVII. 2009.15.Substituted by:X. 2015.13;LXXI.2021.30.Cap. 330.10. Any person who is aggrieved by a decision and, or measure
taken by the competent authority pursuant to this Act, or anyregulations made or Banking Rules or Conduct of Business Rulesissued thereunder, or the 
CRR , or any binding legal instruments issued
under the CRD , may appeal against the decision and, or measure to the
Financial Services Tribunal within such period and under suchconditions as established under the 
Malta Financial Services
Authority Act.
Opening of 
branches.
Amended by:
XVII. 2002.167;XX. 2007.93;XVII. 2009.16;II. 2011 11;X. 2015.14.11. (1) A credit institution licensed in Malta shall inform the
competent authority in writing before opening a new branch,agency or office in Malta.
(2) Unless with the written consent of the competent authority,
no credit institution licensed in Malta may open a new branch,agency or representative office or set up or acquire any subsid iary
in any place outside Malta:
S.L. 371.11Provided that a credit institution licensed in Malta which
intends to exercise its rights under the European Passport Rights
for Credit Institutions Regulations shall only be required to notify
the competent authority in terms of the said Regulations.
(3) A credit institution licensed in Malta shall not establish a
branch, subsidiary or representative office in a third country where
the secrecy laws or other regulations of that country prohibit the
information flows deemed necessary for adequate consolidatedsupervision.
S.L. 371.11
S.L. 371.16(4) Where Malta is the host Member State, the competent
authority shall not require authorisation or endowment capital for
branches of credit institutions authorised in other Member Stat es.
The establishment and supervision of such branches shall be
effected in accordance with article 17B, the European Passport
Rights for Credit Institutions Regulations and regulation 13 of the
Banking Act (Supervisory Review) Regulations .
Opening of 
branches having their head office outside the European Union.
Added by:
II. 2011.12.
Amended by:
XX. 2013.60.Substituted by:
X. 2015.15.
Amended by:
LXXI.2021.31.11A. (1) The competent authority shall not apply provisions
which result in more favourable treatment to a branch of a cred it
institution having its head office in a third country, than tha t
accorded to branches of credit institutions having their head o ffice
in the European Union, when commencing or continuing to carryout their business.
(1A)  Branches of credit institutions which have their head
office in a third country and which are licensed in Malta to op en
such branches, shall report to the competent authority, at leas t
annually, the following information:
(a) the total assets corresponding to the activities of the
branch in Malta;
(b) information on the liquid assets available to the
branch, in particular availability of liquid assets inMember State currencies;
(c) the own funds that are at the disposal of the branch;(d) the deposit protection arrangements available to
                                 BANKING                   [CAP. 371.       27
depositors in the branch;
(e) the risk management arrangements;(f) the governance arrangements, including the key
function holders for the activities of the branch as maybe set out in a Banking Rule;
(g) the recovery plans covering the branch(h) any other information that may be requested by the
competent authority, as it may consider necessary toenable comprehensive monitoring of the activities ofthe branch. 
(2) The competent authority shall notify the 
EBA  of the
following:
(a) all the licences granted to credit institutions, having
their head office in a third country, to open a branch inMalta and any subsequent changes to such licences;
(b) total assets and liabilities of the branches in Malta of
credit institutions having their head office in a thirdcountry which are licensed to open such branches, asperiodically reported;
(c) the name of the third-country group to which a branch of
a credit institution having its head office in a thirdcountry which has been granted a licence to open such abranch belongs.
(3) Where:
(a) credit institutions having their head office in a third
country are licensed to open branches in Malta; or
(b) credit institutions licensed in terms of this Act are part
of a third-country group,
the competent authority shall cooperate closely with overseas
regulatory authorities which supervise credit institutions in o ther
Member States that are part of the same third-country group and , or
with authorities in other Member States which superviseinvestment firms that are part of the same third-country group and,
or with overseas regulatory authorities which supervise branche s in
other Member States of credit institutions having their head of fice
in a third country that are part of the same third-country grou p, as
applicable, to ensure that all activities of that third-country  group
in the European Union are subject to comprehensive supervision,so as to prevent the circumvention of the requirements applicab le to
third-country groups pursuant to this Act and, or any regulatio ns
made and, or any Banking Rules issued thereunder, and, or the
CRD , and, or the CRR , and to prevent any detrimental impact on
the financial stability of the European Union.
 28        CAP. 371. ]                          BANKING
Approval of 
financial holding companies and mixed financial holding companies.
Added by:
LXXI.2021.32.11B. (1) Parent financial holding companies, parent mixed
financial holding companies, EU parent financial holding compan ies
and EU parent mixed financial holding companies, which areestablished in Malta or in another Member State and which have a
credit institution as a subsidiary, shall seek the approval or exemption,
as the case may be, of the competent authority, acting as theconsolidating supervisor, in accordance with this article. Othe r
financial holding companies and mixed financial holding compani es
established in Malta or in another Member State and which have a
credit institution as a subsidiary, shall seek the approval or exemption,
as the case may be, of the competent authority, acting as theconsolidating supervisor, in accordance with this article where  they are
required to comply with the 
CRD, or the CRR, on a sub-consolidated
basis:
Provided that in accordance with Article 21a of the CRD ,
where the competent authority is not the consolidating supervis or,
financial holding companies and mixed financial holding compani es
established in Malta and which have a credit institution as a s ubsidiary,
shall seek the approval or exemption, as the case may be, of th e
consolidating supervisor determined in accordance with Article 111 of
the CRD .
(2) For the purposes of seeking an approval or exemption, as
the case may be, in terms of sub-article (1), financial holdingcompanies and mixed financial hol ding companies referred to the rein
shall, where:
(i) the competent authority is not the consolidating
supervisor but the financial holding company or themixed financial holding company is established inMalta; or
(ii) the financial holding company or the mixed financial
holding company is established in a Member Stateother than Malta and the competent authority is theconsolidating supervisor,
provide the competent authority with the following information:
(a) the structural organisation of the group of which the
financial holding company or the mixed financialholding company, as the case may be, forms part, witha clear indication of its subsidiaries and, whereapplicable, parent undertakings, and the location andtype of activity undertaken by each of the entitieswithin the group;
(b) information regarding the nomination of at least two
persons effectively directing the financial holdingcompany or mixed financial holding company, as thecase may be, and compliance with the requirements setout in article 14(7) on the qualification of directors;
                                 BANKING                   [CAP. 371.       29
(c) information regarding compliance with the criteria set
out in article 7 concerning shareholders and members;
(d) the internal organisation and distribution of tasks
within the group; 
(e) any other information that may be necessary to carry
out the assessments referred to in sub-articles (4) and(5) as may be requested by the competent authority. 
(3) All applications for an approval or exemption, as the case
may be, in terms of this article shall be in such form and acco mpanied
by such information and shall conform with such requirements as  may
be prescribed, from time to time, by a Banking Rule.
(4) Approval may be granted to a financial holding company or
mixed financial holding company, as the case may be, pursuant t o this
article only where all of the following conditions are fulfille d:
(a) the internal arrangements and distribution of tasks
within the group are adequate for the purpose ofcomplying with the requirements imposed by this Actand any regulations made and Banking Rules issuedthereunder transposing the 
CRD , by any binding legal
instruments issued under the CRD  and by the CRR , on
a consolidated or sub-consolidated basis and, inparticular, are effective to:
(i) coordinate all the subsidiaries of the
financial holding company or mixed financial holdingcompany, as the case may be, including, wherenecessary, through an adequate distribution of tasksamong subsidiary institutions;
(ii) prevent or manage intra-group conflicts(iii) enforce the group-wide policies set by the
parent financial holding company or parent mixedfinancial holding company throughout the group;
(b) the structural organisation of the group of which the
financial holding company or mixed financial holdingcompany, as the case may be, is part does not obstructor otherwise prevent the effective supervision of thesubsidiary institutions or parent institutions inaccordance with the individual, the consolidated and,where appropriate, the sub-consolidated obligations towhich they are subject: 
Provided that the assessment of this criterion shall
take into account, in particular:
(i) the position of the financial holding
company or mixed financial holding company, as the
 30        CAP. 371. ]                          BANKING
case may be, in a multi-layered group;
(ii) the shareholding structure(iii) the role of the financial holding company
or mixed financial holding company, as the case may be,within the group;
(c) the criteria set out in article 7(1)(c), (d) and (e), and
the requirements laid down in article 14(7) arecomplied with.
 (5) An exemption may be granted to a financial holding
company or mixed financial holding company, as the case may be,pursuant to this article only where all of the following condit ions are
met: 
(a) the financial holding company's principal activity is to
acquire holdings in subsidiaries or, in the case of amixed financial holding company, its principal activitywith respect to institutions or financial institutions isto acquire holding in subsidiaries;
(b) the financial holding company or mixed financial
holding company, as the case may be, has not beendesignated as a resolution entity in any of the group'sresolution groups in accordance with the resolutionstrategy determined by the relevant resolutionauthority pursuant to the 
BRRD ;
(c) a subsidiary credit institution is designated as
responsible to ensure the group's compliance withprudential requirements on a consolidated basis and isgiven all the necessary means and legal authority todischarge those obligations in an effective manner;
(d) the financial holding company or mixed financial
holding company, as the case may be, does not engagein taking management, operational or financialdecisions affecting the group or its subsidiaries thatare institutions or financial institutions; 
(e) there is no impediment to the effective supervision of
the group on a consolidated basis:
Provided that where financial holding companies or
mixed financial holding companies are exempted fromapproval in accordance with this sub-article, they shallnot be excluded from the perimeter of consolidation aslaid down in this Act and any regulations made andBanking Rules issued thereunder transposing the 
CRD , in
any binding legal instruments issued under the CRD , and
in the CRR .
(6) Where the competent authority is the consolidating
supervisor, it shall monitor compliance with the conditions ref erred to
                                 BANKING                   [CAP. 371.       31
in sub-article (4) or, where applicable, in sub-article (5), on  an ongoing
basis.
(7) (a) Financial holding companies and mixed financial
holding companies shall provide the competent authority, where it is
acting as the consolidating supervisor, with the information re quired to
monitor on an ongoing basis the structural organisation of the group
and compliance with the conditions referred to in sub-article ( 4);
(b) Financial holding companies and mixed financial
holding companies exempted in terms of sub-article (5) shall pr ovide
the competent authority, where it is acting as the consolidatin g
supervisor, with the information required to monitor on an ongo ing
basis the structural organisation of the group and compliance w ith the
conditions referred to in sub-article (5).
(c) The competent authority shall share the information
received in terms of this sub-article with the overseas regulat ory
authority in the Member State where the financial holding compa ny or
the mixed financial holding company, as the case may be, isestablished.
(8) Where the competent authority is the consolidating
supervisor and has established that the conditions set out in s ub-article
(5) are no longer met, the financial holding company or mixedfinancial holding company, as the case may be, shall seek appro val in
accordance with this article.
(9) For the purpose of taking decisions on the approval or the
exemption from approval, as the case may be, referred to in sub -
articles (4), (5) and (8) and, or in sub-articles (3), (4) or ( 7) of Article
21a of the 
CRD , where:
(i) the competent authority is not the consolidating
supervisor but the financial holding company or themixed financial holding company, as the case may be,is established in Malta; or 
(ii) the financial holding company or the mixed financial
holding company, as the case may be, is established ina Member State other than Malta and the competentauthority is the consolidating supervisor,
the competent authority shall work together with the overseas
regulatory authority acting as the consolidating supervisor or with
the overseas regulatory authority in the Member State where thefinancial holding company or the mixed financial holding compan y
is established, as the case may be, in full consultation. 
(10) Where the competent authority is the consolidating
supervisor, it shall prepare an assessment on the matters refer red to in
sub-articles (4), (5) and (8) as applicable, and shall forward that
assessment to the overseas regulatory authority in the Member S tate
 32        CAP. 371. ]                          BANKING
where the financial holding company or the mixed financial hold ing
company is established, as the case may be. 
(11) The competent authority, whether acting as the
consolidating supervisor or whether it is in receipt of an asse ssment
referred to in Article 21a(8) of the CRD from the overseas regulatory
authority acting as the consolidating supervisor, shall do ever ything
within its power to reach a joint decision on the approval or t he
exemption from approval, as the case may be, referred to in sub -
articles (4), (5) and (8) and, or in sub-articles (3), (4) and (7) of Article
21a of the CRD , with the overseas regulatory authority in the Member
State where the financial holding company or the mixed financia l
holding company is established or with the overseas regulatoryauthority acting as the consolidating supervisor, as the case m ay be,
within two months of receipt of that assessment:
Provided that the joint decision shall be duly documented
and reasoned and where the competent authority is the consolida ting
supervisor, it shall communicate the joint decision to the fina ncial
holding company or the mixed financial holding company, as the case
may be.
(12) In the event of a disagreement between the competent
authority and the overseas regulatory authority acting as theconsolidating supervisor or the overseas regulatory authority i n the
Member State where the financial holding company or the mixedfinancial holding company is established, as the case may be, t he
competent authority shall refrain from taking the joint decisio n
referred to in sub-article (11) and shall refer the matter to t he 
EBA in
accordance with Article 19 of Regulation (EU) No. 1093/2010. In
such cases, the competent authority shall adopt a joint decisio n with
the overseas regulatory authority acting as the consolidatingsupervisor or with the overseas regulatory authority in the Mem ber
State where the financial holding company or the mixed financia l
holding company is established, as the case may be, in conformi ty
with the decision of the 
EBA :
Provided that the matter shall not be referred to the EBA
after the end of the two-month period referred to in sub-articl e (11) or
after a joint decision has been reached.
(13) In the case of mixed financial holding companies, where the
coordinator appointed in terms of Article 10 of Directive 2002/87/EC
is neither the competent authority, nor the overseas regulatoryauthority acting as the consolidating supervisor, nor the overs eas
regulatory authority in the Member State where the mixed financ ial
holding company is established, the agreement of the said coord inator
shall be required for the purposes of the decisions or joint de cisions
referred to in sub-articles (4), (5) and (8) and, or sub-articl es (3), (4)
and (7) of Article 21a of the 
CRD , as applicable. Where the agreement
                                 BANKING                   [CAP. 371.       33
of the coordinator is required, the competent authority shall r efer any
disagreements to the relevant European Supervisory Authority,namely, to the 
EBA or to the European Supervisory Authority
(European Insurance and Occupational Pensions Authority) (EIOPA ),
established by Regulation (EU) No. 1094/2010, which shall take its
decision within one month of receipt of the referral. Any decis ion
taken in accordance with this sub-article shall be without prej udice to
the obligations under Directive 2002/87/EC or Directive 2009/138/
EC.
(14) Where approval of a financial holding company or mixed
financial holding company, as the case may be, pursuant to this  article
is refused and the competent authority is the consolidating sup ervisor,
the competent authority shall notify the applicant of the decis ion and
the reasons thereof within four months of receipt of the applic ation, or
where the application is incomplete, within four months of rece ipt of
the complete information required for the decision. Refusal may  be
accompanied, where necessary, by any of the measures referred t o in
article 29AA:
Provided that a decision to grant or refuse approval shall, in
any event, be taken within six months of receipt of the applica tion.
Intermediate 
European Union parent undertaking.
Added by:
LXXI.2021.32.11C. (1) Without prejudice to the derogation provided for in
article 38(5), a credit institution licensed in terms of this A ct which is
part of a third-country group hav ing as part of the same group one or
more other credit institution or one or more investment firm, l icensed
in Malta or authorised in another Member State, shall have a si ngle
intermediate EU parent undertaking that is established either i n Malta
or in another Member State.
(2) The competent authority may allow a credit institution
referred to in sub-article (1) to have two intermediate EU pare nt
undertakings where it determines that the establishment of a si ngle
intermediate EU parent undertaking: 
(a) would be incompatible with a mandatory requirement
for separation of activities imposed by the rules or theoverseas regulatory authority of the third countrywhere the ultimate parent undertaking of the third-country group has its head office; or 
(b) would render resolvability less efficient than in the
case of two intermediate EU parent undertakingsaccording to an assessment carried out by the relevantresolution authority of the intermediate EU parentundertaking.
(3) An intermediate EU parent undertaking shall be a credit
institution licensed in terms of article 7 or authorised in acc ordance
with Article 8 of the 
CRD, or a financial holding company or mixed
financial holding company that has been granted approval in ter ms of
 34        CAP. 371. ]                          BANKING
article 11B and, or Article 21a of the CRD :
Cap. 370.Provided that, where a second intermediate EU parent
undertaking must be set up in connection with investment activi ties to
comply with a mandatory requirement as referred to in sub-artic le (2),
the second intermediate EU parent undertaking may be an investm ent
firm holding an investment services licence in terms of article  6 of the
Investment Services Act or is authorised in accordance with Art icle
5(1) of the MiFID , that is subject to the BRRD .
(4) Sub-articles (1), (2) and (3) shall not apply where the tota l
value of assets in the European Union of the third-country grou p is less
than forty billion euro (€40,000,000,000).
(5) For the purposes of this article:
(a) the total value of assets in the European Union of the third -
country group shall be the sum of the following:
(i) the total value of assets of each institution
in the European Union forming part of the third-countrygroup, as resulting from its consolidated balance sheet oras resulting from their individual balance sheet, where aninstitution's balance sheet is not consolidated
(ii) the total value of assets of each branch of
the third-country group authorised in the European Unionin accordance with the 
CRD , MiFID  or MiFIR ;
(b) the term "institution" shall also include investment firms.
(6) The competent authority shall notify the EBA  with the
following information in respect of each third-country group op erating
in Malta:
(a) the names and the total value of assets of institutions
belonging to a third-country group;
(b) the names and the total value of assets corresponding
to branches authorised in Malta in accordance with theprovisions of national law transposing the 
CRD , the
MiFID  or MiFIR , and the types of activities that they
are licensed to carry out;
(c) the name and the type as referred to in sub-article (3)
of any intermediate EU parent undertaking set up inMalta and the name of the third-country group ofwhich it is part.
(7) A credit institution forming part of a third-country group
shall meet at least one of the following conditions:
(a) it has an intermediate EU parent undertaking;
                                 BANKING                   [CAP. 371.       35
(b) it is an intermediate EU parent undertaking;
(c) it is the only institution in the European Union of the
third-country group; or
(d) it is part of a third-country group with a total value of
assets in the European Union of less than forty billioneuro (€40,000,000,000).
Use of the word 
"bank".
Amended by:
XVII. 2002.168;XX. 2007.94;II. 2011.13.12. (1) Subject to sub-articles (2) and (3), save with the
written permission of the competent authority, no person other than
a credit institution with a current licence may use the word "b ank"
or any of its derivatives or other words as may indicate or pur port
to indicate the carrying on of the business of banking in anylanguage in the description or title under which such person iscarrying on business, or make any such use on any letter paper,  in
any notice or advertisement, or in any other similar manner.
(2) A credit institution licensed or holding an equivalent
authorisation in another country outside Malta may use the nameused in the country where it is licensed or holds an equivalentauthorisation, save that, where there is a risk that the use of  such a
name may be misleading, such credit institution shall add suchexplanatory particulars to its name as the competent authority shall
direct.
(3) Every credit institution shall use as part of its descriptio n or
title the word "bank" or one or more of its derivatives.
Participation in a 
credit institution.
Amended by:
XVII. 2002.169;XIII. 2004.83;XX. 2007.85, 95;III. 2009.18.Substituted by:XVII. 2009.17.
Amended by:
X. 2015.16.13. (1) Notwithstanding anything contained in any other law,
any person or persons acting in concert (hereinafter referred t o in
this Act as the "proposed  acquirer"), who have taken a decisio n
either to -
(a) acquire, directly or indirectly, a qualifying share-
holding in a credit institution;
(b) increase, directly or indirectly, an existing
shareholding which is not a qualifying shareholding soas to cause it to become a qualifying shareholding in acredit institution; or
(c) further increase, directly or indirectly, such qualifying
shareholding in a credit institution as a result of whichthe proportion of the voting rights or of the capitalheld would reach or exceed twenty per centum, thirtyper centum or fifty per centum or so that the creditinstitution would become its subsidiary,
(hereinafter referred to in this Act as the "proposed acquisiti on"),
shall notify the competent authority in writing of any suchdecision, indicating the size of the intended shareholding andproviding any relevant information as and in the manner that th e
competent authority may by a Banking Rule require, including th e
form in which such notification shall be made and the criteriaadopted by the competent authority in determining whether suchperson is a suitable person.
(2) Notwithstanding anything contained in any other law, any
person who -
 36        CAP. 371. ]                          BANKING
(a) acquires, directly or indirectly, at least five per centum
but less than ten per centum of the share capital or ofthe voting rights in a credit institution; or
(b) increases, directly or indirectly, an existing
shareholding so that the proportion of the voting rightsor of the capital held would amount to at least five percentum but less than ten per centum,
shall inform the competent authority in writing, indicating the  size
of the shareholding and providi ng any relevant information as a nd
in the manner that the competent authority may by a Banking Rul e
require. Such Banking Rule may provide, inter alia , general
guidance as to when the shareholding would be deemed to result in
significant influence.
(3) Notwithstanding anything contained in any other law, any
person who has taken a decision either to -
(a) dispose, directly or indirectly, of a qualifying
shareholding in a credit institution;
(b) reduce, directly or indirectly, a qualifying
shareholding so as to cause it to cease to be aqualifying shareholding; or
(c) reduce, directly or indirectly, a qualifying
shareholding so that the proportion of the voting rightsor of the capital held would fall below twenty percentum, thirty per centum or fifty per centum or so thatthe credit institution would cease to be its subsidiary,
shall notify the competent authority in writing of any such dec ision
indicating the size of the intended shareholding and providing any
relevant information as and in the manner that the competentauthority may by a Banking Rule require.
Cap. 345.(4) Sub-articles (1), (2) and (3) shall apply irrespective of
whether or not any of the relevant shares are shares listed on any
regulated market within the meaning of the Financial Markets Act
or on an equivalent market in a third country.
(5) Credit Institutions shall, on becoming aware of any
acquisitions or disposals of holdings in their capital that cau se
holdings to exceed or fall below one of the thresholds referred  to in
this article, inform the competent authority of those acquisiti ons or
disposals:
Provided that credit institutions admitted to trading on a
regulated market shall, at least annually, notify the competentauthority of the names of the shareholders and members possessi ng
qualifying holdings and the sizes of such holdings as shown by the
information received at the annual general meetings ofshareholders and members or as a result of compliance with theregulations relating to companies admitted to trading on a regu lated
market or as requested by the competent authority.
(6) If any person takes or decides to take any action set out in
sub-article (1) or (3) without notifying the competent authorit y or
obtaining its approval in terms of article 13A, then, without
                                 BANKING                   [CAP. 371.       37
prejudice to any other penalty which may be imposed under this
Act, the competent authority shall have the power to make an
order:
(a) restraining such person or credit institution from
taking, or continuing with, such action;
(b) declaring such action to be void and of no effect;
(c) requiring such person or credit institution to take such
steps as may be necessary to restore the positionexisting immediately before the action was taken;
(d) restraining such person or credit institution from
exercising any rights which such action would, iflawful, have conferred upon them, including the rightto receive any payment or to exercise any voting rightsattaching to the shares acquired;
(e) restraining such person or credit institution from
taking any similar action or any other action within thecategories set out in sub-articles (1) and (3).
(7) Without prejudice to any other provision of this Act, where
the influence exercised by any person acquiring or proposing toacquire a qualifying shareholding is, or is likely, to operate to the
detriment of the sound and prudent management of the creditinstitution, the competent authority may exercise any of its po wers
under this Act to put an end to such situation, including the p ower
to issue directives as it may deem reasonable in the circumstan ces.
(8) The competent authority, may, by means of a Banking Rule
issued under this Act indicate the circumstances when persons a re
to be regarded as "acting in concert".
Assessment 
procedure.
Added by:
XVII. 2009.18.
Amended by:
II. 2011.14;X. 2015.17;
LXXI.2021.33.13A. (1) The competent authority shall, promptly and in any
event within two working days following receipt of the notifica tion
required under article 13(1), as well as following the possiblesubsequent receipt of the information referred to in sub-articl e (4),
acknowledge receipt thereof in writing to the proposed acquirer .
(2) The competent authority shall have a maximum of sixty
working days as from the date of the written acknowledgement ofreceipt of the notification required under article 13(1) and al l
documents required by the competent authority to be attached tosuch notification (hereinafter referred to in this Act as the"assessment period") to carry out the assessment on the basis o f
such information as may be determined by a Banking Rule issuedfor this purpose:
Provided that where the approval or exemption, as the case
may be, of a financial holding company or mixed financial holdi ng
company in terms of article 11B and, or Article 21a of the 
CRD,
takes place concurrently with the assessment referred to in thi s
article, the assessment period referred to in this sub-article shall be
suspended for a period exceeding twenty working days until theprocedure set out in article 11B  and, or Article 21a of the 
CRD, is
complete.
(3) The competent authority shall inform the proposed acquirer
 38        CAP. 371. ]                          BANKING
of the date of the expiry of the assessment period at the time of
acknowledging receipt.
(4) The competent authority may, during the assessment period,
if necessary and no later than on the fiftieth working day of s uch
period, request any further information that is necessary tocomplete the assessment. Such a request shall be made in writin g
and shall specify the additional information needed.
(5) During the period between the date of request for additional
information by the competent authority and the receipt of aresponse thereto by the proposed acquirer, the assessment perio d
shall be suspended. The suspension period shall not exceed twen ty
working days. Any further requests by the competent authority f or
completion or clarification of the information shall be at itsdiscretion but shall not result in a suspension of such period.
(6) The competent authority may extend the suspension period
referred to in sub-article (5) up to thirty working days if theproposed acquirer is -
(a) situated or regulated in a third country; or
(b) a person not subject to supervision under -
(i) the 
CRD ;
(ii) Directive 2009/65/EC  of the European
Parliament and of the Council of 13 July 2009on the coordination of laws, regulations andadministrative provisions relating toundertakings for collective investment intransferable securities (UCITS) (recast), asamended from time to time;
(iii)
Directive 2009/138/EC ; or
(iv) MiFID  or MiFIR .
(7) The competent authority shall, upon completion of the
assessment referred to in sub-article (2) and not later than th e date
of the expiry of the assessment period, issue a notice:
(a) granting unconditional approval to the proposed
acquisition;
(b) granting approval to the proposed acquisition subject
to such conditions as the competent authority maydeem appropriate; or
(c) refusing the proposed acquisition.
(8) In making the assessment referred to in sub-article (2), the
competent authority shall neither impose any prior conditions i n
respect of the level of shareholding that must be acquired norexamine the proposed acquisition in terms of the economic needs  of
the market.
(9) In assessing the notification provided for in article 13(1)
and the information referred to in sub-articles (4) and (5) of this
article, the competent authority shall, in order to ensure the sound
and prudent management of the credit institution in which anacquisition is proposed, and having regard to the likely influe nce of
                                 BANKING                   [CAP. 371.       39
the proposed acquirer on the credit institution, assess the sui tability
of the proposed acquirer and the financial soundness of theproposed acquisition in accordance with the following criteria -
(a) the reputation of the proposed acquirer;
(b) the reputation, knowledge, skills and experience, as set
out in article 14(2) and (2A), of any director who willdirect the business of the credit institution as a result of
the proposed acquisition;
(c) the financial soundness of the proposed acquirer, in
particular in relation to the type of business pursuedand envisaged in the credit institution in which theacquisition is proposed;
(d) whether the credit institution will be able to comply
and continue to comply with the prudentialrequirements based on this Act and any regulationsand Banking Rules issued thereunder, on any binding
legal instruments issued under the 
CRD , and on the
CRR , and where applicable, other European Union
laws, in particular Directive 2002/87/EC  of the
European Parliament and of the Council of 16December 2002 on the supplementary supervision ofcredit institutions, insurance undertakings andinvestment firms in a financial conglomerate and
Directive 2009/1 10/EC  of the European Parliament
and of the Council of 16 September 2009 on the takingup, pursuit and prudential supervision of the businessof electronic money institutions, as amended fromtime to time, including whether the group of which itwill become a part has a structure that makes itpossible to exercise effective supervision, effectivelyexchange information among the competent authority
and the overseas regulatory authorities in other MemberStates and determine the allocation of responsibilities
among the competent authority and the overseasregulatory authorities;
(e) whether there are reasonable grounds to suspect that,
in connection with the proposed acquisition, moneylaundering or terrorist financing within the meaning of
Article 1 of 
Directive (EU) 2015/849  is being or has
been committed or attempted, or that the proposedacquisition could increase the risk thereof.
(10) The competent authority may oppose the proposed
acquisition only if there are reasonable grounds for doing so o n the
basis of the criteria set out in sub-article (9) or if the info rmation
provided by the proposed acquirer is incomplete.
(11) If the competent authority, upon completion of the
assessment, decides to oppose the proposed acquisition, it shal l,
within two working days, and not exceeding the assessment perio d,
inform the proposed acquirer in writing specifying the reasons for
such decision. The competent authority may, whether at the requ est
of such proposed acquirer or not, issue a public statement
 40        CAP. 371. ]                          BANKING
indicating such reasons.
(12) If the competent authority does not oppose the proposed
acquisition in writing within the assessment period, such propo sed
acquisition shall be deemed to be approved.
(13) Without prejudice to any other penalty which may be
imposed under this Act, where a qualifying shareholding in a cr edit
institution is acquired notwithstanding the refusal of the comp etent
authority, the exercise of the corresponding voting rights shal l be
suspended and any of the votes cast in contravention of this su b-
article shall be null and void.
(14) The competent authority may fix a maximum period for
concluding the proposed acquisition and extend it whereappropriate.
(15) Notwithstanding the provisions of sub-articles (1) to (6),
where two or more proposals to acquire or increase qualifyingshareholdings in the same credit institution have been notified  to
the competent authority, the latter shall treat the proposed ac quirers
in a non-discriminatory manner.
Co-operation with 
overseas regulatory authorities in the case of  acquisitions.
Added by:
XVII. 2009.18.
Amended by:
LXXI.2021.34.13B. (1) The competent authority shall work in full consultation
with overseas regulatory authorities in other Member States whe n
carrying out the assessment referred to in article 13A(2) if th e
proposed acquirer is one of the following:
(a) a credit institution, assurance undertaking, insurance
undertaking, reinsurance undertaking, investment firmor UCITS management company authorised in anotherMember State or EEA State or in a sector other thanthat in which the acquisition is proposed;
(b) the parent undertaking of a credit institution, assurance
undertaking, insurance undertaking, reinsuranceundertaking, investment firm or UCITS managementcompany authorised in another Member State or EEAState or in a sector other than that in which theacquisition is proposed; or
(c) the person controlling a credit institution, assurance
undertaking, insurance undertaking, reinsuranceundertaking, investment firm or UCITS managementcompany authorised in another Member State or EEAState or in a sector other than that in which theacquisition is proposed.
(2) The competent authority shall, without undue delay,
provide any information which is essential or relevant for theassessment referred to in articl e 13A(2) to the overseas regula tory
authority requesting such information. Upon request, the compet ent
authority shall communicate to the overseas regulatory authorit y all
relevant information and shall communicate on its own initiativ e all
essential information. A decision by the competent authority interms of article 13A shall indicate any views or reservationsexpressed by the overseas regulatory authority responsible for the
proposed acquirer.
                                 BANKING                   [CAP. 371.       41
(3) Where the assessment referred to in article 13A takes place
concurrently with the approval or exemption, as the case may be , of
a financial holding company or mixed financial holding companyin terms of article 11B of this Act and, or Article 21a of the 
CRD,
the competent authority shall coordinate, as appropriate, with the
overseas regulatory authority acting as the consolidating super visor
and, or with the overseas regulatory authority of the Member St ate
where the financial holding company or mixed financial holdingcompany is established, as the case may be.
Mergers, 
reconstructions, divisions and changes in share capital or voting rights.
Added by:
XVII. 2009.18.
Amended by:
X. 2015.18;LXXI.2021.35.13C. (1) Notwithstanding anything contained in any other law
and without prejudice to articles 11B, 13(1) and 13(3) and Article 21a
of the CRD, the consent of the competent authority given in writing
shall be required  before any credit institution may lawfully:
(a) sell or dispose of its business or any significant part
thereof;
(b) merge with any other company, whether a credit
institution or otherwise;
(c) undergo any reconstruction or division; or
(d) increase or reduce its nominal or issued share capital
or effect any material change in the voting rights:
Provided that this will be without prejudice to the
provisions of the CRR  on the conditions for reducing
own funds.
(2) It shall be the duty of all directors and qualifying
shareholders of a credit institution to notify the competentauthority forthwith in writing upon becoming aware that suchcredit institution intends to take any of the actions set out i n sub-
article(1).
(3) Within three months of receipt of such notification or
receipt of such information as the competent authority maylawfully require, whichever is the later, the competent authori ty
shall issue a notice -
(a) granting unconditional consent to the taking of the
action;
(b) granting consent to the taking of the action subject to
such conditions as the competent authority may deemappropriate; or
(c) refusing consent to the taking of the action,
and if it refuses to grant consent it shall inform the person o r the
credit institution concerned in writing of the reason for its r efusal.
(4) If any person or any credit institution takes or decides to
take any action set out in sub-article (1) without obtaining th e
consent of the competent authority, then, without prejudice to any
other penalty which may be imposed under this Act, the competen t
authority shall have the power to make an order:
(a) restraining such person or credit institution from
taking or continuing with such action;
 42        CAP. 371. ]                          BANKING
(b) declaring such action to be void and of no effect;
(c) requiring such person or credit institution to take such
steps as may be necessary to restore the positionexisting immediately before the action was taken;
(d) restraining such person or credit institution from
exercising any rights which such action would, iflawful, have conferred upon them, including the rightto receive any payment or to exercise any voting rightsattaching to the shares acquired;
(e) restraining such person or credit institution from
taking any similar action or any other action within thecategories set out in sub-article (1).
Criteria for 
qualifying holdings.
Added by:
X. 2015.19;
Amended by:
LXXI.2021.36.13D. In determining whether the criteria for a qualifying
shareholding are fulfilled, the voting rights referred to in Ar ticles 9,
10 and 11 of Directive 2004/109/EC and the conditions regarding
aggregation thereof set out in Article 12(4) and (5) of that sa me
Directive, shall be taken into account:
Provided that in determining whether the criteria for a
qualifying shareholding are fulfilled, the competent authority shall
not take into account voting rights or shares which creditinstitutions may hold as a result of providing the underwriting  of
financial instruments on a firm commitments basis in terms of p oint
6 of Section A of Annex 1 to the 
MiFID, provided that those rights
are not exercised or otherwise used to intervene in the managem ent
of the issuer and are disposed of within one year of acquisitio n.
Control of a credit 
institution.
Amended by:
XVII. 2002.170;XX. 2007.96;XVII. 2009.19;X. 2015.20;LXXI.2021.37.14. (1) Any person who is a controller or director of a credit
institution shall be a suitable person to exercise such control .
(2) Credit institutions, financial holding companies and mixed
financial holding companies shall ensure that directors are at all times
of sufficiently good repute and possess sufficient knowledge, s kills
and experience to perform their duties.
(2A)  Directors of credit institutions, financial holding
companies and mixed financial holding companies shall, inparticular, fulfil the following requirements:
(a) all directors shall commit sufficient time to perform
their functions in the credit institution, financialholding company or mixed financial holding company,
as the case may be;
(b) the number of directorships which may be held by a
director at the same time shall take into accountindividual circumstances and the nature, scale andcomplexity of the activities of the credit institution,the financial holding company or the mixed financialholding company, as the case may be: 
       Provided that a director of a credit institution that
is significant in terms of its size, internal organisationand the nature, the scope and the complexity of itsactivities shall, from 1 July 2014, not hold more thanone of the following combinations of directorships at
                                 BANKING                   [CAP. 371.       43
the same time - 
(i) one directorship having an executive role with
two directorships having a non-executive role;
(ii) four directorships having a non-executive role;
(c) for the purposes of paragraph (b), the following shall
count as a single directorship - 
(i) directorships having an executive or non-
executive role held within the same group;
(ii) directorships having an executive or non-
executive role held within –
(aa) institutions which are members of the
same institutional protection schemeprovided that the conditions set out in
Article 113(7) of the 
CRR  are fulfilled; or
(bb) undertakings (including non-financial
entities) in which the credit institution,financial holding company or the mixedfinancial holding company, as the casemay be, holds a qualifying holding.
(3) The following directorships shall not be taken into
consideration for the purposes of sub-article (2A)( b):
(a) directors who are directly or indirectly appointed to
represent the interests of the Government of Malta;and
(b) directors appointed in organisations which do not
pursue predominantly commercial objectives,including directorships in non-profit-making orcharitable organisations.
(4) The competent authority may authorise directors to hold
one additional directorship having a non-executive role. Thecompetent authority shall notify the 
EBA  of such authorisations on
a regular basis.
(5) The board of directors and, where applicable, the management
body, of credit institutions, financial holding companies and m ixed
financial holding companies, shall possess adequate collectiveknowledge, skills and experience to be able to understand the c redit
institution’s activities, including the main risks. The overallcomposition of the board of directors and, where applicable, th e
management body, shall reflect an adequately broad range ofexperience.
(6) Each director of a credit institution, financial holding com pany
and mixed financial holding company shall act with honesty, int egrity
and independence of mind to effectively assess and challenge th e
decisions of the senior management where necessary and toeffectively oversee and monitor management decision-making:
Provided that, where a director is also a member of an
affiliated company or affiliated entity, this shall not in itse lf
constitute an obstacle to acting with independence of mind.
 44        CAP. 371. ]                          BANKING
(7) The directors of a financial holding company or mixed
financial holding company, being a parent to a credit instituti on,
shall be of sufficiently good repute and possess sufficientknowledge skills and experience as referred to in sub-articles (1) to
(6) and any additional requirements as may be specified in a Ba nking
Rule to perform those duties, taking into account the specific role of
a financial holding company or mixed financial holding company,  as
the case may be.
(8) A credit institution, financial holding company and mixed
financial holding company, as the case may be, shall forthwithnotify to the competent authority –
(a) full particulars of all persons who are controllers or
directors of the credit institution, financial holdingcompany and mixed financial holding company, as thecase may be;
(b) full particulars of any person who is proposed to
become a controller or director of the creditinstitution, financial holding company and mixedfinancial holding company, as the case may be;
(c) full particulars of any person who is proposed to cease to
be a controller or director of the credit institution,financial holding company and mixed financial holdingcompany, as the case may be.
(9) A credit institution, financial holding company and mixed
financial holding company shall furnish the competent authority  with
any further information it may require concerning any existing or
proposed controller or director.
(10) If the competent authority is of the opinion that any perso n
who is or is proposed to become a controller or director of a c redit
institution, financial holding company or mixed financial holdi ng
company, as the case may be, is not a suitable person to be acontroller or director, or does not fulfil the requirements set  out in
sub-articles (1) to (6), or any additional requirements as may be
specified in a Banking Rule, the competent authority may give a n
order requiring such a person to cease to be a controller or di rector
or restraining such a person from becoming a controller or dire ctor:
Provided that the competent authority shall in particular verif y
whether the requirements set out in sub-articles (1) to (6) and  any
additional requirements as may be specified in a Banking Rule a re still
fulfilled where they have reasonable grounds to suspect that mo ney
laundering or terrorist financing is being or has been committe d or
attempted, or there is increased risk thereof in connection wit h that
credit institution, financial holding company or mixed financia l
holding company, as the case may be.
(11) For the purposes of this article control includes the power
to determine in any manner the financial and operating policies  of a
body corporate, the power to appoint or remove the majority of the
members of the board of directors or, where applicable, themanagement body, or the power to cast the majority of votes atmeetings of the board of directors or equivalent governing body .
                                 BANKING                   [CAP. 371.       45
(12)  The competent authority may issue, amend or revoke
Banking Rules as may be required in order to better implement t he
provisions of this article.
Prohibited 
transactions.Substituted by:XVII. 2002.171.
Amended by:
IV . 2003.179;XX. 2007.85, 97;L.N. 425 of 2007;XVII. 2009.20;II. 2011.15;X. 2015.21;LXXI.2021.38.15. (1) A credit institution shall not - 
(a) grant any credit facility against the security of its own
shares or against any other securities issued by thecredit institution itself or against any shares or anyother securities of another body corporate in which thecredit institution has control;
(b) grant or permit to be outstanding credit facilities or
extend other banking services, under terms andconditions more favourable than the credit institutionwould have otherwise applied -
(i) to any one of its directors or their spouses
whether jointly or severally, as well as with thirdparties:
    Provided that, in any case where unsecured
credit facilities are granted, these shall not in theaggregate exceed the sum of twenty-threethousand, two hundred and ninety-three euroand seventy-three cents (€23,293.73);
(ii) to any person in whom or in which the credit
institution or any one or more of its directors isinterested as a director, partner, manager, agentor member or to any person of whom or of whichany one or more of the credit institution'sdirectors is a guarantor;
(iii) to any body of persons in which the credit
institution or any one or more of its directorsjointly or severally maintains control, not beingitself a credit institution or the parentundertaking of the credit institution, a subsidiaryof this parent undertaking or a subsidiary of thecredit institution;
and where the competent authority has reason to
believe that such favourable terms and conditions havebeen applied, it shall have the power to require thecredit institution to rectify the position and if the creditinstitution fails to take the necessary action to rectifythe position as required, the competent authority shalltake such measures as it deems appropriate until theposition is rectified;
(c) grant to or permit to be outstanding in respect of any
officer other than a director, or any employee,unsecured credit facilities which in the aggregateexceed twelve months’ emolument of such officer oremployee:
    Provided that the competent authority may by
Banking Rule extend the restrictions listed inparagraphs ( a), (b) and ( c) or any of them to other
 46        CAP. 371. ]                          BANKING
officers, employees or shareholders of credit
institutions or to other categories of persons in suchmanner and to such extent as may be specified;
(d) without the consent of the competent authority acquire
or hold shares in another company which is not acredit institution, which exceeds five per centum ofthat company's issued share capital or any othersubsequent acquisition which exceeds the per centumamount approved by the competent authority;
(e) purchase, acquire or otherwise hold any immovable
property or any right thereon except as may bereasonably necessary for the purpose of conducting itsbusiness or housing or providing amenities for itsstaff:
   Provided that this paragraph shall not prevent a
credit institution -
(i) from letting part of any building which is used
for the purpose of conducting its business; or
(ii) from securing a debt on any immovable property
and, in the event of default in payment of suchdebt, from acquiring or holding such property,for realisation within twelve months, or anylonger period as may be determined by thecompetent authority;
(iii) in other instances from acquiring immovable
property with the prior approval of thecompetent authority the original cost of whichproperty shall not in the aggregate exceed fiveper centum of the credit institution’s own funds.
(2) In sub-article (1)( b) and ( c) the expression "unsecured
credit facilities" shall mean credit facilities made without se curity
or, in respect of any credit facility made with security, any p art
thereof which at any time exceeds the market value of the asset s
constituting that security, or where the competent authority issatisfied that there is no established market value, on the bas is of a
valuation approved by the competent authority itself.
Supervision on a 
consolidated basis.
Added by:
XVII. 2002.172.
Amended by:
XX. 2007.85.15A. (Deleted by Act X. 2015 .22).
Large exposures.
Amended by:
XX. 2007.85.16. (Deleted by Act X. 2015 .23).
Own funds.
Added by:
XVII. 2002.173.
Amended by:
XX. 2007.85, 98;XVII. 2009.21;XX. 2013.61.16A. (Deleted by Act X. 2015 .24).
                                 BANKING                   [CAP. 371.       47
Capital buffers.
Added by:
X. 2015.25.16B. The competent authority shall issue a Banking Rule as it
shall consider appropriate for the regulation of capital buffer s.
Capital adequacy.
Amended by:
XVII. 2002.174;XX. 2007.85, 99;III. 2009.19;XVII. 2009.22;II. 2011.16;XX. 2013.62.17. (Deleted by Act X. 2015 .26). 
Measures aimed at 
addressing credit risks.
Added by:
XVII. 2002.175.
Amended by:
XX. 2007.85, 100.Substituted by:XVII. 2009.23.
Amended by:
II. 2011.17.Substituted by:X. 2015.27.17A. The competent authority may issue a Banking Rule as it
considers appropriate for the implementation of measures aimed at
addressing credit risks arising from the assessment of the qual ity of
a credit institution’s asset portfolio.
Internal 
governance and recovery and resolution plans.
Added by:
XX. 2007.101.
Amended by:
III. 2009.20;II. 2011.18;X. 2015.28;XXI. 2015.22;XXVI.2019.8;LXXI.2021.39.17B. (1) Every credit institution shall put in place robust
governance arrangements which include a clear organisationalstructure with well defined, transparent and consistent lines o f
responsibility, effective processes to identify, manage, monito r and
report the risks it is or might be exposed to, adequate internal control
mechanisms including sound administrative and accountingprocedures, and remuneration policies and practices that areconsistent with and promote sound and effective risk management :
Provided that such remuneration policies and practices
shall be gender neutral.
(2) The arrangements, processes and mechanisms referred to in
sub-article (1), shall be comprehensive and proportionate to th e
nature, scale and complexity of the risks inherent in the busin ess
model and the credit institution’s activities. Credit instituti ons shall
take into account the technical criteria laid down in a BankingRule.
(3) Every credit institution shall also ensure that its internal
control mechanisms and administrative and accounting procedurespermit the checking of compliance with the rules adopted inaccordance with the provisions of this Act and any regulations made
and, or Banking Rules and, or Conduct of Business Rules issued
thereunder, with any binding legal instruments issued under the  
CRD,
and with the CRR  at all times.
(4) Deleted by Act XXVI.2019. 8.
(5) A credit institution shall cooperate closely with the
Resolution Committee established under the Malta Financial
Services Authority Act, and with any relevant European Resolution
Authorities or Third-Country Resolution Authorities and shall p rovide
them with all information necessary for the preparation anddrafting of a viable resolution plan setting out options for th e
orderly resolution of the credit institution in the case of fai lure, in
accordance with the principle of proportionality.
 48        CAP. 371. ]                          BANKING
Credit institutions’ 
internal capital adequacy assessment process.
Added by:
XX. 2007.101.
Amended by:
II. 2011.19.17C.  All credit institutions shall have in place sound, effective
and complete strategies and processes to assess and maintain on  an
on-going basis, the amounts, types and distribution of internalcapital that they consider adequate to cover the nature and lev el of
risks to which they are or might be exposed. These strategies a nd
processes shall be subject to regular internal review to ensure  that
they remain comprehensive and proportionate to the nature, scal e
and complexity of the activities of the credit institution conc erned.
The competent authority shall issue a Banking Rule providing fo r,
inter alia  the internal capital adequacy assessment process that has
to be maintained by credit institutions in relation to their ri sk
profile.
Supervisory review 
and evaluation process.
Added by:
XX. 2007.101.
Amended by:
II. 2011.20.17D. (Deleted by Act X. 2015 .29).
Transactions with 
parent mixed activity holding companies and their subsidiaries.
Added by:
LXXI.2021.40.
S.L. 371.16.17DA.  Credit institutions shall have in place adequate risk
management processes and internal control mechanisms, inaccordance with the 
Banking Act (Supervisory Review)
Regulations and as may be prescribed from time to time in a
Banking Rule, including sound reporting and accountingprocedures in order to identify, measure, monitor and controltransactions with their parent mixed activity holding company a nd
its subsidiaries appropriately. Credit institutions shall repor t any
significant transaction with those entities other than the onereferred to in Article 394 of the 
CRR :
Provided that those procedures and significant transactions
shall be subject to overview by the competent authority.
Supervisory 
measures.
Added by:
X. 2015.30.
Amended by:
LXXI.2021.41.17E. (1) The competent authority shall require a credit
institution to take the necessary measures at an early stage toaddress relevant problems in circumstances where -
(a) the credit institution does not meet the requirements of
this Act or any regulations made or Banking Rules issuedthereunder, of any binding legal instruments issued underthe 
CRD  or of the CRR ;
(b) the competent authority has evidence that the credit
institution is likely to breach this Act or any regulations
made or Banking Rules issued thereunder, any bindinglegal instruments issued under the 
CRD  or the provisions
of the CRR , within the following twelve months.
S.L. 371.16(2) For the purposes of sub-article (1), the powers of the
competent authority shall include the supervisory powers referr ed
to in regulation 9 of the Banking Act (Supervisory Review)
Regulations .
(3) The competent authority shall apply supervisory measures
in accordance with the level of application of the requirements  of
Part One, Title II of the CRR .
                                 BANKING                   [CAP. 371.       49
Liquidity.
Amended by:
XVII. 2002.176;XX. 2007.85, 102.18. The competent authority may issue a Banking Rule
specifying what shall constitute the specified liquid assets an d the
deposit liabilities of a credit institution and laying down theminimum holding of specified assets as a proportion of depositliabilities which a credit institution must hold. 
Information to be 
submitted to the competent authority and the Central Bank.
Amended by:
XVII. 2002.177;XX. 2007.85, 103;XVII. 2009.24;II. 2011.21;X. 2015.31;LXXI.2021.42.19. (1) A credit institution shall submit to the competent
authority - 
(a) periodic statements showing its assets and liabilities
and profit and loss position on an individual and,where appropriate, on a consolidated basis includinganalysis thereof;
(b) such information as is required by the competent
authority for prudential supervision, conduct supervision
and, or statistical purposes;
(c) all the information necessary for the assessment of its
compliance with this Act and any regulations made and,or Banking Rules and, or Conduct of Business Rulesissued thereunder, with any binding legal instrumentsissued under the 
CRD , and with the CRR , as the
competent authority may require;
(d) such separate statements relating to its offices and
branches outside Malta in such form and at such timesas the competent authority may require in thedischarge of its duties.
(1A) A financial holding company and a mixed financial holding
company shall submit to the competent authority all the informa tion
necessary for the assessment of its compliance with this Act an d any
regulations made or Banking Rules issued thereunder, with any b inding
legal instruments issued under the 
CRD, and with the CRR, as the
competent authority may require.
(2) A credit institution shall submit to the Central Bank such
information as the Central Bank may require in the discharge of  its
duties and the Central Bank may enquire into and ask forclarification of any information so submitted.
(3) A credit institution shall register all its transactions and
document systems and processes, which are subject to this Act a nd any
regulations made and, or Banking Rules and, or Conduct of Busin ess
Rules issued thereunder, to any binding legal instruments issue d under
the 
CRD , and to the CRR , in such a manner that the competent authority
may be able to verify compliance with the requirements of the CRR, of
any binding legal instruments issued under the CRD, of this Act and of
any regulations made or Banking Rules and, or Conduct of Busine ss
Rules issued thereunder at all times.
(4) Without prejudice to article 11A, the provisions of this art icle
shall also apply to all branches, agencies or representative offices in
Malta of a credit institution which is not licensed in Malta.
(5) All statements required under sub-article (1) shall be
submitted in such form and at such periods as the comp etent
authority may from time to time prescribe by a Banking Rule and , or
as may be prescribed in any applicable binding legal instrument .
 50        CAP. 371. ]                          BANKING
(6) All statements and other information furnished by any
credit institution, financial holding company and mixed financi al
holding company, as the case may be, under sub-articles (1), (1 A) and
(2) shall, unless otherwise provided in this Act or in any othe r law, be
regarded as secret and confidential except as between that cred it
institution, financial holding company or mixed financial holdi ng
company, as the case may be, and the competent authority or theCentral Bank as the case may be save that the competent authori ty
shall furnish such information under this article as may be req uired
by the Minister or the Central Bank and shall inform the Minist er
and the Central Bank if at any time in its opinion there is con cern
regarding the state of affairs of that credit institution.
Outsourcing 
service providers.
Added by:
XX. 2007.104.
Amended by:
II. 2011.22;XXVI.2019.9;LXXI.2021.43.19A. (1) Where a credit institution intends to outsource its
material services or activities, it shall first inform the comp etent
authority accordingly.
(2) The competent authority may issue a Banking Rule laying
down what constitutes material services or activities, the requ irements
for the information to be submitted regarding the outsourcing s ervice
provider  and the provision of such outsourced services.
Access to accounts 
maintained with a credit institution.
Added by:
XXVI.2019.9.19B.  (1) Credit institutions shall grant payment institutions,
electronic money institutions and account information serviceproviders access to a credit institution’s payment account serv ices on
an objective, non-discriminatory and proportionate basis.
(2) The access referred to in sub-article (1) shall be sufficien tly
extensive as to allow payment institutions, electronic moneyinstitutions and account information service providers to provi de
payment services in an unhindered and efficient manner.
(3) In the event that a credit institution does not allow a
payment institution, an electronic money institution, or an acc ount
information service provider, to have access to the credit inst itution’s
payment account services, such institution shall provide the co mpetent
authority with duly motivated reasons for any such rejection.
(4) The competent authority shall, in case of an event as
referred to in sub-article (3), notify the Central Bank of said  event
together with the reasons provided by the credit institution, w ithout
undue delay.
Management of 
operational and security risks.
Added by:
XXVI.2019.9.19C. (1) Credit institutions shall establish a framework with
appropriate mitigation measures and control mechanisms to manag e
the operational and security risks, relating to the payment ser vices they
provide. As part of that framework, credit institutions shall e stablish
and maintain effective incident management procedures, includin g for
the detection and classification of major operational and secur ity
incidents.
(2) Credit institutions shall provide to the Central Bank on an
annual basis or at shorter intervals, as may be determined by t he
                                 BANKING                   [CAP. 371.       51
competent authority in co-operation with the Central Bank, an u pdated
and comprehensive assessment of the operational and security ri sks
relating to the payment services they provide and on the adequa cy of
the mitigation measures and control mechanisms implemented inresponse to those risks.
(3) The competent authority shall co-operate with the Central
Bank in the assessment and processing of documents referred to in
sub-article (2).
(4) The competent authority may issue, amend or revoke
Banking Rules as may be required in order to better implement t he
provisions of this article.
Incident reporting.
Added by:
XXVI.2019.9.19D. (1) In case of a major operational or security incident as
referred to in article 19C and where Malta is the home Member S tate,
credit institutions shall, without undue delay, notify the Cent ral Bank.
Upon receipt of such notification, the Central Bank shall promp tly
notify the competent authority.
(2) Where the incident has or may have an impact on the
financial interests of its payment service users, the credit in stitution
concerned shall, without undue delay, inform its payment servic e users
of the incident and of all the measures that they can take to m itigate the
adverse effects of the incident.
(3) Upon receipt of the notification referred to in sub-article (1),
the Central Bank shall, in co-operation with the competent auth ority,
assess the relevance of the incident to the relevant authoritie s in Malta,
and notify any such authorities accordingly.
(4) The competent authority shall, in co-operation with the
Central Bank, co-operate with the EBA and the ECB for the purposes
of assessing  the relevance of the incident and informing other relevant
European Union and national authorities in accordance with Arti cle
96(2) of the Payment Services Directive .
(5) Where the competent authority receives a notification of a
major operational or security incident in accordance with sub-a rticle
(1), it shall where appropriate, upon the basis of that notific ation and
in co-operation with the Central Bank, take all the necessary m easures
to protect the immediate safety of the financial system.
(6) Credit institutions shall, at least on an annual basis, prov ide
to the Central Bank statistical data on fraud relating to diffe rent means
of payment.
(7) The competent authority may issue, amend or revoke any
Banking Rules as may be require d to better implement the provis ions
of this article.
 52        CAP. 371. ]                          BANKING
Cap. 376. (8) For the purposes of this article, the terms "home Member
State" and "host Member State" shall have the same meaning as t hat
assigned to them under article 2(1) of the Financial Institutions Act.
Supervision of 
credit institutions.
Amended by:
XVII. 2002.178;XX. 2007.105;XVII. 2009.25;II. 2011.23;X. 2015.32;LXXI.2021.44.20. (1) Every credit institution licensed in terms of this Act, and
where applicable, a financial holding company or a mixed financ ial
holding company, shall submit to the competent authority anyinformation which it may reasonably require in the exercise of its
duties under this Act or any regulations made or Banking Rules or
Conduct of Business Rules issued thereunder, the 
CRR  or any binding
legal instruments issued under the CRD, and the competent authority
may enquire into and ask for clarification of any information s o
submitted.
(2) Any request for information or for clarification thereof
under this article shall be made by notice in writing and shallrequire the recipient to provide the information at such time o r
times or at such intervals or in respect of such period or peri ods as
may be specified by the notice.
(3) Further, the competent authority may -
(a) by notice in writing served on a credit institution, a
financial holding company or a mixed financial holdingcompany, require the credit institution, financial holdingcompany or mixed financial holding company, as the casemay be, to provide a report by an accountant or other
person with relevant professional skill on, or on anyaspect of, any matter about which the competentauthority has required or could require the credit
institution, financial holding company or mixed financialholding company, as the case may be, to provideinformation under sub-article (1);
(b) by notice in writing served on a credit institution, a
financial holding company or a mixed financial holdingcompany, require the credit institution, financial holdingcompany or mixed financial holding company, as the casemay be, to produce within such time and at such place as
may be specified in that notice, such document ordocuments of such description as may be so specifiedin the notice;
(c) authorise an officer, servant or agent of the competent
authority, on producing evidence of his authority, torequire any credit institution, financial holding companyor mixed financial holding company, to provide himforthwith with such information, or to produce to him
forthwith such documents, as he may specify, beingsuch information or documents as the competentauthority may reasonably require for the performanceof its functions under this Act or any regulations made
or Banking Rules or Conduct of Business Rules issuedthereunder.
(4) The accountant or other person appointed by a credit
institution, a financial holding company or a mixed financial h olding
                                 BANKING                   [CAP. 371.       53
company to make any report required under sub-article (3)( a) shall
be a person nominated or approved by the competent authority; a nd
the competent authority may require the report to be in such fo rm
as is specified in the notice.
(5) Where, by virtue of sub-article (3), any person has power to
require the production of any documents from a credit instituti on, a
financial holding company or a mixed financial holding company,  that
person shall have the same power to require the production of t hose
documents from any person who appears to be in possession ofthem.
(6) The power under this article to r equire a credit institution, a
financial holding company or a mixed financial holding company,  or
any other person to produce any documents includes the power -
(a) if the documents are produced, to take copies of them
or extracts from them and to require the credit
institution, financial holding company, mixed financialholding company, or person concerned, or any otherperson who is a present or past officer of, or is or was
at any time employed by or acting as an employee of,
the credit institution, financial holding company andmixed financial holding company in question, to provide
an explanation of any of them; and
(b) if the documents are not produced, to require the
person who was required to produce them to state, tothe best of his knowledge and belief, where they are.
(7) If it appears to the competent authority to be desirable in
the interests of the depositors or potential depositors of a cr edit
institution to do so, or if otherwise required to fulfil its su pervisory
responsibilities, it may also exercise the powers conferred by sub-
articles (1) and (3) in relation to any person who is or has at  any
relevant time been -
(a) a holding company, subsidiary or a company which is
a connected person of that credit institution;
(b) a subsidiary or a person which is a company connected
to a holding company of that credit institution;
(c) a holding company of a subsidiary of that credit
institution; or
(d) a controller of that credit institution; or
(e) an outsourcing service provider of that credit
institution.
(8) The competent authority may by notice in writing served on
any person who is or is to be an officer of a credit institutio n,
financial holding company or mixed financial holding company, a s the
case may be, require him to furnish, within such time as may bespecified in the notice, such information or documents as thecompetent authority may reasonably require for determiningwhether he is a suitable person to hold the particular position  which
he holds or is to hold.
(9) The competent authority may exercise the powers conferred
 54        CAP. 371. ]                          BANKING
by sub-articles (1) and (3) in relation to any person who has a
qualifying shareholding in a credit institution, financial hold ing
company or mixed financial holding company, if it considers tha t the
exercise of those powers is desirable in the interests of thedepositors or potential depositors of that credit institution.
(10) A statement made by a person in compliance with a
requirement imposed by virtue of this article may be used inevidence against him.
(11) The competent authority shall have the power to recover
from a credit institution, financial holding company or mixed f inancial
holding company reported on under sub-article (3) the costs andexpenses incurred in relation to such report.
Right of entry to 
obtain information and documents.
Amended by:
X. 2015.33.21. (1) Any officer, employee, agent or inspector of the
competent authority may, on producing, if required, evidence of  his
authority -
(a) enter any premises occupied by a person on whom a
notice has been served under article 20 above or article22 below for the purpose of obtaining there theinformation or documents required by that notice;
(b) enter any premises occupied by any person on whom a
notice could be served under article 20 above or article22 below for the purpose of obtaining there suchinformation or documents as are specified in theauthority, being information or documents that couldhave been required by such a notice; but the competentauthority shall not authorise any person to act underthis paragraph unless it has reasonable cause to believethat if such a notice were served it would not becomplied with or that any documents to which it wouldrelate would be removed, tampered with or destroyed:
Provided that where an entry as is mentioned in this sub-
article involves premises that are occupied for the purposes ofhabitation, such entry shall be carried out in the presence of an
officer of the Police of a rank not below that of inspector and  shall
moreover not take place between nine in the evening and five in  the
morning.
(2) No person shall intentionally obstruct a person exercising
rights conferred by this article.
Investigations.
Amended by:
XVII. 2002.179;XX. 2007.106;XVII. 2009.26;II. 2011.24;X. 2015.34;LXXI.2021.45.22. (1) If it appears to the competent authority desirable to do
so in the interests of the depositors or potential depositors o f a
credit institution, or if otherwise required to fulfil its supe rvisory
responsibilities, it may appoint one or more competent persons,  as
inspectors, to investigate and report on -
(a) the nature, conduct or state of the credit institution’s
business or any particular aspect of it, or
(b) the ownership or control of the credit institution,
and the competent authority shall give written notice of any su ch
appointment to the credit institution concerned.
                                 BANKING                   [CAP. 371.       55
(2) If a person appointed under sub-article (1) thinks it
necessary for the purposes of his investigation, he may alsoinvestigate the business of any person who is or has at any rel evant
time been - 
(a) a holding company, subsidiary or a company which is
a connected person of the credit institution underinvestigation;
(b) a subsidiary or a company which is a connected person
of a holding company of that credit institution;
(c) a holding company of a subsidiary of that credit
institution; or
(d) a controller of that credit institution; or
(e) an outsourcing service provider of that credit
institution.
(3) The competent authority may exercise the powers conferred
by sub-article (1) in relation to any person who has a qualifyi ng
shareholding in a credit institution if it considers that the e xercise
of those powers is desirable in the interests of the depositors  or
potential depositors of that credit institution.
(4) Where a person appointed under sub-article (1) decides to
investigate the business of any person by virtue of sub-article  (2) or
sub-article (3) he shall inform that person by notice in writin g.
(5) It shall be the duty of every person who is or was an office r,
employee, agent, banker or auditor of a body which is underinvestigation under this Act and any regulations made and, or B anking
Rules and, or Conduct of Business Rules issued thereunder, or a ny
person appointed to make a report in respect of that body under  this
Act and any regulations made and, or Banking Rules and, or Cond uct
of Business Rules issued thereunder and anyone who has a qualif ying
shareholding in, or is a controller of, that body -
(a) to produce to the persons appointed under sub-article
(1), within such time and at such place as they mayrequire, all documents relating to the body concernedwhich are in his custody or power;
(b) to attend before the persons so appointed at such time
and place as they may require; and
(c) otherwise to give those persons all assistance in
connection with the investigation which he isreasonably able to give, 
and those persons may take copies of or extracts from any
documents produced to them under paragraph ( a) above.
(6) A person exercising powers by virtue of an appointment
under this article shall, if so required, produce evidence of h is
authority.
(7) No person shall -
(a) without lawful excuse fail to produce any documents
which it is his duty to produce under sub-article (5);
 56        CAP. 371. ]                          BANKING
(b) without lawful excuse fail to attend before the persons
appointed under sub-article (1) when required to do so;or
(c) without lawful excuse fail to answer any question
which is put to him by persons so appointed withrespect to any credit institution which is underinvestigation or a body which is being investigated byvirtue of sub-article (2) or (3).
(8) A statement made by a person in compliance with a
requirement imposed by virtue of this article may be used inevidence against him.
(9) The competent authority shall have the power to recover
from a credit institution reported on under sub-article (1) the  costs
and expenses incurred in relation to such report.
(10) For the purposes of this article, reference to a credit
institution shall include reference to persons appearing to becarrying out the business of banking.
Suspected 
breaches.
Amended by:
XX. 2007.107;II. 2011.25;X. 2015.35;XXVI.2019.11;LXXI.2021.46.23. (1) Where the competent authority has reasonable grounds
for suspecting that a person has contravened or has failed to c omply
with any provision of this Act or any regulations made or Banki ng
Rules or Conduct of Business Rules issued thereunder, it may bynotice in writing require that person or any other person -
(a) to provide at such place as may be specified in the
notice and either forthwith or at such time as may beso specified, such information as it may reasonablyrequire for the purpose of investigating the suspectedcontravention or failure to comply;
(b) to produce, at such place as may be specified in the
notice and either forthwith or at such time as may beso specified, such documents, or documents of suchdescription as may be specified which it mayreasonably require for that purpose;
(c) to attend at such place and time as may be specified in
the notice, and answer questions relevant fordetermining whether such a contravention or failure tocomply has occurred.
(2) The competent authority or their duly authorised officer,
employee or agent may take copies of or extracts from anydocuments produced under this article.
(3) Any officer, employee or agent of the competent authority
may, between five o'clock in the morning and nine o'clock at ni ght,
on producing if required evidence of his authority, enter anypremises occupied by a person on whom a notice has been servedunder sub-article (1) for the purpose of obtaining there theinformation or documents required by the notice, putting thequestions referred to in paragraph ( c) of that sub-article or
exercising the powers conferred by sub-article (2).
(4) No person shall without lawful excuse fail to comply with a
requirement imposed on him under this article or intentionally
                                 BANKING                   [CAP. 371.       57
obstruct a person in the exercise of the rights conferred by su b-
article (3).
(5) A statement made by a person in compliance with a
requirement imposed by virtue of this article may be used inevidence against him.
Obstruction.
Amended by:
XX. 2007.108;XXVI.2019.12.24. No person who knows or suspects that an investigation is
being or is likely to be carried out -
(a) under article 20, article 22 or article 23; or
(b) into the suspected commission of any breach under this
Act,
may falsify, conceal, destroy or otherwise dispose of, or cause  or
permit the falsification, concealment, destruction or disposal of,
documents which he knows or suspects are or would be relevant t o
such an investigation unless he proves that he had no intention  of
concealing facts disclosed by the documents from persons carryi ng
out such an investigation.
Co-operation, 
sharing and transmission of information.
Amended by:
XVII. 2002.180;IV . 2003.180;XX. 2007.109;XVII. 2009.27;II. 2011.26;XX. 2013.63;X. 2015.36;XXVI.2019.13;LXXI.2021.47;
LXXII.2021.32 .25. (1) On the basis of Malta’s international commitments, the
competent authority may share its supervisory duties with overs eas
regulatory authorities in the case of a credit institution lice nsed in
terms of this Act and operating in the country of such overseasregulatory authority or a branch established in Malta and havin g its
head office in another Member State.
(2) The competent authority may further, on the basis of Malta’s
international commitments, exchange information with overseasregulatory authorities in other Member States or transmit infor mation to
the 
ESRB, the EBA or the European Securities and Markets Authority
established by Regulation (EU) No. 1095/2010, in accordance with
this Act and any regulations made and Banking Rules issued ther eunder
transposing the CRD, with any binding legal instruments issued under
the CRD, with the CRR, with Regulation (EU) 2019/2033, with
Article 15 of Regulation (EU) No. 1092/2010, with Articles 31, 35
and 36 of Regulation (EU) No. 1093/2010 , with Articles 31 and 36 of
Regulation (EU) No. 1095/2010, with Directive (EU) 2019/2034 and
with other Directives applicable to credit institutions. Such i nformation
shall be subject to professional secrecy provided for under thi s Act and
any regulations issued thereunder.
(2A)  Notwithstanding article 17(1) of the Malta Financial
Services Authority Act and articles 19(6), 34(2), 34(4) and 34(7), the
competent authority may also, subject to the conditions set out  in sub-
articles (2B) and (4A), transmit or share certain information w ith the
following:
(a) the International Monetary Fund and the World Bank,
for the purposes of assessments for the FinancialSector Assessment Program;
(b) the Bank for International Settlements, for the
purposes of quantitative impact studies;
(c) the Financial Stability Board, for the purposes of its
 58        CAP. 371. ]                          BANKING
surveillance function:
Provided that where the disclosure of information in terms
of this sub-article involves the processing of personal data, a ny
processing of personal data will be in accordance with therequirements laid down in the 
GDPR .
(2B) The competent authority may only share confidential
information with the international bodies referred to in sub-ar ticle
(2A) following an explicit request and where at least the follo wing
conditions are met:
(a) the request is duly justified in light of the specific
tasks performed by the requesting body in accordancewith its statutory mandate; 
(b) the request is sufficiently precise as to the nature,
scope and format of the required information, and themeans of its disclosure or transmission;
(c) the requested information is strictly necessary for the
performance of the specific tasks of the requestingbody and does not go beyond the statutory tasksconferred on the requesting body;
(d) the information is transmitted or disclosed exclusively
to the persons directly involved in the performance ofthe specific task;
(e) the persons having access to the information are
subject to professional secrecy requirements at leastequivalent to those referred to in article 34(4).
Cap. 330. (3) Notwithstanding article 17(1) of the Malta Financial Services
Authority Act and articles 19(6) and 34(2), the competent authority
may also conclude cooperation agreements, providing for exchang es
of information, with third country overseas regulatory authorit ies
or with authorities or bodies of third countries in accordance with
sub-articles (7) and (8), only if the information disclosed is subject
to a guarantee that professional secrecy requirements at leastequivalent to those referred to in article 34(4) are complied with:
Provided that such exchange of information shall be for the
purpose of performing the supervisory tasks of the authorities or
bodies mentioned in this sub-article:
Provided further that where the information originates in
another Member State, it shall only be disclosed with the expre ss
agreement of the overseas authority which has disclosed it, and  where
appropriate, solely for the pu rposes for which the overseas authority
gave its agreement.
(4) The competent authority may disclose information under
the provisions of sub-article (2) only to the extent that the authorities
receiving the information restrict its use for supervisory andregulatory purposes or for such other purposes as may specifica lly
be agreed upon with the competent authority.
(4A)  Where a request is made by any of the entities referred to
                                 BANKING                   [CAP. 371.       59
in sub-article (2A), the competent authority may only transmit
aggregate or anonymised information and may only share otherinformation at the premises of the competent authority.
(5) The competent authority may further, on the basis of
international agreements, or upon reciprocity agreements, autho rise
overseas regulatory authorities to carry out themselves, or thr ough
the intermediation of competent persons they appoint, on-siteinspections for supervisory and regulatory purposes in branches  or
subsidiaries of credit institutions having their head office in  the
country of the overseas regulatory authority making the inspect ion:
S.L. 371.11Provided that on-the-spot checking and inspection of
branches established in Malta of credit institutions authorised  in
another Member State, shall be carried out in accordance with t he
European Passport Rights for Credit Institutions Regulations .
(6) Nothing in this Act or in any other law shall prevent the
competent authority from transmitting information to the follow ing
for the purposes of their tasks -
(a) the Central Bank, ESCB central banks and other
bodies with a similar function in their capacity asmonetary authorities when the information is relevantfor the exercise of their respective statutory tasks,including the conduct of monetary policy and relatedliquidity provision, oversight of payments, clearingand settlement systems and the safeguarding ofstability of the financial system;
(b) contractual or institutional protection schemes as
referred to in Article 113(7) of the 
CRR ;
(c) where appropriate, other public authorities responsible
for overseeing payment systems;
(d) the ESRB , the European Insurance and Occupational
Pensions Authority established by Regulation (EU)
No. 1094/2010  and the European Securities and
Markets Authority established by Regulation (EU) No.
1095/2010 , where that information is relevant for the
exercise of their tasks under Regulations (EU) No.1092/2010, (EU) No. 1094/2010 or (EU) No. 1095/2010:
Provided that the competent authority shall take the
appropriate measures to remove obstacles preventing it fromtransmitting information in accordance with this sub-article:
Provided further that information received in accordance
with this sub-article shall be subject to professional secrecyrequirements at least equivalent to those referred to in article 34(4):
Provided further that in an emergency situation, including a
situation as described in Article 18 of 
Regulation (EU) No. 1093/
2010 or a situation of adverse developments in markets arises,
which potentially jeopardises the market liquidity and the stab ility
of the financial system, the competent authority shall communic ate
without delay information to the ESCB central banks where that
 60        CAP. 371. ]                          BANKING
information is relevant for the exercise of their statutory tas ks,
including the conduct of monetary policy and related liquidityprovision, the oversight of payments, clearing and settlementsystems, and to the 
ESRB where such information is relevant for
the exercise of its statutory tasks.
Cap. 330. (7) The provisions of article 17(1) of the Malta Financial
Services Authority Act and of article 34(2), (4) and (7) shall not
preclude the exchange of information between the competentauthority and other authorities in Malta; between the competentauthority and overseas regulatory authorities in other MemberStates; or between the competent authority and the following, i n the
discharge of their supervisory functions -
(a) authorities entrusted with the public duty of
supervising other financial sector entities and theauthorities responsible for the supervision of financialmarkets;
(b) authorities or bodies charged with responsibility for
maintaining the stability of the financial system inMember States through the use of macro-prudentialrules;
(c) reorganisation bodies or authorities aiming at
protecting the stability of the financial system;
(d) contractual or institutional protection schemes as
referred to in Article 113(7) of the 
CRR ;
(e) bodies involved in the liquidation and bankruptcy of
institutions and in other similar procedures;
(f) persons responsible for carrying out statutory audits of
the accounts of institutions, insurance undertakingsand financial institutions;
(
g) authorities responsible for supervising the obliged
entities listed in points (1) and (2) of Article 2(1) of
Directive (EU) 2015/849  for compliance with that
Directive, and financial intelligence units in otherMember States;
(h) authorities or bodies responsible for the application of
rules on structural separation within a banking group;
Provided that the provisions of article 34(4) and (7) shall
not preclude the disclosure to bodies which administer deposit-guarantee schemes and investor compensation schemes ofinformation necessary for the exercise of their functions:
Provided further that the information received shall in any
event be subject to professional secrecy requirements at leastequivalent to those referred to in article 34(4).
Cap. 330. (8) Notwithstanding article 17(1) of the Malta Financial Services
Authority Act, the provisions of sub-articles (2) and (3) and of articles
19(6), 34(2), 34(4), 34(5) and 34(7), the competent authority s hall
exchange information with the authorities responsible foroverseeing -
(a) the bodies involved in the liquidation and bankruptcy
                                 BANKING                   [CAP. 371.       61
of institutions and in other similar procedures;
(b) contractual or institutional protection schemes as
referred to in Article 113(7) of the CRR ;
(c) persons charged with carrying out statutory audits of
the accounts of institutions, insurance undertakingsand financial institutions:
Provided that in the cases referred to in this sub-article, the
competent authority shall require fulfilment of at least thefollowing conditions: 
(i) that the information is exchanged for the
purpose of performing the tasks referred to inthis sub-article;
(ii) that the information received is subject to
professional secrecy requirements at leastequivalent to those referred to in article 34(4);
(iii) where the information originates in another
Member State, that it is not disclosed without theexpress agreement of the overseas regulatoryauthorities which have disclosed it and, whereappropriate, solely for the purposes for whichthose authorities gave their agreement:
Provided further that where the authorities or bodies
referred to in this sub-article perform their task of detection  or
investigation through the assistance of persons appointed for t hat
purpose in view of their specific competence and not employed i n
the public sector, the competent authority may exchangeinformation with the authorities or bodies responsible under th e law
for the detection and investigation of breaches of company law,  to
such persons, and shall require the fulfilment of at least thefollowing conditions:
(i) that the information is exchanged for the
purpose of detecting and investigating breachesof company law;
(ii) that the information received is subject to
professional secrecy requirements at leastequivalent to those referred to in article 34(4);
(iii) where the information originates in another
Member State, that it is not disclosed without theexpress agreement of the overseas regulatoryauthorities which have disclosed it and, whereappropriate, solely for the purposes for whichthose authorities gave their agreement.
Cap. 330. (9) Notwithstanding article 17(1) of the Malta Financial Services
Authority Act and the provisions of articles 19(6), 34(4) and 34(7),
the competent authority may aut horise the disclosure of certain
information to other government departments of other MemberStates’ central government administrations responsible forlegislation on the supervision of institutions, financial insti tutions
and insurance undertakings and to inspectors acting on behalf o f
those departments:
 62        CAP. 371. ]                          BANKING
Provided that such disclosures may be made only where
necessary for reasons of prudential supervision and prevention and
resolution of failing credit institutions. Without prejudice to  sub-
article (10), persons having access to the information shall besubject to professional secrecy requirements at least equivalen t to
those referred to in article 34(4):
Provided further that in an emergency situation, including a
situation as described in Article 18 of 
Regulation (EU) No. 1093/
2010 or a situation of adverse developments in markets arises,
which potentially jeopardises the market liquidity and the stab ility
of the financial system, the competent authority may discloseinformation which is relevant to the departments referred to in  this
sub-article in all Member States concerned.
(9A)  The competent authority shall communicate to the 
EBA  the
names of the authorities or bodies that may receive information  as
described in sub-articles (8) and (9).
(9B) In order to implement sub-article (9), the authorities or b odies
referred to in sub-article (8), shall communicate to the compet ent
authority which disclosed the information, the names andresponsibilities of the persons to whom it is to be sent.
Cap. 330. (10) Notwithstanding article 17(1) of the Malta Financial Services
Authority Act, and the provisions of articles 19(6), 34(4) and 34(7),
the competent authority may disclose certain information relati ng to
the prudential supervision of credit institutions to parliament ary
enquiry committees, courts of auditors and other entities in ch arge
of enquiries in Malta, under the following conditions -
(a) that the entities have a precise mandate under Maltese
law to investigate or scrutinise the actions of thecompetent authority or for laws on the supervision ofcredit institutions;
(b) that the information is strictly necessary for fulfilling
the mandate referred to in paragraph ( a);
(c) the persons with access to the information are subject
to professional secrecy requirements at leastequivalent to those referred to in article 34(4);
(d) where the information originates in another Member
State, such information shall not be disclosed withoutthe express agreement of the overseas regulatoryauthorities which have disclosed it and, solely for thepurposes for which those overseas regulatoryauthorities gave their agreement:
Provided that where the disclosure of information relating
to prudential supervision involves the processing of personal d ata,
any processing by the entities referred to in this sub-article shall
comply with any applicable data protection legislation.
(11) The competent authority shall not disclose in terms of sub-
articles (9) and (10), any information received under Article 5 2,
Article 53(2) and Article 56 of the 
CRD, except with the express
consent of the overseas regulatory authority of the Member Stat e in
which such an on-the-spot check or inspection was carried out o r of
                                 BANKING                   [CAP. 371.       63
the overseas regulatory authority of the Member State which
disclosed such information.
Cap. 330. (12) Notwithstanding article 17(1) of the Malta Financial Services
Authority Act and of articles 19(6) and 34(2), the competent authority
may communicate information referred to in sub-articles (2) and  (3)
and in articles 34(4), 34(5) and 34(7), to a clearing house or other
similar body recognised under national law for the provision ofclearing or settlement services of the relevant national market , if it
considers that it is necessary to communicate such information in
order to ensure the proper functioning of these bodies in relat ion to
defaults or potential defaults by market participants:
Provided that the information received under this article
shall be subject to the conditions of professional secrecy at l east
equivalent to those referred to in article 34(4):
Provided further that information received by the competent
authority under Article 53(2) of the 
CRD  may not be disclosed by the
competent authority without the express consent of the overseasregulatory authority in another Member State and the authority in
another Member State responsible for the supervision of investm ent
firms which had disclosed it.
(13) There shall be meetings held between a credit institution,
its appointed auditors and the competent authority on a trilate ral or
bilateral basis as circumstances may warrant. These meetings ma y
be called by any of the parties concerned but shall always bechaired by the competent authority.
Co-operation and 
sharing of information with respect to supervision on a consolidated basis.
Added by:
XX. 2007.110.
Amended by:
XVII. 2009.28;II. 2011.27;XX. 2013.64.Substituted by:X. 2015.37.S.L. 371.15.25A. The competent authority shall cooperate closely with
overseas regulatory authorities in all matters with respect tosupervision on a consolidated basis. Such cooperation shall beregulated through the Supervisory Consolidation Regulations.
Competent 
authority as consolidating 
supervisor.
Added by:
II. 2011.29.
Amended by:
XX. 2013.65.25B. (Deleted by Act X. 2015 .38).
Verification of 
information in specific cases.
Added by:
XX. 2007.110.Re-numbered by:II. 2011.28.
Amended by:
II. 2011.30.XX. 2013.66.25C. (Deleted by Act X. 2015 .39).
 64        CAP. 371. ]                          BANKING
Communication by 
auditors, etc., with the competent authority.
Amended by:
XVII. 2002.181;XX. 2007.111;II. 2011.31;X. 2015.40;LXXI.2021.48.26. (1) The disclosure in good faith to the competent authority
by -
(a) an auditor of a credit institution, financial holding
company or mixed financial holding company, as the casemay be; or
(b) a person appointed to make a report under article
20(3)( a) or article 22(1),
of any fact or decision referred to in article 31(9) shall not
constitute a breach of any restriction on disclosure of informa tion
imposed by contract or by any legislative, regulatory oradministrative provision and shall not involve such persons in any
liability. Such disclosure shall be made simultaneously to the board
of directors or to the management body, as applicable, of the c redit
institution, financial holding company or mixed financial holdi ng
company, as the case may be, unless there are compelling reason s not
to do so.
(2) In relation to a person appointed to make a report under
article 20(3)( a), this article applies to any matter of which he
becomes aware in his capacity as the person making the report a nd
which -
(a) relates to the business or affairs of the credit
institution in relation to which a report is made or any
associated body of that credit institution; or
(b) if by virtue of article 20(7) the report relates to an
associated body of a credit institution, to the businessor affairs of that body.
(3) In relation to a person appointed to make a report under
article 22(1), this article applies to any matter of which he b ecomes
aware in his capacity as the person making the report and which  -
(a) relates to the business or affairs of the credit
institution in relation to which his report is made orany associated body of that credit institution, or
(b) if, by virtue of article 22(2), the report relates to an
associated body of a credit institution, to the businessor affairs of that body.
(4) In this article "associated body", in relation to an
institution, means any such body as is mentioned in article 20( 7) or
in article 22(2).
(5) In relation to an auditor of a credit institution, financial
holding company and mixed financial holding company, as the cas e
may be, this article shall apply to any matter falling within a rticle
31(9).
Joint Banking 
Committee.27. Repealed by Act XVII. 2002.182 .
                                 BANKING                   [CAP. 371.       65
Credit institutions 
unable to meet obligations.
Amended by:
XVII. 2002.183;XX. 2007.112;II. 2011.32;X. 2015.41;LXXI.2021.49.28. Notwithstanding any investigation provided for in this Act
and any regulations made and, or Banking Rules and, or Conduct of
Business Rules issued thereunder -
(a) where a credit institution, financial holding company or
mixed financial holding company establishes that it is
likely to become unable to meet its obligations or thatit is about to suspend payment, it shall forthwithinform the competent authority and the Governor ofthe Central Bank in writing;
(b) where the competent authority becomes aware that a
credit institution, financial holding company or mixedfinancial holding company is likely to become unable tomeet its obligations or that it is about to suspendpayment, it shall forthwith inform the Governor of theCentral Bank in writing;
(c) where the Central Bank becomes aware that a credit
institution, financial holding company or mixed financialholding company is likely to become unable to meet its
obligations or that it is about to suspend payment, itshall forthwith inform the competent authority inwriting.
Depositor 
protection.
Added by:
XVII. 2002.184.
Amended by:
IV . 2003.181;XX. 2007.113.28A.  Without prejudice to the powers arising under article 3, the
Minister, acting on the advice of the competent authority, maymake regulations to establish schemes or other arrangements wit h
such distinct legal personality or otherwise as may be prescrib ed,
for the protection of depositors in cases where credit institut ions
are unable to satisfy their obligations towards depositors and to
regulate the management and the financing of any such schemes o r
arrangements for compensation and the contributions and levies to
be paid thereto, to set out minimum and maximum levels ofcompensation, to exclude certain deposits from the application of
such schemes or arrangements, and to make provision for any oth er
aspect related to depositor protection schemes including rules on
advertising; and such schemes shall be exempt from the payment of
income tax as from the date of establishment of such schemes.
Power of 
competent authority to take control of credit institutions.
Amended by:
XVII. 2002.185;XX. 2007.114;XLIV .2018.11;XXVI.2019.14;LXXI.2021.50.29. (1) If, whether from any report made under article 20 or
article 22 or otherwise, it appears to the competent authority that
any of the circumstances indicated in article 9(2) apply, thecompetent authority, after consulting with the Central Bank, ma y,
without prejudice to the provisions of article 9(2) and to any other
powers conferred on the competent authority under this Act or a ny other
applicable law –
(a) require the credit institution forthwith to take such
steps as the competent authority may considernecessary to remedy or rectify the matter;
(b) appoint a competent person to advise the credit
institution in the proper conduct of its business;
(c) appoint a competent person to take charge of the assets
of the credit institution or any portion of them for thepurpose of safeguarding the interests of depositors;
 66        CAP. 371. ]                          BANKING
(d) appoint a competent person to assume control of the
business of the credit institution and either to carry onthat business or to carry out such other function orfunctions in respect of such business, or part thereof,
including to take the necessary action for the creditinstitution to be dissolved and wound up, as the competentauthority may direct;
(e) require the credit institution to wind up its business or
to wind up its business in Malta;
(f) appoint a competent person to act as liquidator for the
purpose of winding up the affairs of the creditinstitution;
(g) fix the remuneration to be paid by the credit institution
to any person appointed under this sub-article;
Cap. 383.(h) appoint a person to act as controller and, or to assume
control of a credit institution for the purposes of the
Controlled Companies (Procedure for Liquidation)
Act;
     and having adopted any one or more of the measures
aforesaid, the competent authority may further adopt anyone or more measures, whether in addition thereto or insubstitution therefor.
(2) Where a competent person is appointed by the competent
authority:
(a) under sub-article (1)( b), the credit institution shall act
in accordance with the advice given by such personunless and until the competent authority otherwisedirects;
(b) under sub-article (1)( c), the credit institution shall
deliver to such person all the assets of which he isplaced in charge, and all the powers, functions andduties of the credit institution in respect of those assetswhether exercisable by the company in generalmeeting or by the board of directors or by any otherperson, including the legal and judicial representationof the credit institution, shall be exercisable by andvest in him to the exclusion of the credit institution;
(c) under sub-article (1)( d), the credit institution shall
submit its business to the control of such person andshall provide him with such facilities as he mayrequire in order to carry on that business or to carryout the functions assigned to him under that paragraph,and all the powers, functions and duties of the creditinstitution, whether exercisable by the company ingeneral meeting or by the board of directors or by anyother person, including for the purpose of the dissolutionand winding up of the credit institution as well as the legaland judicial representation of the credit institution in allmatters, shall be exercisable by and vest in him to theexclusion of any other person:
                                 BANKING                   [CAP. 371.       67
Provided that the competent person shall not take any
decision for the purpose of the dissolution and winding upof the credit institution unless the competent authority,after consulting with the Central Bank, issues a directive tothat effect in terms of article 4B and any such directivemay contain such instructions, requirements andconditions as the competent authority may considernecessary, including with regard to the mode of windingup.
(3) Where a person is appointed under sub-article (1)( c) or ( d) -
(a) any function, power or duty exercisable by any other
person, including the curator of a bankrupt or anyother person appointed by or under any other law, andrelating to any assets or business of which the personappointed under either of the paragraphs aforesaid isplaced in charge or in control, shall, unless or until thecompetent authority otherwise directs or an expressprovision of law specifically provides otherwise, ceaseto be so exercisable;
(b) the person appointed under either of the paragraphs
aforesaid shall, in respect of such property,partnerships, firms or other business as the competentauthority may specify and in which the creditinstitution has an interest, whether directly orindirectly, including any interest arising fromadvances or loans made or credit facilities given or anyliability undertaken, have such powers, functions andduties, including legal and judicial representation, asthe competent authority may direct, and any suchpower, function or duty shall be exercisable by andvest in such person to the exclusion of any otherperson:
  Provided that:
 (i) the competent authority shall have power to
direct that all or any of the powers, functions orduties aforesaid should be exercisable by anyother person, and in any such case, with effectfrom such date or dates as the competentauthority may specify and unless and until thecompetent authority otherwise directs, thepowers, functions and duties to which thedirection of the competent authority appliesshall be exercisable by and vest in such otherperson appointed for the purpose to theexclusion of all others;
(ii) where the competent authority is of the opinion
that the credit institution has ceased to have anyinterest as aforesaid, it shall direct that anypowers, functions and duties exercisable underthis paragraph shall cease to be so exercisable,but any such direction shall not affect anything
 68        CAP. 371. ]                          BANKING
done or omitted to be done by virtue or by
reason of any of the aforesaid powers, functionsor duties;
(c) the person appointed under either of the paragraphs
aforesaid shall have the power to require any otherperson to provide him with such facilities as he maydeem necessary to carry out any of the powers,functions or duties under this article;
Cap. 13. (d) the provision of law relating to bankruptcy and in
particular Part III of the Commercial Code  shall cease
to apply to, and shall cease to operate in respect of anyproperty, partnership, firm or other business specifiedby the competent authority under paragraph ( b), unless
and until, or except to the extent that, the competentauthority otherwise directs; and in any such case theperson appointed as aforesaid shall, subject to anydirections of the competent authority given in theinterest of the creditors, act as if those provisions didnot exist and as if any declaration of bankruptcy hadnot been made;
(e) any person appointed by the competent authority under
any of the provisions of this article shall submit six-monthly reports of his activities and annual accountsof all transactions carried out by him in theperformance of his functions audited by anindependent auditor to the Minister who will placesuch reports and accounts on the table of the House ofRepresentatives within fifteen days.
(4) Where a person is appointed under sub-article (1)( f), such
person shall be the liquidator of the company for all purposes of
law to the exclusion of any other person.
(5) The provisions of this article shall have effect
notwithstanding any other provision of any enactment, andnotwithstanding any deed, contract, instrument or other documen t
whatsoever.
(6) The foregoing provisions of this article vesting exclusive
powers of representation in a person appointed by the competentauthority thereunder shall apply also to any act or proceedingscommenced or instituted before such representation vested asaforesaid, and in respect of any such act or proceedings any ot her
person acting or purporting to act, or in respect of whom actio n is
taken, in that capacity shall cease to be a party to, and shall  be
excluded from, any such act or proceedings.
(7) No person shall in any way obstruct a person appointed
under sub-article (1) in the performance of any of his function s,
powers or duties under this article.
(8) Deleted by Act
 XXVI.2019. 14.
(9) Upon receipt of a report as is mentioned in sub-article (1),
the competent authority shall inform the Central Bank on whethe r it
intends to take any action pursuant to such report and of any a ction
                                 BANKING                   [CAP. 371.       69
it intends to take thereon.
Cap. 386.(10) Without prejudice to the powers of the competent authority
in terms of sub-article (1), the c ompetent authority may also m ake an
application to the Civil Court (Commercial Section) for the dis solution
and winding up by the Civil Court (Commercial Section) of a cre dit
institution where it appears to the competent authority that a credit
institution should be dissolved and wound up by the Civil Court(Commercial Section) for the reason set out in article 214(2)(b )(iii) of
the 
Companies Act, and where the Civil Court (Commercial Section)
accedes to the application the relevant provisions of the Companies
Act in relation to the dissolution and winding up by the Civil Cou rt
(Commercial Section) and any other applicable provisions of any  other
law shall apply.
(11) Any measure adopted in terms of sub-article (1) shall rema in
in force notwithstanding that a credit institution ceases to ho ld a
licence for whatever reason or such licence ceases to have effe ct,
unless the competent authority otherwise directs.
Ranking of 
creditors in case of insolvency or winding up of  a credit institution.Substituted by:X. 2017.3.
Amended by:
XLIV .2018.12;LXXI.2021.51.29A.   Repealed by Act  LXXII of 2021 .
Supervisory 
measures related to financial holding companies and mixed financial holding companies.
Added by:
LXXI.2021.52.29AA. (1) Without prejudice to any other power of the competent
authority under this Act or any other law, where the competent authority
is the consolidating supervisor and has established that the co nditions
set out in article 11B(4) are not met or have ceased to be met,  the
competent authority shall take the appropriate supervisory meas ures to
ensure or restore, as the case may be, continuity and integrity  of
consolidated supervision and ensure compliance with the require ments
laid down in this Act and any regulations made and Banking Rule s
issued thereunder transposing the CRD, in any binding legal
instruments issued under the CRD , and in the CRR , on a consolidated
basis. In the case of a mixed financial holding company, thesupervisory measures applied by the competent authority as theconsolidating supervisor shall, in particular, take into accoun t the
effects on the financial conglomerate. The supervisory measuresreferred to in this sub-article shall include:
(a) withdrawing the approval granted to a financial
holding company or mixed financial holding companyin terms of article 11B;
 (b) suspending the exercise of voting rights attached to the
shares of the subsidiary institutions held by thefinancial holding company or mixed financial holdingcompany;
 70        CAP. 371. ]                          BANKING
(c) issuing administrative measures or administrative
penalties, in terms of this Act and any regulationsmade or Banking Rules issued thereunder, against thefinancial holding company, the mixed financialholding company or the directors and managers,subject to the provisions of national law transposing
Articles 65 to 72 of the 
CRD ;
(d) issuing instructions or directions to the financial
holding company or mixed financial holding company,
to transfer to its shareholders the participations in itssubsidiary institutions;
(e) issuing a directive to the financial holding company or
mixed financial holding company in terms of Article4B;
(f) designating on a temporary basis another financial
holding company, mixed financial holding company or
institution within the group as responsible for ensuringcompliance with the requirements laid down in this
Act and, or any regulations made and, or Banking
Rules issued thereunder transposing the 
CRD , in the
CRD  and, or in the CRR  on a consolidated basis;
(g) restricting or prohibiting distributions or interest
payments to shareholders;
(h) requiring financial holding companies or mixed
financial holding companies to divest from, or reduce,holdings in institutions or other financial sectorentities;
(i) requiring financial holding companies or mixed
financial holding companies to submit a plan onreturn, without delay, to compliance;
(j) restraining any person within financial holding
companies or mixed financial holding companies and,or financial holding companies or mixed financialholding companies from taking, or continuing to take,any action as a result of which the conditions set out inarticle 11B(4) are not met or have ceased to be met;
(k) requiring any person within financial holding
companies or mixed financial holding companies and,or financial holding companies or mixed financialholding companies to take such steps as may benecessary to restore the position existing immediatelybefore any action, as a result of which the conditionsset out in article 11B(4) are not met or have ceased tobe met, was taken; 
(l) restraining any person within financial holding
companies or mixed financial holding companies and,or financial holding companies or mixed financialholding companies from exercising any rights which alawful action, as a result of which the conditions setout in article 11B(4) are not met or have ceased to be
                                 BANKING                   [CAP. 371.       71
met, would have conferred upon them, including the
right to receive any payment or to exercise any votingrights attaching to the shares acquired;
(m) any measure under article 29 of this Act: 
  Provided that in exercising any of its powers under article
29, the provisions of the said article shall apply mutatis mutandis , and
provided further that any reference to ''the credit institution '' shall be
deemed to be reference to ''the financial holding company" and,  or "the
mixed financial holding company", as applicable.
(2) Where the competent authority intends to withdraw an
approval in accordance with sub-article (1)(a), it shall serve written
notice of its intention on the financial holding company or mix ed
financial holding company; such notice shall specify the ground s upon
which the competent authority intends to take such action and s hall
specify a period, being a period not less than forty-eight hour s and not
more than thirty calendar days, in which the financial holdingcompany or mixed financial holding company shall be entitled to  make
representations to the competent authority as to why such actio n
should not be taken. Unless the competent authority decides tha t the
matter is urgent, it shall not withdraw an approval before the expiry of
such period. 
(3) For the purpose of taking decisions on the supervisory
measures referred to in sub-article (1), where the financial ho lding
company or the mixed financial holding company is established i n a
Member State other than Malta and the competent authority is th e
consolidating supervisor, the competent authority shall work to gether
with the overseas regulatory aut hority in the Member State wher e the
financial holding company or the mixed financial holding compan y is
established, as the case may be, in full consultation. 
(4) Where the competent authority is not the consolidating
supervisor but the financial holding company or the mixed finan cial
holding company is established in Malta, the competent authorit y
shall, for the purposes of taking decisions on the supervisory measures
referred to in Article 21a(6) of the 
CRD, work together with the
overseas regulatory authority acting as the consolidating super visor in
full consultation.
(5) Where the competent authority is the consolidating
supervisor and where the financial holding company or the mixedfinancial holding company is not established in Malta, the comp etent
authority shall prepare an assessment on the matters referred t o in sub-
article (1), and shall forward that assessment to the overseas regulatory
authority in the Member State where the financial holding compa ny or
the mixed financial holding company is established.
(6) The competent authority, whether acting as the
 72        CAP. 371. ]                          BANKING
consolidating supervisor or whether it is in receipt of an asse ssment
referred to in Article 21a(8) of the CRD from the overseas regulatory
authority acting as the consolidating supervisor, shall do ever ything
within its powers to reach a joint decision on the measures ref erred to
in sub-article (1) of this article and, or in Article 21a(6) of  the CRD,
with the overseas regulatory aut hority in the Member State wher e the
financial holding company or the mixed financial holding compan y is
established or with the overseas regulatory authority acting as  the
consolidating supervisor, as the case may be, within two months  of
receipt of that assessment:
Provided that the joint decision shall be duly documented
and reasoned and where the competent authority is the consolida ting
supervisor, it shall communicate the joint decision to the fina ncial
holding company or the mixed financial holding company.
(7) In the event of a disagreement between the competent
authority and the overseas regulatory authority acting as theconsolidating supervisor or with the overseas regulatory author ity in
the Member State where the financial holding company or the mix ed
financial holding company is established, as the case may be, t he
competent authority shall refrain from taking the joint decisio n
referred to in sub-article (6) and shall refer the matter to th e 
EBA in
accordance with Article 19 of Regulation (EU) No. 1093/2010. In
such cases, the competent authority shall adopt a joint decisio n with
the overseas regulatory authority acting as the consolidatingsupervisor or with the overseas regulatory authority in the Mem ber
State where the financial holding company or the mixed financia l
holding company is established, as the case may be, in conformi ty
with the decision of the 
EBA :
Provided that the matter shall not be referred to the EBA
after the end of the two-month period referred to in sub-articl e (6) or
after a joint decision has been reached.
(8) In the case of mixed financial holding companies, where the
coordinator appointed in terms of Article 10 of Directive 2002/87/EC
is neither the competent authority, nor the overseas regulatoryauthority acting as the consolidating supervisor, nor the overs eas
regulatory authority in the Member State where the mixed financ ial
holding company is established, the agreement of the said coord inator
shall be required for the purposes of the decisions or joint de cisions
referred to in sub-article (1) of this article and, or in Artic le 21a(6) of
the 
CRD , as applicable.
Where the agreement of the coordinator is required, the compete nt
authority shall refer any disagreements to the relevant Europea n
Supervisory Authority, namely, to the EBA or to the European
Supervisory Authority (European Insurance and OccupationalPensions Authority) (EIOPA), established by 
Regulation (EU) No.
                                 BANKING                   [CAP. 371.       73
1094/2010, which shall take its decision within one month of receipt
of the referral. Any decision tak en in accordance with this sub -article
shall be without prejudice to the obligations under Directive 2002/87/
EC or Directive 2009/138/EC .
Language of 
regulations.
Added by:
XIII. 2004.84.
Amended by:
XX. 2007.117;LXXI.2021.53.29B. Regulations, Banking Rules and Conduct of Business Rules
made under this Act and any amendment thereto or revocationthereof may be made in the English language only.
Publication of 
audited financial statements.
Amended by:
XVII. 2002.187;XX. 2007.85, 118;II. 2010.5;X. 2015.43;XXVI.2019.15;LXXI.2021.54.30. Every credit institution, and, where applicable, financial
holding company and mixed financial holding company, sh all, not
later than four months from the closing of its financial year o r at
any other time as may be authorised in writing by the competentauthority -
(a) forward to the competent authority and the Central
Bank, and
(b) make available to the public, in paper or in electronic
form, 
a copy of its audited financial statements or consolidated fina ncial
statements, as may be applicable, drawn up and published in suc h
manner as may be specified in accordance with a Banking Rule.
Specific 
publication requirements.
Added by:
X. 2015.44.30A. (1) The competent authority may require credit
institutions -
(a) to publish information referred to in Part Eight of the
CRR  more than once per year and to set deadlines for
publication;
(b) to use specific media and locations for publications
other than the financial statements.
(2) The competent authority may require parent undertakings to
publish annually, either in full or by way of references toequivalent information, a description of their legal structure and
governance and organisational structure of the group of institu tions
in accordance with Article 14(3), Article 74(1) and Article 109 (2)
of the 
CRD  .
Auditors.
Amended by:
XXV . 1995.434;XVII. 2002.188;XX. 2007.85, 119;X. 2015.45;LXXI.2021.55.31.(1)(a) Every credit institution shall each year appoint an
approved auditor or auditors whose duty shall be toreport on the financial statements of the creditinstitution examined by them and on all financialstatements prepared by the credit institution.
Cap. 386.(b) For the purpose of this article an approved auditor
shall be a person who is qualified to be an auditor inaccordance with the 
Companies Act, and holds the
authorisation of the competent authority to act asauditor of a credit institution.
(2) If a credit institution fails to appoint an auditor under su b-
article (1) or, at any time fails to fill any vacancy in the of fice of an
auditor, the competent authority shall have the power to appoin t an
 74        CAP. 371. ]                          BANKING
auditor for that credit institution and shall fix the remunerat ion to
be paid by that credit institution to such auditor.
(3) The auditors’ report shall include statements as to the
following matters -
(a) whether they have obtained all the information and
explanations which to the best of their knowledge andbelief were necessary for the purpose of their audit;
(b) whether in their opinion, proper books of account have
been kept by the credit institution, so far as appearsfrom their examination of those books,
(c) whether the credit institution’s financial statements
dealt with by the report are in agreement with thebooks of account;
(d) whether, in their opinion, and to the best of their
knowledge and according to the explanations given tothem, the said financial statements give theinformation required by any law which may from timeto time be in force in the manner so required and give atrue and fair view.
(4) The report of the auditors shall be read together with the
report of the directors of the credit institution at the annual  meeting
of shareholders.
(5) Every auditor of a credit institution shall have the right t o
demand such information or explanation as he deems necessary inthe performance of his duties from any officer or employee of t he
credit institution.
(6) A credit institution shall forthwith give written notice to the
competent authority -
(a) on the appointment of its auditors;
(b) if it proposes to give notice to its shareholders to -
(i) replace its auditors at the expiration of their term
of office;
(ii) remove its auditors before the expiration of their
term of office;
(c) if the auditors cease to be auditors of the credit
institution for any reason other than those in paragraph(b).
(7) The competent authority may require a credit institution to
change its appointed auditors where, in the competent authority ’s
opinion, such auditors are considered unfit for this appointmen t at
any time during their term of office.
(8) An auditor shall immediately advise the competent
authority if -
(a) he resigns;
(b) he does not seek to be re-appointed; or
(c) he decides to qualify the audit report.
                                 BANKING                   [CAP. 371.       75
(9) In his capacity as an auditor of a credit institution or due  to
a direct request by the competent authority under article 20 orunder article 22, an auditor shall promptly notify the competen t
authority of any fact or decision concerning that credit instit ution
of which he has become aware while carrying out his tasks, whic h
is liable to -
(a) constitute a material breach of this Act or any
regulations made or Banking Rules or Conduct ofBusiness Rules issued thereunder which lay down the
licensing conditions or which specifically govern theactivities of credit institutions;
(b) affect the ongoing functioning of the credit institution;
(c) affect the depositors of the credit institution, of the
branches in Malta of a credit institution authorised byan overseas regulatory authority or of any connectedperson which is a credit institution;
(d) lead to refusal to certify the accounts or to the
expression of reservations:
Provided that an auditor shall also have the duty to report
any fact or decision of which he becomes aware in the course ofcarrying out his tasks in an undertaking having close links res ulting
from a control relationship with the credit institution within which
he is carrying out that task.
(9A)  The competent authority may require the replacement of an
auditor if that auditor acts in breach of his obligations under  sub-
article (9).
(10) Notwithstanding any of the provisions of the foregoing sub-
articles, the competent authority may in the case of a creditinstitution not licensed in Malta grant exemption by way ofBanking Rule from any of the requirements of this article provi ded
that the same does not materially detract from the main objects  of
this article.
Cap. 386.(11) In so far as the provisions of this article are inconsisten t
with the provisions of the Companies Act, the provisions of this
article shall prevail and the pro visions of the said Act shall,  to the
extent of the inconsistency, not apply to credit institutions.
Disqualification of 
officers.
Amended by:
XVII. 2002.188;XX. 2007.120;X. 2015.46.32. (1) No person -
(a) who has been adjudged bankrupt or has made a
composition with his creditors or has been an officerof a credit institution which has had its licencewithdrawn under article 9(2); and who has not beenexempted in writing by the competent authority fromthe provisions of this article; or
(b) who is interdicted or incapacitated or who has been
involved in money laundering or found guilty of acrime affecting public trust, theft, fraud, extortion orof knowingly receiving property obtained by theft orfraud,
shall act or continue to act as an officer of a credit institut ion.
 76        CAP. 371. ]                          BANKING
Duties of officers 
of credit institutions.
Amended by:
XVII. 2002.188;XX. 2007.85;X. 2015.47;LXXI.2021.56.33. Every officer of a credit institution shall take all reasonable
steps -
(a) to secure compliance by the credit institution with its
licence and with the provisions of this Act and anyregulations made and, or Banking Rules and, or Conductof Business Rules issued thereunder,  and
(b) to ensure that no incorrect information is provided to
the competent authority either wilfully or as the resultof gross negligence.
Duties of officers 
of financial holding companies and mixed financial holding companies.
Added by:
LXXI.2021.57.33A. Every officer of a financial holding company or a mixed
financial holding company shall take all reasonable steps –
(a) to secure compliance by the financial holding
company or the mixed financial holding company, as the casemay be, with its approval and with this Act and any regulationsmade or Banking Rules issued thereunder
(b) to ensure that no incorrect information is
provided to the competent authority either wilfully or as theresult of gross negligence.
Confidentiality.
Amended by:
XVII. 2002.189;XX. 2007.85, 121;II. 2011.33;X. 2011.39;X. 2015.48;XXXI. 2017.72;XXVI.2018.91;XXVI.2019.16;LXXI.2021.58;
LXXII.2021.34 .34. (1) Nothing in this Act shall authorise the Central Bank or
the competent authority to enquire or cause an enquiry to be ma de
in a credit institution into the affairs of any individual cust omer of
a credit institution except -
(a) for the purpose of ensuring compliance with any of the
provisions of this or any other Act, or
Cap. 204.(b) for the purpose of enabling the Central Bank to satisfy
its responsibilities under the Central Bank of Malta
Act, or
(c) for the purpose of enabling the Central Bank or the
competent authority, as the case may be, to satisfytheir respective obligations arising under Malta’sinternational commitments.
(2) No person, including past and present officers or agents of a
bank, financial holding company or mixed financial holding comp any,
shall disclose any information relating to the affairs of a ban k or of
a customer of a bank, or relating to the affairs of a financial  holding
company or a mixed financial holding company, which he has acqu ired
in the performance of his duties or the exercise of his functio ns
under this Act or any regulations made or Banking Rules or Cond uct
of Business Rules issued thereunder except -
(a) when authorised to do so under any of the provisions of
this Act or any regulations made or Banking Rules orConduct of Business Rules issued thereunder; or
(b) for the purpose of the performance of his duties or the
exercise of his functions;
                                 BANKING                   [CAP. 371.       77
(c) when lawfully required to do so by any court or tribunal
or under a provision;
(d) for the purpose of enabling the Central Bank or the
competent authority, as the case may be, to satisfytheir respective obligations arising under Malta’sinternational commitments; or
(e) when the customer expressly consents, in writing, to
the disclosure of information relating to his affairs, tothe extent authorised by the customer.
Cap. 373.(3) Where an officer of a credit institution has reason to believe
that a transaction or a proposed transaction could involve mone y
laundering or the funding of terrorism, he sh all act in compliance
with the reporting and other obligations set out in the regulat ions
made under article 12 of the Prevention of Money Laundering Act,
and any procedures and guidance issued thereunder, and suchdisclosure shall not constitute a breach of confidentiality.
Cap. 9.(4) Officers of the competent authority and of the Central
Bank, including past and present officers, as well as auditors or
experts acting on behalf of the competent authority or the Cent ral
Bank, shall be governed by the obligation of professional secre cy
and shall not disclose information obtained in the course of carrying
out supervisory and other duties unless such disclosure ofinformation be done in summary or co llective form, such that
individual credit institutions cannot be identified, without pr ejudice to
the provisions  of the 
Criminal Code :
Provided that the said officers, auditors or experts may divulg e
such information for the purpose of the performance of their du ties, or
the exercise of their functions, only in summary and collective  form as
specified in sub-article (4), or when lawfully required to do s o, by any
court or under a provision of any law:
Provided further that where a credit institution has been
declared bankrupt or is being compulsorily wound up, confidenti al
information which does not concern third parties involved inattempts to rescue that credit institution may be disclosed in civil or
commercial proceedings.
(5) The provisions of sub-article (4) shall not prevent the
competent authority from exchanging information with overseasregulatory authorities in othe r Member States and authorities i n other
Member States responsible for the  supervision of investment fir ms or
transmitting information to the ESRB, the EBA or the EuropeanSecurities and Markets Authority established by Regulation (EU)  No.
1095/2010, in accordance with the Act and any regulations made and
Banking Rules issued thereunder transposing the 
CRD, with any
binding legal instruments issued under the CRD, with the CRR, with
Regulation (EU) 2019/2033 , with Article 15 of Regulation (EU) No.
1092/2010, with Articles 31, 35 and 36 of Regulation (EU) No.
1093/2010  and with Articles 31 and 36 of Regulation (EU) No.1095/
2010, with Directive (EU) 2019/2034 and with other Directives
applicable to credit institutions. Such information shall be su bject to
 78        CAP. 371. ]                          BANKING
the provisions of sub-article (4):
S.L. 371.16.Provided that the provisions of sub-article (4) shall not preve nt
the competent authority from publishing the outcome of stress t ests
carried out in accordance with the Banking Act (Supervisory
Review) Regulations or Article 32 of Regulation (EU) No. 1093/
2010 or from transmitting the outcome of the stress tests to the EB A
for the purpose of publication by the EBA of the results of Uni on-wide
stress tests.
S.L. 371.16Provided that the provisions of sub-article (4) shall not
prevent the competent authority from publishing the outcome ofstress tests carried out in accordance with the 
Banking Act
(Supervisory Review) Regulations  or Article 32 of Regulation (EU)
No. 1093/2010 or from transmitting the outcome of the stress tests
to the EBA for the purpose of the publication by the EBA of the
results of Union-wide stress tests.
Substituted by:
XXXI. 2017.72.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 activit ies or
for the fulfilment of its obligations, communicate any informat ion
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
credit institution forms part, which carry out any
activities licensed or authorised by the competentauthority 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 activitiesmentioned in this paragraph, and which are authorised
by an overseas authority in a recognised jurisdiction, aswell as  the credit institution’s holding company or
financial holding company or mixed financial holdingcompany or mixed activity holding company, where thisis necessary for the proper carrying out of its activities orfor the fulfilment of its obligations or for the carrying out
of risk management , audit or compliance  processes of the
credit institution or of the group of companies of which itforms part ; 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 theactivities or risk management, audit or compliance
processes of the credit institution or of the group of
companies of which it forms part or in order to assess
the credit institution’s compliance with any statutoryobligations relating to the prevention of moneylaundering and the funding of terrorism;
(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
                                 BANKING                   [CAP. 371.       79
such communication of information shall be made
subject to all proper controls and safeguards, so that itshall be the responsibility of the credit institution toensure that the group company member, the auditor orexpert, or the outsourcing service provider, as the casemay be, is subject to equivalent obligations of dataprotection, confidentiality and care as required underMaltese law and any European Union law, including the
GDPR :
Provided further that for the purpose of this article,
advertising, marketing or promotion, shall not, underany circumstances, be considered as necessary for theproper carrying out of the activities of a creditinstitution or for the fulfilment of its obligations:
S.L. 373.01.Provided further that communication of informationmade in terms of paragraphs ( a) to ( c) shall be without
prejudice to any provision of the 
Prevention of Money
Laundering and Funding of Terrorism Regulations .
(7) Where the competent authority receives confidential
information under sub-articles (4) and (5), it shall use suchinformation only in the course of its duties and only for any o f the
following purposes -
(a) to check that the conditions governing access to the
activity of credit institutions are met and to facilitatemonitoring, on a non-consolidated or consolidatedbasis, of the conduct of such activity, especially withregard to the monitoring of liquidity, solvency, largeexposures and administrative and accountingprocedures and internal control mechanisms;
(b) to impose penalties;
Cap. 330.(c) in an appeal against a decision of the competent
authority pursuant to article 10 and in any courtproceedings before the Court of Appeal in terms ofarticle 21(14) of the 
Malta Financial Services Authority
Act;
(d) in court proceedings initiated pursuant to special
provisions provided for in European Union lawadopted in the field of credit institutions.
(8)  The competent authority, when processing personal data for
the purposes of this Act and any regulations and, or Banking Ru les
and, or Conduct of Business Rules issued thereunder, shall do s o in
accordance with any applicable legislation on data protection.
(9) The provisions of article 25(2) and sub-articles (4), (5) an d
(7) of this article shall be without prejudice to the powers ofinvestigation conferred on the European Parliament pursuant to
Article 226 of the Treaty on the Functioning of the European
Union.
Data protection.
Added by:
XXVI.2019.17.34A. (1) Credit institutions may, when necessary to safeguard
the prevention, investigation and detection of payment fraud, p rocess
 80        CAP. 371. ]                          BANKING
personal data.
(2) The provision of information to individuals about the
processing of personal data, the processing of such personal da ta and
any other processing of personal data for the purposes of this Act and
any regulations and, or Rules issued thereunder shall be carrie d out in
accordance with any applicable data protection legislation. 
(3) Unless otherwise permitted under other provisions of this Ac t
and under applicable legislation, credit institutions shall onl y access,
process and retain personal data necessary for the provision of  their
services with the explicit consent of those making use of their  services.
Offences.
Amended by:
XVII. 2002.190;XX. 2007.85, 122;L.N. 425 of 2007;II. 2011.34;X. 2011.40.Substituted by:X. 2015.49.
Amended by:
XXI. 2015.23;LXXI.2021.59.35. (1) Any person who - 
(a) fails to comply with any directive issued by the
competent authority under this Act;
(b) without reasonable excuse alters, suppresses, conceals,
destroys or refuses to produce any document which heis lawfully required to produce by any person under
this Act or any regulations made or Banking Rules orConduct of Business Rules issued thereunder;
(c) makes a statement, promise or forecast which he
knows to be misleading, false or deceptive, ordishonestly conceals any material facts;
(d) recklessly makes (dishonestly or otherwise) a
statement, promise or forecast which is misleading,false or deceptive; or
(e) contravenes or fails to comply with any of the
provisions of articles 2A, 5(1) and (2), 6(1), 6A, 12, 13,
17B, 21(2), 22(7), 23(4), 24, 28( a), 29(7), 32, 33( b),
and 34(2) and (4),
shall be guilty of an offence:
Provided that, with respect to paragraphs ( c) and ( d), a
person shall be guilty of an offence if he makes the statement,promise or forecast or conceals the facts for the purpose ofinducing, or is reckless as to whether it may induce, another p erson
(whether or not to the person to whom the statement, promise orforecast is made or from whom the facts are concealed) -
(i) to make, or refrain from making, a deposit with
him or any other person; or
(ii) to enter, or refrain from entering, into an
agreement for the purpose of making such adeposit:
Provided further that, with respect to paragraphs ( c) and
(d), a person shall not be guilty of an offence unless -
(i) the statement, promise or forecast is made in or
from Malta, or the facts are concealed in or fromMalta, or arrangements are made in or fromMalta for the statement, promise or forecast to
                                 BANKING                   [CAP. 371.       81
be made or the facts to be concealed;
(ii) the person on whom the inducement is intended
to or may have effect on is in Malta; or
(iii) the deposit is or would be made, or the
agreement is or would be entered into, in Malta.
(2) Any person who is knowingly a party to, or procures or aids
and abets the commission of any offence under sub-article (1), shall
be guilty of an offence and shall be liable to the same penalti es as
the principal offender.
(3) Any person found guilty of an offence shall, on conviction,
be liable to a fine ( multa ) not exceeding two million euro
(€2,000,000) or to a term of imprisonment not exceeding threeyears or to both such fine and imprisonment.
(4) No proceedings for an offence under this Act shall be
commenced without the sanction of the Attorney General.
Administrative 
penalties and other administrative measures imposed by the competent authority.
Added by:
XVII. 2002.191.
Amended by:
XX. 2007.123.Substituted by:X. 2015.50.
Amended by:
LXXI.2021.60.35A. (1) Without prejudice to the provisions of articles
29AA(1)(c), 35 and 35B and to any regulations made under articl es
3(1)(a), 3(1)(c) and 3(1)(e), where any person fails to comply with
any of the conditions imposed in a licence, and, or where thecompetent authority is satisfied that a person’s conduct amount s to
a breach of any of the provisions of this Act, or any regulatio ns
made or Banking Rules issued thereunder, or the 
CRR, or such
person has failed to comply with a directive issued by thecompetent authority under this Act, or any regulation made orBanking Rules or Conduct of Business Rules issued thereunder, o r the
CRR, or any binding legal instruments issued under the CRD, the
competent authority may, by notice in writing and without recou rse
to a court hearing, impose on such person an administrative pen alty
of -
(a) up to twice the amount of the benefit derived from the
breach where that benefit can be determined;
(b) in the case of a natural person, up to five million euro
(€5,000,000); or
(c) in the case of a legal person, up to 10% of the total
annual net turnover of the undertaking in the precedingbusiness year including the gross income consisting ofinterest receivable and similar income, income fromshares and other variable or fixed-yield securities, andcommissions or fees receivable in accordance with
Article 316 of the 
CRR :
Provided that, in the case of a subsidiary of a parent
undertaking, the relevant gross income shall be the gross incom e
resulting from the consolidated account of the ultimate parentundertaking in the preceding business year.
(2) The Minister may, acting on the advice of the competent
authority, make regulations as shall be deemed appropriate toprovide for the establishment and imposition of administrativepenalties and other administrative measures on licence holders or
others as may be specified therein.
 82        CAP. 371. ]                          BANKING
(3) Where the competent authority decides to impose an
administrative penalty in terms of this Act or any regulations made
thereunder, it shall notify the person on whom the penalty is b eing
imposed by means of a notice in writing.
(4) Where the person upon whom the notice referred to in sub-
article (3) is served -
(a) fails to pay to the competent authority the amount of
the penalty within a period of thirty days of the serviceof the notice, and fails to appeal from the decision ofthe competent authority to the Financial Services
Tribunal; or
(b) appeals to the Financial Service Tribunal and fails
within a period of fifteen days from the decision of the
Tribunal to pay the administrative penalty as
confirmed or as reduced by that Tribunal,
then, in every case, the amount of the administrative penalty, as
originally imposed or as reduced , as the case may be, shall be due
to the competent authority as a civil debt, and the provisions of
sub-article (5) shall apply.
Cap. 12.(5) A notice as is referred to in sub-article (3), or the decisi on
of the Financial Services Tribunal, as the case may be, shall u pon
the service by judicial act of a copy thereof on the person ind icated
in the notice, constitute an executive title for all effects an d
purposes of Title VII of Part I of Book Second of the Code of
Organization and Civil Procedure .
(6) The imposition by the competent authority of an
administrative penalty in terms of this Act, or any regu lations made
thereunder, shall be without prejudice to any other consequence s of
the act or omission of the offender under civil or criminal law :
Provided that in all cases where the competent authority
imposes an administrative penalty in respect of anything done o r
omitted to be done by any person and such act or omission alsoconstitutes a criminal offence, no proceedings may be taken orcontinued against the said person in respect of such criminaloffence.
Publication of 
administrative penalties.
Added by:
X. 2015.51.
Amended by:
LXXI.2021.61.35B. (1) The competent authority shall publish, on its official
website and in any other media as it considers appropriate, anyadministrative penalty or penalties imposed under the provisions of
this Act or of any regulations made or Banking Rules or Conduct  of
Business Rules issued thereunder, of the 
CRR , or of any binding legal
instruments issued under the CRD. Such publications shall include
information on the type and nature of the breach and the identi ty of
the person on whom the penalty is imposed, without undue delayafter that person is informed of those penalties:
Provided that in cases where an appeal has been filed by the
person on whom such administrative penalty or penalties have be en
imposed, the competent authority shall, without undue delay, al so
publish on its official website and in any other media as it co nsiders
appropriate, information on the status of the appeal and the
                                 BANKING                   [CAP. 371.       83
outcome thereof.
(2) The competent authority shall publish the penalties
imposed under the provisions of this Act or of any regulations made
or Banking Rules or Conduct of Business Rules issued thereunder , of
the CRR, or of any binding legal instruments issued under the CRD,
on an anonymous basis,  in any of the following circumstances:
(a) where the penalty is imposed on a natural person and,
following an obligatory prior assessment, publicationof personal data is found to be disproportionate;
(b) where publication would jeopardise the stability of
financial markets or an on-going criminalinvestigation;
(c) where publication would cause, insofar as it can be
determined, disproportionate damage to the creditinstitutions or natural persons involved:
Provided that, with respect to paragraphs ( a), (b) and ( c),
publication on an anonymous basis in any such circumstances sha ll
be an exceptional measure which needs to be justified by a deta iled
report compiled by the competent authority:
Provided further that, where the circumstances referred to
in this sub-article are likely to cease within a reasonable per iod of
time, publication under this article may be postponed for such a
period of time.
(3) Information published in terms of this article shall remain
on the official website of the competent authority for a period  of
not less than five years. Personal data shall be retained on th e
official website of the competent authority and in any other me dia
it considers appropriate only for the period necessary, inaccordance with the provisions of Maltese legislation on dataprotection.
Obligation to give 
reasons.
Added by:
LXXI.2021.62.35C. In exercising its supervisory powers in accordance with this
Act and any regulations made and, or Banking Rules and, or Cond uct
of Business Rules issued thereunder, with the CRR and with any
binding legal instruments issued under the CRD, the competent
authority shall, in its decisions, state the grounds on which s uch
decisions have been based.
Application of Act 
to the Central Bank. 36. The provisions of this Act shall not apply to the Central
Bank, save where and to the extent that the Central Bank is ref erred
to by name.
 84        CAP. 371. ]                          BANKING
Complaints.
Cap. 378.
Cap. 555.37. Any complaints made by any person making use of a
payment service provided by a credit institution or by other in terested
third parties, including consumer associations within the meani ng of
the Consumer Affairs Act, in relation to any alleged infringements of
the provisions of this Act transposing the Payment Services Directive
by a credit institution licensed in terms of this Act, or an ag ent or a
branch established in Malta under the right of establishment of  a credit
institution in another Member State, shall be submitted to the Arbiter
in terms of the Arbiter for Financial Services Act.
Transitory 
provisions.
Amended by:
LXXI.2021.63.38. (1) Credit institutions that, before 12 January 2016, have
performed in Malta activities of payment initiation service pro viders
and account information service providers shall not until eight een
months after the date of entry into force of the regulatory tec hnical
standards referred to in Article 98 of the Payment Services Directive ,
be prohibited from continuing to perform such activities in Mal ta in
accordance with the currently applicable regulatory framework.
(2) Until credit institutions acting as account servicing paymen t
service providers comply with the regulatory technical standard s
referred to in Article 98 of the Payment Services Directive, such
credit institutions shall not block or obstruct the use of paym ent
initiation services or account information services for the acc ounts that
they are servicing.
(3) By way of derogation from article 11C(1), where a third-
country group operates through a credit institution licensed in  terms of
this Act, and through one or more other institutions in the Eur opean
Union and with a total value of assets in the European Union eq ual to or
greater than forty billion euro (€40,000,000,000) on 27 June 20 19, the
credit institution licensed in terms of this Act shall ensure t hat the
intermediate EU parent undertaking referred to in article 11C(1 ) or the
two (2) intermediate EU parent undertakings referred to in arti cle
11C(2), as the case may be, shall be established by 30 December  2023.
Added by:
XVII. 2002.192.
Amended by:
II. 2010.6;II. 2011.35;X. 2015.52;LXXI.2021.64.FIRST SCHEDULE
(Article 2(2))
List of Additional Activities
1. Financial leasing;2. Payment Services as defined in the Financial Institutions
Act;
3. Issuing and administering other means of payment
(travellers’ cheques, bankers’ drafts and similar instruments)insofar as this activity is not covered by activity 2 above;
4. Guarantees and commitments;5. Trading for own account or for account of customers in:
(a) money market instruments (cheques, bills, certificates
                                 BANKING                   [CAP. 371.       85
of deposit, and similar instruments);
(b) foreign exchange;
(c) financial futures and options;
(d) exchange and interest-rate instruments;
(e) transferable securities.
6. Participation in securities issues and the provision of
services related to such issues;
7. Advice to undertakings on capital structure, industrial
strategy and related questions and advice as well as servicesrelating to mergers and the purchase of undertakings;
8. Money broking;9. Portfolio management and advice;10. Safekeeping and administration of securities;11. Credit reference services;12. Safe custody services;13. Issuing electronic money.
Added by:
LXXI.2021.65.SECOND SCHEDULE
(Article 6(1))
List of entities that are not subject to the requirement to app ly to
the competent authority for a licence under this Act:
1. The Central Bank and central banks of other Member States;2. Post office giro institutions; 3. In Denmark, the "Eksport Kredit Fonden", the "Eksport
Kredit Fonden A/S", the "Danmarks Skibskredit A/S" and the"KommuneKredit
4. In Germany, the "Kreditanstalt für Wiederaufbau",
"Landwirtschaftliche Rentenbank", "Bremer Aufbau-Bank GmbH","Hamburgische Investitions- und Förderbank", "InvestitionsbankBerlin",  "Investitionsbank  des  Landes  Brandenburg","Investitionsbank Schleswig-Holstein", "Investitions- und Förde rbank
Niedersachsen – NBank", "Investitions- und Strukturbank Rheinla nd-
Pfalz", "Landeskreditbank Baden-Württemberg – Förderbank", "LfAFörderbank  Bayern",  "NRW.BANK",  "SaarländischeInvestitionskreditbank AG", "Sächsische Aufbaubank – Förderbank ",
"Thüringer Aufbaubank", undertakings which are recognised under  the
"Wohnungsgemeinnützigkeitsgesetz" as bodies of State housing po licy
and are not mainly engaged in banking transactions, and underta kings
recognised under that law as non-profit housing undertakings; 
 86        CAP. 371. ]                          BANKING
5. In Estonia, the "hoiu-laenuühistud", as cooperative
undertakings that are recognised under the "hoiu-laenuühistu se adus
6. In Ireland, the Strategic Banking Corporation of Ireland,
credit unions and friendly societies;
7. In Greece, the "Ταμείο Παρακαταθηκών και Δανείων"
(Tamio Parakatathikon kai Danion);
8. In Spain, the "Instituto de Crédito Oficial9. In France, the "Caisse des dépôts et consignations10. In Croatia, the "kreditne unije" and the "Hrvatska banka za
obnovu i razvitak
11. In Italy, the "Cassa depositi e prestiti 12. In Latvia, the "krājaizdevu sabiedrības", undertakings that
are recognised under the "krājaizdevu sabiedrību likums" ascooperative undertakings rendering financial services solely to  their
members;
13. In Lithuania, the "kredito unijos" other than the "centrinės
kredito unijos 
14. In Hungary, the "MFB Magyar Fejlesztési Bank Zártkörűen
Működő Részvénytársaság" and the "Magyar Export-Import BankZártkörűen Működő Részvénytársaság
Cap. 574.15. In Malta, "The Malta Development Bank" established in
terms of the Malta Development Bank Act; 
16. In the Netherlands, the "Nederlandse Investeringsbank voor
Ontwikkelingslanden  NV",  the  "NV  NoordelijkeOntwikkelingsmaatschappij", the "NV Limburgs Instituut voorOntwikkeling en Financiering", the "OntwikkelingsmaatschappijOost-Nederland NV" and kredietunies; 
17. In Austria, undertakings recognised as housing associations
in the public interest and the "Österreichische Kontrollbank AG
18. In Poland, the "Spółdzielcze Kasy Oszczędnościowo —
Kredytowe" and the "Bank Gospodarstwa Krajowego
19. In Portugal, the "Caixas Económicas" existing on 1 January
1986 with the exception of those incorporated as limited compan ies
and of the "Caixa Económica Montepio Geral
20. In Slovenia, the "SID-Slovenska izvozna in razvojna banka,
d.d. Ljubljana
                                 BANKING                   [CAP. 371.       87
21. In Finland, the "Teollisen yhteistyön rahasto Oy/Fonden för
industriellt samarbete AB", and the "Finnvera Oyj/Finnvera Abp
22. In Sweden, the "Svenska Skeppshypotekskassan.