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Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 20,774, 27 ta’ Jannar , 2022
Taqsima  B
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L.N. 22 of 2022
INVESTMENT SERVICES ACT
(CAP. 370)
Investment Services Act (Supervisory Revie w Investment Firms 
Directive) Regulations, 2022
IN EXERCISE of the powers conferred by article 12 of the
Investment Services Act, the Minister responsible for the regulation of
Financial Services, acting on the advice of the Malta Financial
Services Authority, has made the following regulations:
Citation, scope 
and 
commencement.1. (1) The title of these regulations is the Investment
Services Act (Supervisory Review Investment Firms Directive)
Regulations, 2022.
(2) The scope of these regulations is to transpose Articles 7, 8 ,
13, 14, 15, 34, 36, 37, 38, 39, 40, 41, 42, 43, and 45 of Direc tive (EU)
2019/2034 of the European Parliament and of the Council of 27
November 2019 on the prudential supervision of investment firmsand amending Directives 2002/87/EC, 2009/65/EC, 2011/61/EU,
2013/36/EU, 2014/59/EU and 2014/65/EU.
(3) These regulations shall come into force on such date as the
Minister may by notice in the Gazette establish.
Interpretation. 2. (1) In these regulations, unless the context otherwise
requires:
Cap. 370. "the Act" means the Investment Services Act;
"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
credit institutions, amending Directive 2002/87/EC andrepealing Directives 2006/48/EC and 2006/49/EC, as amended
from time to time, and includes any implementing measures that
have been or may be issued thereunder;
Cap. 371."credit institution" means a pe rson licensed in terms of the
Banking Act, whose head office is in Malta or an undertakingwhose business is to receive deposits or other repayable funds
from the public and to grant credits for its own account,
authorised by a European regulatory authority in terms of theCRD or authorised by a European regulatory authority in an EEA
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Member State;
"CRR" means Regulation (EU) No 575/2013 of the
European Parliament and of the Council of 26 June 2013 on
prudential requirements for credit institutions and amending
Regulation (EU) No 648/2012, as amended from time to time,
and includes any implementing measures that have been or maybe issued thereunder;
"EBA" means the European Banking Authority established
by Regulation (EU) No 1093/2010;
"EIOPA" means the European Insurance and Occupational
Pensions Authority as established by Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24
November 2010 establishing a European Supervisory Authority
(European Insurance and Occupational Pensions Authority),amending Decision No 716/2009/EC and repealing Commission
Decision 2009/79/EC;
"ESCB central banks" shall ha ve the same meaning as that
assigned to it in point 45 of Article 4(1) of the CRR;
"ESFS" means the European System of Financial
Supervision;
"ESRB" means the European Systemic Risk Board
established by Regulation (EU) No 1092/2010;
"European investment firm" means a firm as defined in
Article 4(22) of the IFR, authorised by its European regulatoryauthority within the meaning of Article 5 of the MiFID, or
authorised by a European regulatory authority in an EEA State;
"home member state" means 
(a) in the case of an investment firm, within the
meaning of these regulations, Malta;
(b) in the case of a "European investment firm",
within the meaning of these regulations, the Member Statewhere such European investment Firm is authorised by itsEuropean regulatory authority;
S.L. 370.10."host member state" means a Member State or an EEA
State where an investment firm has established a branch or
provides services on a cross border basis in terms of the
European Passport Rights for Investment Firms Regulations;
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"investment firm" means a person who holds an investment
services licence issued by the competent authority under the Ac t,
and which is subject to the requirements of the IFD;
"the IFR" means Regulation 2019/2033 of the European
Parliament and of the Council of 27 November 2019 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, and includes any implementing measures that have been or
may be issued thereunder;
"the IFD" means Directive 2019/2034 of the European
Parliament and of the Council of 27 November 2019 on theprudential supervision of i nvestment firms and amending
Directives 2002/87/EC, 2009/65/EC, 2011/61/EU, 2013/36/
EU, 2014/59/EU and w2014/65/EU, as amended from time to
time, and includes any implementing measures that have been
or may be issued thereunder; 
Cap. 330."Resolution Committee" means the Resolution Committee
appointed in terms of article 7B(2) of the Malta FinancialServices Authority Act;
"third country" means a country which is not a Member
State or an EEA State.
(2) Words and expressions used in these regulations shall have
the same meaning as that assigned to them as in the Act.
Designation and 
powers of the 
competent 
authority.Cap. 330.3. (1) The Malta Financial Services Authority established by
the Malta Financial Services A uthority Act shall be the designa ted
competent authority in Malta for the purposes of implementing the
relevant provisions of the IFD and the IFR and any reference in  these
regulations to the competent authority shall be read and constr ued
accordingly.
(2) The competent authority shall exercise all the functions,
obligations and powers pursuant to the IFD and the IFR and shal l
satisfy all the requirements impos ed on competent authorities by the
IFD and the IFR.
Co-operation 
within the European 
system of 
financial supervision.4. In the exercise of its duties, the competent authority shall
take into account the convergence in  respect of supervisory too ls and
supervisory practices in the application of the laws, regulations and
administrative requirements adopted pursuant to the IFD and the  IFR.
For that purpose, the competent authority:
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(a) shall co-operate with trust and full mutual respect, as
party to the ESFS, in particular when ensuring the exchange of
appropriate, reliable and exha ustive information between them
and other parties to the ESFS;
(b) shall participate in the activities of the EBA and, as
appropriate, in the colleges of supervisors referred to in Arti cle
48 of the IFD and in Article 116 of the CRD;
(c) shall 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 recommendations issued bythe ESRB pursuant to Article 16 of Regulation (EU) No 1092/
2010;
(d) shall co-operate closely with the ESRB;
(e) shall not be inhibited by other national legislative
provisions in the performance of its duties as member of the
EBA and the ESRB, or its duties under the IFD and the IFR.
Union 
dimension of supervision.5. The competent authority shall, in the exercise of its general
duties, duly consider the potential impact of its decisions on the
stability of the financial system in the other Member States concerned
as well as in the Union as a whole and, in particular, in emerg ency
situations, based on the information available at the relevant time.
Collaboration 
concerning 
supervision.6. (1) The competent authority shall collaborate closely
with European regulatory authorities, as detailed in Schedule I I, for the
purpose of its duties pursuant to the IFD and the IFR, and Directive
(EU) 2018/843 of the European Parliament and of the Council of 30
May 2018 amending Directive (EU) 2015/849 on the prevention of the
use of the financial system fo r the purposes of money launderin g or
terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU, in particular by exchanging information about European
investment firms without delay, including:
(a) all information concerning the management and
ownership structure of the investment firm;
(b) all information concerning compliance with own
funds requirements by the investment firm;
(c) all information concerning compliance with the
concentration risk requirements and        liquidity requiremen ts
of the investment firm;
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(d) all information concerning the administrative and
accounting procedures and internal control mechanisms of the
investment firm; 
(e) any other relevant factors that may influence the risk
posed by the investment firm.
(2) Where Malta is the home Member State, the competent
authority shall provide the European regulatory authorities of the host
Member State immediately with any information and findings abou t
any potential problem s and risks posed by a European investment  firm
to the protection of clients or the stability of the financial system in thehost Member State which it has identified when supervising theactivities of a European investment firm. 
(3) Where Malta is the home Member State of the investment
firm, the competent authority shall act upon information provid ed by
the European regulatory authorities of the host Member State by taking
all measures necessary to avert or remedy the potential problem s and
risks referred to in sub-regulation (2). The competent authorit y, if so
requested by the European regulatory authorities of the host MemberState, shall explain in detail how it has taken into account th e
information and findings.
(4) (a) Where Malta is the home Member State of an
investment firm, and following the communication of the information
and findings referred to in sub-regulation (2), the European regulatoryauthorities of the host Member State consider that the competen t
authority has not taken the necessary measures referred to in sub-regulation (3), the European regulatory authorities of the host  Member
State may, after having informed the competent authority, EBA and
ESMA, take appropriate measures to  protect clients to whom serv ices
are provided or to protect the stability of the financial syste m. 
(b) Where Malta is the host Member State of a
European Investment Firm, and following the communication
of the information and findings e quivalent to those referred to
in sub-regulation (2) to the European regulatory authority, and
the competent authority considers that the European regulatory
authority has not taken the necessary measures equivalent tothose referred to in sub-regulation (3), the competent authorit y
may, after having informed the European regulatory authority,EBA and ESMA, take appropriate measures to protect clientsto whom services are provided or to protect the stability of th e
financial system.
(5) The competent authority may refer to the EBA situations
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where a request for collaboration to a European regulatory auth ority, in
particular to exchange information, has been rejected or has not been
acted upon within a reasonable time.
(6) Where the competent authority disagrees with the
measures to be taken by the European regulatory authority of th e
host Member State in relation to the information and findingsreferred to in sub-regulation (2), the competent authority may refer
the matter to the EBA and request its assistance in accordance with
Article 19 of the IFR.
(7) Where Malta is the home Member State of the investment
firm, for the purpose of assessing the condition in point (c) o f the first
sub-paragraph of Article 23(1) of the IFR, the competent author ity
may request the competent author ity of a Maltese clearing membe r to
provide information relating to the margin model and parameters  used
for the calculation of the margin requirement of the relevantinvestment firm. 
(8) The competent authority may exchange information with
the bodies listed and in the manner specified in Schedule V for thebetter carrying out of its supervisory functions in accordance with the
IFD and the IFR:
Provided that the information received or exchanged by the
competent authority or by its officers, employees or agents as well asinspectors, auditors and experts engaged by the competent autho rity,
from the bodies listed in the sai d Schedule, shall be treated a s
confidential and protected by the duty of professional secrecy.
On-the-spot 
checks and 
inspections of 
branches in another Member 
State.7. (1) Where a European investment firm carries out its
activities through a branch in Malta, the competent authority m ay
permit the European regulatory authority of the home Member Sta te
concerned, after it has notified the competent authority, to ca rry out,
itself or through an intermediary appointed for that purpose, on-the-
spot checks of the information referred to in regulation 6 andinspections of such branches.
(2) The competent authority may carry out, on a case-by-case
basis, on-the-spot checks and in spections of the activities car ried out
by branches of European investment firms in Malta and require
information from a branch about its activities and for supervis ory
purposes, where it considers it relevant for reasons of stabili ty of the
financial system in Malta. Before carrying out such checks andinspections, the competent authority shall consult the European
regulatory authority of the home Member State concerned.
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(3) On-the-spot checks and inspections of branches when
carried out in Malta shall be conducted in accordance with the laws of
Malta.
(4) As soon as possible, following completion of those checks
and inspections, the competent au thority shall communicate to t he
European regulatory authority of the home Member State, theinformation obtained and findings that are relevant for the ris k
assessment of the investment firm concerned.
Oversight of 
remuneration.8. (1) The competent authority shall collect the information
disclosed publicly by investment firms in relation to Article 51 of the
IFR as well as the information provided by investment firms on the
gender pay gap and shall use it to benchmark remuneration trends and
practices and shall provide this information to the EBA.
(2) The competent authority shall collect information on the
number of natural persons per investment firm that are remunera ted €1
million or more per financial year, in pay brackets of €1 million,
including data on their work responsibilities, the business are a
involved and the main elements of their salary, including bonus es,
long-service awards and pension contributions.
(3) The competent authority can demand investment firms to
provide it with the total remuneration figures for each member of the
management body or senior management.
(4) The competent authority shall forward the information
contained in sub-regulations (2) and (3) to the EBA.
Supervisory 
review and 
evaluation.9. (1) The competent authority shall review, to the extent
relevant and necessary, taking into account the investment firm’s size,
risk profile and business model, the arrangements, strategies,
processes and mechanisms implemented by the investment firm to
comply with the IFD and IFR and evaluate the following asappropriate and relevant, so as to ensure a sound management an d
coverage of its risks: 
(a) the risks referred to in Article 29 of the IFD;
(b) the geographical location of an investment firm’s
exposures;
(c) the business model of  the investment firm;
(d) the assessment of systemic risk, taking into account
the identification and measurement of systemic risk under
Article 23 of the IFR or recommendations of the ESRB;
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(e) the risks posed to the security of investment firms’
network and information system s to ensure confidentiality,
integrity and availability of their processes, data and assets;
(f) the exposure of investment firms to the interest rate
risk arising from non‐trading book activities;
(g) governance arrangements of investment firms and the
ability of members of the management body to perform their
duties:
Provided that for the purposes of this sub-regulation, the
competent authority shall duly take into account whether the
investment firm holds a professional indemnity insurance.
S.L. 370.05.(2) The competent authority shall establish the frequency and
intensity of the review and evaluation referred to in sub-regulation (1)having regard to the size, systemic importance, nature, scale andcomplexity of the activities of the investment firm concerned and
taking into account the principle of proportionality. The provisions ofthe Investment Services Act (Control of Assets) Regulations mus t be
taken into consideration. 
(3) The competent authority shall decide on a case‐by‐case
basis whether and in which form the review and evaluation is to becarried out with regard to investment firms that meet the conditions for
qualifying as small and non‐inte rconnected investment firms set  out in
Article 12(1) of the IFR, only where it deems it to be necessary due to
the size, nature, scal e and complexity of the activities of those
investment firms.
(4) When conducting the review and evaluation referred to in
paragraph (g) of sub-regulation (1), the competent authority shall have
access to agendas, minutes and supporting documents for meetings of
the management body and its committees, and the results of the
internal or external evaluation of the performance of the management
body.
Ongoing 
review of 
permission to 
use internal models.10. (1) The competent authority shall review on a regular
basis, and at least every three years, investment firms’ compli ance
with the requirements for the permission to use internal models  as
referred to in Article 22 of the IFR. It shall in particular have regard to
changes in an investment firm’s business and to the implementation of
those internal models to new products, and review and assess whether
the investment firm uses well‐developed and up‐to‐date techniqu es
and practices for those internal models. The competent authority shall
ensure that material deficiencies identified in the coverage of  risk by
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an investment firm’s internal models are rectified, or take steps to
mitigate their consequences, including by imposing capital add‐ ons or
higher multiplication factors. 
(2) Where for an internal market risk model numerous
overshootings as referred to in Article 366 of the CRR indicate  that the
model is not or is no longer sufficiently accurate, the competent
authority shall revoke the permission for using the internal mo del or
impose appropriate measures to ensure that the model is improve d
promptly within a set timeframe.
(3) If an investment firm has received permission from the
competent authority to apply an internal model but no longer me ets the
requirements for applying those internal models, the competent
authority shall require the invest ment firm to either demonstra te to the
satisfaction of the competent authority that the effect of non-
compliance is immaterial or present a plan and a deadline to co mply
with the requirements. The competent authority shall requireimprovements to that plan if it i s unlikely to result in full c ompliance
or if the deadline is inappropriate. If the investment firm is unlikely to
be able to restore compliance within an appropriate deadline or has not
satisfactorily demonstrated that the effect of non-compliance i s
immaterial, the permission to use the approach shall be revoked or
limited to compliant areas or those where compliance can be ach ieved
within an appropriate deadline.
(4) The competent authority shall take into account the
analysis carried out by the EBA in terms of Article 37 of the I FD and
the guidelines containing benchmarks on the basis of that analy sis
issued by the EBA, for the review of the permissions it grants to
investment firms to use internal models.
Supervisory 
measures.11. (1) The competent authority shall require an investment
firm to take the necessary measures at an early stage to addres s
relevant problems in c ircumstances where:
(a) the investment firm does not meet the requirements of
the Act, regulations or Investment Services Rules issued
thereunder, transposing the requirements of the IFD or of the
IFR;
(b) the competent authority has evidence that the
investment firm is likely to breach the Act, regulations orInvestment Services Rules issu ed thereunder, or the provisions
of the IFR, within the following twelve months.
(2) For the purposes of sub-regulation (1), the powers of the
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competent authority shall include those contained in Schedule I .
(3) The competent authority has the supervisory powers to
intervene in the exercise of its functions into the activity of investment
firms in an effective and proportionate way. 
(4) For the purposes of regulations 10, 11(3), 12 and of the
application of the IFR, the competent authority shall have thepowers as designated in Schedule I below.
Specific 
liquidity 
requirements.12. (1) The competent authority shall impose the specific
liquidity requirements referred to in paragraph (1)(k) of Schedule I
only where, on the basis of the reviews carried out in accordan ce with
regulations 9 and 10, it concludes that an investment firm that does not
meet the conditions for qualifying as a small and non‐interconn ected
investment firm set out in Articl e 12(1) of the IFR or that mee ts the
conditions set out in Article 12(1) of the IFR but has not beenexempted from liquidity requirement in accordance with Article 43(1)
of the IFR is in one of the following situations:
(a) the investment firm is exposed to liquidity risk or
elements of liquidity risk that are material a nd are not covered or
not sufficiently covered by the liquidity requirement set out inPart Five of the IFR;
(b) the investment firm does not meet the requirements
set out in Articles 24 and 26 of the IFD and other administrativemeasures are unlikely to sufficiently improve the arrangements,processes, mechanisms and strategies within an appropriate
timeframe.
(2) For the purposes of paragr aph (a) of regulation 18(1),
liquidity risk or elements of liquidity risk shall be considere d not to
be covered or to be insufficiently covered by the liquidity
requirement set out in Part Five of the IFR only where the amounts
and types of liquidity considered adequate by the competent
authority following the supervisory review of the assessment ca rried
out by investment firms in accordance with Article 24(1) of the  IFD
are higher than the investment firm’s liquidity requirement set  out in
Part Five of the IFR. 
(3) The competent authority shall determine the level of the
specific liquidity required pursuant to paragraph (1)(k) of Sch edule I
as the difference between the liquidity considered adequate pursuant tosub-regulation (2) and the liquidity requirement set out in Par t Five of
the IFR.
(4) The competent authority shal l require investment firms to
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meet the specific liquidity requi rements referred to in paragra ph (1)(k)
of Schedule I with liquid assets as set out in Article 43 of th e IFR.
(5) The competent authority shall substantiate in writing its
decision to impose a specific liquidity requirement as referred  to in
paragraph (1)(k) of Schedule I by giving a clear account of the  full
assessment of the elements referred to in sub-regulations (1) to (3).
Notification to 
EBA by the 
competent authority.13. The competent authority shall inform the EBA of:
(a) its review and evaluation process referred to in
regulation 9;
(b) the methodology used for decisions referred to in
regulation 12 and Schedule I;
(c) the level of administrative sanctions laid down by
Member States, referred to in Article 18 of the IFD.
Data protection. 14. The competent authority, when processing personal data for
the purposes of the IFD, shall do so in accordance with Regulat ion
(EU) 2016/679 of the European Parliament and of the Council of 27
April 2016 on the protection of natural persons with regard to the
processing of personal data and on the free movement of such data,
and repealing Direc tive 95/46/EC (General Data Protection
Regulation).
SCHEDULE I
SUPERVISORY POWERS
(Regulations 9, 10, 11(3), and 12)
(1) For the purposes of regulatio ns 9, 10, 11(3), and 12 and the
application of the IFR, the competent authority shall have at l east the
following powers:
(a) to require investment firms to hold own funds in
excess of the requirements set out in Article 11 of the IFR, un der
the conditions of the Investment Services Rules transposing therequirements of Article 40 of the IFD or to adjust the own fund s
and liquid assets required in case of material changes in the
business of those investment firms;
(b) to require the reinforcement of the arrangements,
processes, mechanisms and strategies implemented inaccordance with the Investment Services Rules transposing therequirements of Articles 24 and 26 of the IFD;
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(c) to require investment firms to present, within one
year, a plan to restore compliance with supervisory requirement s
pursuant to the Act, regulations or Investment Services Rules
issued thereunder, the IFD, and to the IFR and set a deadline for
its implementation, including improvements to that plan
regarding scope and deadline;
(d) to require investment firms to apply a specific
provisioning policy or treatment of assets in terms of own fund s
requirements;
(e) to restrict or limit the business, operations or network
of investment firms or to request the dives tment of activities that
pose excessive risks to the soundness of an investment firm;
(f) to require the reduction of the risk inherent in the
activities, products and systems of investment firms;
(g) to require investment firms to limit variable
remuneration as a percentage of net revenues where it isinconsistent with the maintenance of a sound capital base;
(h) to require investment firms to use net profits to
strengthen own funds;
(i) to restrict or prohibit distributions or interest
payments by an investment firm to shareholders, members or
holders of Additional Tier 1 instruments within the meaning of
the IFR, where the prohibition does not constitute an event ofdefault of the investment firm;
(j) to impose additional or more frequent reporting
requirements to those set in the IFD and the IFR, includingreporting on capital and liquidity positions;
(k) to impose specific li quidity requirements in
accordance with Article 42 of the IFD;
(l) to require additional disclosures;
(m)  to require investment firms to reduce the risks
posed to the security of investment firms’ network and
information systems to ensure confidentiality, integrity and
availability of their processes, data and assets:
Provided that, the competent authority shall notify the
Resolution Committee of any additional own funds requirement
imposed pursuant to sub-paragraph (a) for an investment firm that falls
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under the scope of the BRRD.
(2) For the purposes of paragraph (1)(j), the competent
authority may only impose additional or more frequent reporting
requirements on investment firms where the information to be reported
is not duplicative and one of the following conditions is met:
(a) one of the cases referred to in paragraphs (a) and (b)
of regulation 11(1) applies;
(b) the competent authority considers it to be necessary
to gather the evidence referred to in paragraph (b) of regulation11(1);
(c) the additional information is required for the purpose
of the supervisory review and ev aluation process referred to in
regulation 9:
Provided that, information shall be deemed to be
duplicative where the competent authority already has the same orsubstantially the same information, where that information is capable
of being produced by the competent authority or of being obtain ed by
the same competent authority through other means than a requirement
on the investment firm to report it. The competent authority sh all not
require additional information where the information is availab le to
the competent authority in a different format or level of granularitythan the additional information to be reported and that different format
or granularity does not prevent i t from producing substantially  similar
information.
(3) The additional own funds requirements referred to in
paragraph (1)(a) shall be imposed  by the competent authority on ly
where, on the basis of the reviews carried out in accordance wi th
regulations 9 and 10, it ascerta ins any of the following situat ions for
an investment firm:
(a) the investment f irm is exposed to risks or elements of
risks, or poses risks to others that are material and are not
covered or not sufficiently covered by the own fundsrequirement, and especially K‐factor requirements, set out in
Parts Three or Four of the IFR;
(b) the investment firm does not meet the requirements
set out in Articles 24 and 26 of the IFD and other supervisorymeasures are unlikely to sufficiently improve the arrangements,
processes, mechanisms and strategies within an appropriate
timeframe;
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(c) the adjustments in relation to the prudent valuation of
the trading book are insufficient to enable the investment firm  to
sell or hedge out its positions within a short period without
incurring material losses under normal market conditions;
(d) the review carried out in accordance with regulation
10 shows that non‐compliance with the requirements for theapplication of the permitted internal models will likely lead t o
inadequate levels of capital;
(e) the investment firm repeatedly fails to establish or
maintain an adequate level of additional own funds as set out i n
Article 41 of the IFD.
(4) For the purposes of paragraph (3)(a), risks or elements of
risks shall be considered not to be covered or to be insufficie ntly
covered by the own funds requirements set out in Parts Three and Fourof the IFR only where the amounts, types and distribution of capital
considered adequate by the competent authority following the
supervisory review of the assessment carried out by investment firms
in accordance with Article 24(1) of the IFD are higher than the
investment firm’s own funds requirement set out in Parts Three or Four
of the IFR:
Provided that, for the purposes of this paragraph, the capital
considered to be adequate may include risks or elements of risks thatare explicitly excluded from the own funds requirement set out in Parts
Three or Four of the IFR.
(5) The competent authority shall determine the level of the
additional own funds required pu rsuant to paragraph (1)(a) as the
difference between the capital considered adequate pursuant to
paragraph (4) and the own funds requirement set out in Parts Three or
Four of the IFR.
(6) The competent authority shal l require investment firms to
meet the additional own funds requirement referred to in paragr aph
(1)(a) with own funds subject to the following conditions:
(a) at least three quarters of the additional own funds
requirement is met with Tier 1 capital as defined in the IFR;
(b) at least three quarters of the Tier 1 capital as defined
in the IFR is composed of Common Equity Tier 1 capital as
defined in the IFR;
(c) those own funds are not used to meet any of the own
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funds requirements set out in points (a), (b) and (c) of Articl e
11(1) of the IFR.
(7) The competent authority shall substantiate in writing its
decision to impose an additional own funds requirement as referred to
in paragraph (1)(a) by giving a clear account of the full asses sment of
the elements referred to in paragraphs (3) to (6). In the case set out in
paragraph (3)(d), that includes a specific statement of why the  level of
capital established in accordance with Article 41(1) of the IFR  is no
longer considered sufficient.
(8) Competent authorities may impose an additional own funds
requirement in accordance with paragraphs (3) to (7) on investm ent
firms that meet the conditions for qualifying as small andnon‐interconnected investment firms set out in Article 12(1) of  the IFR
on the basis of a case‐by‐case assessment and where the competent
authority deems it to be justified.
(9) Taking into account the principle of proportionality and
commensurate with the size, syst emic importance,  nature, scale and
complexity of activities of investment firms that do not meet t he
conditions for qualifying as small and non‐interconnected investmentfirms set out in Article 12(1) of the IFR, the competent authority mayrequire such investment firms t o have levels of own funds which ,
based on Article 24 of the IFD, are sufficiently above the requirementsset out in Part Three of the IFR and in the IFD, including the additionalown funds requirements referred to in paragraph (1)(a), to ensure that
cyclical economic fluctuations do not lead to a breach of those
requirements or threaten the ability of the investment firm to winddown and cease activities in an orderly manner.
(10) The competent authority shall, where appropriate, review
the level of own funds that has been set by each investment fir m that
does not meet the conditions for qualifying as a small and
non‐interconnected investment firm set out in Article 12(1) of the IFR,
in accordance with paragraph (9) and, where relevant, shall
communicate the conclusions of that review to the investment firm
concerned, including any expectation for adjustments to the lev el of
own funds established in accord ance with paragraph (9). Such a
communication shall include the date by which the competentauthority requires the adjustment to be completed:
Provided that, the competent authority shall notify the
Resolution Committee of any a dditional own funds requirement
imposed pursuant to paragraph (1)(a) for an investment firm that falls
under the scope of the BRRD and about any expectation for
adjustments pursuant to this paragraph.
VERŻJONI ELETTRONIKA
B 202
________________________________________________________________________________________________________________________
Ippubblikat mid-Dipartiment tal-Informazzjoni (doi.gov.mt) — Valletta — Published by the Department of Information (doi.gov.mt) — Valletta
Mitbugħ fl-Istamperija tal-Gvern fuq karta FSC — Printed at the Government Printing Press on FSC certified paper
Prezz /Price
€0.72B 202
SCHEDULE II
BODIES WITH WHOM THE COMPETENT AUTHORITY MAY
EXCHANGE INFORMATION
(Regulation 6)
The competent authority may exchange information with:
(1) Other European regulatory authorities and may transmit
information to the ESRB, EBA, ESMA, central banks of the Member
States, the European System of Central Banks (ESCB) and the
European Central Bank in their capacity as monetary authorities and,
where appropriate, public authorities responsible for overseein g
payment and settlement systems, with confidential information w here
that information is necessary for the performance of their task s, and in
accordance with the IFD and the IFR.
(2) Bodies or authorities responsible for supervising the
entities governed by and listed in points (1) and (2) of Article 2(1) ofDirective (EU) 2015/849 of the European Parliament and of the
Council of 20 May 2015 on the prevention of the use of the financialsystem for the purposes of money laundering or terrorist financ ing,
amending Regulation (EU) No 648/2012 of the European Parliamentand of the Council, and repealing Directive 2005/60/EC of theEuropean Parliament and of the Council and Commission Directive
2006/70/EC, for compliance with the said Directive (EU) 2015/849.
VERŻJONI ELETTRONIKA