INVESTMENT   SERVICES              [CAP. 370.       1
CHAPTER 370
INVESTMENT SERVICES ACT
To regulate the carrying on of investment business and to make
provision for matters ancillary thereto or connected therewith.
19th September, 1994;
23rd September, 1994;
30th December, 1994;
8th July, 1995
ACT XIV of 1994  as amended by Acts: XXIV , XXV of 1995; Legal
Notices 191 of 1998  and 46 of 1999 ; Acts XVII of 2002 , IV of 2003 , XIII of
2004 , XII of 2006 ; Legal Notice 318 of 2006 ; Act XX of 2007 ; Legal Notice
425 of 2007 ; Acts XVII of 2009 , XIX of 2010,  X of 2011; Legal Notice 251
of 2013 ; Act XX of 2013 ; Legal Notice 147 of 2014 ; Acts XXII of 2014 , XXI
of 2015 , XIX of 2016  and XXXI of 2017 , XLIV of 2018 , V of 2020,  Act
XLVI, LXXI of 2021 and LXXII of 2021 .
PRELIMINARY
Short title. 1. The short title of this Act is the Investment Services Act.
Interpretation.
Amended by:
XVII. 2002.136;XX. 2007.61;XVII. 2009.3;X. 2011.23;L.N. 251 of 2013;XX. 2013.35;XXII. 2014.2;XXI. 2015.11;XXXI. 2017.44;XLIV .2018.5;
LXXII.2021.5 .2.(1) In this Act, unless the context otherwise requires -
"agricultural commodity derivatives" means derivative contracts
relating to products listed in Article 1 and Annex I of Parts I  to XX and
XXIV/1, to Regulation  (EU) No. 1308/2013, as well as to products
listed in Annex I to Regulation (EU) No. 1379/2013 of the Europ ean
Parliament and of the Council of 11 December 2013 on the commonorganisation of the markets in fishery and aquaculture products ,
amending Council Regulations (EC) No. 1184/2006 and (EC) No.1224/2009 and repealing Council Regulation (EC) No. 104/2000, a s
amended from time to time;
"
AIFM Directive" means Directive 2011/61/EU of the European
Parliament and of the Council of 8 June 2011 on AlternativeInvestment Fund Managers and amending Directives 
2003/41/EC  and
2009/65/EC  and Regulations (EC) No 1060/2009 and (EU) No 1095/
2010, as amended from time to time, and includes any implementing
measures that have been or may be issued thereunder;
"ancillary services" means any of the services listed within th e Third
Schedule;
"Alternative Investment Fund or AIF" means a collective
investment scheme, including subfunds thereof, which raisescapital from a number of investors, with a view to investing it  in
accordance with a defined investment policy for the benefit ofthose investors, and which does not qualify as a UCITS Scheme i n
terms of the 
UCITS Directive ;
"binding legal instrument" means any directly applicable measur es,
including, but not limited to, any implementing technical stand ards,
any regulatory technical standards or any similar measures, iss ued
under European Union legislation;
 2        CAP. 370. ]                 INVESTMENT   SERVICES
"Alternative Investment Fund Manager or AIFM" means a legal
person whose regular business is the management of one or more
AIFs;
"certificates" means those securities which are negotiable on t he
capital market and which in case of a repayment of investment b y the
issuer are ranked above shares but below unsecured bond instrum ents
and other similar instruments;
"client" means any natural or legal person to whom an investmen t
services licence holder provides investmen t or ancillary servic es;
"close links" means a situation in which two or more natural or  legal
persons are linked by:
(i) participation in the form of ownership, direct or by
way of control, of 20% or more of the votingrights or capital of an undertaking;
(ii)  "control" which means the relationship between a
parent undertaking and a subsidiary , in all thecases referred to in Article 22(1) and (2) of
Directive 2013/34/EU , or a similar relationship
between any natural or legal person and anundertaking, any subsidiary undertaking of asubsidiary undertaking also being considered to bea subsidiary of the parent undertaking which is atthe head of those undertakings;
(iii) a permanent link of both or all of them to the
same person by a control relationship;
"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 , and
Directives 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 implementing measures, implementingtechnical standards, regulatory technical standards, guidelines  and
similar measures that have been or may be issued thereunder;
"collective investment scheme" means any scheme or
arrangement which has as its object or as one of its objects th e
collective investment of capital acquired by means of an offer of
units for subscription, sale or exchange and which has thefollowing characteristics:
(a) the scheme or arrangement operates according to the
principle of risk spreading; and either
(b) the contributions of the participants and the profits or
income out of which payments are to be made to themare pooled; or 
(c) at the request of the holders, units are or are to be re-
purchased or redeemed out of the assets of the schemeor arrangement, continuously or in blocks at short
                        INVESTMENT   SERVICES              [CAP. 370.       3
intervals; or 
(d) units are, or have been, or will be issued continuously
or in blocks at short intervals:
Provided that an alternative investment fund that is not
promoted to retail investors and that does not have the charact eristic
listed in paragraph ( a) hereof shall only be deemed to be a collective
investment scheme if the scheme, in specific circumstances asestablished by regulations under this Act, is exempt from suchrequirement and satisfies any conditions that may be prescribed ;
"collective investment scheme licence" means a licence for the
issue or creation of units or the carrying on of an activity by  a
collective investment scheme issued under article 6;
"commodity derivatives" shall have the same meaning as that giv en
to the term by Article 2 of the 
MiFIR ; 
Cap. 330."competent authority" means the Malta Financial Services
Authority established by the Malta Financial Services Authority Act;
"compliance with the group capital test" means compliance by a
parent undertaking in an investment firm group with the require ments
of Article 8 of the IFR;
"Conduct of Business Rules" refers to Rules issued by the compe tent
authority under various articles of this Act;
consolidated basis" means the same as the meaning assigned to i t in
point (48) of Article 4(1) of the CRR ; 
"consolidating supervisor" means the same as the meaning
assigned to it in point (41) of Article 4(1) of the CRR ;
"the CRD" means Directive 2013/36/EU of the European
Parliament and of the Council of 26 June 2013 on access to theactivity of credit institutions and the prudential supervision of
credit institutions and investment firms, amending 
Directive 2002/
87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as
amended from time to time, and includes any implementingmeasures that have been or may be issued thereunder; 
"credit institution" means a credit institution as defined in p oint (1)
of Article 4(1) of the 
CRR ;
"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 or may
be issued thereunder;
"depositary receipts" means those securities which are negotiab le on
the capital market and which represent ownership of the securit ies of a
non-domiciled issuer while being able to be admitted to trading  on a
regulated market and traded independently of the securities of the non-
domiciled issuer;
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"derivatives" means those securities giving the right to acquir e or
sell any transferable security or giving rise to a cash settlem ent
determined by reference to transferable securities, currencies,  interest
rates or yields, commodities or other indices or measures; and referred
to in paragraphs 4 to 10 of the Second Schedule;
"Directive 2002/87/EC" means Directive 2002/87/EC of the
European Parliament and of the Council of 16 December 2002 on t he
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 
"
Directive 2013/34/EU" means Directive 2013/34/EU of the
European Parliament and of the Council of 26 June 2013 on theannual financial statements, consolidated financial statements and
related reports of certain types of undertakings, as may be ame nded
from time to time;
"document" or "documentation" includes information recorded in
any form and, in relation to information recorded otherwise tha n in
legible form, references to its production include references t o
producing a copy of the information in legible form; 
"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;
"ESMA" means the European Securities and Markets Authority
established by 
Regulation (EU) No 1095/2010 of the European
Parliament and of the Council of 24 November 2010;
"ESRB" means the European Systemic Risk Board established by
Regulation (EU) No 1092/2010 of the European Parliament and of
the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing aEuropean Systemic Risk Board;
"EU parent financial holding company" means the same as the
meaning assigned to it in point (31) of Article 4(1) of the 
CRR ; 
"EU parent institution" means the same as the meaning assigned to
it in point (29) of Article 4(1) of the CRR ; 
"EU parent mixed financial holding company" means the same as
the meaning assigned to it in point (33) of Article 4(1) of the  CRR ;
"European investment firm" means an investment  firm as
defined in Article 4(1) of the MIFID and as authorized by its
                        INVESTMENT   SERVICES              [CAP. 370.       5
European regulatory authority within the meaning of Article 5 o f
the Directive or authorized by a European regulatory authority in
an EEA State;
"European management company" has the same meaning assigned
to it in regulations made under this Act;
"European regulatory authority" means the body or bodies
designated by a Member State or EEA State other than Malta inaccordance with Article 44 of the 
AIFM Directive, Article 67 of the
MIFID, Article 97 of the UCITS Directive and Article 4 of the CRD
to carry out each of the duties provided for under the differen t
provisions of the said Directives;
"exempted person" means a person who for any reason is
exempted from any or all of the provisions of article 3;
"financial holding company" means the same as the meaning
assigned to it in point (20) of Article 4(1) of the CRR ;
"financial institution" means a financial institution as define d in
point (14) of Article 4(1) of the IFR;
"home Member State or EEA State" means:
(a) where the European investment firm is a natural person,
the Member State or EEA State in which the head office
of that person is situated; or
(b)  where the European investment firm is a legal person,
the Member State or EEA State in which its registeredoffice is situated; or
(c) where the European investment firm has, under its
national law no registered office, the Member State orEEA State in which its head office is situated;
"host Member State or EEA State" means the Member State or
EEA State, other than the home Member State or EEA State, in wh ich
an investment services licence holder has a branch or providesinvestment services and, or activities;
"the 
IFD" means Directive (EU) 2019/2034 of the European
Parliament and of the Council of 27 November 2019 on the pruden tial
supervision of investment firms and amending Directives 2002/87 /EC,
2009/65/EC, 2011/61/EU, 2013/36/EU, 2014/59/EU and 2014/65/EU,as amended from time to time, and includes any binding legalinstruments, guidelines and other measures that have been or ma y be
issued thereunder;
"the 
IFR" means Regulation (EU) 2019/2033 of the European
Parliament and of the Council of 27 November 2019 on the pruden tial
requirements of investment firms and amending Regulations (EU) No.
1093/2010, (EU) No. 575/2013, (EU) No. 600/2014 and (EU) No. 80 6/
2014, as amended from time to time, and includes any binding le gal
instruments, guidelines and other measures that have been or ma y be
issued thereunder;
 6        CAP. 370. ]                 INVESTMENT   SERVICES
"instrument" means any instrument, contract or right falling
within the Second Schedule to this Act and whether or not issue d in
Malta;
"investment advertisement" means any form or medium of
marketing activity or communication disseminated to the public by
means of all types of media, other than a prospectus, which pro motes
the purchase or procurement of an investment service or instrum ent;
"investment agreement" means any agreement the making or
performance of which by either party constitutes an investmentservice; 
"investment firm" means an investment firm as defined in Articl e
4(1) of the 
MiFID ;
"investment firm group" means an investment firm group as
defined in point (25) of Article 4(1) of the IFR;
"investment holding company" means an investment holding
company as defined in point (23) of Article 4(1) of the IFR;
"investment service" means any service and activity falling wit hin
the First Schedule  when provided in relation to an instrument:
Provided that the service of Management of Investments in
terms of the First Schedule shall also include the collective p ortfolio
management of assets of a collective investment scheme whenprovided in relation to an asset that is not an instrument with in the
meaning of the Second Schedule;
"investment services licence" means a licence to provide an
investment service under article 6; 
"Investment Services Rules" refers to Rules issued by the
competent authority under various articles of this Act;
"licence" means a collective investment scheme licence or an
investment services licence; 
"licence holder" means a person who holds a licence;"Malta’s international commitments" means Malta’s
commitments, responsibilities and obligations arising out ofmembership 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
agreement, however called, whether bilateral, multilateral, to which
Malta is a party;
"management body" means the body or bodies of a licence holder
which are appointed in accordance with national law and areempowered to set the strategy, objectives and overall direction  of
the licence holder, and oversee and monitor management decisionmaking, and includes the persons who effectively direct thebusiness of the licence holder;
"market operator" means a person  or persons who manages and, or
operates the business of a regul ated market and may be the regu lated
market itself;
                        INVESTMENT   SERVICES              [CAP. 370.       7
"Member State" means a Member State of the European
Communities;
" MIFID " means Directive 2014/65/EU  of the European Parliament
and of the Council of 15 May 2014 on markets in financial instr uments
and amending Directive 2002/92/EC and Directive 2011/61/EU, as
amended from time to time, and includes any implementing measur es
that 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 in fina ncial
instruments and amending Regulation (EU) No. 648/2012 , as may be
amended from time to time, and includes any implementing measur es,
implementing technical standards, regulatory technical standard s,
guidelines and similar measures that have been or may be issuedthereunder;
"Minister" means the Minister responsible for the regulation of
Financial Services;
"mixed-activity holding company" means a parent undertaking
other than a financial holding company, an investment holdingcompany, a credit institution, an investment firm, or a mixed f inancial
holding company within the meaning of 
Directive 2002/87/EC, the
subsidiaries of which include at least one investment firm;
S.L. 330.06."mixed financial holding company" means the same as the
meaning assigned to it in regulation 2 of the Financial Conglomerates
Regulations ;
"multilateral system" means any system or facility in which mul tiple
third-party buying and selling tradin g interests in financial i nstruments
are able to interact in the system;
"multilateral trading facility" or "MTF" means a multilateral s ystem,
operated by an investment services licence holder or a market o perator,
which brings together multiple third-party buying and selling i nterests
in instruments - in the system and in accordance with non-discretionary rules - in a way that results in a contract in ac cordance
with Title II of 
MIFID ;
"organised trading facility" or "OTF" means a multilateral syst em
which is not a regulated market or an MTF and in which multiplethird-party buying and selling interests in bonds, structured f inance
products, emission allowances or derivatives are able to intera ct in the
system in a way that results in a contract in accordance with T itle II of
MIFID.
Cap. 330."overseas regulatory authority" means an authority in a country
or territory outside Malta that is not a Member State or EEA St ate
which exercises any regulatory or supervisory function in relat ion
to financial services corresponding to a function of the compet ent
authority as defined in the Malta Financial Services Authority Act;
"parent financial holding company" means the same as the
meaning assigned to the term "parent financial holding company in a
Member State" in point (30) of Article 4(1) of the CRR ; 
 8        CAP. 370. ]                 INVESTMENT   SERVICES
"parent institution" means the same as the meaning assigned to the
term "parent institution in a Member State" in point (28) of Ar ticle
4(1) of the CRR ; 
"parent mixed financial holding company" means the same as the
meaning assigned to the term "parent mixed financial holdingcompany in a Member State" in point (32) of Article 4(1) of the  
CRR ;
"parent undertaking" means a parent undertaking within the
meaning of Article 2(9) and 22 of Directive 2013/34/EU ;
"participants" means the persons who participate in or receive,  or
are to participate in or receive, profits or income arising fro m the
acquisition, holding, management or disposal of the propertycomprised in a collective investment scheme or sums paid out ofsuch profits or income; 
"prescribed" means prescribed by regulations made under this
Act;
Cap. 386."prospectus" has the meaning assigned to it in article 2 of the
Companies Act, and the word "shares" therein shall be read as
including a reference to the word "unit";
"qualifying shareholding" means a direct or  indirect holding i n a
company which represents ten per  centum or more of the sharecapital or of the voting  rights referred to in Articles 9 and 10 of
Directive  2004/109/EC of the European Parliament and of the 
Council of the 15 December 2004 on the harmonization  oftransparency requirements in relation to information  about iss uers
whose securities are admitted to trading and amending 
Directive
2001/34/EC taking into account  the conditions regarding the
aggregation thereof laid in that Directive, or which  makes itpossible to exercise a significant influence over  the manageme nt
of the company in which that holding  subsists, and "qualifyingshareholder" shall be construed accordingly:
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 investment
services licence holders, European Investment Firms or creditinstitutions   may hold as a result of providing the service of  
underwriting or placing of financial instruments on a firm
commitment basis in terms of point 6 of Section A  to Annex 1 to
the 
MIFID, provided that those rights are, on the one hand, not
exercised or otherwise used to  intervene in the management of the
issuer and, on the other, disposed of within one year of acquis ition;
Cap. 345."regulated market" has the meaning assigned to it under the
Financial Markets 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 of t he
financial system and establishing a European Systemic Risk Boar d, as
amended from time to time, and includes any implementing measur es
                        INVESTMENT   SERVICES              [CAP. 370.       9
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/ECand repealing Commission Decision 2009/78/EC, as amended fromtime to time, and includes any implementing measures that have been
or may be issued thereunder;
"
Regulation (EU) No. 1094/2010" means Regulation (EU) No.
1094/2010 of the European Parliament and of the Council of 24November 2010 establishing a European Supervisory Authority(European Insurance and Occupational Pensions Authority), amend ing
Decision No. 716/2009/EC and repealing Commission Decision 2009 /
79/EC, as amended from time to time, and includes any implement ing
measures that have been or may be issued thereunder;
"
Regulation (EU) No 1095/2010" refers to 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 Decision No
716/2009/EC and repealing Commission Decision 2009/77/EC;
"
Regulation (EU) No. 1227/2011" means Regulation (EU) No.
1227/2011 of the European Parliament and of the Council of 25October 2011 on wholesale energy market integrity andtransparency;
"
Regulation (EU) No. 648/2012" means Regulation (EU) No.
648/2012 of the European Parliame nt and of the Council of 4 Jul y
2012 on OTC derivatives, central counterparties and traderepositories, as may be amended from time to time, and includesany implementing measures, implementing technical standards,regulatory technical standards, guidelines and similar measures  that
have been or may be issued thereunder;
"
Regulation (EU) No. 1308/2013" means Regulation (EU) No.
1308/2013 of the European Parliament and of the Council of 17December 2013 establishing a common organisation of the marketsin agricultural products and repealing Council Regulations 
(EEC) No.
922/72 , (EEC) No. 234/79 , (EC) No. 1037/2001  and (EC) No. 1234/
2007 ;
S.L. 330.09."resolution entity" means the same as the meaning assigned to i t in
sub-regulation (1) of regulation 2 of the Recovery and Resolution
Regulations ;
S.L. 330.09."resolution group" means the same as the meaning assigned to it  in
sub-regulation (1) of regulation 2 of the Recovery and Resolution
Regulations ;
"Solvency II Directive" means Directive 2009/138/EC of the
European Parliament and of the Council of 25 November 2009 onthe taking-up and pursuit of the business of Insurance and
 10        CAP. 370. ]                 INVESTMENT   SERVICES
Reinsurance, as amended from time to time, and includes any
implementing measures that have been or may be issued thereunde r;
"structured finance products" means those securities created to
securitise and transfer credit risk associated with a pool of f inancial
assets entitling the security holder to receive regular payment s that
depend on the cash flow from the underlying assets;
"sub-consolidated basis" means the same as the meaning assigned
to it in point (49) of Article 4(1) of the CRR ;
Cap. 386."subsidiary" has the same meaning as that given to the term by
article 2 of the Companies Act;
"third country" means a country which is not a Member State or
an EEA State;
"trading venue" means a regulated market, an MTF or an OTF;"UCITS" means undertakings for collective investment in
transferable securities in terms of the 
UCITS Directive as defined
herein;
"UCITS Directive " means Directive 2009/65/EC of the European
Parliament and of the Council of 13 July 2009 on the coordinati on
of laws, regulations and administrative provisions relating toundertakings for collective investment in transferable securiti es
(UCITS) (recast), as amended from time to time, and includes an y
implementing measures that have been or may be issued thereunde r;
"UCITS management company" me ans a management company as
defined in point (b) of Article 2(1) of the 
UCITS Directive ;
"unit" means any representation of the rights and interests of
participants in a collective investment scheme;
"wholesale energy product" means wholesale energy products as
defined in point (4) of Article 2 of Regulation (EU) No. 1227/201 1;
Cap. 252."working days" shall not include Saturdays and the days referre d
to in the 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
Investment Services 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 wit h
this Act and any regulations and Investment Services Rules made  or
issued thereunder transposing the CRD , any binding legal instruments
issued under the CRD, and in accordance with the CRR, the terms
"institution", "parent institution", "EU parent institution" an d "parent
undertaking" shall also include:
(a) financial holding companies and mixed financial
holding companies that have been granted approval inaccordance with article 10CA of this Act and, or
Article 21a of the 
CRD ; 
(b) designated institutions controlled by an EU parent
                        INVESTMENT   SERVICES              [CAP. 370.       11
financial holding company, an EU parent mixed
financial 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 10CA(5) of this Act and, or Article 21a(4) ofthe 
CRD  
(c) financial holding companies, mixed financial holding
companies or institutions designated pursuant toarticle 16AA(1)(f) of this Act and, or Article 21a(6)(d)
of the 
CRD :
Provided that for the purposes of this sub-article:
(i) the term "control" means the same as the
meaning assigned to it in point (37) of Article4(1) of the 
CRR , and the term "controlled" shall
be construed accordingly
(ii) the term "institution" means the same as the
meaning assigned to it in point (3) of Article4(1) of the 
CRR .
(1B) Reference to the "approval" of financial holding companies
or mixed financial holding companies in this Act and any regula tions
and, or Investment Services Rules issued thereunder, means anapproval granted by the competent authority in terms of article  10CA
of this Act or an approval granted through the joint decision o f the
competent authority and any European regulatory authority in te rms of
article 10CA of this Act and Article 21a of the 
CRD as the case may
be. 
(1C) Reference to the "exemption" of financial holding
companies or mixed financial holding companies in this Act and any
regulations and, or Investment Services Rules issued thereunder ,
means an exemption granted by the competent authority in terms of
article 10CA of this Act or an exemption granted through the jo int
decision of the competent authority and any European regulatoryauthority in terms of article 10CA of this Act and Article 21a of the
CRD , as the case may be.
(2) In this Act and in any regulations made thereunder, if there
is any conflict between the English and Maltese texts, the Engl ish
text shall prevail.
(3) The objective of this Act is, in part, to transpose and
implement the provisions of the AIFM Directive, the BRRD, the
CRD, the MIFID, the MiFIR and the UCITS Directive, and any EU
Regulations or Directives on financial services and consequently this
Act and any regulations adopted thereunder shall be interpreted  and
applied accordingly.
 12        CAP. 370. ]                 INVESTMENT   SERVICES
Competent 
authority.
Added by:
XVII. 2002.137.Substituted by:X. 2011.24.
Amended by:
XX. 2013.36;XXII. 2014.3;XXI. 2015.12;XXXI. 2017.45;
LXXII.2021.6.2A. (1) The competent authority shall carry out its functions
under this Act and, in particular, shall ensure compliance with  the
provisions of this Act.
(2) The competent authority shall also carry out the functions a nd
duties as competent authority for all purposes of the AIFM Directive ,
the CRD , the CRR , the MIFID , the MiFIR , the UCITS Directive , the
IFD and the IFR, and the Commission of the European Union,
ESMA, the EBA and European regulatory authorities shall beinformed accordingly.
(2A) The competent authority shall have the expertise, resource s,
operational capacity, powers and independence necessary to carr y out
its functions and exercise its powers at law.
(3) Without prejudice to any other duty arising from this Act,
the 
AIFM Directive, the MiFID, the MiFIR, the UCITS Directive,
the IFD or the IFR, the competent authority shall:
(a) notify ESMA of the complaint and redress procedures
which are available in Malta;
(b) notify the Commission of the European Union, ESMA
and the other European regulatory authorities that it isthe contact point in terms of article 17(1) and that it isthe authority designated to receive requests forexchange of information or cooperation in terms ofthis Act;
(c) send to ESMA and to the Commission of the European
Union, a list of the categories of bonds referred to in
Article 54(1) of the 
UCITS Directive  together with the
categories of issuers authorised, in accordance withthe laws and supervisory arrangements mentioned inthat sub-paragraph, to issue bonds complying with thecriteria set out in Article 54 of the 
UCITS Directive . A
notice specifying the status of the guarantees offeredshall be attached to those lists;
(d) ensure that all information received under the third
paragraph of Article 51 of the 
UCITS Directive
aggregated in respect of all the management orinvestment companies they supervise is accessible toESMA in accordance with Article 35 of 
Regulation
(EU) No 1095/2010 , and ESRB in accordance with
Article 15 of Regulation (EU) No 1092/2010 for the
purpose of monitoring systemic risks at EuropeanUnion level;
(e) subject to the conditions laid down in Article 35 of
Regulation (EU) No 1095/2010 , provide ESMA and
the ESRB with aggregated information relating to theactivities of AIFMs under their responsibility;
(f) provide ESMA and other European regulatory
authorities with any information required for thepurposes of carrying out its duties under the 
AIFM
Directive .
                        INVESTMENT   SERVICES              [CAP. 370.       13
Cap. 330.(4) Without prejudice to the functions, powers and duties
assigned to the competent authority by means of this Act, thecompetent authority shall also have the functions, powers andduties assigned to it under the 
Malta Financial Services Authority
Act and under any regulations made thereunder for the purposes of
transposing the provisions of the BRRD .
LICENSING REQUIREMENTS
Requirement of 
licence for investment services.
Amended by:
XVII. 2002.138;XXXI. 2017.46.3.(1) No person shall provide, or hold himself out as
providing, an investment service in or from within Malta unless  he
is in possession of a valid investment services licence. 
(2) No body corporate, unincorporated body or association
formed in accordance with or existing under the laws of Malta,shall provide or hold itself out as providing an investment ser vice
in or from within a country, territory or other place outside M alta
unless it is in possession of a valid investment services licen ce.
(3) The competent authority may by notice in writing to any
person determine that -
(a) a service falls within the First Schedule when provided
in relation to an instrument;
(b) an instrument, contract or right falls within the Second
Schedule and whether or not issued in Malta; or
(c) a service falls within the Third Schedule;
and subject to any appeal under article 19 with respect to such
person the determination by the Competent Authority unless overruled by the Tribunal shall be conclusive for all purposes of t his
Act.
Requirement of 
licence for collective investmentscheme.4.(1) Subject to the provisions of sub-article (3), no
collective investment scheme shall issue or create any units orcarry on any activity in or from within Malta unless there is i n
respect of it a valid collective investment scheme licence. 
(2) Subject to the provisions of sub-article (3), no collective
investment scheme formed in accordance with or existing under t he
laws of Malta shall issue or create any units or carry on any a ctivity
in or from within a country, territory or other place outside M alta
unless there is in respect of it a valid collective investment scheme
licence.
(3) No collective investment scheme shall be precluded by the
provisions of sub-article (1) from issuing or creating such uni ts or
from taking such steps as may be necessary for the incorporatio n
or, as the case may be, the establishment of the scheme or fromtaking such steps as may be necessary for securing theauthorisation of the scheme by the competent authority.
APPLICATION, GRANT, REVOCATION, ETC., OF LICENCES
Application for a 
licence.5. An application for a licence shall be made in the form and
manner required by the competent authority and shall furthermor e - 
(a) contain or be accompanied by such information and
 14        CAP. 370. ]                 INVESTMENT   SERVICES
particulars, in addition to those required by this article,
as the competent authority may require or as may beprescribed;
(b) be verified in the manner and to the extent required by
the competent authority, or as may be prescribed;
(c) contain the address in Malta for service on the
applicant of any notice or other document required orauthorised to be served on him by or under this Act;
(d) in the case of an investment services licence, be
accompanied by a programme of operations setting outsuch matters as may be required to be set out by thecompetent authority from time to time;
(e) in the case of a collective investment scheme licence,
specify the nature of the collective investment schemeconcerned; and
(f) be accompanied by such fee as may be prescribed in
respect of the licence applied for.
Power of 
competent authority to refuse or grant licence.
Amended by:
XVII. 2002.139;IV . 2003.174;XX. 2007.62;XIX. 2010.52;XX. 2013.36;XXXI. 2017.47;
LXXII.2021.7 .6.(1) The competent authority may grant or refuse to grant a
licence applied for under this Act:
Provided that the competent authority shall not -
(a) (i) grant an investment services licence unless it is
satisfied that the applicant is a fit and properperson to provide the investment servicesconcerned and that the applicant will complywith and observe regulations made under this Act
as well as any Investment Services Rules and anyConduct of Business Rules issued by thecompetent authority made under this Act andwhich are applicable to him;
(ii) grant an investment services licence for the
provision of any investment service other thanacting as trustee or custodian in relation to acollective investment scheme:
(a) if the applicant is a body corporate, unless
it has both its head office and registeredoffice in Malta;
(b) if the applicant is a body corporate with no
registered office under its national law,unless it has its head office in Malta; or
(c) if the applicant is not a body corporate
unless the applicant’s head office is inMalta;
(iii) grant an investment services licence solely for
the provision of an ancillary service;
(b) grant a collective investment scheme licence unless it
is satisfied that the scheme will comply in all respectswith any Investment Services Rules and regulationsmade under this Act and applicable to it and that its
                        INVESTMENT   SERVICES              [CAP. 370.       15
directors, and officers, or in the case of a trust, its
trustees, are fit and proper persons to carry out thefunctions required of them in connection with thescheme;
(c) grant a licence to an applicant unless the relevant
European regulatory authorities have been consulted inthe instances referred to in article 17C;
Added by:
XXXI. 2017.47.(d) grant a licence to an applicant if there are objective
and demonstrable grounds for believing that themanagement body of the applicant may pose a threat toits effective, sound and prudent management and to theadequate consideration of the interest of its clients and
the integrity of the market; 
Added by:
XXXI. 2017.47.(e) grant a licence to an applicant unless it is satisfied that
the members of the management body of the applicantare of sufficiently good repute, possess sufficientknowledge, skills and experience and commit sufficienttime to perform their functions with the applicant;
(f) grant a licence to an applicant which has an investment
holding company or a mixed financial holding companyas its parent undertaking unless it is satisfied that themembers of the management body of such parentundertaking are of sufficiently good repute and possesssufficient knowledge, skills and experience to effectivelyperform their duties, taking into account the specific roleof an investment holding company or mixed financialholding company.
(2) ( a) In granting a licence the competent authority may
subject it to such conditions as it may deemappropriate, and having granted a licence it may, fromtime to time, vary or revoke any condition so imposedor impose new conditions.
(b) For the better carrying out of the provisions of this
Act, and to transpose, implement and give effect to the
provisions and requirements of Directives, Regulationsand other legislative matters of the European Unionrequiring transposition or implementation, thecompetent authority may, from time to time, issue andpublish Investment Services Rules and Conduct ofBusiness Rules which shall be binding on licenceholders and others as may be specified therein. SuchInvestment Service Rules and Conduct of BusinessRules may lay down additional requirements andconditions in relation to activities of licence holders,the conduct of their business, their relations withcustomers, the public and other parties, theirresponsibilities to the competent authority, reportingrequirements, financial resources, capital adequacyand related requirements, and any other matters as thecompetent authority may consider appropriate.
 16        CAP. 370. ]                 INVESTMENT   SERVICES
(3) When considering whether to grant or refuse to grant a
licence the competent authority shall, in particular, have rega rd to -
(a) the protection of investors and the general public;
(b) the protection of the reputation of Malta taking into
account Malta’s international commitments;
(c) the promotion of competition and choice; and
(d) in the case of a collective investment scheme licence,
the reputation and suitability of the applicant and allother parties connected with the scheme.
Substituted by:
XXXI. 2017.47. (4) ( a) Every investment services licence shall specify the
investment service which the holder thereof has been authorised  to
provide, and shall, where applicable, cover one or more of theancillary services set out in the Third Schedule;
(b) Every collective investment scheme licence shall specify
the class of collective investment scheme to which thelicence relates.
 (5) Without prejudice to the generality of sub-article (2), the
conditions to which the competent authority shall subject a lic ence
may be made applicable, or be prescribed to be applicable, to -  
(a) all investment services licences or all collective
investment scheme licences, as the case may be; 
(b) certain types of licences;
(c) all licences granted to certain types of licence holders;
(d) all licences in relation to particular services or
schemes, as the case may be.
Substituted by:
XXXI. 2017.47.(6) Within six months from the date of the submission of a
properly completed application form together with the requisitedocumentation, the competent authority shall inform an applican t
in writing of its decision whether or not to grant a licence:
Provided that, the competent authority shall inform a
UCITS management company which has submitted an applicationfor authorisation of a UCITS or where applicable a self-managedUCITS, in writing, within two months of the submission of acomplete application whether or not the collective investmentscheme has been authorised. Where an investment company has notdesignated a management company, this proviso shall not apply a nd
the first paragraph of this sub-article shall apply:
Provided further that the competent authority shall inform
an AIFM in writing within three months of the submission of acomplete application whether or not authorisation has been gran ted.
The competent authority may prolong this period for up to three
additional months where it considers it necessary due to thespecific circumstances of the case and after having notified th e
AIFM accordingly.
(7) Any requirement in this Act that a person be a fit and
proper person to carry out certain activities or functions shal l be
interpreted as a requirement not only that such person be a fit  and
                        INVESTMENT   SERVICES              [CAP. 370.       17
proper person to carry out such activities or functions, but al so that
any qualifying shareholder or members, director of officer of s uch
person, and, in the case of a trust, each one of its trustees, be a fit
and proper person to carry out such activities or functions.
(8) ( a) Where close links exist between an applicant and any
other person the competent authority shall:
(i) only grant a licence if it considers that such
close links do not prevent it from exercisingeffectively its supervisory functions; and 
(ii) refuse to grant such a licence if it considers that
the laws, regulations or administrativeprovisions of any country outside Maltagoverning one or more persons with whom theapplicant has close links, or their enforcement,prevent the effective exercise of its supervisoryfunctions.
(b) The competent authority may from time to time, by
means of Investment Service Rules under this Actdefine the circumstances in which "close links" are tobe regarded as existing between any two or morepersons.
(9) The competent authority shall establish a register of all
holders of an investment services licence. This register, which  shall
be publicly available, shall also indicate the services in rela tion to
which each investment services licence was issued and shall beupdated on a regular basis.
(10) The competent authority shall notify ESMA whenever an
investment services licence has been granted by the competentauthority in terms of this article.
Power of 
competent authority to cancel 
or suspend licences.
Amended by:
XVII. 2002.140;
XX. 2007.63;XX. 2013.38;XXXI. 2017.48;
LXXII.2021.8 .7.(1) The competent authority may at any time cancel or
suspend a licence in accordance with the provisions of this Act .
 (2) In the case of an investment services licence, the competen t
authority may cancel or suspend a licence -
(a) if it considers that the holder thereof is not a fit and
proper person to provide the investment service he isauthorised to provide; or
(b) if it considers that the holder thereof does not fulfil the
requirements of, or has contravened, any of theprovisions of this Act or regulations made thereunder or
of any applicable Investment Services Rules or Conductof Business Rules issued by the competent authority, orhas failed to satisfy or comply with any obligation orcondition to which he or the licence is subject byvirtue of or under this Act; or
(c) if the competent authority has been furnished by or on
behalf of the licence holder with information which isfalse, inaccurate or misleading, or if the licence holderhas obtained the licence by making false statements or byany other irregular means; or
 18        CAP. 370. ]                 INVESTMENT   SERVICES
(d) if the licence holder has not commenced to provide the
service he has been authorised to provide within thetime provided for in the licence or has ceased toprovide such service; or
(e) if it considers it desirable to cancel or suspend the
licence for the protection of investors and the generalpublic, and the reputation of Malta taking into accountMalta’s international commitments; or
(f) at the request of the licence holder; or
(g) in any of the circumstances under which the competent
authority would have been precluded from issuing thelicence under this Act or where under this Act it wouldhave been entitled to refuse the grant of such licence:
       Provided that an investment services licence shall
automatically be cancelled if the licence holder is eitherdeclared bankrupt, or goes into liquidation, or makes acomposition with its creditors, or is otherwise dissolved.
(3) In the case of a collective investment scheme licence, the
competent authority may cancel or suspend a licence -
(a) if it considers that the directors, officers or trustees of
the scheme are not fit and proper persons to carry outthe functions required of them in connection with thescheme; or
(b) if it considers that the scheme to which the licence
refers does not fulfil the requirements of any provisionof this Act or of any Investment Services Rules orregulations made thereunder, or there has been acontravention of any such provision as aforesaid, or anobligation or condition to which the scheme or thelicence is subject by virtue of or under this Act has notbeen satisfied or complied with; or
(c) if information has been furnished to the competent
authority by or on behalf of or in relation to thescheme which is false, inaccurate or misleading; or
(d) if the scheme has not commenced the activities which
it was authorised to carry on within the time providedfor in the licence or has ceased to carry on suchactivities; or
(e) if it considers it desirable to cancel or suspend the
licence for the protection of investors and the generalpublic and the reputation of Malta taking into accountMalta’s international commitments; or
(f) at the request of the manager or trustee or custodian of
the scheme, or their equivalent:
    Provided that a collective investment scheme licence
shall automatically be cancelled if the licence holder iseither declared bankrupt, or goes into liquidation, ormakes a composition with its creditors, or is otherwisedissolved.
                        INVESTMENT   SERVICES              [CAP. 370.       19
(4) The competent authority shall notify ESMA of any
cancellation of an investment services licence in terms of sub-article (2).
Notification of 
proposed refusal, variation, cancellation or suspension of a licence.
Amended by:
XVII. 2002.141.8.(1) Where the competent authority proposes -
(a) to vary any condition to which the licence is subject or
to impose a condition thereon; or
(b) to refuse an application for a licence or to cancel or
suspend a licence,
it shall give the applicant or, as the case may be, the licence  holder
or the manager and trustee or custodian of a collective investm ent
scheme, or their equivalent, notice in writing of its intention  to do
so, setting out the reasons for the decision it proposes to tak e.
 (2) Every notice given under sub-article (1) shall state that t he
recipient of the notice may, within such reasonable period afte r the
service thereof as may be stated in the notice (being a period of not
less than forty-eight hours and not longer than thirty days), m ake
representations in writing to the competent authority giving re asons
why the proposed decision should not be taken, and the competen t
authority shall consider any representation so made before arri ving
at a final decision.
(3) The competent authority shall as soon as practicable notify
its final decision in writing to any of the persons to whom not ice is
to be given under sub-article (1).
Application of 
CRR  to certain 
investment firms.
Added by:
LXXII.2021.3.8A. (1) The competent authority may decide to apply the
requirements of the CRR pursuant to point (c) of the first sub-
paragraph of Article 1(2) of the IFR to an investment firm to carry out
any of the activities listed in points (3) and (6) of Section A  of Annex I
to MiFID, where the total value of the consolidated assets of such
investment firm is equal to or exceeds five billion euro(€5,000,000,000), calculated as an average of the previous twel ve (12)
months, and one or more of the following criteria apply:
(a) such investment firm carries out those activities on
such a scale that the failure or the distress of theinvestment firm could lead to systemic risk;
(b) the investment firm is a clearing member as defined in
point (3) of Article 4(1) of the 
IFR, or
(c)  the competent authority considers it to be justified in
light of the size, nature, scale and complexity of theactivities of the investment firm concerned, taking intoaccount the principle of proportionality and havingregard to one or more of the following factors: 
(i) the importance of the investment firm for the
economy of Malta or of the European Union; 
(ii) the significance of the investment firm’s cross-
border activities; 
(iii) the interconnectedness of the investment firm
 20        CAP. 370. ]                 INVESTMENT   SERVICES
with the financial system.
(2)  Sub-article (1) shall not apply to commodity and emission
allowance dealers, collective investment undertakings or insura nce
undertakings.
(3) Where the competent authority decides to apply the
requirements of the CRR to an investment firm in accordance with
sub-article (1), that investment firm shall be supervised for c ompliance
with prudential requirements under Titles VII and VIII of the CRD as
transposed in national law. 
(4) Where the competent authority decides to revoke a decision
taken in accordance with sub-article (1), it shall inform the i nvestment
firm without delay: 
Provided that, any decision taken by the competent authority
under sub-article (1) shall cease to apply where an investment firm no
longer meets the threshold referred to in that sub-article, cal culated
over a period of twelve consecutive months.
(5) For the purposes of this article, the term "investment firm "
means an investment firm licensed under this Act.
OBLIGATIONS OF LICENCE HOLDERS AND OTHERS
Changes in 
information; payment of fees.
Amended by:
XVII. 2002.142;
LXXII.2021.10 .9.(1) The holder of an investment services licence, an
investment holding company or mixed financial holding company a nd
the manager of a collective investment scheme which has beenlicensed under this Act, or any other person having responsibil ity
for the day to day administration or management of such a schem e,
shall provide the competent authority with particulars of anychanges in the information provided under this Act as soon as s uch
holder, manager or person becomes aware of such changes andshall notify the competent authority, on a continuous basis, of  any
changes or circumstances which give rise to the existence of cl ose
links within the meaning in article 6.
(2) Every holder of a licence shall pay to the competent
authority such periodic fee, and within such time, as may from time
to time be prescribed.
Persons providing 
administrative services.
Added by:
XVII. 2002.143.
Amended by:
XX. 2007.62;XVII. 2009.4.9A. (1) Any person who in Malta or from Malta provides to
licence holders in Malta, or to equivalent authorised persons a nd
schemes overseas, administrative services which do not themselv es
constitute licensable activity under this Act, shall be require d to
apply for recognition by the competent authority under this art icle,
and no person shall provide such services unless he is sorecognised.
(2) The competent authority may from time to time, issue
Investment Service Rules laying down the requirements andconditions for granting recognition, providing for the refusal of
recognition and for the variation, cancellation and supervision  of
                        INVESTMENT   SERVICES              [CAP. 370.       21
recognition and generally regulating the provision of such
administrative services. Such Investment Service Rules may inparticular include provision for the following matters:
(i) establishing which activities constitute
administrative services for the purposes of thisarticle;
(ii) the form and the content of applications to the
competent authority for recognition;
(iii) the application, annual and other fees payable in
respect of recognition;
(iv) the obligation to supply documentation and
other information to the competent authority;
(v) measures to allow the competent authority to
ensure compliance by recognised administratorswith this Act and Investment Service Rulesissued thereunder;
(vi) arrangements for the exchange of information
with other regulatory bodies both in Malta andoverseas;
(vii) providing for the mutual recognition of persons
recognised as fit to provide such services outsideMalta;
(viii) to provide for the imposition of administrative
penalties up to a maximum of forty-fivethousand euro (€45,000) or for otheradministrative sanctions in case of any breach ofthe provisions of this article or of the applicableInvestment Services Rules or of any of theconditions attached to a recognition certificate,where any;
(ix) generally any other matter ancillary or
connected with the above.
(3) Where the competent authority refuses, varies, cancels or
suspends a recognition issued in terms of this article or impos es an
administrative penalty in terms of the applicable InvestmentServices Rules, an appeal shall lie to the Financial Services
Tribunal and the provisions of article19(3) shall apply to such
appeal.
Participation in an 
investment services licence holder.
Amended by:
XVII. 2002.144.Substituted by:XVII. 2009.5. 10. (1) Notwithstanding anything contained in an any other
law, any person or persons acting in concert (hereinafter refer red to
in this Act as the "proposed licence acquirer") who have taken a
decision either to -
(a) acquire, directly or indirectly, a qualifying
shareholding in an investment services licence holder;
(b) increase, directly or indirectly, an existing
shareholding which is not a qualifying shareholding soas to cause it to become a qualifying shareholding inan investment services licence holder; or
(c) further increase, directly or indirectly, such qualifying
 22        CAP. 370. ]                 INVESTMENT   SERVICES
shareholding in an investment services licence holder
as a result of which the proportion of the voting rightsor of the capital held would reach or exceed twenty per
centum , thirty per centum  or fifty per centum  or so that
the investment services licence holder would becomeits subsidiary,
(hereinafter referred to in this Act as the "proposed acquisiti on"),
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 Investment Services Rules require, including t he
form in which such notification shall be made and the criteriaadopted by the competent authority in determining whether suchperson is a fit and proper person.
(2) 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 an investment services licence holder;
(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 per
centum , thirty per centum  or fifty per centum  or so that
the investment services licence holder would cease tobe 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 Investment Services Rules require.
(3) Sub-articles (1) and (2) shall apply irrespective of whether
or not any of the relevancy shares listed on a regulated marketwithin the meaning of the 
Financial Markets Act or  on  an
equivalent market which is not situated in a Member State or anEEA State.
(4) It shall be the duty of an investment services licence holde r
to notify the competent authority forthwith upon becoming awarethat any person has taken any action set out in sub-articles (1 ) or
(2).
(5) If any person or any investment services licence holder
takes or decides to take any action set out in sub-articles (1)  or (2)
without notifying the competent authority or obtaining its appr oval
in terms of article 10A, then, without prejudice to any other p enalty
which may be imposed under this Act, the competent authorityshall have the power to make an order:
(a) restraining such person or investment services licence
holder from taking, or continuing with, such action;
(b) declaring such action to be void and of no effect;
                        INVESTMENT   SERVICES              [CAP. 370.       23
(c) requiring such person or investment services licence
holder to take such steps as may be necessary torestore the position existing immediately before theaction was taken;
(d) restraining such person or investment services licence
holder from exercising any rights which such actionwould, if lawful, have conferred upon them, includingthe right to receive any payment or to exercise anyvoting rights attaching to the shares acquired; or
(e) restraining such person or investment services licence
holder from taking any similar action or any otheraction within the categories set out in sub-articles (1)and (2).
(6) 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 against
the sound and prudent management of an investment serviceslicence holder, the competent authority may issue a notice ofobjection and exercise any of the powers assigned to it under t his
Act to put an end to such situation, including the power to iss ue
directives as it may deem reasonable and appropriate in thecircumstances.
(7) A copy of any notice served on the person concerned in
terms of sub-article (6) shall be served on the company to whos e
shares it relates.
(8) The competent authority, may, by means of Investment
Services Rules issued under this Act, indicate the circumstance s
when persons are to be regarded as "acting in concert".
Assessment 
procedure.
Added by:
XVII. 2009.6.
Amended by:
X. 2011.25;
XXII. 2014.4;
XXXI. 2017.49;
LXXII.2021.11 .10A. (1) The competent authority shall, promptly and in any
event within two working days following receipt of the notifica tion
required under article 10(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 10(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 an assessment on the basis ofsuch information as may be determined by Investment ServicesRules issued for this purpose.
(3) The competent authority shall inform the proposed acquirer
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
and no later than the fiftieth working day of such period, requ est
any further information that is necessary to complete theassessment. Such a request shall be made in writing and shallspecify the additional information needed.
 24        CAP. 370. ]                 INVESTMENT   SERVICES
(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 interrupted. The interruption period shall not exceedtwenty working days. Any further requests by the competentauthority for completion or clarification of the information sh all be
at its discretion but shall not result in an interruption of su ch
period.
(6) The competent authority may extend the interruption
referred to in sub-article (5) up to thirty working days if theproposed acquirer is: 
(a) a natural or legal person situated or regulated in
countries that are not Member States or EEA States; or
(b) a natural or legal person not subject to supervision under
the 
MIFID , the UCITS Directive , the CRD , the IFD, or
the Solvency Directive.
(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) The competent authority may refuse the proposed
acquisition only if there are reasonable grounds for doing so o n the
basis of the criteria set out in the Investment Services Rulesreferred to in article 10(1) or if the information provided by the
proposed acquirer is incomplete.
(10) If the competent authority decides to refuse the proposed
acquisition, it shall, within two working days, and not exceedi ng
the assessment period, inform the proposed acquirer in writingspecifying the reasons for such decision. The competent authori ty
may, whether at the request of such proposed acquirer or not, i ssue
a public statement indicating such reasons.
(11) If the competent authority does not refuse the proposed
acquisition in writing within the assessment period, such propo sed
acquisition shall be deemed to be approved.
(12) Without prejudice to the provisions of article 22, where a
qualifying shareholding in an investment services licence holde r is
acquired notwithstanding the refusal of the competent authority , the
exercise of the corresponding voting rights shall be suspended and
any of the votes cast in contravention of this sub-article shal l be
                        INVESTMENT   SERVICES              [CAP. 370.       25
null and void.
(13) The competent authority may fix a maximum period for
concluding the proposed acquisition and extend it whereappropriate.
(14)  Notwithstanding the provisions of sub-articles (1) to (6),
where two or more proposals to acquire or increase qualifyingshareholdings in the same investment services licence holder ha ve
been notified to the competent authority, the latter shall trea t the
proposed acquirers in a non-discriminatory manner.
Co-operation with 
European regulatory authorities and overseas regulatory authorities in case of acquisitions.
Added by:
XVII. 2009.7.
Amended by:
XXII. 2014.5.10B. (1) The competent authority shall work in full
consultation with the European regulatory authorities or overse as
regulatory authorities when carrying out the assessment referre d to
in article 10A(2) if the proposed acquirer is one of the follow ing:
(a) a credit institution, insurance undertaking, reinsurance
undertaking, investment firm or UCITS managementcompany authorised in another Member State or EEAState or in a sector other than that in which theacquisition is proposed;
(b) the parent undertaking of a credit institution, 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;
(c) a person controlling a credit institution, 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.
(2) The competent authority shall, without undue delay,
provide any information which is essential or relevant for theassessment referred to in article 10A(2) to the European regula tory
authority or overseas regulatory authority requesting suchinformation. Upon request, the competent authority shallcommunicate to the European regulatory authority or overseasregulatory authority all relevant information and shallcommunicate on its own initiative all essential information. Adecision by the competent authority in terms of article 10A sha ll
indicate any views or reservations expressed by the Europeanregulatory authority or overseas regulatory authority responsib le
for the proposed acquirer.
Mergers, 
reconstructions, divisions and changes in share capital or voting rights.
Added by:
XVII. 2009.8.10C. (1) Notwithstanding anything contained in any other law,
and without prejudice to article 10(1) and (2), the consent of the
competent authority given in writing shall be required before a n
investment services licence holder may lawfully:
(a) sell or dispose of its business or any significant part
thereof;
(b) merge with any other company, whether licensed under
this Act or not;
 26        CAP. 370. ]                 INVESTMENT   SERVICES
(c) undergo any reconstruction or division; or
(d) increase or reduce its nominal or issued share capital
or effect any material change in voting rights.
(2) It shall be the duty of all directors and qualifying
shareholders of an investment services licence holder to notify  the
competent authority forthwith in writing, upon becoming awarethat such investment services licence holder intends to take an y of
the actions set out in 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 or the
investment services licence holder concerned in writing for thereason for its refusal.
(4) If any person or any investment services licence holder
takes or decides to take any action set  out in sub-article (1)  without
obtaining the consent of the competent authority, then, withoutprejudice 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 investment services licence
holder from taking, or continuing  with, such action;
(b) declaring such action to be void and of no effect;
(c)  requiring such person or investment service licence
holder to take such steps as may be necessary torestore the position existing immediately before theaction was taken;
(d) restraining such person or investment services licence
holder from exercising any rights which such actionwould, if lawful, have conferred upon them, includingthe right to receive any payment or to exercise anyvoting rights attaching to the shares acquired;
(e) restraining such person or investment services licence
holder from taking any similar action or any otheraction within the categories set out in sub-article (1).
Approval of 
financial holding companies and mixed financial holding companies.
Added  by:
LXXII.2021.12.10CA. (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 or EEA State an d
which have an investment firm as a subsidiary, shall seek the a pproval
                        INVESTMENT   SERVICES              [CAP. 370.       27
or exemption, as the case may be, of the competent authority ac ting, as
the consolidating supervisor, in accordance with this article. Other
financial holding companies or mixed financial holding companie s,
established in Malta or in another Member State or EEA State an d
which have an investment firm as a subsidiary, shall seek the a pproval
or exemption, as the case may be, of the competent authority, a cting as
the consolidating supervisor, in accordance with this article w here they
are required to comply with the CRD or the CRR on a sub-
consolidated basis:
Provided that in accordance with article 10D where the
competent authority is not the consolidating supervisor, financ ial
holding companies and mixed financial holding companies establi shed
in Malta and which have an investment firm as a subsidiary, sha ll seek
the approval or exemption, as the case may be, of the consolida ting
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:
(a) the competent authority is not the consolidating
supervisor but the financial holding company or themixed financial holding company is established inMalta; or
(b) the financial holding company or the mixed financial
holding company is established in a Member State oran EEA State other than Malta and the competentauthority is the consolidating 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 onthe qualification of directors set out in InvestmentServices Rules;
(c) the internal organisation and distribution of tasks
within the group;
(d) any other information that may be necessary to carry
out the assessments referred to in sub-articles (3) and(4) as may be requested by the competent authority.
 28        CAP. 370. ]                 INVESTMENT   SERVICES
(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 any such requirement s as
may be established, from time to time, by Investment Services R ules.
(4) Approval may be granted to a financial holding company or
a mixed financial holding company, as the case may be, pursuant  to
this article only where all of the following conditions are ful filled:
(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 Investment ServicesRules issued thereunder transposing the 
CRD  and by
the CRR  on a consolidated or sub-consolidated basis
and, in particular, 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 oftasks among 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 thegroup;
(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 asconcerns the individual, the consolidated and, whereappropriate the sub-consolidated obligations to whichthey are subject:
Provided that the assessment of this criterion shall take into
account, in particular:
(i) the position of the financial holding company or
the mixed financial holding company, as thecase 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 casemay be, within the group;
(c) the requirements on the qualification of directors laid
down in Investment Services Rules, are complied 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
                        INVESTMENT   SERVICES              [CAP. 370.       29
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 holdings 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 exemptedfrom approval in accordance with this sub-article, theyshall not be excluded from the perimeter ofconsolidation as laid down in the provisions of this Actand any regulations made and Investment ServicesRules issued thereunder transposing 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
in sub-article (4) or, where applicable, 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).
 30        CAP. 370. ]                 INVESTMENT   SERVICES
(c) The competent authority shall share the information
received in terms of this sub-article with the European regulat ory
authority where the financial holding company or the mixed fina ncial
holding company, as the case may be, is established.
(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 orthe mixed financial holding company, as thecase 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 in a Member State or an EEA Stateother than Malta and the competent authority isthe consolidating supervisor,
the competent authority shall work together with the European
regulatory authority acting as the consolidating supervisor or with
the European regulatory authority in the Member State or EEAState where the financial holding company or the mixed financia l
holding company is established, as the case may be, in fullconsultation.
(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 European regulatory authority in the Member S tate
or EEA State where the financial holding company or the mixedfinancial holding 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 European 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 European regulatory authority in the
Member State or EEA State where the financial holding company o r
the mixed financial holding company is established or with theEuropean regulatory authority acting as the consolidating super visor,
as the case may be, within two months of receipt of that assess ment:
                        INVESTMENT   SERVICES              [CAP. 370.       31
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 European regulatory authority acting as theconsolidating supervisor or the European regulatory authority i n the
Member State or EEA State where the financial holding company o r
the mixed financial holding company is established, as the case  may
be, the competent authority shall refrain from taking the joint  decision
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 European regulatory authority acting as the consolidatingsupervisor or with the European regulatory authority in the Mem ber
State or EEA State where the financial holding company or the m ixed
financial holding company is established, as the case may be, i n
conformity 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 th e
coordinator appointed in terms of Article 10 of 
Directive 2002/87/EC
is neither the competent authority, nor the European regulatoryauthority acting as the consolidating supervisor, nor the Europ ean
regulatory authority in the Member State or EEA State where themixed financial holding company is established, the agreement o f the
said coordinator shall be required for the purposes of the deci sions or
joint decisions referred to in sub-articles (4), (5) and (8) an d, or sub-
articles (3), (4) and (7) of Article 21a 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 the EuropeanSupervisory Authority (European Insurance and OccupationalPensions Authority) (EIOPA), established by 
Regulation (EU) No.
1094/2010, which shall take its decision within one month of receipt
of the referral. Any decision taken in accordance with this par agraph
shall be without prejudice to the obligations under Directive 2002/87/
EC or the Solvency II Directive .
(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 therefor within four months of receipt of the appli cation, or
where the application is incomplete, within four months of rece ipt of
 32        CAP. 370. ]                 INVESTMENT   SERVICES
the complete information required for the decision. Refusal may  be
accompanied, where necessary, by any of the measures referred t o in
article 16AA:
Provided that a decision to grant or refuse approval shall, in
any event, be taken within six months of receipt of the applica tion.
(15) For the purposes of this article:
(a) the term "financial institution" means the same as the
meaning assigned to it in point (26) of Article 4(1) ofthe 
CRR ;
(b) the term "group" means a group as defined in point
(138) of Article 4(1) of the CRR ;
(c) the term "institution" means an institution as defined
in point (3) of Article 4(1) of the CRR ;
(d) the term "investment firm" means an investment firm
as defined in point (2) of Article 4(1) of the CRR ;
(e) the term "parent undertaking" means a parent
undertaking as defined in point (15) of Article 4(1) ofthe 
CRR ;
(f) the term "resolution authority" means an authority
designated by a Member State or an EEA State inaccordance with Article 3 of the 
BRRD ;
(g) the term "subsidiary" means a subsidiary as defined in
point (16) of Article 4(1) of the CRR .
(16) The provisions of this article shall be without prejudice to
the provisions of article 10.
Intermediate 
European Union parent undertaking.
Added by:
LXXI.2021.16.10D. (1) An investment firm established in Malta which is
part of a third-country group hav ing as part of the same group one or
more credit institution or one or more other investment firm in  Malta
or in another Member State or in an EEA State, shall have a sin gle
intermediate EU parent undertaking that is established in Malta  or in
another Member State or in an EEA State.
(2) The competent authority may allow an investment firm
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 would: 
(a) be incompatible with a mandatory requirement
for separation of activities imposed by the rules or the overse as
regulatory authority of the third country where the ultimateparent undertaking of the third-country group has its headoffice; or
(b) render resolvability less efficient than in the case
of two intermediate EU parent undertakings according to an
                        INVESTMENT   SERVICES              [CAP. 370.       33
assessment carried out by the relevant resolution authority of
the intermediate EU parent undertaking.
Cap. 371.(3) An intermediate EU parent undertaking shall be a credit
institution licensed in terms of article 7 of the Banking Act or
authorised in accordance with Article 8 of the CRD, or a financial
holding company or mixed financial holding company that has bee n
granted approval in accordance with article 11B of the Banking Act
and, or Article 21a of the CRD :
Provided that, where the third-country group referred to in
sub-article (1) does not have a credit institution within the s ame group
or where a second intermediate EU parent undertaking must be se t up
in connection with investment activities to comply with a manda tory
requirement as referred to in sub-article (2), the intermediate  EU
parent undertaking or the second intermediate EU parent underta king
may be an investment firm which holds an investment services li cence
or an investment firm authorised in accordance with Article 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, the total value of assets in
the European Union of the third-country group shall be the sum of the
following: 
(a) the total value of assets of each investment firm and
credit institution in the European Union forming part of thethird-country group, as resulting from its consolidated balancesheet or as resulting from their individual balance sheet, wher e
their balance sheet is not consolidated
(b) the total value of assets of each branch of the
third-country group authorised in the European Union inaccordance with the 
CRD , MIFID  or MiFIR .
(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 the
credit institutions and investment firms belonging to a third-country group;
(b) the names and the total value of assets
corresponding to branches authorised in Malta in accordancewith the provisions of national law transposing the 
CRD ,
MIFID  or MiFIR , and the types of activities that they are
licensed to carry out;
 34        CAP. 370. ]                 INVESTMENT   SERVICES
(c) the name and the type as referred to in sub-article
(3) of any intermediate EU parent undertaking set up in Maltaand the name of the third-country group of which it is part.
(7) An investment firm established in Malta forming part of a
third-country group shall meet at least one of the following co nditions:
(a) it has an intermediate EU parent undertaking;(b) it is an intermediate EU parent undertaking;(c) it is the only investment firm in the European
Union of the third-country group and the third-country groupdoes not have any credit institutions in the European Union; or
(d) it is part of a third-country group with a total
value of assets in the European Union of less than forty billio n
euro (€40,000,000,000).
(8) By way of derogation from sub-article (1), where a third-
country group operates through an investment firm established i n
Malta and through one or more credit institutions or one or mor e other
investment firms in the European Union and with a total value o f
assets equal to or greater than forty billion euro (€40,000,000 ,000) on
27 June 2019, the investment firm established in Malta shall en sure
that the intermediate EU parent undertaking referred to in sub- article
(1) or the two intermediate EU parent undertakings referred to in sub-
article (2), as the case may be, shall be established by 30 Dec ember
2023.
(9) For the purposes of this article:
(a) the term "branch" means a branch as defined in
point (17) of Article 4(1) of the 
CRR ;
(b) the term "group" means a group as defined in
point (138) of Article 4(1) of the CRR ;
(c) the term "investment firm" means an investment
firm as defined in point (2) of Article 4(1) of the CRR ;
(d) the term "parent undertaking" means a parent
undertaking as defined in point (15) of Article 4(1) of the CRR ;
(e) the term "resolution authority" means an
authority designated by a Member State or an EEA State inaccordance with Article 3 of the 
BRRD
(f) the term "third-country group" means a group of which
the parent undertaking is established in a third country.
                        INVESTMENT   SERVICES              [CAP. 370.       35
Prospectus and 
investment advertisements.Substituted by:XVII. 2002.145.
Amended by:
XX. 2007.62; 11.(1)(a)  No collective investment scheme, whether licensed or
not, shall issue or cause to be issued a prospectus in orfrom within Malta unless the prospectus has beenapproved by the Competent Authority.
(b) No person, other than licence holders, may issue or
cause to be issued an investment advertisement in orfrom within Malta unless its contents have beenapproved by a licence holder.
(2) The competent authority may, from time to time, issue such
Conduct of Business Rules or directives to licence holders as it may
consider appropriate in order to set minimum standards andrequirements which are to be observed by licence holders whenissuing or approving investment advertisements or issuing aprospectus in accordance with sub-article (1). Such Conduct of
Business Rules or directives may also include provision for suc h
exemptions or conditions as may be specified therein and maymake different provision for different cases or classes of case s,
under such terms and conditions as may be prescribed.
(3) The competent authority may impose such conditions,
limitations and restrictions on a licence holder with respect t o the
issue or approval of investment advertisements, as it may consi der
appropriate.
REGULATORY AND INVESTIGATORY POWERS
Minister’s power 
to make regulations.
Amended by: 
XXV .1995.432;XVII. 2002.146;IV . 2003.175;XIII. 2004.79;XII. 2006.62;XX. 2007.64;L.N. 425 of 2007;XIX. 2010.53;X. 2011.26;XX. 2013.39;XXII. 2014.6;XXI. 2015.13;XXXI. 2017.51;
LXXII.2021.13. 12. (1) The Minister, acting on the advice of the competent
authority, may make regulations to give effect to the provision s of
this Act, and without prejudice to the generality of the forego ing
may, by such regulations, in particular, do any of the followin g:
(a) amend the definitions of "ancillary services", "collective
investment scheme" and "investment service" in article 2,as well as the provisions of the First, Second and ThirdSchedules;
(b) regulate investment services and collective investment
schemes, as well as services provided and activitiescarried on in conjunction therewith or in relationthereto; providing for any matter he may deemexpedient including the creation and exercise of rightsby or for the benefit of the public, the imposition ofduties and obligations on the holders of a licence orpersons responsible for the management oradministration thereof and the regulation of any feesand, or any other charges imposed directly orindirectly on investors; provide for the safekeepingand custody of the property of collective investmentschemes and for the requirement to appoint acustodian, and prescribe and regulate in the mostextensive manner the functions, duties, responsibilitiesand obligations of the custodian; establish thequalifications and other eligibility criteria necessary toact as custodian, including residence qualifications;provide for the protection of the property of the
 36        CAP. 370. ]                 INVESTMENT   SERVICES
schemes in the event of the insolvency of the
custodian, and for the purpose of this paragraph"custodian" shall include a sub-custodian; require thekeeping of records with respect to the transactions andfinancial position of collective investment schemesand for the inspection of those records, and prescribereporting and disclosure requirements, including thepreparation of periodical reports with respect to theschemes and the furnishing of those reports to theshareholders, unit-holders or other participants in thesaid schemes, and to others; and provide for theregulation of the free circulation of units of collectiveinvestment schemes and to regulate the managementcompanies of such schemes;
(c) establish schemes or other arrangements for the
compensation of investors in cases where licence
holders or any types thereof as may be specified, areunable to satisfy their obligations towards investors orclaims in respect of any liability incurred by them inconnection with the carrying out of any activity inregard to which they are licensed, and to regulate themanagement and the financing of any such schemes orarrangements and, the contributions and levies to bepaid thereto, to set the minimum and maximum levelsof compensation payable thereunder and may undersuch schemes and arrangements distinguish betweendifferent classes of investors and, exclude certainclasses from compensation, and to make provision forthe regulation of and for other aspect related to suchschemes or arrangements and may moreover providethat such schemes or arrangements as may beprescribed shall have a legal personality distinct fromthat of the contributors thereto and of the competentauthority and provide for the judicial and legalrepresentation thereof; and such schemes shall beexempt from the payment of income tax as from thedate of establishment of such schemes;
(d) define the criteria for determining whether a holding is
an indirect holding for the purposes of determiningwhether a qualifying shareholding exists;
(e) regulate the promotion or sale by or on behalf of any
person, and by any means, of an investment service orof a collective investment scheme or of anyinstrument, including the criteria and procedures forthe granting or refusing of consent by the competentauthority pursuant to the provisions of article 11 ofthis Act;
(f) amend the provisions of article 18 on the
circumstances in which auditors are obliged tocommunicate information to the competent authority,to prescribe regulations governing the disclosure byauditors of information pursuant to article 18 and to
                        INVESTMENT   SERVICES              [CAP. 370.       37
establish supervisory and disciplinary procedures for
auditors in respect of their duties under the provisionsof article 18;
(g) regulate the drawing-up, approval, publication and
distribution in Malta of prospectuses relating to theoffer of transferable securities authorised or otherwiseapproved, in a country or countries outside Malta andto make provision for the recognition of suchprospectuses taking into account Malta’s internationalcommitments;
(h) provide for and regulate the payment by any person,
body or scheme, as the case may be, of licence or otherfees and such other charges payable to the competentauthority in respect of any matter provided for, by orunder this Act or any regulations made under thisarticle, as may be prescribed;
(i) exempt any person, service, instrument, collective
investment scheme, or advertisement from any one ormore of the provisions of this Act subject to suchvariations, additions, adaptations and modifications asmay be prescribed and subject to such conditions orother requirements, including other forms ofauthorisation and notification procedures, as may beprescribed;
(j)(deleted by Act XXII. 2014.6 .)
(k) transpose, implement and give effect to the provisions
and requirements of the 
AIFM Directive , the BRRD , the
CRR , the CRD , the MiFID , the MiFIR , the UCITS
Directive , the IFD, and the IFR;
(l) establish financial resources requirements for licence
holders and to transpose, implement and give effect to
the provisions of the CRD  and the CRR , as may be
amended from time to time, including the provision ofimplementing technical standards as specified therein;regulate the supervision on a consolidated basis, providefor the consultation, co-ordination, co-operation and thesharing and exchange of information with Europeanregulatory authorities and other third country regulatoryauthorities as may be necessary; provide for the exchangeof information with the European Systemic Risk Board,central banks which are members of the EuropeanSystem of Central Banks, including the Central Bank ofMalta, exchange of information with the EuropeanBanking Authority and the European Securities andMarkets Authority, and exchange of information withother departments of government administrations in otherMember States responsible for law on the supervision ofinstitutions, financial institutions and insuranceundertakings and with inspectors acting on behalf ofthose departments; provide for the establishment ofcolleges of supervisors; provide for the exercise ofpowers by the competent authority on investment
 38        CAP. 370. ]                 INVESTMENT   SERVICES
services licence holders, credit institutions, financial
holding companies, mixed financial holding companiesand mixed activity holding companies, or their effectivemanagers, as may be defined in the said regulations;provide for the establishment and imposition ofadministrative penalties on licence holders or others asspecified therein or other measures for the contraventionof any of the regulations, and to provide for appealstherefrom to the Financial Services Tribunal; provide forthe obligations of the competent authority to report to theEuropean Banking Authority, the European Commissionand the European Insurance and Occupational Pensions
Authority, the European Securities and MarketsAuthority as may be specified in the said regulations;
(m) provide for reporting and other requirements and
conditions which a person operating a multilateraltrading facility must satisfy, on a continuing andongoing basis and to establish the circumstances andthe manner in which requirements and conditions maybe varied, suspended or revoked, and to transpose therequirements of the 
MIFID  and the MiFIR  thereon;
(n) transpose, implement and 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 beissued thereunder and relating to licence holders andothers as may be specified therein; regulations made
under this paragraph, and strictly related to transpositionor implementation as aforesaid, may provide that anyprovision of this Act or of any other law shall not applyto matters falling under the regulations, and that in so faras any of the provisions of the regulations areinconsistent with the provisions of this Act or of anyother law, such provisions in any such regulations shallprevail;
(o) provide that any one or more of the bodies mentioned in
Article 107(3) of the 
UCITS Directive  may, in the
interests of consumers, and in accordance with theapplicable laws of Malta, take action before the courts oradministrative bodies of Malta, to ensure that theprovisions of this Act and the Investment Services Rulesand regulations issued hereunder transposing the 
UCITS
Directive  are implemented;
(p) prescribe anything that is to be or which may be
prescribed;
(q) provide for any matter incidental to or connected with
any of the above.
 (2A) Regulations made under this article may also contain
provision for enabling a person who has entered, or offered to
                        INVESTMENT   SERVICES              [CAP. 370.       39
enter, into an investment agreement with the holder of a licenc e to
rescind the agreement or withdraw the offer within such period and
in such manner as may be prescribed, and in particular, but wit hout
prejudice to the generality of the foregoing, may make provisio n -
(a) for requiring the service of notice with respect to the
rights exercisable under the regulations;
(b) for the restitution of property and the making or
recovery of payments where those rights are exercised;
(c) for such other matters as are incidental to or connected
with any of the above.
Cap. 16.(2B)  Regulations made under this article may make provision
for the constitution of common funds for investment purposes inthe form of a collective investment scheme by contract or otherarrangement in writing and may exempt such funds from theapplication of any article or provision of the 
Civil Code  under Title
V of Part I of Book Second with such modifications and variatio ns
as may be established.
(2C)  Regulations made under this article may also make
provision for the re-organisation and winding-up of thoseinvestment services licence holders to which such re-organisati on
and winding-up is, or may be rendered, applicable in terms of t he
BRRD .
 (3) Regulations made under this article, may be made subject to
such exemptions or conditions as may be specified therein, maymake different provision for different cases, circumstances orpurposes and may give to the competent authority such powers ofadaptation of the regulations as may also be so specified.
(4) Where regulations have been issued in terms of this article,
the competent authority may issue Investment Services Rules and, or
Conduct of Business Rules within the meaning of article 6 of th is Act
for the better carrying out and to better implement the provisi ons of
the regulations.
(5) Regulations made under this article may impose: 
(a) administrative penalties which may not exceed one
hundred and fifty thousand euro (€150,000) for eachinfringement or failure to comply, as the case may be;
(b) punishments or other penalties in respect of any
contravention or failure of compliance not exceeding afine (multa) of one hundred and fifty thousand euro(€150,000) or imprisonment for a term not exceedingone year, or both such fine and imprisonment; and
(c) administrative penalties and fines higher than one
hundred and fifty thousand euro (€150,000), wheredeemed necessary or appropriate for any contraventionof or failure of compliance with any EU Directive orEU Regulation or of any regulations made under thisarticle to transpose or to give effect to any EUDirective or EU Regulation.
 40        CAP. 370. ]                 INVESTMENT   SERVICES
Added by:
XXXI. 2017.51.(5A)  Regulations made under this article may prescribe
administrative penalties and fines as provided for in sub-artic le (5)( c),
for any breach of any provision of this Act or for any breach o f any
Investment Services Rules or Conduct of Business Rules, transpo sing
and, or implementing any EU Directive or EU Regulation.
(6) Regulations made under this Act and any amendment or
revocation of such regulations, may be published in the Englishlanguage only.
(7) The exercise of any of the powers assigned under this
article shall be subject to any obligations or rights arising f rom
Malta’s international commitments.
Power of 
competent authority to require information.
Amended by:
XVII. 2002.147;XX. 2007.65;XX. 2013.40;
LXXII.2021.14.13. (1) Without prejudice to any powers of the competent
authority arising under any other law, the competent authority shall
have the power to require information from:
(a) any person who is or was providing, or who appears to
be or to have been providing, an investment service; 
(b) a collective investment scheme; (c) any person who is or was carrying on, or who appears
to be or has been carrying on activities in connectionwith such a scheme; 
(d) any person who has issued, or appears to have issued
an advertisement falling within the provisions ofarticle 11(1); 
(e) an auditor of a licence holder; or(f) any other person who appears to be in possession of
relevant information.
(1A) Without prejudice to sub-article (1), the competent author ity
shall have the power to require information from:
(a) investment firms established in Malta;
(b) investment holding companies established in Malta;(c) mixed financial holding companies established in
Malta and their subsidiaries;
(d) mixed-activity holding companies established in
Malta;
(e) persons belonging to the entities referred to in points
(a) to (d);
(f) third parties to whom the entities referred to in points
(a) to (d) have outsourced operational functions oractivities.
(1B) Without prejudice to the generality of sub-articles (1) and
(1A), the competent authority may, by notice in writing, requir e any
person referred to in the said sub-articles to do all or any of  the
following:
                        INVESTMENT   SERVICES              [CAP. 370.       41
(a) to furnish to the competent authority, at such time and
place and in such form as it may specify, suchinformation and documentation as it may require,including the power to require existing telephone andexisting data traffic records, with respect to any suchservice, scheme or advertisement as aforesaid, or withrespect to any person with whom the licence holderhas close links within the meaning of article 6;
(b) to furnish to the competent authority any information
or documentation aforesaid verified in such manner asit may specify;
(c) to attend before the competent authority, or before a
person appointed by it, at such time and place as itmay specify, to answer questions and provideinformation and documentation with respect to anysuch service, scheme or advertisement as aforesaid."
(2) The competent authority may examine and make copies or
extracts of any documents furnished or provided under this arti cle.
 (3) Where the person required to provide information or
documentation under this article does not have the relevantinformation or documentation, he shall disclose to the competen t
authority where, to the best of his knowledge, that information  or
documentation is, and the competent authority may require anyperson, whether indicated as afor esaid or not, who appears to i t to
be in possession of that information or documentation, to provi de
it.
 (4) A statement made and documentation provided in
pursuance of any requirement under this article may be used inevidence against the person making the statement or providing t he
documentation as well as against any person to whom they relate .
Cap. 9.(5) The provisions of this article shall not apply to informatio n
or documentation which is privileged in accordance with theprovisions of article 642(1) of the 
Criminal Code .
(6) The power to require the production of documentation
under the provisions of this article shall be without prejudice  to any
lien or charge claimed by any person in relation to suchdocumentation.
(7) Where the competent authority has appointed a person
under sub-article (1)( c), such person shall, for the purposes of
carrying out his functions under his appointment, have all thepowers conferred on the competent authority by this article and  a
requirement made by him shall be deemed to be and have the sameforce and effect as a requirement of the competent authority.
Cap. 204.(8) Without prejudice to the other provisions of this article, a
licence holder may be required to submit to the Central Bank ofMalta such information as the Bank may reasonably require for t he
discharge of its duties under the 
Central Bank of Malta Act.
 42        CAP. 370. ]                 INVESTMENT   SERVICES
Appointment of 
inspectors.
Amended by:
XX. 2007.66;
LXXII.2021.15 .14. (1) The competent authority may, whenever it deems it
necessary or expedient, appoint an inspector or inspectors toinvestigate and report on the affairs of any persons or schemereferred to in article 13(1)(a) to (d) and (1A).
(2) An inspector appointed under sub-article (1) - 
(a) may also, if he thinks it necessary or expedient for the
purposes of that investigation, investigate the affairs ofany person or scheme mentioned in sub-article (1);
(b) shall have and may exercise all the powers conferred
on the competent authority by article 13, and anyrequirement made by him shall be deemed to be andhave the same force and effect as a requirement of thecompetent authority;
(c) may, and if so directed by the competent authority
shall, make interim reports and on the conclusion ofhis investigation shall make a final report to the saidauthority.
(3) The competent authority shall have power to order that all
expenses of, and incidental to, an investigation pursuant to th is
article be paid by the persons or scheme concerned.
Cap. 281.(4) For the purposes of this article inspectors may include an
advocate, a person authorised to carry on the profession ofaccountant or auditor in terms of the 
Accountancy Profession Act,
or a person considered by the competent authority as possessingsuitable expertise to exercise such function.
Power to issue 
directives.
Amended by:
XVII. 2002.148;XX. 2007.67;X. 2011.27;XX. 2013.41;XXII. 2014.7;XXI. 2015.14;XXXI. 2017.52;XLIV .2018.6;
LXXII.2021.16 .15. (1) Without prejudice to any of the powers conferred on it
by articles 13 and 14, the competent authority may, whenever itdeems it necessary, and whether upon a report by an inspectorappointed under article 14 or not, give, by notice in writing, such
directives as it may deem appropriate in the circumstances; and  any
person to whom or to which the notice is given shall obey, comp ly
with and otherwise give effect to any such directive within the  time
and in the manner stated in the directive or further directive.
Provided that the competent authority may give any such
directive even where a licence holder, for whatever reason, cea ses
to hold a licence granted in terms of this Act:
Provided further that any directive given in terms of this arti cle
shall, unless the competent authority otherwise directs, contin ue to apply
even when a licence holder, for whatever reason, ceases to hold  a licence
granted in terms of this Act.
(2) Without prejudice to the generality of the foregoing
provisions of this article, a directive under this article may - 
(a) require anything to be done or be omitted to be done,
or impose any prohibition, restriction or limitation, orany other requirement, including any requirementemanating from European Union legislation, and confer
powers, with respect to any transaction or other act, orto any assets, or to any other thing whatsoever;
                        INVESTMENT   SERVICES              [CAP. 370.       43
(b) require a collective investment scheme and the
manager of such a scheme, or his equivalent, and anyother person who may issue, redeem, sell or purchaseunits in the scheme, to cease the issue, redemption,sale, or purchase of units or all or any combination ofthose activities, as may be specified in the directive orfurther directive;
(c) require that any person having functions in relation to
the holder of a licence be prohibited, temporarily orotherwise, suspended from carrying out activitieslicensable under the Act, or removed or removed andreplaced by another person acceptable to the competent
authority;
(d) require a collective investment scheme or its directors
and shareholders, or the manager or trustee orcustodian of a scheme, or their equivalent, to wind itup by such date and in accordance with such procedureand other provisions as may be specified in thedirective or further directive;
(e) require a licence holder or any person who is or was
providing, or who appears to be or to have beenproviding an investment service to cease operationsand to wind up its affairs, in accordance with suchprocedures and directions as may be specified in thedirective, which may provide for the appointment of aperson to take possession and control of all documents,records, assets and property belonging to or in thepossession or control of the licence holder or suchother person;
(f) require a licence holder to submit a financial recovery
plan, as may be determined in the Investment ServicesRules, if it considers that the interest of investors,consumers, creditors or other interested persons are likelyto be prejudiced owing to a deterioration in the financialposition of the licence holder;
(g) require the cessation of any practice that is contrary to
the provisions adopted in the implementation of the
AIFM Directive , the BRRD , the CRD , the MiFID , the
UCITS Directive , and the IFD;
Cap. 345.(h) require the removal of a financial instrument from
trading, on trading arrangements within the meaningof the 
MIFID , the MiFIR  other than on regulated
markets in terms of the Financial Markets Act;
(i) require the suspension of trading in a financial
instrument; 
(j) request any person to take steps to reduce the size of
the position or exposure; 
(k) limit the ability of any person from entering into a
commodity derivative, including by introducing limits onthe size of a position any person can hold at all times in
 44        CAP. 370. ]                 INVESTMENT   SERVICES
accordance with Article 57 of MIFID :
Provided that in applying paragraphs ( d) and ( e), the
competent authority may also appoint a competent person to act as
liquidator for the purposes of winding up the affairs of a lice nce holder
under this Act; and such person shall be the liquidator of the licence
holder for all purposes of law to the exclusion of any other pe rson.
(3) The power to give directives under this article shall includ e
the power to vary, alter, 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 arti cle.
Power of the 
competent authority to protect the public interest.
Added by:
XX. 2013.42.
Amended by:
XLIV .2018.7.15A. (1) Without prejudice to the powers conferred to the
competent authority under this Act, the competent authority may ,
where it is satisfied that sufficient circumstances exist, proc eed to
take any one or more of the following measures:
(a) appoint a person to advise the licence holder in the
proper conduct of its business;
(b) appoint a person to take charge of the assets of the
licence holder, or any portion of them, for the purposesof safeguarding the interests of investors, consumers,creditors or, if any, shareholders, of the licence holder;
(c) appoint a person to assume control of the business of
the licence holder, either to carry on that business or tocarry out such other function or functions in respect of
such business, or part thereof, including to take the
necessary action for the licence holder to be dissolved andwound up, as the competent authority may direct;
(d) fix the remuneration to be paid by the licence holder to
any person appointed under article 15 or under thisarticle;
(e) do such other act as it may deem appropriate in the
circumstances to give better effect to theimplementation of the provisions of this article,
and having adopted any one or more of the measures aforesaid, t he
competent authority may further proceed in any one or more suchmeasures, whether in addition thereto or in substitution theref or.
(2) Where a person is appointed by the competent authority -
(a) under sub-article (1)( a), it shall be the duty of the
licence holder to act in accordance with the advicegiven by such person unless and until the competentauthority, on representation made to it, directsotherwise;
(b) under sub-article (1)( b), the licence holder shall
deliver to such person all the assets, whether movableor immovable, of which he is placed in charge, and allthe powers, functions and duties of the licence holderin respect of those assets, including, if such licence
                        INVESTMENT   SERVICES              [CAP. 370.       45
holder is a legal person, those exercisable by the legal
person in a general meeting, or by the directors, or byany other person, including the legal and judicialrepresentation of such legal person, shall beexercisable by and vest in the person appointed underthe said paragraph to the exclusion of any otherperson;
(c) under sub-article (1)( c), the licence holder shall submit
its business to the control of such person and shallprovide such person with such facilities as may berequired to carry on that business or to carry out thefunctions assigned to such person under the saidparagraph; and all the powers, functions and duties ofthe licence holder, including, if such licence holder isa legal person, those exercisable by the legal person ina general meeting, or by the directors, or by any other
person, including for the purpose of the dissolution andwinding up of the licence holder as well as the legal andjudicial representation of such legal person in all matters,
shall be exercisable by and vest in such person to theexclusion of any other person:
Provided that the competent person shall not take any
decision for the purpose of the dissolution and winding upof the licence holder unless the competent authority issuesa directive to that effect in terms of article 15, and any suchdirective may contain such instructions, requirements andconditions as the competent authority may considernecessary, including with regard to the mode of windingup.
Cap. 386.(2A) Without prejudice to the powers of the competent authority
in terms of sub-article (1), the competent authority may also m ake
an application to the court for the dissolution and winding up by the
court of a licence holder where it appears to the competentauthority that a licence holder should be dissolved and wound u p
by the court for the reason set out in article 214(2)(b)(iii) o f the
Companies Act, and where the court accedes to the application t he
relevant provisions of the 
Companies Act in relation to the
dissolution and winding up by the court and any other applicabl e
provisions of any other law shall apply.
(3) The competent authority may, where it feels it is in the bes t
interest of the public so to do, make or issue public statement s or
notices giving warnings or information about any measure taken in
terms of this article.
(4) The competent authority may require the licence holder
concerned to pay all the expenses of, and incidental to, the pu blication
or issue of public statements or notices pursuant to this artic le, or such
part thereof as it may deem appropriate; and any sum so due sha ll be
recoverable by the competent authority in the same manner as anadministrative penalty imposed under this Act.
(5) Any measure adopted in terms of sub-article (1) shall remai n in
force notwithstanding that a licence holder ceases to hold a li cence for
 46        CAP. 370. ]                 INVESTMENT   SERVICES
whatever reason, unless the competent authority otherwise direc ts.
Right of entry.
Amended by:
LXXII.2021.17.16. (1) Any officer, employee or agent of the competent
authority, on producing, if required, evidence of his authority , may
enter premises occupied by a person on whom a notice has beenserved under article 13 or whose affairs are being investigatedunder article 14, for the purpose of obtaining and, or verifyin g there
the information or documents required by that notice, or otherw ise
for the purpose of the investigation, and of exercising any of the
powers conferred by the said articles.
(2) Where any officer, employee or agent of the competent
authority has reasonable cause to believe that if such notice a s is
referred to in sub-article (1) were served it would not be comp lied
with or that any documents to which it could relate would beremoved, tampered with or destroyed, such person may, onproducing, if required, evidence of his authority, enter any pr emises
referred to in sub-article (1) for the purpose of obtaining the re any
information or documents specified in the authority, beinginformation or documents that could have been required under su ch
notice as is referred to in sub-article (1).
(2A)  Without prejudice to sub-articles (1) and (2), any office r,
employee or agent of the competent authority, on producing, ifrequired, evidence of his authority, may enter premises occupie d by a
person on whom a notice has been served under article 13 and by  any
other person included in the supervision of compliance with the  group
capital test, where the competent  authority is the group superv isor, in
order to conduct an inspection:
Provided that the exercise of the right of entry under this
sub-article in relation to any person included in the supervisi on of
compliance with the group capital test where the competent auth ority
is the group supervisor, shall be subject to the prior notifica tion of
other competent authorities concerned.
(3) For the purposes of any action taken under the provisions of
this article, the competent authority may request the assistanc e of
the Commissioner of Police, who may for such purpose exercisesuch powers as are vested in him for the prevention of offences  and
the enforcement of law and order.
Administrative 
penalties and other measures.
Added by:
XX. 2007.68.
Amended by:
L.N. 425 of 2007;X. 2011.28;XX. 2013.43;XXXI. 2017.53;V .2020.14.16A. (1) Without prejudice to any other powers assigned to the
competent authority in terms of this Act, where a licence holde r or
the manager, secretary, director or any other person responsibl e for
a licence holder contravenes or fails to comply with any of theconditions imposed in a licence, and, or where the competentauthority is satisfied that a person’s conduct amounts to a bre ach of
any of the provisions of this Act, regul ations, Investment Services
Rules or Conduct of Business Rules issued thereunder, includingfailure to cooperate in an investigation, the competent authori ty
may by notice in writing and without recourse to a court hearin g
impose on the licence holder, manager, secretary, director, and , or 
                        INVESTMENT   SERVICES              [CAP. 370.       47
Cap. 330.any other person as the case may be, an administrative penalty
which may not exceed one hundred and fifty thousand euro(€150,000) for each infringement or failure to comply, as the c ase may
be.The provisions of article 16 (4) of the 
Malta Financial Services
Authority Act shall apply mutatis mutandis.
(2) Administrative penalties or other measures that may be
imposed by the competent authority on licence holders or others , as
may be specified, may be imposed in the form of a fixed penalty , a
daily penalty, or both.
(3) The imposition by the competent authority of an
administrative penalty in terms of this article shall be withou t
prejudice to any other consequence of the act or omission of th e
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.
(4) The competent authority may, by means of a public
statement, disclose the name of the person sanctioned, theparticular breach of the provision of this Act, regu lations,
Investment Services Rules or Conduct of Business Rules issuedthereunder, and the penalty or administrative measure imposed. The
competent authority shall withhold such public disclosure where  it
deems that such disclosure would seriously jeopardise the finan cial
markets, be detrimental to the interests of investors or causedisproportionate damage to the parties involved.
(5) Where the competent authority has made a public statement
in terms of sub-article (4), it shall simultaneously report tha t fact to
ESMA.
(6) The competent authority shall annually provide ESMA with
aggregated information about all the administrative measures an d
sanctions imposed in accordance with this article and shall upo n
request provide the necessary information on the application ofadministrative measures and imposition of penalties in the case  of
breaches of the provisions adopted in the implementation of the
AIFM Directive .
Supervisory 
measures related to financial holding companies and mixed financial holding companies.
Added  by:
LXXII.2021.18.16AA.  (1) Without prejudice to any other power of the
competent authority under this Act or any other law, where thecompetent authority is the consolidating supervisor and hasestablished that the conditions set out in article 10D(4) are n ot met or
have ceased to be met, the competent authority shall take theappropriate supervisory measures to ensure or restore, as the c ase may
be, continuity and integrity of consolidated supervision and en sure
compliance with the requirements laid down in this Act and anyregulations made and Investment Services Rules issued thereunde r
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
 48        CAP. 370. ]                 INVESTMENT   SERVICES
mixed financial holding company, the supervisory measures appli ed
by the competent authority as the consolidating supervisor shal l, in
particular, take into account the effects on the financial cong lomerate.
The supervisory measures referred 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 10D; 
(b) suspending the exercise of voting rights attached to the
shares of the subsidiary institutions held by thefinancial holding company or mixed financial holdingcompany; 
(c) issuing administrative measures or administrative
penalties, in terms of this Act and any regulationsmade or Investment Services Rules issued thereunder,against the financial holding company, the mixedfinancial holding company or the directors andmanagers, subject to the provisions of national lawtransposing Articles 65 to 72 of the 
CRD ;
(d) issuing instructions or directions to the financial
holding company or mixed financial holding companyto 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 article15;
(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 Investment
Services 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 themselvesfrom, or reduce, holdings in institutions or otherfinancial sector entities; 
(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 10D(4) are not met or have ceased to be met;
(k) requiring any person within financial holding
companies or mixed financial holding companies and,
                        INVESTMENT   SERVICES              [CAP. 370.       49
or financial holding companies or mixed financial
holding 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 10D(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 10D(4) are not met or have ceased to bemet, would have conferred upon them, including theright to receive any payment or to exercise any votingrights attaching to the shares acquired;
(m) any measure under article 15A: 
Provided that in exercising any of its powers under article
15A, the provisions of the said article shall apply mutatis mutandis ,
and provided further that any reference to "the licence holder"  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 or in an EEA State other than Malta and the compet ent
authority is the consolidating supervisor, the competent author ity shall
work together with the European regulatory authority in the Mem ber
State or EEA State where the financial holding company or the m ixed
financial holding company is established, as the case may be, i n 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
 50        CAP. 370. ]                 INVESTMENT   SERVICES
European 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 Europeanregulatory authority in the Member State or EEA State where thefinancial holding company or the mixed financial holding compan y is
established.
(6) The competent authority, whether acting as the consolidatin g
supervisor or whether it is in receipt of an assessment referre d to in
Article 21a(8) of the 
CRD from the European regulatory authority
acting as the consolidating supervisor, shall do everything wit hin its
powers to reach a joint decision on the measures referred to in  sub-
article (1) of this article and, or in Article 21a(6) of the CRD, with the
European regulatory authority in the Member State or EEA State where
the financial holding company or the mixed financial holding co mpany
is established or with the European 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 European regulatory authority acting as theconsolidating supervisor or wit h the European regulatory author ity in
the Member State or EEA State where the financial holding compa ny
or the mixed financial holding company is established, as the c ase may
be, the competent authority shall refrain from taking the joint  decision
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 European regulatory authority acting as the consolidatingsupervisor or with the European regulatory authority in the Mem ber
State or EEA State where the financial holding company or the m ixed
financial holding company is established, as the case may be, i n
conformity 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
                        INVESTMENT   SERVICES              [CAP. 370.       51
is neither the competent authority, nor the European regulatory
authority acting as the consolidating supervisor, nor the Europ ean
regulatory authority in the Member State or EEA State where themixed financial holding company is established, the agreement o f the
said coordinator shall be required for the purposes of the deci sions or
joint decisions referred to in sub-article (1) of this article and, or in
Article 21a(6) of the 
CRD, as applicable. Where the agreement of the
coordinator is required, the competent authority shall refer an y
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 the Solvency II
Directive .
(9) For the purposes of this article:
(a) the term "group" means a group as defined in point
(138) of Article 4(1) of the CRR ;
(b) the term "institution" means an institution as defined
in point (3) of Article 4(1) of the CRR ;
(c) the term "participation" means the same as the
meaning assigned to in point (35) of Article 4(1) of the
CRR ; and
(d) the term "subsidiary" means a subsidiary as defined in
point (16) of Article 4(1) of the CRR .
Obligation to state 
grounds for decisions.
Added by:
XX. 2007.68.
Amended by:
X. 2011.29;
XX. 2013.44;
XXII. 2014.8;XXI. 2015.15;XXXI. 2017.54;
LXXII.2021.19 .16B.  Any decision taken under this Act by the competent
authority in terms of any provisions which transpose the AIFM
Directive, the BRRD, the CRD, the MiFID, the UCITS Directive,
and the IFD, including any regulations, regulations, Investment
Services Rules or Conduct of Business Rules issued thereunder, made
thereunder for the said transposition, shall state the grounds on
which such a decision has been based.
Substituted by:
XX. 2007.69;
LXXII.2021.20.CO-OPERATION WITH REGULATORY AUTHORITIES AND 
OTHER BODIES
Powers 
exercisable.
Amended by:
XVII. 2002.149;XX. 2007.70;X. 2011.30;XX. 2013.45;XXII. 2014.9;XXI. 2015.16;XIX. 2016.21;XXXI. 2017.55;
LXXII.2021.21 . 17. (1) The competent authority shall act as the contact point
in terms of and for the purposes of Article 79(1) of the MIFID, and
it shall also exercise its powers and duties as provided for in  the
UCITS Directive .
(1A) The competent authority shall cooperate with other local
regulatory authorities or bodies which are also responsible for  the
supervision of credit institutions and financial institutions a nd shall
exchange with such local regulatory authorities or bodies, with out
delay, any information which is essential or relevant to the ex ercise of
 52        CAP. 370. ]                 INVESTMENT   SERVICES
their functions.
(2) The competent authority shall cooperate with other
European regulatory authorities whenever necessary for thepurpose of carrying out its duties and exercising its powers un der the
AIFM Directive, the BRRD, the CRD, the CRR, the MIFID, the
MiFIR , the UCITS Directive , the IFD and the IFR. It shall render the
necessary assistance to other European regulatory authorities, in
particular by exchanging information and cooperating in anyinvestigatory or supervisory function. In terms of the 
AIFM
Directive , the BRRD , the CRD , the MiFID , the UCITS Directive  and
the IFD, the competent authority may use its powers for the purposes
of cooperation even in cases where the conduct under investigat ion
does not constitute an infringement of any provisions of this A ct,
regulations, Investment Services Rules or Conduct of Business R ules
issued thereunder:
Provided that the competent authority shall communicate
information to other European regulatory authorities where this  is
relevant for monitoring and responding to the potential implica tions of
the activities of an individual AIFM or AIFMs collectively, for  the
stability of systemically relevant investment services licence holders
and the orderly functioning of markets on which AIFMs are activ e.
ESMA and the ESRB shall be informed accordingly.
(2A)  Without prejudice to the generality of sub-article (2), t he
competent authority shall, for the purposes of its duties pursu ant to the
IFR and the IFD as transposed in national law, exchange information
about investment firms with European regulatory authorities wit hout
delay, including the following:
(a) information about the management and ownership
structure of the investment firm; 
(b) information about compliance with own funds
requirements by the investment firm; 
(c) information about compliance with the concentration
risk requirements and liquidity requirements of theinvestment firm; 
(d) information about the administrative and accounting
procedures and internal control mechanisms of theinvestment firm
(e) any other relevant factors that may influence the risk
posed by the investment firm:
Provided that for the purposes of this sub-article the term
"investment firm" means an investment firm licensed under this Act.
(3) Upon receipt of a request from European regulatory
authorities designated as contact points within the individualMember States or EEA States under Article 79(1) of the 
MIFID , the
competent authority shall immediately take the necessary measur es
in order to gather the information required for the carrying ou t of
its duties pursuant to the MIFID and the MiFIR. If the competent
                        INVESTMENT   SERVICES              [CAP. 370.       53
authority is not able to supply the required information
immediately, it shall notify the requesting European regulatoryauthority of the reasons.
(4) At the time of communicating information to the European
regulatory authorities, whether designated as contact points or  not,
the competent authority may stipulate that the information must  not
be disclosed without its express agreement, in which case suchinformation may be exchanged solely for the purposes for whichthe competent authority had given its agreement.
(5) Where a European regulatory authority exchanging
information with the competent authority stipulates at the time  of
communication of the information that such information must notbe disclosed without its express agreement, such information ma y
be used by the competent authority solely for the purposes forwhich the European regulatory authority would have given itsagreement.
(6) Information received by the competent authority from
contact points in the other Member States or EEA States may betransmitted to other bodies or natural or legal persons, provid ed
that:
(a) the express agreement of the contact points which
disclosed the information is obtained; and
(b) the information is used solely for the purposes for
which the contact points gave their agreement:
Provided that in duly justified circumstances the competent
authority can transmit information to other bodies or natural o r
legal persons without satisfying the conditions in paragraphs ( a)
and ( b), in which case the competent authority shall immediately
inform the contact point that sent the information.
(7) Where the competent authority receives confidential
information from contact points in the other Member States or E EA
States or from overseas regulatory authorities or auditors unde r
articles 17D and 18, or when other bodies or natural or legalpersons receive confidential information from the competentauthority, they may only use such confidential information in t he
course of their duties, in particular:
(a) to check that the conditions governing the taking-up of
the business of licence holders, including undertakingscontributing towards the business activity of UCITS aremet and to facilitate the monitoring, on a non-consolidated or consolidated basis, of the conduct ofthat business, especially with regard to the financialresources requirements;
(b) to monitor the proper functioning of trading venues
within the meaning of the 
MIFID  and the MiFIR ;
(c) to impose penalties or adopt other administrative
measures and to consider representations received intheir regard;
(d) in appeals under article 19;
 54        CAP. 370. ]                 INVESTMENT   SERVICES
Cap. 330.(e) to investigate complaints received from consumers in
terms of article 20 of the Malta Financial Services
Authority Act; or
(f) in taking any decision in the implementation of the
UCITS Directive  and the MIFID  and the MiFIR;  or
(g) to monitor the prudential rules set out in the IFD and
the IFR.
(8) Sub-article (7) of this article and article 26 shall not
preclude the competent authority  from exchanging information, i n
terms of the UCITS Directive, with European regulatory
authorities, where that information is to be divulged to:
(a) authorities with public responsibility for the
supervision of credit institutions, investmentundertakings, insurance undertakings or otherfinancial organisations, or authorities responsible forthe supervision of financial markets;
(b) bodies involved in the liquidation or bankruptcy of
UCITS or undertakings contributing towards theirbusiness activity, or bodies involved in similarprocedures; or
(c) persons charged with carrying out statutory audits of the
accounts of insurance undertakings, credit institutions,investment services licence holders or other financialinstitutions.
(9) Sub-article (7) of this article and article 26 shall not pre clude
the competent authority from exchanging information with Europe an
regulatory authorities, or other overseas regulatory authoritie s or other
bodies and entities in pursuance of the requirements and terms of the
BRRD , CRD , the CRR , the IFD and the IFR, as may be prescribed.
(10) Without prejudice to the powers of the competent authority
under this Act or any other law, where the competent authority has
good reason to suspect that acts contrary to the provisions of the
AIFM Directive, the CRD, the CRR, the MiFID, the MiFIR, the
UCITS Directive, the IFD and the IFR are being or have been
carried out on the territory of another Member State or EEA Sta te
by entities not subject to its supervision, it shall notify thi s in as
specific a manner as possible to the contact point in the otherMember State or EEA State and to ESMA:
Provided that where the said suspected acts have been or are
suspected to have been committed by an AIFM in breach of the 
AIFM
Directive , the competent authority shall also inform the home Member
State and the host Member State of the AIFM, as the case may be , in as
specific a manner as possible.
(11) Where the information in the possession of the competent
authority had originated from a European regulatory authority o r an
overseas regulatory authority, it may not be disclosed to a Eur opean
regulatory authority or to any other third party without the ex press
agreement of the European regulatory authority or the overseasregulatory authority which had transmitted it and, whereappropriate, solely for the purposes for which that authority h ad
                        INVESTMENT   SERVICES              [CAP. 370.       55
given its agreement.
(12) Where a European regulatory authority suspects that acts
carried out by entities not subject to its supervision and whic h are
contrary to the provisions of the AIFM Directive , the CRD , the CRR ,
the MiFID, the MiFIR, the UCITS Directive, the IFD or the IFR are
being or have been carried out in Malta and notifies the compet ent
authority to this effect, the competent authority shall takeappropriate action. The competent authority shall inform thenotifying European regulatory authority and ESMA of the outcome of
any such action and, to the extent possible, of significant int erim
developments:
Provided that any such action taken by the competent
authority shall be without prejudice to the powers and function s of
the European regulatory authority that has forwarded theinformation.
(13) Without prejudice to the foregoing provisions of this
article, the competent authority may exercise the following pow ers
at the request of or for the purpose of assisting a Europeanregulatory authority:
(a) the power to impose, revoke or vary conditions on the
grant of a licence pursuant to the provisions of article6(2);
(b) the power to cancel or suspend a licence under article
7(1);
(c) the powers of inquiry under article 13;
(d) the power to appoint inspectors under article 14;
(e) the powers of intervention under article 15;
(f) the powers of entry under article 16;
(g) the power to communicate to the European regulatory
authority information which is in the possession of thecompetent authority, whether or not as a result of theexercise of any of the above powers.
(14)  The competent authority shall have the powers conferred
upon it by Article 101(8) of the 
UCITS Directive .
(15) The competent authority may also cooperate with European
regulatory authorities with respect to facilitating the recover y of
administrative penalties.
 56        CAP. 370. ]                 INVESTMENT   SERVICES
Co-operation in 
supervisory functions, verifications, on-site checks, inspections and investigations.
Added by:
XX. 2007.71.
Amended by:
X. 2011.31;XX. 2013.46;XXII. 2014.10;XXXI. 2017.56;
LXXII.2021.22 .
Cap. 345.17A. (1) The competent authority may request the cooperation
of a European regulatory authority in carrying out its supervis ory
functions or for an on-site verification or in an investig ation in the
territory of the latter within the framework of their powers:
Provided that in the case of a person holding a licence or
other equivalent authorisation from a European Regulatory
Authority and who is a remote member within the meaning of the
MIFID of a regulated market authorised in terms of the Financial
Markets Act, the competent authority may communicate with such
person directly, in which case the competent authority shall in form
the contact point of the home Member State of such personaccordingly.
(2) If, upon the request for cooperation by the competent author ity
in terms of Article 54(2) of the 
AIFM Directive , Articles 52 and 118
of the CRD  and A rticle 101(5) of the UCITS Directive , a verification
or an investigation is carried out in a Member State by a Europ ean
regulatory authority, the competent authority may request that its own
officers, employees or agents accompany the officials carrying out the
verification or investigation, and such officers, employees or agents
shall, however, be subject to the overall control of such Membe r State
on whose territory the said verification or investigation is be ing
conducted.
(3) A European regulatory authority may request the
cooperation of the competent authority in carrying out itssupervisory functions or for an on-site verification or in aninvestigation, in which case the competent authority shall, wit hin
the framework of its powers:
(a) carry out the verifications or the investigation itself,
and in respect of requests pursuant to Article 118 ofthe 
CRD  with the participation of the requesting
authority; or
(b) allow the requesting authority to carry out the
verification or investigation, and, it may also, in terms of
Article 54(2) of the AIFM Directive  and Article 101(5)
of the UCITS Directive , request that its own officers,
employees or agents accompany the European regulatoryauthority in carrying out the verification or investigation;or
(c) allow inspectors or experts within the meaning of article
14 and auditors within the meaning of article 18 to carry
out the verification or investigation.
(4) Without prejudice to any other provision of this Act, the
competent authority may request the cooperation of a Europeanregulatory authority to verify information about investment fir ms,
investment holding companies, mixed financial holding companies ,
financial institutions, ancillary services undertakings, mixed- activity
holding companies or subsidiaries, including subsidiaries which  are
insurance companies, that are located in the territory of the E uropean
regulatory authority concerned.
                        INVESTMENT   SERVICES              [CAP. 370.       57
(5) Without prejudice to any other provision of this Act, a
European regulatory authority may request the cooperation of th e
competent authority to verify information about investment firm s,
investment holding companies, mixed financial holding companies ,
financial institutions, ancillary services undertakings, mixed- activity
holding companies or subsidiaries, including subsidiaries which  are
insurance companies, that are located in Malta.
(6) Where a European regulatory authority makes a request in
terms of sub-article (2), the competent authority shall, within  the
framework of its powers:
(a) carry out the verification itself;
(b) allow the European regulatory authority who made
that request to carry out such verification; 
(c) request an auditor or expert to carry out the
verification impartially and to report the resultspromptly:
Provided that for the purposes of paragraphs (a) and (c), the
European regulatory authority that made the request shall be al lowed
to participate in the verification. 
(7)  Where a European investment firm carries out its activities
through a branch in Malta, the European regulatory authority of  the
home Member State may, after having informed the competentauthority, carry out, itself or through intermediaries that it appoints for
that purpose, inspections of such a branch and on-site checks o f the
information referred to in article 17(2A).
(8) Without prejudice to sub-article (7), where Malta is the ho st
Member State, the competent authority shall, for supervisory pu rposes
and where the competent authority considers it to be relevant f or
reasons of stability of the financial system in Malta, have the  power to
carry out, on a case-by-case basis, on-site checks and inspecti ons of
the activities carried out by branches of European investment f irms on
its territory and require information from a branch about its a ctivities:
Provided that, before carrying out such checks and
inspections, the competent authority shall, without delay, cons ult the
European regulatory authority of the home Member State:
Provided further that, as soon as possible following the
completion of those on-site checks and inspections, the compete nt
authority shall communicate to the European regulatory authorit y of
the home Member State the information obtained and findings tha t are
relevant for the risk assessment of the European investment fir m
concerned.
 58        CAP. 370. ]                 INVESTMENT   SERVICES
Refusal to co-
operate.
Added by:
XX. 2007.71.
Amended by:
X. 2011.32;XX. 2013.47;XIX. 2016.22;XXXI. 2017.57.17B.  The competent authority may refuse to act on a request for
cooperation in carrying out an investigation, onsite verificati on or
supervisory function under article 17A of this Act or to exchan ge
information with European regulatory authorities designated ascontact points under Article 44 of the 
AIFM Directive, or with
European regulatory authorities designated as con tact points under
Article 79(1) of the MIFID, or with European regulatory authorities
designated under Article 101(1) of the UCITS Directive for the
purpose of carrying out duties and exercising powers thereunder  only
where:
(a) such an investigation, on-site verification, supervisory
function or exchange of information might adverselyaffect the sovereignty, security or public policy of
Malta;
(b) compliance with the request is likely to affect
adversely its own investigation, enforcement activitiesor, where applicable, any criminal investigation;
(c) judicial proceedings have already been initiated in
respect of the same actions and against the samepersons before the courts of Malta; or
(d) a final judgment has already been delivered in relation
to such persons for the same actions in Malta:
In the case of such a refusal, the competent authority shall
notify the European regulatory authority and ESMA accordingly,providing as detailed information as possible for such refusal.
Inter-authority 
consultation prior to granting of a licence.
Added by:
XX. 2007.71.
Amended by:
XXXI. 2017.58.17C. (1) Prior to granting a licence to an applicant which is -
(a) a subsidiary of a person holding an investment services
licence or equivalent authorisation or of a marketoperator or of a credit institution authorised in another
Member State or EEA State; or
(b) a subsidiary of the parent undertaking of a person
holding an investment services licence or anequivalent authorisation or of a credit institutionauthorised in another Member State or EEA State; or
(c) controlled by the same natural or legal persons which
control a holder of an investment services licence orthe holder of an equivalent authorisation or a creditinstitution authorised in another Member State or EEAState,
the competent authority shall consult with the relevant Europea n
regulatory authorities.
(2) Prior to granting a licence to an applicant which is -
(a) a subsidiary of a credit institution or insurance
undertaking authorised in another Member State orEEA State; or
(b) a subsidiary of the parent undertaking of a credit
institution or insurance undertaking authorised inanother Member State or EEA State; or
                        INVESTMENT   SERVICES              [CAP. 370.       59
(c) controlled by the same person, whether natural or
legal, who controls a credit institution or insuranceundertaking authorised in another Member State orEEA State,
the competent authority shall consult with the European regulat ory
authority responsible for the supervision of credit institution s or
insurance undertakings.
(3) Consultation between the competent authority and the
European regulatory authorities shall in particular take place when
assessing the suitability of the shareholders or members and th e
reputation and experience of persons who effectively direct thebusiness involved in the management of another entity of the sa me
group. The competent authority shall exchange all information t hat
is of relevance to the other European regulatory authoritiesinvolved regarding the suitability of shareholders or members a nd
the reputation and experience of persons who effectively direct  the
business, both for the granting of a licence as well as for theongoing assessment of compliance with operating conditions.
Referral to ESMA.
Added by:
XX. 2013.49.17D.  The competent authority may refer to ESMA, situations
where a request relating to one of the following has been rejec ted
or has not been acted upon within a reasonable time:
(a) to exchange information as provided for in article 17;
(b) to carry out a supervisory activity, an on-site
verification or an investigation, as provided for inarticle 17A; and
(c) to seek authorisation for its officials to accompany
those of the European regulatory authority as providedfor in article 17A.
Cooperation with 
ESMA.
Added by:
XX. 2013.49.
Amended by:
XXXI. 2017.59.17E.  (1) The competent authority shall cooperate with ESMA
for the purposes of the AIFM Directive , the MIFID , the MiFIR  and
the UCITS Directive  in accordance with Regulation (EU) No 1095/
2010 .
(2) In the case of a disagreement between the competent
authority and a European regulatory authority on an assessment,action or omission pertaining to either authority, in areas whe re the
AIFM Directive requires cooperation or coordination between
authorities from more than one Member State, the competentauthority may refer the matter to ESMA.
(3) The competent authority shall, without delay, provide ESMA
with all information necessary to carry out its duties under th e 
AIFM
Directive, the MIFID, the MiFIR and the UCITS Directive in
accordance with Article 35 of Regulation (EU) No 1095/2010 .
Added by:
XX. 2007.72.CO-OPERATION WITH OVERSEAS REGULATORY AUTHORITIES 
AND OTHER BODIES
 60        CAP. 370. ]                 INVESTMENT   SERVICES
Co-operation with 
overseas regulatory authorities.
Added by:
XX. 2007.72.Re-numbered by:XX. 2013.48.
Amended by:
XXXI. 2017.60;V .2020.15;
LXXII.2021.23 .17F. (1) Co-operation agreements with overseas regulatory
authorities or other authorities, bodies and natural or legal p ersons
in countries that are not Member States or EEA States may beentered into only if the information disclosed is subject toguarantees of professional secrecy at least equivalent to thoserequired under article 26. Such exchange of information must beintended for the performance of the functions of those overseasregulatory authorities or other authorities, bodies and natural  or
legal persons:
Provided that the transfer of personal data to countries that
are not Member States or EEA States shall be in accordance withthe provisions of Chapter IV of 
Directive 95/46/EC of the European
Parliament and of the Council of 24 October 1995 on the protect ion
of individuals with regard to the processing of personal data a nd on
the free movement of such data.
(2) The competent authority may conclude cooperation
agreements providing for the exchange of information withoverseas regulatory authorities, other authorities or with bodi es and
natural or legal persons in countries that are not Member State s or
EEA States responsible for:
(i) the supervision of credit institutions, other
financial organisations, persons holding alicence, insurance undertakings, financial
institutions and financial markets, includingfinancial entities licensed to operate as centralcounterparties where central counterparties havebeen recognised under Article 25 of 
Regulation
(EU) No. 648/2012 ;
(ii) the liquidation and bankruptcy of persons
holding a licence or an equivalent authorisationand other similar procedures;
(iii) carrying out statutory audits of the accounts of
persons holding a licence or an equivalentauthorisation and other financial institutions,credit institutions and insurance undertakings, inthe performance of their supervisory functions,or which administer compensation schemes, inthe performance of their functions;
(iv) overseeing the bodies involved in the liquidation
and bankruptcy of persons holding a licence oran equivalent authorisation and other similarprocedures;
(v) overseeing persons charged with carrying out
statutory audits of the accounts of insuranceundertakings, persons holding a licence or anequivalent authorisation, credit institutions andother financial institutions:
       Provided that, for the purposes of this paragraph,
the term "financial insitutions" means both financialinstitutions as defined in point (26) of Article 4(1) ofthe 
CRR  and as defined in point (14) of Article 4(1)
                        INVESTMENT   SERVICES              [CAP. 370.       61
of the IFR;
(vi) overseeing persons active on emission allowance
markets for the purpose of ensuring aconsolidated overview of financial and spotmarkets; 
(vii) overseeing persons active on agricultural
commodity derivatives markets for the purposeof ensuring a consolidated overview of financialand spot markets.
(3) Where the information in the possession of the competent
authority had originated from a European regulatory authority o r an
overseas regulatory authority, it may not be disclosed to anoverseas regulatory authority or to any other third party witho ut the
express agreement of the European regulatory authority or theoverseas regulatory authority which had transmitted it and, whe re
appropriate, solely for the purposes for which that authority h ad
given its agreement.
(4) Without prejudice to the foregoing provisions of this
article, at the request of, or for the purposes of assisting anoverseas regulatory authority, the competent authority may exer cise
the powers listed in article 17(13), and for the purposes of th is sub-
article the words "European regulatory authority" shall be read  as
"overseas regulatory authority".
Competent 
authority to inform the Commission and ESMA of general difficulties.
Added by:
XX. 2013.50.17G. The competent authority shall inform the Commission of
the European Union and ESMA of any general difficulties which:
(a) an investment services licence holder encounters in
establishing itself or providing investment servicesand, or performing investment activities in anyoverseas country or territory; and
(b) UCITS encounter in marketing their units in any
overseas country or territory.
DUTY OF AUDITORS
Auditor’s duty to 
report.
Amended by:
XVII. 2002.150;XXII. 2014.11;
LXXII.2021.24 .18. (1) An auditor of the holder of a licence shall have the
duty to report immediately to the competent authority any fact or
decision concerning that licence holder of which he becomes awa re in
his capacity as auditor of such licence holder which – 
(a) is likely to lead to a serious qualification or refusal of
the auditor’s report on the accounts of such licenceholder; 
(b) constitutes or is likely to constitute a material breach
of this Act or any regulations or Rules issuedthereunder, including the legal or regulatoryrequirements applicable to the licence holders in orunder this Act; 
(c) may affect the continuous functioning of the licence
holder; 
(d) may lead to the refusal to certify the licence holder’s
 62        CAP. 370. ]                 INVESTMENT   SERVICES
accounts or to the expression of reservations; or
(e) relates to any other matter which may be prescribed.
(2) An auditor of the licence holder shall report to the
competent authority any facts or decision as specified in sub-a rticle
(1) of any person having close links with such licence holder w ithin
the meaning in article 6, of which he becomes aware in his capa city
as auditor of the licence holder or of the person having such c lose
links.
(3) No duty (including the duty of professional secrecy) to
which an auditor of the holder of a licence may be subject, sha ll be
regarded as contravened by reason of his communicating in goodfaith to the competent authority, whether or not in response to  a
request from it, any information or opinion on a matter of whic h the
auditor has become aware in his capacity as auditor of that lic ence
holder and which is relevant to any functions of the competentauthority under the provisions of this Act or is required to becommunicated by virtue of sub-article (1).
(4) The matters prescribed for the purposes of sub-article (1)( d)
may include matters related to persons other than the licenceholder.
(5) An auditor of a licence holder shall, in the absence of
compelling reasons not to do so, simultaneously report theinformation specified in sub-articles (1) and (2), in accordanc e with
the provisions of sub-articles (3) and (4), to the management b ody
of the licence holder.
(6) The competent authority may require the replacement of a
person referred to in sub-article (1) if that person acts in br each of his
obligations under paragraphs (a) to (d) of sub-article (1).
APPEALS, REMEDIES, SANCTIONS AND CONFIDENTIALITY
Appeals.
Amended by:
XVII. 2002.151;XII. 2006.63;XX. 2007.73;XVII. 2009.9;
X. 2011.33;
XX. 2013.51;
LXXII.2021.25 .
Cap. 330.19. (1) In this article the Financial Services Tribunal means
the Tribunal established under article 21 of the Malta Financial
Services Authority Act.
(2) Subject to the provisions of this article, an appeal shall l ie
to the Tribunal with respect to:
(a) any notice in terms of article 3(3);
(b) any failure to inform an applicant within the terms of
article 6(6);
(c) any administrative penalty imposed under article 16A;
(d) any refusal, variation, cancellation or suspension of a
licence under article 8(3);
(e) any notice issued or any order made in terms of 
articles 10, 10A and 10C;
(f) any decision concerning an advertisement under article
11;
(g) any punishment or penalty imposed under article
12(5);
                        INVESTMENT   SERVICES              [CAP. 370.       63
(h) any directive given under article 15; or
(i) any measure taken in terms of article 15A(1), (2) and (4);
(j) any measure taken in terms of paragraphs (a) to (l) of
article 16AA(1).
Cap. 330. (3) The provisions of article 21 of the Malta Financial Services
Authority Actshall apply mutatis mutandis  to appeals that may be
brought before the Tribunal under this article.
Cap. 330.(4) In pursuance of the UCITS Directive , the Tribunal referred to
in this article shall also have the competence to hear appeals by
European management companies, exercising a freedom ofestablishment or a freedom to provide services in Malta, fromdecisions of the competent authority to take measures for breac hes
incurred by European management companies and the phrases"aggrieved person" and "appellant" in article 21 of the
 Malta
Financial Services Authority Act shall include European
management companies.
Unenforceability 
of certain agreements.20. An investment agreement which is entered into - 
(a) by a person in the course of providing an investment
service in contravention of the provisions of article 3of this Act; or
(b) by the holder of an investment services licence or by
an exempted person in consequence of anything saidor done by a person in the course of providing aninvestment service in contravention of the provisionsof article 3, 
shall be unenforceable against the other party; and such other party
shall be entitled to recover any money paid, or other propertytransferred by him under the agreement, or where such propertycannot be so recovered, such party shall be entitled to have itreplaced by its value at the time of the agreement, together wi th
compensation for any loss sustained by him in consequence of su ch
payment or transfer or the non-recovery of the property transfe rred
and any profits that may have accrued as a result of that money  or
other property having been transferred by him:
Provided that where on demand for a recovery under this
article, the court is satisfied that - 
(i) in a case falling under paragraph ( a), the person
therein mentioned reasonably believed he wasnot contravening the provisions of the saidarticle 3; or
(ii) in a case falling under paragraph ( b), the licence
holder or exempted person neither knew norought to have known that the agreement wasentered into as mentioned in that paragraph, 
it may allow an investment agreement to which this article appl ies
to be enforced and the money or property paid or transferredthereunder to be retained.
 64        CAP. 370. ]                 INVESTMENT   SERVICES
Powers of the court 
in the case of a likely contravention.
Amended by: 
XXIV .1995.362;XX. 2007.74;XXXI. 2017.61..21. (1) If, on an application by the competent authority made
to the Civil Court, First Hall, the said court is satisfied - 
(a) that there is reasonable likelihood that a person will
contravene any of the provisions of articles 3, 4 or 11or of any regulations, Investment Services Rules andConduct of Business Rules issued under it, or will
contravene or fail to comply with any condition,obligation, requirement, Investment Services Rules,directive, or order made or given under any of theprovisions of this Act; or
(b) that a person has contravened any such provision or
has contravened or failed to comply with any suchcondition, obligation, requirement, Investment Services
Rules, Conduct of Business Rules, directive, or order
and that steps could be taken to remedy thecontravention or failure,
the court may give such orders as it may deem appropriate to
restrain the contravention or, as the case may be, to require t he
person referred to in paragraph ( a) or (b), or any other person who
appears to the court to have been knowingly concerned in thecontravention, to take such steps as the court may direct.
(2) If, on an application made under sub-article (1), the court is
satisfied that a person has entered into any transaction incontravention of any of the provisions of articles 3, 4 or 11, the
court may order that person and any other person who appears tothe court to have been knowingly concerned in the contravention  to
take such steps as the court may direct for restoring the parti es to
the position in which they were before the transaction was ente red
into.
(3) If, on an application made under sub-article (1), the court is
further satisfied that -
(a) profits have accrued to any person as a result of the
contravention; or
(b) an investor has suffered loss or been otherwise
adversely affected as a result of that contravention, 
the court may order the person responsible for the contraventio n to
pay into court such sum as appears to it to be just having rega rd to
the extent of the profit, loss or adverse effect as aforesaid, and
order such sum to be paid out as the court may direct to the pe rsons
who have entered into transactions as a result of which profits  have
accrued or losses or adverse effects have been suffered asaforesaid.
(4) For the purposes of this article the court may order the
production by any person of such accounts and the provision ofsuch information, and verified in such manner, as the court maydeem appropriate.
(5) The provisions of this article shall be without prejudice to
any right of any aggrieved person to bring proceedings directly  in
respect of any right such person may otherwise have independent ly
                        INVESTMENT   SERVICES              [CAP. 370.       65
of the competent authority.
Offences.
Amended by:
XX. 2007.75.22. (1) Any person who contravenes or fails to comply with
any of the provisions of articles 3, 4, 9, 10, 11, 13, 15 or 26  or of
article 13 as applied by article 14, or of articles 13, 14 or 1 5 as
applied by articles 17 and 17D, or of any court order made unde r
article 21 or of any regulations made under articles 12 or 31, or
contravenes or fails to comply with any condition, obligation,requirement, directive or order made or given under any of theprovisions of this Act, shall be guilty of an offence.
(2) Any person who for the purposes of, or pursuant to, any of
the provisions of this Act or of any regulations made thereunde r, or
any condition, obligation, requirement, directive or order made  or
given as aforesaid, furnishes information or makes a statementwhich he knows to be inaccurate, false or misleading in anymaterial respect, or recklessly furnishes information or makes a
statement which is inaccurate, false or misleading in any mater ial
respect, shall be guilty of an offence.
(3) Any person who is knowingly a party to the carrying on of
any investment service or of any activity by a collective inves tment
scheme with a fraudulent intent or for a fraudulent purpose, sh all be
guilty of an offence.
(4) Any person who by any statement, promise or forecast
which he knows to be misleading, false or deceptive, or by anydishonest concealment of material facts, or by the reckless mak ing
(whether dishonest or otherwise) of any statement, promise orforecast which is misleading, false or deceptive, induces orattempts to induce another person to enter into or offer to ent er into
an investment agreement, shall be guilty of an offence.
(5) Any person who with intent to avoid detection of the
commission of an offence under this Act removes, destroys,conceals or fraudulently alters any book, document or other pap er,
shall be guilty of an offence.
(6) Any person who intentionally obstructs a person exercising
rights conferred by this Act shall be guilty of an offence. 
Penalties.
Amended by:
XX. 2007.76;L.N. 425 of 2007;X. 2011.34.23. A person guilty of an offence under the provisions of
article 22 shall be liable on conviction to a fine ( multa ) not
exceeding four hundred and sixty-six thousand euro (€466,000) o r to a
term of imprisonment not exceeding four years, or to both such fine
and imprisonment, unless such fine or term of imprisonment isotherwise imposed under article 12(5).
Criminal 
proceedings.24. (1) No proceedings for an offence under this Act shall be
commenced without the consent of the Attorney General.
(2) The provisions of this Act shall not affect any criminal
proceedings that may be competent under any other law.
 66        CAP. 370. ]                 INVESTMENT   SERVICES
Public statement as 
to person's misconduct.
Amended by:
XII. 2006.64;XX. 2007.77;XXXI. 2017.62.25. (1) If it appears to the competent authority that a person
who holds or who held a licence, or any other person, hascontravened any of the provisions of this Act or of any regulat ions
made under this Act or has contravened or failed to comply withany condition, obligation, requirement, Investment Services Rul es,
Conduct of Business Rules, directive, or order made or given un der
any of the provisions of this Act, the competent authority maypublish a statement to that effect.
(2) Nothing in this article shall restrict or otherwise prejudic e
the powers of the competent authority under article 15(4).
Confidentiality.
Amended by:
XVII. 2002.152.Substituted by:IV . 2003.176;XII. 2006.65.
Amended by:
XX. 2007.78;X. 2011.35;XX. 2013.52;XXII. 2014.12;XXXI. 2017.63;V .2020.16;XLVI.2021.58;
LXXII.2021.26 .26. (1) Other than for the proper discharge of their duties or
functions under this Act or any other Act, or as may be otherwi se
provided in any other law, information obtained by the competen t
authority or by its officers, employees or agents, as well as b y
inspectors, auditors and experts engaged by the competentauthority for the purposes of, or pursuant to, any of the provi sions
of this Act, or of any regulations, Investment Services Rules o r
Conduct of Business Rules made thereunder, or in the discharge of
their duties or any functions, shall be treated as confidential  and
protected by the duty of professional secrecy, and shall not bedisclosed to any other person, except in the following cases:
(a) where the disclosure is required for the detection,
prevention or prosecution of criminal offences underthe criminal provisions of this Act or any other Act;
(b) where the information is disclosed by the competent
authority with a view to the institution of, or otherwisefor the purposes of any proceedings before any court ortribunal;
(c) where the information is disclosed in civil or
commercial proceedings in relation to the bankruptcyor dissolution and consequential winding up by theCourt of a licence holder, provided such informationdoes not concern third parties and is necessary for thecarrying out of the proceedings, or is disclosed to anoverseas body responsible for the liquidation andbankruptcy of a person holding a licence or anequivalent authorisation from a European regulatoryauthority or an overseas regulatory authority;
(d) where a summary or collection of the information is
prepared or supplied in such a way as not to enable the
identity of any persons, including UCITS, theirmanagement companies and custodians to whom theinformation relates  to be ascertained;
(e) where the information is disclosed to an auditor where
such disclosure would assist him in the exercise of hisfunctions under article 18;
Cap. 345.(f) where the information is provided to the Central Bank
of Malta in the exercise of its functions in terms of law;
(g) where the information is provided to such other local
or European or overseas regulatory, judicial or
                        INVESTMENT   SERVICES              [CAP. 370.       67
enforcement authorities in the pursuance of serious
concerns of a regulatory or criminal nature; and
(h) where the competent authority publishes the outcome
of stress tests in accordance with Article 100 of the
CRD  or Article 32 of Regulation (EU) No 1093/2010
and, or transmits the results to the EBA:
Provided that this article shall not prevent the competent
authority from exchanging or transmitting confidential informat ion
in accordance with the AIFM Directive, the BRRD, the CRD, the
CRR, the MIFID, the MiFIR, the UCITS Directive, the IFD and the
IFR, and with other Directives of the European Union applicable to
licence holders, credit institutions, pension funds, insurance and
reinsurance intermediaries, insurance undertakings, regulatedmarkets or market operators, including the exchange or transmis sion
of confidential information to ESMA or the ESRB:
Provided further that this article shall not prevent the
competent authority from using such information for otherpurposes where the body or person communicating information tothe competent authority consents thereto.
(1A) Notwithstanding the provisions of sub-article (1),
information obtained by the competent authority or by its offic ers,
employees or agents, as well as by inspectors, auditors and exp erts,
who are or were engaged by the competent authority, in the cour se of
their duties and, or pursuant to the 
IFR or the IFD as transposed in
national law, shall be treated as confidential and protected by  the duty
of professional secrecy, and shall not be disclosed to any othe r person,
except in the following cases:
(a) where it is necessary for the proper discharge of their
duties or functions under this Act or any other Act, oras may be otherwise provided in any other law; 
(b) where the information is disclosed in summary or
aggregate form, provided that individual investmentfirms or persons cannot be identified, withoutprejudice to cases covered by criminal law; 
(c) in civil or commercial proceedings, where the
investment firm to which the information relates hasbeen declared bankrupt or is being compulsorilywound up, such information does not concern thirdparties and the disclosure of such information isnecessary for carrying out those proceedings; 
(d) in proceedings initiated under article 19; (e) to monitor the prudential rules set out in the 
IFD a s
transposed in national law and in the IFR;
(f) to impose penalties and other administrative measures; (g) in an appeal against a decision of the competent
authority, including court proceedings; 
(h) to the Commission of the European Union when the
 68        CAP. 370. ]                 INVESTMENT   SERVICES
information is necessary for the exercise of the powers
of the Commission of the European Union, or
(i) to the EBA, ESMA, the ESRB, central banks of the
Member States or EEA States, the European System of
Central Banks and the European Central Bank, in theircapacity as monetary authorities, and, whereappropriate, public authorities responsible foroverseeing payment and settlement systems, wherethat information is necessary for the performance oftheir tasks.
(1B)  Natural and legal persons and other bodies, other than tho se
mentioned in sub-article (1A), that receive information pursuan t to the
IFR or the IFD as transposed in national law shall only use that
information for the purposes expressly provided by the competen t
authority or by law.
(2) Without prejudice to the cases covered by criminal law, any
confidential information received by bodies or natural or legalpersons within the meaning of Article 81 of the 
MiFID , Article 15 of
the IFD, and of Article 102 of the UCITS Directive shall only be
used in the performance of their duties and for the exercise of  their
functions. In addition, such information is to be used specific ally
for the purpose for which such information was provided to themand, or in the context of administrative or judicial proceeding s
specifically related to the exercise of those functions:
Provided that where a body or person communicating
information to the competent authority consents thereto, suchinformation may be used by the competent authority for otherpurposes.
(3) The provisions of this article and of articles 17 and 17F of
this Act shall not preclude the competent authority fromtransmitting to the Central Bank of Malta, the European System of
Central Banks and the European C entral Bank, in their capacity as
monetary authorities, and, where appropriate, to recognised cle aring
houses or other similar body performing clearing or settlementservices, to bodies which administer compensation schemes, and to
other public authorities responsible for overseeing payment andsettlement systems, confidential information intended for theperformance of their functions. Likewise, the competent authori ty
shall be entitled to the receipt of such information as it may require for
the purpose of performing its functions under the 
MIFID and the
MiFIR :
Provided that where the exchange of information is carried out
in terms of the UCITS Directive , the express consent of the European
regulatory authority shall be obtained.
Cap. 373.(4) Where an officer or an employee of a licence holder has reas on
to believe that a transaction or a proposed transaction could i nvolve
money laundering or the funding of terrorism, he shall act incompliance with the reporting and other obligations set out in the
regulations made under article 12 of the
 Prevention of Money
                        INVESTMENT   SERVICES              [CAP. 370.       69
Laundering Act and any procedures and guidance issued thereunder,
and such disclosure shall not constitute a breach of confidenti ality.
MISCELLANEOUS
Exclusion of 
liability.
Amended by:
XXV .1995.432;XX. 2007.79;XXXI. 2017.64.27. Deleted by Act V.2020 .17.
Notices, etc.
Amended by:
XX. 2007.80;XXXI. 2017.65.28. A notice or other document to be given or served under this
Act, or any regulations, Investment Services Rules or Conduct o f
Business Rules made thereunder, shall be deemed to have been du ly
given or served on a person if -
(a) it has been delivered to him; or
(b) it has been left at the address furnished by him to the
competent authority, or to his last known address; or
(c) if it has been sent to him by post or by telefax at any of
the aforesaid addresses; or
(d) in the case of a body of persons, whether corporate or
unincorporate, or of a scheme or of a trust, if it hasbeen given or served in any of the manners aforesaidto or on a secretary, clerk, manager, trustee or theirequivalent, or to any member of the governing body oran appointed representative.
Application of 
Exchange Control 
Act.29. (Deleted by: XX. 2007.81. ).
Social security and 
import duty exemptions in respect of licence holders and expatriate staff. Cap. 318.30. (1) Expatriate officers and employees of any licence
holder and the licence holder shall be exempt from the provisio ns
of the Social Security Act, in respect of remuneration paid or
attributed to such officers and employees by the licence holder  for
services rendered exclusively in a managerial capacity or in afunction requiring special expertise which is not generallyavailable in Malta.
(2) In order to obtain the exemption provided for by sub-article
(1), the licence holder shall apply to the Department for Socia l
Security identifying the officers and employees concerned toget her
with such proof as the department may require that the conditio ns
of that sub-article are satisfied.
(3) Personal belongings and effects of an expatriate officer or
employee of a licence holder imported by him into Malta, not la ter
than six months from his first taking up residence, shall be ex empt
from customs duty:
Provided that duty shall become payable on anything
imported free of duty and subsequently sold, assigned or otherw ise
transferred to a person resident in Malta.
(4) Furniture, equipment and other material required by a
licence holder and imported into Malta for its own use and purp ose
shall be exempt from customs duty:
 70        CAP. 370. ]                 INVESTMENT   SERVICES
Provided that duty shall become payable on anything
imported free of duty and subsequently sold, assigned or otherw ise
transferred to a person resident in Malta.
(5) For the purposes of this article, "expatriate" means an
individual who is not a national of Malta, who has been posted to
Malta from abroad or recruited directly from abroad in order to  be
employed by a licence holder, whose mission in Malta is of atemporary nature and who has maintained the centre of hiseconomic interests outside Malta.
Continuance of 
foreign body corporate.Substituted by:XVII. 2002.153.31. (1) A body corporate, formed, incorporated or registered
in a country outside Malta (hereinafter referred to as "foreign  body
corporate"), and carrying on the business of a collective inves tment
scheme, which is similar in nature to a body corporate as knownunder the laws of Malta (hereinafter referred to as "local bodycorporate"), and which would, if it were such a local bodycorporate qualify to be authorised or recognised as a collectiv e
investment scheme under this Act, may, subject to the specificapproval and authorisation of the competent authority, be conti nued
as a collective investment scheme under this Act and under theapplicable laws of Malta.
(2) The continuance of a foreign body corporate shall not take
place unless such continuance (or similar process, includingconversion) is permitted by the applicable laws of the foreignjurisdiction and is in accordance with such provisions thereof as
may bring about such continuance (or similar process).
(3) Continuance may only take place if it is allowed by the
statute or equivalent instrument of the foreign body corporate to so
continue, and if it is approved in accordance with the procedur e, if
any, established therein or in the applicable law of the foreig n
jurisdiction for this purpose.
(4) The continuance of a foreign body corporate as a local body
corporate shall be effected by an instrument of continuancecontaining, in addition to the declarations relating to thecontinuance, the equivalent of a memorandum and articles orequivalent constitutive document as may be required by this Act  or
other applicable laws of Malta for the registration of such bod y
corporate in accordance with the type of local body corporate i n
which it is to be continued, and showing on the face of it that  the
continuance has been approved as provided in this article.
(5) The delivery of the instrument of continuance to the
Registrar of Companies shall, for all purposes of the laws of M alta,
be equivalent to the delivery of a deed of partnership or of amemorandum and articles of a company, as the case may be, as if  it
were a local body corporate to be registered under this Act; an d the
Registrar shall treat it accordingly.
(6) Upon the delivery of the instrument of continuance and its
registration under this Act the body corporate shall cease to b e a
body corporate under the jurisdiction of its previous registrat ion
and shall continue its corporate existence under the laws of Ma lta,
and shall retain all its assets, rights and liabilities.
                        INVESTMENT   SERVICES              [CAP. 370.       71
(7) Where continuance as aforesaid entitles or requires the
body corporate to redeem the interest of dissenting persons who se
approval is required, such interest may be redeemed on such ter ms
as may be agreed or as the courts in Malta may, on demand of ei ther
party, establish.
(8) ( a) A local body corporate carrying on business as a
collective investment scheme authorised or otherwisefalling within the meaning of this Act, may, subject tothe specific approval and authorisation of thecompetent authority, be continued as a foreign bodycorporate, and the foregoing provisions of this articleshall apply mutatis mutandis .
(b) A local body corporate shall not cease to be a local
body corporate subject to Maltese jurisdiction until theRegistrar has received notice in writing of thecontinuance (or other process) made as aforesaid andunless and until, being satisfied that the requirementsof this article have been complied with, the Registrarhas registered such continuance and has, inconsequence thereof and by virtue of this article,struck the name of the company off the register.
(9) The Minister may, acting on the advice of the competent
authority, make regulations for the better carrying out of theprovisions of this article.
Inclusion of 
holding companies in supervision of compliance with the group capital test.
Added by:
LXXII.2021.27.32. Investment holding companies and mixed financial holding
companies shall be included in the supervision of compliance wi th the
group capital test.
Assessment of 
third country 
supervision and other supervisory techniques.
Added by:
LXXII.2021.27.33. (1) Where two or more European investment firms that
are subsidiaries of the same parent undertaking, the head offic e of
which is in a third country, are not subject to effective super vision at
group level, the competent authority shall, together with any o ther
European regulatory authority involved, assess whether the Euro pean
investment firms are subject to supervision by the third-countr y
supervisory authority which is equivalent to the supervision se t out in
the IFD as transposed in national law and in Part One of the IFR.
(2) Where the assessment referred to in sub-article (1)
concludes that no such equivalent supervision applies, the comp etent
authority shall adopt appropriate supervisory techniques whichachieve the objectives of supervision in accordance with Articl e 7 or 8
of the 
IFR. Those supervisory techniques shall be decided by the
competent authority where it would have been the group supervis or
had the parent undertaking been established in the European Uni on,
after consulting the European regulatory authorities involved. Any
measures taken pursuant to this paragraph by the competent auth ority
shall be notified to the European regulatory authorities involv ed, to
 72        CAP. 370. ]                 INVESTMENT   SERVICES
EBA and to the Commission of the European Union.
(3) Without prejudice to sub-article (2), where the competent
authority would have been the group supervisor had the parentundertaking been established in the European Union, it may requ ire
the establishment of an investment holding company or mixedfinancial holding company in the European Union and apply Artic le 7
or 8 of the 
IFR to that investment holding company or mixed financial
holding company.
Supervision of 
mixed-activity holding company.
Added by:
LXXII.2021.27.34. Where the parent undertaking of an investment firm licensed
under this Act is a mixed-activity holding company, the compete nt
authority may supervise transactions between such investment fi rm and
the mixed-activity holding company and the subsidiaries of the latter,
and require the said investment firm to have in place adequate risk
management processes and internal control mechanisms, includingsound reporting and accounting procedures to identify, measure,  monitor
and control those transactions.
Amended by:
L.N. 46 of 1999;XVII. 2002.154;XIII. 2004.80.Substituted by:XX. 2007.82.
Amended by:
L.N. 251 of 2013;L.N. 147 of 2014;XXXI. 2017.66.FIRST SCHEDULE
(Article 2)
Investment Services and Activities
1. Reception and Transmission of Orders in relation to one or
more instruments
The reception from a person of an order to buy, sell or subscri be
for instruments and the transmission of that order to a third p arty
for execution.
Substituted by:
XXXI. 2017.66.2. Execution of orders on behalf of clients
Acting to conclude agreements to buy or sell one or more
instruments on behalf of clients and includes the conclusion ofagreements to sell instruments issued by an investment serviceslicence holder or a credit institution at the moment of theirissuance.
3. Dealing on own account
Trading against proprietary capital resulting in conclusion of
transactions in one or more instruments.
4. Management of InvestmentsManaging or agreeing to manage assets belonging to another
person if those assets consist of or include one or more instru ments
or the arrangements for their management are such that the pers on
managing or agreeing to manage those assets has a discretion toinvest any of those assets in one or more instruments.
                        INVESTMENT   SERVICES              [CAP. 370.       73
Cap. 403.Management of Investments may also constitute the selection or
agreement to select, on a discretionary basis, instruments byreference to which benefits are wholly or partly payable under a
contract of insurance falling within class III - linked long te rm of
the Second Schedule to the 
Insurance Business Act.
Collective portfolio management of assets, belonging to a colle ctive
investment scheme, where the arrangements for their management are
such that the person managing or agreeing to manage those asset s has
discretion to invest in any movable and, or immovable property.
5. Trustee, Custodian or Nominee Services
(a) Acting as trustee, custodian or nominee holder of an
instrument, or of the assets represented by orotherwise connected with an instrument, where theperson acting as trustee, custodian or nominee holderis so doing as part of his providing any investmentservice in paragraphs 1, 2, 3, 4 or 6 of this Schedule;
Cap. 331.Provided that for the purposes of this sub-paragraphany person who is authorised or otherwise exemptfrom authorisation in the terms of article 43 or 43A ofthe 
Trusts and Trustees Act shall not by virtue of
holding such assets be required to have a licence interms of this sub-paragraph if such person does notprovide an investment service and delegates allactivities which are investment services in terms ofthis Act to a person who is licensed to provide suchservices; or
(b) Holding an instrument or the assets represented by or
otherwise connected with an instrument as nominee,where the person acting as nominee is so doing onbehalf of another person who is providing anyinvestment service in this Schedule or on behalf of aclient of such person, and such nominee holding iscarried out in relation to such investment service:
Provided that for the purposes of this paragraph any
person who is authorised or otherwise exempt fromauthorisation in the terms of article 43 or 43A of the
Trusts and Trustees Act shall not by virtue of holding
such assets be required to have a licence in terms ofthis Act.
(c) Acting as trustee or custodian in relation to a
collective investment scheme.
6. Investment AdviceGiving, offering or agreeing to give, to persons in their capac ity
as investors or potential investors or as agent for an investor  or
potential investor, a personal r ecommendation in respect of one  or
more transactions relating to one or more instruments.
For the purposes of this paragraph, a "personal recommendation"
shall mean a recommendation presented as suitable for the perso n
to whom it is addressed, or which is based on a consideration o f the
circumstances  of  that  person,  and  must  constitute  a
 74        CAP. 370. ]                 INVESTMENT   SERVICES
recommendation to take one of the following steps:
(a) to buy, sell, subscribe for, exchange, redeem, hold or
underwrite a particular instrument;
(b) to exercise or not to exercise any right conferred by a
particular instrument to buy, sell, subscribe for,exchange, or redeem an instrument;
Cap. 403.(c) to select one or more instruments by reference to
which benefits are wholly or partly payable under acontract of insurance falling within the meaning ofclass III - ‘linked long term’, of the Second Scheduleto the 
Insurance Business Act.
A recommendation is not a personal recommendation if it is
issued exclusively through distribution channels or to the publ ic.
7. Underwriting of instruments and, or placing of instruments
on a firm commitment basis
The underwriting or placing of instruments such that the person
providing the service assumes the risk of bringing a new securi ties
issue to the market by buying the issue from the issuer therebyguaranteeing the sale of a certain number of shares to investor s
8. Placing of Instruments without a firm commitment basis
The marketing of newly-issued securities or of securities which
are already in issue but not listed, to specified persons and w hich
does not involve an offer to the public or to existing holders of the
issuer’s securities’ - without assuming the risk of guaranteein g the
sale of a certain number of shares by buying the relative secur ities
from the issuer.
9. Operation of a Multilateral Trading Facility
The operation of a multilateral system which brings together
multiple third party buying and selling interests in instrument s - in
the system and in accordance with non-discretionary requirement s -
in a way that results in a contract.
10. The reception, transmission, and submission of a bid
relating to emission allowances
The reception, transmission, and submission of a bid by a perso n
on any auction platform which auctions emission allowances with in
the meaning of 
Commission Regulation (EU) No 1031/2010 of 12
November 2010 on the timing, administration and other aspects o f
auctioning of greenhouse gas emission allowances pursuant to
Directive 2003/87/EC of the European Parliament and of the
Council establishing a scheme for greenhouse gas emissionsallowances trading within the Community, as may be amendedfrom time to time.
                        INVESTMENT   SERVICES              [CAP. 370.       75
Added by:
XXXI. 2017.66.11.  Operation of an Organised Trading Facility 
The operation of an OTF whereby multiple third-party buying
and selling interests in bonds, structured finance products, em ission
allowances or derivatives are able to interact in the system in  a way
that results in a contract.
Amended by:
L.N. 191 of 1998;XVII. 2002.155;L.N. 318 of 2006.Substituted by:XX. 2007.83.
Amended by:
XXXI. 2017.67.SECOND SCHEDULE
(Article 2)
Instruments
1. Transferable Securities.
Those classes of securities which are negotiable on the capital
market and include:
(a) shares in companies and other securities equivalent to
shares in companies, partnerships or other entities, anddepository receipts in respect of shares;
(b) bonds or other forms of securitised debt, including
depository receipts in respect of such securities;
(c) any other securities giving the right to acquire or sell
any such transferable securities or giving rise to a cashsettlement determined by reference to transferablesecurities, currencies, interest rates or yields,commodities or other indices or measures.
2. Money Market Instruments.
Those classes of instruments whi ch are normally dealt in on the
money market, such as treasury bills, certificates of deposit a nd
commercial papers and excluding instruments of payment.
3. Units in collective investment schemes.4  Options, futures, swaps, forward rate agreements and any
other derivative contracts relating to securities, currencies, interest
rates or yields, emission allowances or other derivative instru ments,
financial indices or financial measures which may be settledphysically or in cash.
5. Options, futures, swaps, forwards and any other derivative
contracts relating to commodities that must be settled in cash or
may be settled in cash at the option of one of the parties othe r than
by reason of default or other termination event;
Cap. 345.6. Options, futures, swaps, and any other derivative contracts
relating to commodities, that can be physically settled provide d that
they are traded on a regulated market, within the meaning of th e
Financial Markets Act a Multilateral Trading Facility, or an
Organised Trading Facility, except for wholesale energy product s
traded on an Organised Trading Facility that must be physicallysettled;
7. Options, futures, swaps, forwards and any other derivative
contracts relating to commodities, that can be physically settl ed,
 76        CAP. 370. ]                 INVESTMENT   SERVICES
are not for commercial purposes, are not included in article 6 of
this Schedule, and, which have the characteristics of otherderivative instruments.
8. Derivative instruments for the transfer of credit risk.9. Rights under a contract for differences or under any other
contract the purpose or intended purpose of which is to secure a
profit or avoid a loss by reference to fluctuations in the valu e or
price for property of any description or in an index or other f actor
designated for that purpose in the contract.
Substituted by:
XXXI. 2017.67.10. Options, futures, swaps, forward rate agreements and any
other derivative contracts relating to climatic variables, frei ght rates or
inflation rates or other official economic statistics that must  be settled
in cash or may be settled in cash at the option of one of the p arties
other than by reason of default or other termination event, as well as
any other derivative contracts relating to assets, rights, obli gations,
indices and measures not otherwise mentioned in this Schedule, which
have the characteristics of other derivative financial instrume nts,
having regard to whether, inter alia , they are traded on a regulated
market, OTF, or an MTF;
11. Certificates or other instruments which confer property
rights in respect of any instrument falling within this Schedul e.
12. Foreign exchange acquired or held for investment
purposes.
Added by:
XXXI. 2017.67.13. Emission allowances consisting of any units recognised for
compliance with the requirements of Directive  2003/87/EC
(Emissions Trading Scheme).
Added by:
XXXI. 2017.68.THIRD SCHEDULE
(Article 2)
Ancillary Services
1. Safekeeping and administration of financial instruments
for the account of clients, including custodianship and relatedservices such as cash, collateral management and excludingmaintaining securities accounts at the top tier level; 
2. Granting credits or loans to an investor to allow him to
carry out a transaction in one or more financial instruments, w here
the firm granting the credit or loan is involved in the transac tion; 
3. Advice to undertakings on capital structure, industrial
strategy and related matters and advice and services relating t o
mergers and the purchase of undertakings; 
4. Foreign exchange services where these are connected to the
provision of investment services; 
5. Investment research and financial analysis or other forms
of general recommendation relating to transactions in financialinstruments; 
                        INVESTMENT   SERVICES              [CAP. 370.       77
6. Services related to underwriting; 
7. Investment services and activities as well as ancillary
services of the type included under Section A or B of Annex 1related to the underlying of the derivatives included under poi nts
(5), (6), (7) and (10) of Section C of 
MIFID where these are
connected to the provision of investment or ancillary services.