Opinion of the European Central Bank of 18 May 2011 on various amendments to the Central Bank of Malta Act (CON/2011/43)
Date: 2011-05-18
Institutions: European Central Bank
Subjects: Malta, central bank, data collection, intra-EU payment, money, national law, payment system, statistics

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 18 May 2011 

on various amendments to the Central Bank of Malta Act 

(CON/2011/43) 

Introduction and legal basis 

On 18 April 2011, the European Central Bank (ECB) received a request from the Central Bank of Malta 
(hereinafter ‘CBM’) for an opinion on draft amendments to the Central Bank of Malta Act1 (hereinafter 

the ‘draft amendments’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning  of  the  European  Union  and  the  third,  fourth  and  fifth  indents  of  Article 2(1)  of  Council 

Decision 98/415/EC  of  29 June 1998  on  the  consultation  of  the  ECB  by  national  authorities  regarding 
draft  legislative  provisions2,  as  the  draft  amendments  concern  the  Central  Bank  of  Malta,  statistics  and 

payment systems. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the 

ECB, the Governing Council has adopted this opinion. 

1.  

Purpose of the draft amendments 

1.1  According  to  the  consultation  request  received  from  the  CBM,  the  Central  Bank  of  Malta  Act 

(hereinafter  the  ‘CBM  Act’)  is  being  amended  primarily  to  better  regulate  the  collection  of 

information, to allocate a general enabling power to the CBM to regulate payments and payment 

services  and  to  appoint  the  CBM  as  the  competent  authority  in  terms  of  Regulation  (EC) 

No 924/2009 of the European Parliament and of the Council of 16 September 2009 on cross-border 
payments  in  the  Community  and  repealing  Regulation  (EC)  No  2560/20013.  Other  amendments 

relate to the authenticity and fitness checking of euro banknotes and coins. 

1.2 

In that context, the draft amendments also include three enabling provisions empowering the CBM 

to issue, amend or revoke directives (a) in the context of payment services (article 34A(1)); (b) on 

limitations  on  cash  payments  (article  43A);  and  (c)  on  the  authenticity  and  fitness  checking  of 

currency notes and coins (article 50A). 

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2 
3 

Cap. 2014 of the Laws of Malta. 
OJ L 189, 3.7.1998, p. 42.  
OJ L 266, 9.10.2009, p. 11. 

 
 
 
 
                                                 
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1.3  The  draft  amendments  also  propose  deleting  article  24  of  the  CBM  Act  on  the  collection  of 

statistical  information  and  propose  a  new  article  23  on  the  collection  of  statistical  and  other 

information which will reorganise, update and merge articles 23 and 24. 

1.4  Finally, the draft amendments also fine-tune definitions, include references to the Treaty of Lisbon, 

reorganise provisions and delete unnecessary articles. 

2. 

General observations 

2.1  The ECB welcomes the proposed insertion of a new article 18 into the CBM Act on the transfer of 

data  or  information.  The  ECB  encourages  measures  promoting  the  exchange  and  transfer  of 

information, 

including 

information  subject 

to  confidentiality  and  professional  secrecy 

requirements, between the key public authorities in the financial markets, as well as the sharing of 

such  information  with  decision-making  bodies.  In  this  regard,  the  ECB  welcomes  the  aim  of 

ensuring the transferability without any restriction or limitation of data or information within the 

CBM and/or between the CBM and other persons or entities. 

2.2  Without prejudice to the specific observations in Section 3 below, the ECB however questions the 

need  to  include  both  a  general  provision  on  the  CBM’s  powers  to  issue,  amend  and  revoke 

directives  and  separate  individual  enabling  provisions  conferring  such  powers  on  the  CBM  with 

regard to specific areas. 

3.  

Statistics 

3.1  The  ECB  welcomes  the  proposed  new  article  23  on  the  collection  of  statistical  and  other 

information  since  it  also  clarifies  further  the  duties  of  the  CBM  in  the  field  of  statistics  and 

encompasses  the  collection  of  statistical  and  other  information  in  order  to  assist  the  ECB  in  the 

performance of the ESCB’s tasks.  

3.2  The ECB also notes the proposed deletion of the reference to ‘reporting agent’ and the detailed and 

exhaustive definition thereof in article 23(3) and the subsequent amendment of article 23(1), now 

referring  to  the  duty  of  ‘any  person  or  entity  which  is  licensed,  authorised  or  registered  by  a 

competent authority, any branch of a foreign legal person, or any other person or entity, as may be 

determined by the CBM’ to provide the CBM with any statistical and other information that may be 

necessary for it to carry out its tasks. The ECB acknowledges the need for this draft amendment, 

since article 23(1) will be worded in more general terms, providing a broader definition and a wider 

scope of applicability.  

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4.  Monetary policy 

Article 18 on monetary policy is deleted. Amongst others, it conferred sole authority and responsibility 

within the CBM on the Governor to take decisions and perform any function or duty or to exercise any 

power  relating  to  monetary  policy  and  referred  to  the  establishment  of  the  Monetary  Policy  Advisory 

Committee. The ECB understands that the CBM has retained its powers to organise itself internally and 

that the deletion of article 18 does not in any way interfere with the possibility for the Governor to receive 

advice on matters relating to monetary policy at his request. 

5. 

Payment systems 

5.1  The ECB notes the draft amendments in article 34(2) of the CBM Act, notably subsections (a) and 

(b) which refer to the right of the CBM to terminate, close, suspend or revoke a payment system. 

While  welcoming  the  draft  amendments,  the  ECB  considers  that  they  should  clarify  further  that 

these  two  proposed  amendments  apply  exclusively  to  domestic  payment  systems  and  therefore 

recommends modifying them accordingly.  

5.2  The  ECB  notes  the  draft  amendment  of  article  34(7)  and  specifically  the  definition  of  ‘payment 

system’ or ‘system’ which is a direct rendering of the definition provided by Directive 98/26/EC of 

the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and 
securities  settlement  systems4.  However,  the  definition  of  ‘participant’  in  the  first  indent  is 

inconsistent  with  the  analogous  definition  in  Article  2(f)  of  Directive  98/26/EC  (as  amended  by 
Directive  2009/44/EC5),  according  to  which  a  participant  means  an  institution,  a  central 

counterparty, a settlement agent, a clearing house or a system operator, and an indirect participant 

may  only  be  considered  a  participant  if  it  is  warranted  on  the  grounds  of  systemic  risk  and  on 

condition  that  the  indirect  participant  is  known  to  the  system.  The  ECB  takes  the  view  that  this 

could create some ambiguity, since both definitions should reflect Directive 98/26/EC if they are 

intended to transpose it. The wording of the first  indent of article 34(7) of the draft amendments 

needs  to  be  revised  accordingly,  in  order  to  foster  maximum  transparency  and  legal  certainty. 

Moreover, the ECB also recommends, in order to ensure consistency and greater clarity, including 

references to the applicable Union legal acts. 

6. 

Payment services 

In  the  context  of  payment  services,  the  ECB  welcomes  the  proposed  insertion  of  a  new  article  34A  on 

payment services. By virtue of the draft article 34A(2), the CBM is appointed as competent authority for 

the  purposes  of  Article  9  of  Regulation  (EC)  No  924/2009  and  will  be  responsible  for  monitoring 

compliance and taking all necessary measures to ensure compliance. Article 34A(1) empowers the CBM 

4  
5  

OJ L 166, 11.6.1998, p. 45. 
OJ L 146, 10.6.2009, p. 37. 

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to issue, amend or revoke directives on the provision of payment services and to impose limitations on 

payments through the said directives. The ECB welcomes this new enabling provision, but also takes the 

view that this indent should clearly specify that such initiatives should be taken in line with the applicable 

Union legislation.   

7. 

Currency matters 

7.1  As regards the draft insertion of a new article 43A on limitations on cash payments, while noting 

that the draft amendment does not include any reference to justifications based on public reasons, 

the  ECB  refers  to  recital  19  of  Council  Regulation  (EC)  No  974/98  of  3  May  1998  on  the 
introduction of the euro6. The ECB is of the view that the wording of the new article 43A leaves 

some  room  for  interpretation  and  restrictions  on  cash  payments  that  would  not  necessarily  be 

justifiable  on  the  basis  of  public  reasons.  It  therefore  suggests  further  reconsidering  this  article’s 

wording to ensure that any limitation on cash payments is justified by public reasons and complies 

with the general principle of proportionality with regard to the objectives pursued. 

7.2 

In  the  context  of  currency  matters,  reference  is  also  made  to  the  draft  amendments  concerning 

articles 50 and 50A. These amendments are linked to the implementation of Decision ECB/2010/14 
of 16 September 2010 on the authenticity and fitness checking and recirculation of euro banknotes7 

and  of  Regulation  (EU)  No  1210/2010  of  the  European  Parliament  and  of  the  Council  of 

15 December  2010  concerning  authentication  of  euro  coins  and  handling  of  euro  coins  unfit  for 
circulation8 and are welcomed by the ECB.   

7.3  Nevertheless  the  ECB  has  concerns  about  the  definition  of  ‘professional  cash  handler’  in 

Section 50(6)  of  the  draft  amendments,  which  is  derived  from  the  definition  in  Article  6(1)  of 

Council Regulation (EC) No 1338/2001 of 28 June 2001 laying down measures necessary for the 
protection  of  the  euro  against  counterfeiting9,  but  restricts  the  scope  of  the  definition.  On  the 

contrary,  by  virtue  of  Section 5  of  CBM  Directive  No  10,  which  implements  Decision 
ECB/2010/1410, the said Directive ‘applies to cash handlers as referred to in Article 6 of Council 

Regulation (EC) No 1338/2001 of 28 June 2001 laying down measures necessary for the protection 

of the euro against counterfeiting’. Consequently the definitions appear to be contradictory, which 

can  give  rise  to  ambiguity.  The  ECB  questions  the  need,  if  at  all,  to  distinguish  between 

‘professional cash handler’ in one legal act and ‘cash handler’ in another. The ECB is moreover of 

the view that the proposed definition of ‘professional cash handler’ in the CBM Act, which departs 

6  
7  
8  
9  
10  

OJ L 139, 11.5.1998, p. 1. 
OJ L 267, 9.10.2010, p. 1. 
OJ L 339, 22.12.2010, p. 1. 
OJ L 181, 4.7.2001, p. 6. Article 6 has been amended by Regulation (EC) No 44/2009 (OJ L 17, 22.1.2009, p. 1). 
CBM  Directive  No  10  was  the  subject  of  ECB  Opinion  CON/2010/90.  All  ECB  opinions  are  available  on  the  ECB’s 
website at www.ecb.europa.eu.  

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from  the  definition  of  ‘cash  handler’  in  CBM  Directive  No  10,  should  be  revisited,  particularly 

since articles 50 and 50A of the CBM Act and CBM Directive No 10 all relate to the same matter.  

8. 

Administrative penalties 

The  ECB  notes  the  amendments  to  article  56  and  proposed  transfer  to  the  CBM  of  the  power  to  issue 

regulations providing for administrative penalties, currently vested in the Minister. 

The  ECB  also  notes  the  proposed  deletion  of  the  last  proviso  of  the  former  version  of  article  56(1) 

according  to  which  the  Minister  (who,  following  the  entry  into  force  of  the  amendments,  would  be 

replaced by the CBM)  may not issue regulations providing for penalties or sanctions where regulations 

providing  for  similar  penalties  or  sanctions  have  been  adopted  by  the  ECB  under  the  Treaties  or  the 

Statute.  In  this  regard,  the  ECB  takes  the  view  that  this  proviso  should  be  reinserted  into  article  56, 

thereby clearly and unequivocally recognising the ECB’s power to impose sanctions.   

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 18 May 2011. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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