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Bill No. 51 Entitled The Various Financial Services Laws (Amendment) Act, 2010 (Bill No. 51)

A Bill entitled

AN ACT to amend various financial services laws

BE IT ENACTED by the President, by and with the advice and consent of the House of Representatives, in this present Parliament assembled, and by the authority of the same, as follows:-

1. The short title of this Act is the Various Financial

Services Laws (Amendment) Act, 2010.

PART I

AMENDMENT OF THE MALTA FINANCIAL SERVICES

AUTHORITY ACT

2. This Part amends and shall be read and construed as one with the Malta Financial Services Authority Act, hereinafter in this Part referred to as “the principal Act”.

3. Article 2 of the principal Act shall be amended as follows:

(a) the definition “financial services” shall be substituted as follows:

Short title.

Amendment of the Malta Financial Services Authority Act.

Cap. 330.

Amendment of article

2 of the principal Act.

C 656

Cap. 386.

Amendment of article

4 of the principal Act.

Amendment of article

6 of the principal Act.

Cap. 345.

“ “financial services” means the business of credit and financial institutions, the business of insurance and the activities of insurance intermediaries, the provision of investment services and collective investment schemes, pensions and retirement funds, regulated markets, central securities depositories and such other areas of activity or services as may be placed under the supervisory and regulatory competence of the Authority by the Minister or by any other law;”; and
(b) immediately after the definition “prescribed” there shall be inserted the following new definition:
“ “Registrar of Companies” means the person appointed pursuant to article 400 of the Companies Act and who shall be a senior official of the Authority;”.

4. Article 4 of the principal Act shall be amended as follows:

(a) In subarticle (2) thereof, immediately after the words “monitoring areas or activities in the financial services sector” there shall be added the words “and the registration of commercial partnerships”; and
(b) in subarticle (4) thereof, for the words “In this Act, “Malta’s international commitments” shall have the same meaning assigned to the term under article 2 of the Investment Services Act.”, there shall be substituted the words “In this Act, “Malta’s international commitments” shall mean Malta’s commitments, responsibilities and obligations arising out of membership of the European Union and membership of, or affiliation to, or relationship with, any international, global or regional organisations or grouping of countries or out of any treaty, convention or other international agreement, however called, whether bilateral, multilateral including Memoranda of Understanding, to which Malta is a party.”.

5. In subarticle (1) of article 6 of the principal Act, immediately after the words “as may be set out by Government.”, there shall be added the words “The Board of Governors shall also act as the Listing Authority established under the Financial Markets Act and shall perform the functions set out in Part III of the said Financial Markets Act”.

6. Article 9 of the principal Act shall be amended as follows:

(a) in subarticle (1) thereof, immediately after the words “the Authority.”, there shall be added the words “The Co-ordination Committee shall act as the point of contact and the principal channel of communication and co-ordination between the Board of Governors, the Supervisory Council and the Board of Management and Resources.”; and
(b) for subarticle (2) thereof, there shall be substituted the following:
“(2) The Co-ordination Committee shall consist of the Chairman of the Board of Governors, who shall preside thereat, the Director-General, the Chief Operations Officer of the Authority, the Director of the Legal Office and the Registrar of Companies.”.

7. In subarticle (2) of article 10 of the principal Act, for the words “within the Authority for Banking, Company Compliance, Insurance, Investment Services and for any other area of financial services under the regulatory supervision of the Authority.”, there shall be substituted the words “within the Authority for Authorisation, the supervision of Banking, Insurance, Pensions and Retirement Funds, Securities and Markets, for Regulatory Development and for any other area of financial services under the regulatory supervision of the Authority as may be determined by the Board of Governors. The Supervisory Council may, with the approval of the Board of Governors, from time to time make internal arrangements to authorise one or more of the aforementioned Directors to sign a licence or category of licences as it may deem appropriate.”.

8. In subarticle (1) of article 11 of the principal Act, for the words “the Authority including business development and ancillary services”, there shall be substituted the words “the Authority including human resources, business development and ancillary services”.

9. Subarticle (1) of article 13 of the principal Act shall be amended as follows:

(a) for the words “a Consumer Complaints Manager and such other officers”, there shall be substituted the words
C 657

Amendment of article

9 of the principal Act.

Amendment of article

10 of the principal

Act.

Amendment of article

11 of the principal

Act.

Amendment of article

13 of the principal

Act.

C 658

Amendment of article

17 of the principal

Act.

Amendment of article

29 of the principal

Act.

Amendment of the Financial Markets Act.

Cap. 345.

Amendment of article

2 of the principal Act.

“Directors, a Consumer Complaints Manager and such other officers”; and
(b) for the words “the Chief Operations Officer and the Consumer Complaints Manager”, there shall be substituted the words “the Chief Operations Officer, Directors and the Consumer Complaints Manager”.

10. In paragraph (a) of subarticle (2) of article 17, immediately after the words “matters related to the regulation and supervision of financial services” there shall be added the words “and the registration of commercial partnerships”.

11. For article 29 of the principal Act, there shall be substituted the following:

“ “29. The Authority, the members of the Board of Governors, of the Co-Ordination Committee, of the Supervisory Council, of the Board of Management and Resources and of the Legal Office and the officers and employees of the Authority, shall not be liable in damages for anything done or omitted to be done in the discharge or purported discharge of any function under this Act or any other Act administered by the Authority, or otherwise in the exercise of their official duties, unless the act or omission is shown to have been done or omitted to be done, as the case may be, in bad faith.”.

PART II

AMENDMENT OF THE FINANCIAL MARKETS ACT

12. This Part amends and shall be read and construed as one with the Financial Markets Act, hereinafter in this Part referred to as “the principal Act”.

13. Article 2 of the principal Act shall be amended as follows:

(a) for the definition “Listing Authority” there shall be substituted the following:
“ “Listing Authority” means such person or body appointed under the Malta Financial Services Authority
Act to perform the functions set out in Part III of this
Act;”;
(b) immediately after the definition “multilateral system” there shall be inserted the following new definition:
“ “overseas central securities depository” means a person authorised to provide the same or substantially similar services to those stipulated in article 26 in a recognised jurisdiction.”; and
(c) immediately after the definition “quoted company”
there shall be inserted the following new definition: “ “recognised jurisdiction” means:
(a) a Member State; (b) an EEA State;
(c) any country that is a member of the Organization for Economic Co-operation and Development (OECD) established in 1961;
(d) a country that is a signatory of the IOSCO Multilateral Memorandum of Understanding; or
(e) any other jurisdiction where the central securities depository or the overseas central securities depository is regulated and with whom the competent authority has a Memorandum of Understanding covering securities;”.

14. In article 4 (1)(b) of the principal Act, for the words “an authorised investment exchange for the purposes of this Act”, there shall be substituted the words “an authorised regulated market for the purposes of this Act”.

15. In article 11 of the principal Act, for the words “There shall be a Listing Authority having the following functions:”, there shall be substituted the words “The Listing Authority shall have the following functions:”.

C 659

Amendment of article

4 of the principal Act.

Amendment of article

11 of the principal Act.

C 660

Amendment of article

14 of the principal

Act.

Amendment of article

23 of the principal

Act.

Amendment of article

28 of the principal

Act.

16. Article 14 of the principal Act shall be amended as follows:

(a) for the marginal note “Listing committee”, there shall be substituted the words “Listing Advisory Board”;
(b) in subarticle (1) thereof, for the words “The Listing Authority may establish a committee, hereinafter referred to as the “Listing Committee” ”, there shall be substituted the words “The Listing Authority shall establish an Advisory Board, hereinafter referred to as the “Listing Advisory Board”,”
(c) for subarticle (2) thereof, there shall be substituted the following:
“ (2) The Listing Advisory Board shall be composed of up to five members and shall be appointed for a term not exceeding three years. The Board’s functions shall be to make recommendations to, and otherwise assist, the Listing Authority in the admissibility to listing of financial instruments and in anything related to, connected with or incidental to, any of the functions of the Listing Authority. The Board shall also assist and give advice to the Securities and Markets Supervision Unit of the Authority on listing matters.”; and
(d) subarticle (3) thereof shall be deleted.

17. In article 23 of the principal Act, for the words “committee, officer or employee thereof”, there shall be substituted the words “committee, advisory board, officer or employee thereof”.

18. Article 28 of the principal Act shall be amended as follows:

(a) in subarticle (1) thereof, for the words “in a central securities depository, may be created and, or transferred by an entry on the register maintained in a central securities depository and no instrument in writing shall be required for this purpose”, there shall be substituted the words “in a central securities depository or an overseas central securities depository, may be created and, or transferred by an entry on
the register maintained in the central securities depository or the overseas central securities depository and no instrument in writing shall be required for this purpose”;
(b) in subarticle (2) thereof, for the words “in a central securities depository, may be held or evidenced in a dematerialised or uncertificated form.”, there shall be substituted the words “in a central securities depository or an overseas central securities depository, may be held in a dematerialised or uncertificated form.”;
(c) in subarticle (3) thereof, immediately after the words “duly registered with a central securities depository”, there shall be added the words “or an overseas central securities depository”; and
(d) in subarticle (4) thereof, for the words “duly authorised in terms of this Part”, there shall be substituted the words “or an overseas central securities depository”.

19. In article 29 of the principal Act, the words “authorised under this Part”, shall be deleted.

20. Article 30 of the principal Act shall be amended as follows:

(a) in subarticle (1)(h) thereof, for the words “for an authorisation which may be subject to such variations,”, there shall be substituted the words “for an authorisation or from any provision of this Act which may be subject to such variations,”; and
(b) in subarticle (2) thereof, for the words “classes of financial instruments and for different circumstances or purposes”, there shall be substituted the words “classes of financial instruments, overseas central securities depositories and for different circumstances or purposes”.

21. In article 31 of the principal Act, for the words “central securities depositories authorised under this Part and on others”, there shall be substituted the words “central securities depositories and on others”.

22. In article 50 of the principal Act, immediately after the words “in terms of article 45”, there shall be added the words

C 661

Amendment of article

29 of the principal

Act.

Amendment of article

30 of the principal

Act.

Amendment of article

31 of the principal

Act.

Amendment of article

50 of the principal

Act.

C 662

Amendment of the Companies Act. Cap. 386.

Amendment of article

118 of the principal

Act.

Amendment of article

120 of the principal

Act.

Insertion of new article 126A to the principal Act.

“or on a regulated multilateral system or an equivalent regulated market or multilateral system in a non-Member State or non-EEA State”.

PART III

AMENDMENT OF THE COMPANIES ACT

23. This Part amends and shall be read and construed as one with the Companies Act, hereinafter in this Part referred to as “the principal Act”.

24. Article 118 of the principal Act shall be amended as follows:

(a) in subarticle (1) thereof, for the words “may be made by private writing”, there shall be substituted the words “shall be made in writing”; and
(b) immediately after subarticle (2) thereof, there shall be added the following new subarticle :
“(3) This article shall not apply to shares or debentures of a public company held or evidenced in a dematerialised or uncertificated form within the meaning of the Financial Markets Act.”.

25. In subarticle (3) of article 120 of the principal Act, for the words “as the case may be.”, there shall be substituted the words “as the case may be:

Provided that in the case of public companies whose shares are admitted to listing on a regulated market or on an equivalent market in a non-Member State or non-EEA State, the delivery to the Registrar shall take place within 90 days after the date on which a transfer of any such shares is registered with the company, and within 90 days from the date on which any such shares transmitted causa mortis have been registered in the name of the person entitled to be registered as the holder thereof.”.

26. Immediately after article 126 of the principal Act, there shall be added the following new article 126A:

Proper

keeping

of register in certain instances.

126A. (1) Notwithstanding the provisions of articles 123 and 124 of this Act, where shares or debentures of a public company are held or evidenced in a dematerialised or uncertificated form within the meaning of the Financial Markets Act, the company shall remain responsible for the proper keeping of the register and shall keep a copy of all entries relating to registered shareholders and registered holders of debentures held by the central securities depository or by an overseas central securities depository.
(2) For the purposes of this article “central securities depository” and “overseas central securities depository” shall have the same meaning assigned to them in article 2 of the Financial Markets Act.”.
C 663

27. Immediately after paragraph (b) of subarticle (2) of article 209 of the principal Act, there shall be added the following new paragraph:

“(c) allow any of its securities to be admitted to listing or trading.”.

28. In subarticle (1) of article 400 of the principal Act, for the words “The Minister shall appoint a person to be Registrar of Companies and other Commercial Partnerships”, there shall be substituted the words “The Minister, acting on the advice of the competent authority under the Malta Financial Services Authority Act, shall appoint a senior official of the said Authority to be Registrar of Companies and other Commercial Partnerships”.

PART IV

AMENDMENT OF THE INSURANCE BUSINESS ACT

29. This Part amends and shall be read and construed as one with the Insurance Business Act, hereinafter in this Part referred to as “the principal Act”.

30. Subarticle (10) of article 69 of the principal Act shall be deleted.

Amendment of article

209 of the principal

Act.

Amendment of article

400 of the principal

Act.

Cap. 330.

Amendment of the Insurance Business Act.

Cap. 403.

Amendment of article

69 of the principal

Act.

C 664

Objects and Reasons

The object of this Bill is to affect amendments to the Malta Financial Services Authority Act, the Financial Markets Act, the Companies Act and the Insurance Business Act.