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Maltese Laws |
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:-
Laws (Amendment) Act, 2011.
AMENDMENTS TO THE MALTA FINANCIAL SERVICES AUTHORITY ACT
Short title.
Amendment of the Malta Financial Services Authority Act. Cap. 330.
Amendment of article 6 of the principal Act.
Amendment of article 16 of the principal Act.
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(a) in sub-article (3) thereof, for the words "an administrative penalty which may not exceed ninety-three thousand and one
hundred and seventy-four euro and ninety- four cents (93,174.94)." there shall be substituted the words "an administrative
penalty which may not exceed one hundred and fifty thousand (150,000) euro.";
(b) in sub-article (4) thereof, for the words "shall be due to the competent authority." there shall be substituted
the words "shall be due to the Authority.";
(c) in sub-article (7) thereof, for the words "the competent authority may issue reprimands," there shall
be substituted the words "the Authority may issue reprimands,"; and
Amendment of article 17 of the principal Act.
Amendment of article 20A of the principal Act.
Amendment of article 20C of the principal Act.
(d) in the Maltese text of sub-article (8) thereof, for the words "għandha tkun bla ħsara għall-pubblikazzjoni" there shall be substituted the words "għandha tkun soġġetta għall- pubblikazzjoni".
(a) in paragraph (a) thereof, for the words "a foreign competent authority" there shall be substituted the words "an
overseas regulatory authority"; and
(b) in the proviso thereto, for the words "concluded with the Competent Authority." there shall be substituted the words
"concluded with the Authority.".
(a) in sub-article (1) thereof, for the words "The Minister, acting on the advice of the competent authority,"
there shall be substituted the words "The Minister, acting on the advice of the Authority,"; and
(b) in sub-article (2) thereof, for the words "The Minister, acting on the advice of the competent authority,"
there shall be substituted the words "The Minister, acting on the advice of the Authority,".
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regulatory authorities,", and for the words "with overseas competent authorities, as may be necessary;" there shall
be substituted the words "with overseas regulatory authorities, as may be necessary;".
"(18) In this article, "competent authority" refers to the Authority under this Act and under any other law for the purposes of which it is appointed as the competent authority.".
AMENDMENTS TO THE TRUSTS AND TRUSTEES ACT
(a) in sub-article (6) thereof, for the words "fine (multa) not exceeding four hundred and sixty-five thousand and eight hundred and seventy-four euro and sixty-eight cents (465,874.68)"
there shall be substituted the words "fine (multa) not exceeding four hundred and sixty-six thousand (466,000) euro"; and
(b) in sub-article (7) thereof, for the words "may not exceed ninety-three thousand and one hundred and seventy-four euro
and ninety-four cents (93,174.94)." there shall be substituted the words "may not exceed one hundred and fifty thousand
(150,000) euro.".
AMENDMENTS TO THE FINANCIAL MARKETS ACT
Amendment of article 21 of the principal Act.
Amendment of the Trusts and Trustees Act. Cap. 331.
Amendment of article 51 of the principal Act.
Amendment of article 53 of the principal Act.
Amendment of the Financial Markets Act. Cap. 345.
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Amendment of article 2 of the principal Act.
Cap. 330.
" "competent authority" means the Malta Financial Services Authority established by the Malta Financial Services Authority Act;".
Amendment of article 11A of the principal Act.
Amendment of article 19 of the principal Act.
Amendment of article 38 of the principal Act.
Amendment of article 39A of the principal Act.
Amendment of article 41 of the principal Act.
Amendment of article 42 of the principal Act.
16. In sub-article (3) of article 38 of the principal Act, for the words "fine (multa) of eleven thousand and six hundred and forty-six euro and eighty-seven cents (11,646.87)" there shall be substituted the words "fine (multa) of twelve thousand (12,000) euro".
18. In sub-article (1) of article 41 of the principal Act, for the words "fine (multa) not exceeding four hundred and sixty-five thousand and eight hundred and seventy-four euro and sixty-eight cents (465,874.68)" there shall be substituted the words "four hundred and sixty-six thousand (466,000) euro".
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AMENDMENTS TO THE INVESTMENT SERVICES ACT
(i) for the definition "competent authority" there shall be substituted the following:
Amendment of the Investment Services Act. Cap. 370.
Amendment of article 2 of the principal Act.
Cap. 330.
" "competent authority" means the Malta Financial Services Authority established by the Malta Financial Services Authority
Act, which body shall also carry out the duties as competent authority for all purposes of the MIFID Directive and the UCITS Directive;".
(ii) the definition "Directive" shall be deleted;
(iii) in the definition "European investment firm", for the words "of the Directive", there shall be substituted
the words "of the MIFID Directive";
(iv) in the definition "European regulatory authority", for the words "Article 48 of the Directive to carry out
each of the duties provided for under the different provisions of the Directive", there shall be substituted the words "Article
48 of the MIFID Directive and Article 97 of the UCITS Directive to carry out each of the duties provided for under the different
provisions of both said Directives";
(v) immediately after the definition "Member
State" there shall be inserted the following new definition:
" "MIFID Directive” means Directive 2004/
39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives
85/611/ EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and
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repealing Council Directive 93/22/EEC, as amended from time to time, and includes any implementing measures that have been or
may be issued thereunder;";
(vi) in the proviso to the definition "qualifying shareholding", for the words "Annex 1 to the Directive", there
shall be substituted the words "Annex 1 to the MIFID Directive";
(vii) immediately after the definition "subsidiary" there shall be inserted the following new definition:
" "UCITS Directive" means Directive 2009/
65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions
relating to undertakings for collective investment in transferable securities (UCITS) (recast), as amended from time to time, and
includes any implementing measures that have been or may be issued thereunder;"; and
Substitution of article 2A of the principal Act.
Amendment of article 10A of the principal Act.
Amendment of article 12 of the principal Act.
(b) in sub-article (3) thereof, for the word "Directive" there shall be substituted the words "MIFID Directive and the UCITS Directive".
"2A. The competent authority shall carry out its functions under this Act and, in particular, shall ensure compliance with the provisions of this Act.".
(a) in sub-paragraph (i) thereof, for the words "the Directive" there shall be substituted the words "the MIFID
Directive"; and
(b) for sub-paragraph (ii) thereof, there shall be substituted the following:
"(ii) the UCITS Directive;".
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(a) in sub-article (1) thereof:
(i) in paragraph (k) thereof, for the words "requirements of the Directive" there shall be substituted the words "requirements
of the MIFID Directive and the UCITS Directive";
(ii) in paragraph (m) thereof, for the words "Directive thereon", there shall be substituted the words "MIFID Directive
and UCITS Directive thereon";
(iii) paragraphs (o) and (p) thereof shall be renumbered (p) and (q) respectively;
(iv) immediately after paragraph (n) thereof, there shall be added the following new paragraph:
"(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 the applicable laws of Malta, take action before the courts or administrative bodies of Malta,
to ensure that the provisions of this Act and the Investment Services Rules and regulations issued hereunder transposing the UCITS
Directive are implemented;"; and
(b) in sub-article (5) thereof, for the words "fine (multa) of ninety-three thousand and one hundred and seventy-four euro and ninety-four cents (93,174.94)" there shall be substituted
the words "fine (multa) of one hundred and fifty thousand (150,000) euro".
(a) in paragraph (f) thereof, for the words "in the implementation of the Directive", there shall be substituted the
words "in the implementation of the MIFID Directive and the UCITS Directive"; and
(b) in paragraph (g) thereof, for the words "of the Directive", there shall be substituted the words "of the MIFID
Directive".
Amendment of article 15 of the principal Act.
Amendment of article 16A of the principal Act.
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(a) in sub-article (1) thereof, for the words "may not exceed ninety-three thousand and one hundred and seventy-four euro
and ninety-four cents (93,174.94)." there shall be substituted the words "may not exceed one hundred and fifty thousand
(150,000) euro.";
(b) in sub-article (2) thereof:
(i) for the words "Investment Services Rules may provide for the imposition of administrative penalties" there
shall be substituted the words "Administrative penalties"; and
(ii) for the words "whether in the form of a fixed penalty, a daily penalty, or both, for any breach of the Rules." there
shall be substituted the words "may be imposed in the form of a fixed penalty, a daily penalty, or both.";
(c) in sub-article (4) thereof:
(i) for the words "Upon conclusion of any appeal proceedings in terms of article 19, or the lapse of time required to lodge
an appeal, the competent authority may", there shall be substituted the words "The competent authority may"; and
Amendment of article 16B of the principal Act.
Amendment of article 17 of the principal Act.
(ii) for the words "such disclosure would seriously jeopardise the financial markets or cause disproportionate damage to the parties involved.", there shall be substituted the words "such disclosure would seriously jeorpardise the financial markets, be detrimental to the interests of investors or cause disproportionate damage to the parties involved.".
(a) in sub-article (1) thereof, for the words "of the Directive", there shall be substituted the words "of the MIFID Directive, and it shall also exercise its powers and duties as provided for in the UCITS Directive";
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(b) in sub-article (2) thereof:
(i) for the words "carrying out its duties under the Directive." there shall be substituted the words
"carrying out its duties and exercising its powers under the MIFID Directive and the UCITS Directive.", and
(ii) for the words "In terms of the Directive", there shall be substituted the words "In terms of the MIFID
Directive and the UCITS Directive";
(c) in sub-article (3) thereof:
(i) for the words "of the Directive", there shall be substituted the words "of the MIFID Directive", and
(ii) for the words "pursuant to the Directive" there shall be substituted the words "pursuant to the MIFID
Directive";
(d) in sub-article (7) thereof:
(i) in paragraph (a) thereof, for the words "the business of investment services licence holders", there shall
be substituted the words "the business of licence holders, including undertakings contributing towards the business activity
of UCITS";
(ii) in paragraph (b) thereof, for the words "of the Directive", there shall be substituted the words "of the MIFID
Directive";
(iii) in paragraph (d) thereof, the word "or" shall be deleted;
(iv) in paragraph (e) thereof, for the words "Malta Financial Services Authority Act.", there shall be substituted the
words "Malta Financial Services Authority Act; or"; and
(v) immediately after paragraph (e) thereof, there shall be inserted the following new paragraph:
"(f) in taking any decision in the implementation of the UCITS Directive and the MIFID Directive.";
(e) sub-articles (8), (9), (10) and (11) thereof shall be
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renumbered as sub-articles (9), (10), (11) and (12) respectively;
(f) immediately after sub-article (7) thereof, there shall be added the following new sub-article:
"(8) Sub-article (7) hereof and article 26 shall not preclude the competent authority from exchanging information, in terms
of the UCITS Directive, with European regulatory authorities, where that information is to be divulged to:
(i) authorities with public responsibility for the supervision of credit institutions, investment undertakings, insurance undertakings
or other financial organisations, or authorities responsible for the supervision of financial markets;
(ii) bodies involved in the liquidation or bankruptcy of UCITS or undertakings contributing towards their business activity, or bodies
involved in similar procedures; or
(iii) persons charged with carrying out statutory audits of the accounts of insurance undertakings, credit institutions, investment
firms or other financial institutions.";
(g) in sub-article (9) thereof, as renumbered, for the words "acts contrary to the provisions of the Directive",
there shall be substituted the words "acts contrary to the provisions of the MIFID Directive or the UCITS Directive";
(h) in sub-article (11) thereof, as renumbered, for the words "contrary to the provisions of the Directive", there shall
be substituted the words "contrary to the provisions of the MIFID Directive or the UCITS Directive"; and
(i) immediately after sub-article (12) thereof, as renumbered, there shall be inserted the following new sub- article:
Amendment of article 17A of the principal Act.
"(13) The competent authority shall have the powers conferred upon it by Article 101(8) of the UCITS Directive.".
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(a) in the proviso to sub-article (1) thereof, for the words "of the Directive", there shall be substituted
the words "of the MIFID Directive";
(b) sub-article (2) thereof shall be renumbered as sub- article (3);
(c) immediately after sub-article (1) thereof, there shall be inserted the following new sub-article:
"(2) If, upon the request for cooperation by the competent authority in terms of Article 101(5) of the UCITS Directive, a verification
or an investigation is carried out in a Member State by a European 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 Member State.";
(d) sub-article (3) thereof, as renumbered, shall be amended as follows:
(i) in paragraph (b) thereof, for the words "or investigation" there shall be substituted the words "or investigation,
and, it may also, in terms of Article 101(5) of the UCITS Directive, request that its own officers, employees or agents accompany
the European regulatory authority in carrying out the verification or investigation"; and
(ii) in paragraph (c) thereof, for the words "allow inspectors or experts within the meaning of article 14" there
shall be substituted the words "allow inspectors or experts within the meaning of article 14 and auditors within the
meaning of article 18".
31. In article 23 of the principal Act, for the words "fine (multa) not exceeding four hundred and sixty-five thousand and eight hundred and seventy-four euro and sixty-eight cents (465,874.68)" there shall be substituted the words "fine (multa) not exceeding four hundred and sixty six thousand (466,000) euro".
Amendment of article 17B of the principal Act
Amendment of article 23 of the principal Act.
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Amendment of article 26 of the principal Act.
(a) in sub-article (1) thereof:
(i) in paragraph (d) thereof, for the words "identity of any persons to whom the information relates", there
shall be substituted the words "identity of any persons, including UCITS, their management companies and custodians
to whom the information relates"; and
(ii) in the proviso thereof:
1. for the words "in accordance with the Directive" there shall be substituted the words "in accordance with the
MIFID Directive, the UCITS Directive,"; and
2. for the words "pension funds, UCITS," there shall be substituted the words "pensions funds,";
(b) in sub-article (2) thereof, for the words "of the Directive", there shall be substituted the words "of the MIFID
Directive and of Article 102 of the UCITS Directive";
(c) in sub-article (3) thereof:
(i) for the words "where appropriate, to other public authorities" there shall be substituted the words "where
appropriate, to recognised clearing houses or other similar body performing clearing or settlement services, to bodies which administer
compensation schemes, and to other public authorities"; and
(ii) for the words "their functions." there shall be substituted the words "their functions:", and immediately
thereafter there shall be added the following new proviso:
"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."; and
(d) immediately after sub-article (3) thereof, there shall
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be added the following new sub-article:
Cap. 373.
"(4) Where an officer or an employee of a licence holder has reason to believe that a transaction or a proposed transaction could involve money laundering, he shall act in compliance with the reporting and other obligations set out in the regulations made under article 12 of the Prevention of Money Laundering Act and any procedures and guidance issued thereunder, and such disclosure shall not constitute a breach of confidentiality.".
AMENDMENTS TO THE BANKING ACT
Amendment of the Banking Act.
Cap. 371.
Amendment of article 2 of the principal Act.
Cap. 330.
" "competent authority" means the Malta Financial Services Authority established by the Malta Financial Services Authority Act;".
(b) sub-articles (2) and (3) thereof shall be renumbered as sub-articles (1) and (2) respectively.
Amendment of article 3 of the principal Act.
Amendment of article 35 of the principal Act.
Amendment of the Schedule to the principal Act.
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Amendment of the Financial Institutions Act. Cap. 376.
Amendment of article 2 of the principal Act.
AMENDMENTS TO THE FINANCIAL INSTITUTIONS ACT
(2) The provisions of paragraphs (c) and (d) of article 50 shall be deemed to have come into force on the 1st January, 2011.
(a) for the definition "agent" there shall be substituted the following:
" "agent" means a person who acts on behalf of a financial institution in providing those services listed under
the First Schedule, other than issuing electronic money;";
(b) immediately after the definition "agent" there shall be added the following new definition:
" "average outstanding electronic money" means the average total amount of financial liabilities related to electronic
money in issue at the end of each calendar day over the preceding six calendar months, calculated on the first calendar day of each
calendar month and applied for that calendar month;";
(c) for the definition "the competent authority" there shall be substituted the following:
Cap. 330.
" "the competent authority" means the Malta Financial Services Authority established by the Malta Financial Services
Authority Act;";
(d) the definition "the Directive" shall be deleted;
(e) immediately after the definition "EEA State" there shall be inserted the following new definition:
" "Electronic Money Directive" means Directive
2009/110/EC of the European Parliament and of the
Council of 16 September 2009 on the taking up, pursuit
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and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and
2006/48/EC and repealing Directive 2000/46/EC, as may
be amended from time to time and includes any implementing measures that have been issued or may be issued thereunder, and "electronic
money" shall have the meaning assigned to it in the Third Schedule;"; and
(f) immediately after the definition "payment institution" there shall be inserted the following new
definition:
" "Payment Services Directive" means Directive
2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives
97/7/EC, 2002/65/EC, 2005/
60/EC and 2006/48/EC and repealing Directive 97/5/EC, as may be amended from time to time and includes any
implementing measures that have been issued or may be issued thereunder.".
the following:
Amendment of article 3 of the principal Act.
Cap. 371.
"(5) A licensed financial institution may not take deposits or other repayable funds from the public within the
meaning of the Banking Act."; and
(b) immediately after sub-article (6) thereof, there shall be added the following new sub-articles:
"(7) The competent authority may, in relation to a company whose head office is in Malta and that issues electronic money in
Malta, waive the application of all or part of the provisions relating to general prudential requirements, initial capital, own funds
and safeguarding requirements, as set out in this Act and in any Financial Institutions Rules applying to financial institutions
authorised to issue electronic money, in cases where:
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(a) the total business activities of the company generate an average outstanding electronic money that does not exceed the
amount of one million euro (€ 1,000,000); and
(b) none of the natural persons responsible for the management or operation of the company’s business has been convicted of
offences relating to money laundering or terrorist financing or other financial crimes:
Provided that, the underlying contractual arrangements of the company shall provide that the payment instrument or payment account
of the consumer where the electronic money is stored is subject to a maximum storage amount of not more than two hundred and fifty
euro (€ 250).
(8) A company that issues electronic money which has been granted a waiver in terms of the preceding sub-article shall be entered
into a public register of financial institutions held in accordance with article
8D.
(9) The competent authority shall determine which of the activities in the Third Schedule may be provided by the companies registered
in accordance with the provisions of sub-article (8).
(10) A company that has been granted a waiver in terms of sub-article (7) shall:
(a) notify the competent authority of any change in its situation which is relevant to the conditions laid down in sub-article
(7); and
(b) report periodically, at least annually or during any other period which the competent authority may determine, on its average
outstanding electronic money:
Provided that, where the conditions laid down in sub-article (7) are no longer met, the company shall apply for a licence under this
Act to the competent authority within thirty calendar days:
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Cap. 373.
Provided further that where a company as referred to in the preceding proviso has not sought licensing within such period, it shall
be prohibited from issuing electronic money in accordance with sub-article (1).
(11) A company as referred to in sub- article (7) shall be treated as a financial institution authorised to issue electronic
money but shall not benefit from the freedom to provide services and the right of establishment.
(12) For the better carrying out of the provisions of this article on the granting of waivers, the competent authority may, from
time to time, publish Financial Institutions Rules which shall be binding on licence holders as specified therein.
(13) Notwithstanding anything provided for in this article, the application of the provisions of the Prevention of Money
Laundering Act shall not be waived.".
words "other than paragraph 4 thereof" there shall be substituted
the words "other than paragraphs 4 and 10 thereof"; and
(b) in sub-article (4) thereof, for the words "any licensed financial institution carrying out payment services"
there shall be substituted the words "any licensed financial institution carrying out payment services or issuing electronic
Amendment of article 5 of the principal Act.
Amendment of article 5A of the principal Act.
Amendment of article 6 of the principal Act.
Amendment of article 8 of the principal Act.
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Amendment of article 8A of the principal Act.
money, or both,".
(a) sub-articles (2) and (3) thereof shall be renumbered as sub-articles (3) and (4) respectively;
(b) immediately after sub-article (1) thereof, there shall be inserted the following new sub-article:
"(2) A financial institution authorised to issue electronic money shall not issue electronic money through agents:
Provided that a financial institution authorised to issue electronic money may, subject to such conditions as may be established by
the competent authority, distribute and redeem electronic money through agents."; and
(c) immediately after sub-article (4) thereof, as renumbered, there shall be inserted the following new sub- article:
"(5) Where the financial institution licensed or holding an equivalent authorisation in another Member State or EEA State carries
out the activities listed in the Schedules in Malta through a branch or by engaging an agent, the financial institution shall follow
the procedures laid out in a Financial Institutions Rule:
Amendment of article 8B of the principal Act.
Addition of new articles to the principal Act.
Provided that if the competent authority has reasonable grounds to suspect that, through such branch or agent, money laundering or terrorist financing, within the meaning of Council Directive 2005/60/EC, is being or has been committed or attempted, or that the engagement of such branch or agent could increase the risk of money laundering or terrorist financing, it shall inform the Member State or EEA State in which the financial institution is established, and may refuse to register the branch or agent, or may withdraw the registration of the branch or agent.".
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"Opening of branches having their head office outside the European Union.
Issuance and redeemability of electronic money.
8E. (1) In the assessment of an application for the opening of a branch by a financial institution authorised
to issue electronic money and having its head office outside the Community, the competent authority may not apply provisions
which result in more favourable treatment than that accorded to a financial institution having its head office within the Community.
(2) The competent authority shall notify the European Commission of all authorisations for branches of financial institutions having
their head office outside the Community as stated in sub- article (1).
8F. (1) Financial institutions authorised to issue electronic money shall issue electronic money at par value on the receipt
of funds.
(2) A financial institution authorised to issue electronic money shall ensure that, at any moment, upon request by the holder
thereof, it is in a position to redeem the monetary value of any electronic money held, at par value and without delay.
(3) For the better carrying out of the provisions of this article and to better transpose the provisions of the Electronic
Money Directive on issuance and redeemability of electronic money, the competent authority may, from time to time, publish Financial
Institutions Rules which shall be binding on licence holders as specified therein.".
(a) in paragraph (a) of sub-article (1) thereof, for the words "or to increase or reduce, directly or indirectly" there
shall be substituted the words "or to further increase or reduce, directly or indirectly";
(b) for sub-article (4) thereof, there shall be substituted the following:
"(4) (a) Where a person intends to take any action as set out in sub-article (1)(a) and (b), such person shall notify the competent
authority in writing of any such decision, indicating the size of the intended shareholding
Amendment of article 9 of the principal Act.
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and providing any relevant information as and in the manner that the competent authority may by a Financial Institutions Rule require,
including the form in which such notification shall be made and the criteria adopted by the competent authority in determining whether
such person is a suitable person. The competent authority shall, within two months of receiving such notification, give
its approval or otherwise and if such period elapses without the competent authority having notified its decision, such decision
shall be deemed to be an approval.
(b) Where the qualifying shareholding is acquired despite the opposition of the competent authority, the competent authority
shall, regardless of any other sanction which may be adopted, provide for the suspension of the exercise of the voting rights of
the acquirer, the nullity of the votes cast or the possibility of annulling those votes."; and
(c) immediately after sub-article (5) thereof, there shall be inserted the following new sub-article (6):
Addition of new articles to the principal Act.
"(6) The competent authority may, by means of a Financial Institutions Rule and subject to such criteria as may be established therein, provide that all or part of the provisions of this article be waived.".
"Prohibition of interest.
Safeguarding requirements.
10A. The granting of interest or of any other benefit related to the length of time during which a financial institution providing
the services listed in the Third Schedule holds electronic money shall be prohibited.
10B. (1) A financial institution shall safeguard all funds received from payment services users or in exchange for electronic
money that has been issued.
(2) For the better carrying out of the provisions of this Act on safeguarding requirements, the competent authority
may, from time to time, publish Financial Institutions Rules which shall be binding on licence holders as specified therein.".
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(a) sub-article (1) thereof shall be deleted;
(b) sub-article (2) thereof shall be renumbered as sub- article (1);
(c) for paragraph (b) of sub-article (1) thereof, as renumbered, there shall be substituted the following:
Amendment of article 12 of the principal Act.
Cap. 16.
"(b) determine the circumstances under which a company may be exempted from requiring a licence under this Act;
(c) transpose, implement and give effect to the requirements of the Electronic Money Directive and the Payment Services
Directive;
(d) regulate the transposition, implementation and giving effect to the provisions, requirements, obligations and commitments
relating to the regulation of payment institutions and electronic money institutions arising out of membership of, affiliation to
or relationship with international or regional organisations or groupings of countries or out of any treaty, convention or other
international agreement whether bilateral, regional or multilateral, to which Malta is a party; and
(e) provide that any other law, or any provision thereof, shall not apply to matters falling under the regulations, and, in
particular, may exempt activities as may be designated from the application of any article or provision of the Civil Code.";
and
(d) immediately after sub-article (1) thereof, as renumbered, there shall be inserted the following new sub- article:
"(2) Regulations made under this article may be made subject to such exemptions or conditions as may be specified therein,
may make different provision for different cases, circumstances or purposes and may give to the competent authority such
powers of adaptation of the
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Amendment of article 13 of the principal Act.
regulations as may also be so specified.".
(a) in paragraph (d) of sub-article (1) thereof, for the words "other than those listed in the Schedule" there shall
be substituted the words "other than those listed in the Schedules"; and
(b) immediately after sub-article (4) thereof, there shall be added the following new sub-article:
"(5) Where the competent authority has availed itself of the waiver provided for in article 3(7), it shall:
(a) notify the European Commission forthwith of any subsequent change;
(b) inform the European Commission of the number of legal persons concerned; and
Amendment of article 14 of the principal Act.
Amendment of article 20 of the principal Act.
(c) inform the European Commission, on an annual basis, of the total amount of outstanding electronic money issued as at 31 December of each calendar year.".
"(3) Financial institutions providing the services listed in paragraphs 2 and 3 of the Second Schedule and financial institutions authorised to issue electronic money carrying out the additional activities listed in paragraphs 2(b) to (e) of the Third Schedule, shall provide separate accounting information as specified in a Financial Institutions Rule issued by the competent authority. The accounting information shall be subject to an auditor’s report.".
(a) sub-article (2) thereof shall be amended as follows:
(i) in paragraph (a) thereof, for the words "financial institutions carrying out payment services solely for
their supervisory and regulatory purposes" there shall be substituted the words "financial institutions carrying out
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payment services or issuing electronic money or both solely for their supervisory and regulatory purposes";
(ii) for paragraph (c) thereof, there shall be substituted the following:
"(c) other relevant authorities designated under Directive 2007/64/EC, Directive 2009/110/ EC, Directive 95/46/EC, Directive
2005/60/EC and other Community legislation applicable to financial institutions authorised to provide payment services and to issue
electronic money, including measures regulating the protection of individuals with regard to the processing of personal
data and the prevention of money laundering and terrorist financing."; and
(b) for the proviso to sub-article (3) thereof, there shall be substituted the following:
"Provided that the competent authority may exchange information and communicate with other overseas regulatory authorities
either upon their request or on its own initiative:
Provided further that in the case of cross-border consumer disputes, the competent authority may use any of its powers under this
article and shall co-operate and exchange information for the purpose of investigating and resolving any such disputes.".
Amendment of article 23 of the principal Act.
Amendment of article 25 of the principal Act.
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Cap. 373.
"(3) Where an officer of a financial institution has reason to believe that a transaction or a proposed transaction could involve money laundering, he shall act in compliance with the reporting and other obligations set out in the regulations made under article 12 of the Prevention of Money Laundering Act and any procedures and guidance issued thereunder, and such disclosure shall not constitute a breach of confidentiality.".
Substitution of article 26 of the principal Act.
Cap. 330.
Cap. 378.
"26. (1) (a) Without prejudice to the generality of article 20 of the Malta Financial Services Authority Act,
the Consumer Complaints Manager shall also have the function of investigating complaints from a payment service user and a holder
of electronic money arising out of, or in connection with, any alleged infringement by a financial institution of the provisions
of this Act implementing the Payment Services Directive and the Electronic Money Directive.
(b) The provisions of article 20 of the Malta Financial Services Authority Act shall, mutatis mutandis, apply to complaints made under this article.
(c) Complaints as described in sub- article (1) may include complaints from interested parties, within the meaning
of the Payment Services Directive and the Electronic Money Directive, as well as complaints from registered consumer associations
as defined in the Consumer Affairs Act.
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Cap. 387.
(2) (a) A dispute between a payment service user or a holder of electronic money and a financial institution may, at the discretion of the payment service user or a holder of electronic money, or if agreed between the parties involved in the dispute, whether by written agreement or otherwise, be referred to arbitration in accordance with the Arbitration Act. The appointing authority and administrator shall be the Malta Arbitration Centre, and only one arbitrator shall be appointed in such disputes.
Cap. 378.
(b) Reference of a dispute to arbitration in accordance with paragraph (a) shall be one of the conditions of a licence of persons
licensed under this Act.
(c) The Consumer Complaints Manager shall, when replying to a complaint, inform the complainant of the possibility of having the
dispute settled through arbitration proceedings in terms of this article.
(3) Any action taken by the Consumer Complaints Manager under this article shall be without prejudice to the right of a consumer,
within the meaning of the Consumer Affairs Act, to submit a claim to the Consumer Claims Tribunal established under that Act,
or to exercise any other rights under that Act.".
"27. The objective of this Act is, in part, to implement the provisions of Directive 2007/64/EC of the European Parliament and of the Council on payment services in the internal market, in particular Titles I, II, Chapter 5 of Title IV and the Annex and of Directive 2009/110/EC of the European Parliament and of the Council on the taking up, pursuit and prudential supervision of the business of electronic money institutions and shall be interpreted and applied accordingly.".
"FIRST SCHEDULE (Article 2)
Substitution of article 27 of the principal Act.
Amendment of the First Schedule to the principal Act.
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ACTIVITIES OF FINANCIAL INSTITUTIONS
1. Lending (including personal credits, mortgage credits, factoring with or without recourse, financing of commercial
transactions including forfeiting);
2. Financial leasing;
3. Venture or risk capital;
4. Payment services as defined in the Second
Schedule;
5. Issuing and administering other means of payment (travellers cheques and bankers’ drafts and similar instruments) in so
far as this activity is not covered by point 4 above;
6. Guarantees and commitments;
in:
7. Trading for own account or for account of customers
(a) money market instruments (cheques, bills, Certificates of deposit and similar instruments);
(b) foreign exchange;
(c) financial futures and options;
(d) exchange and interest rate instruments; (e) transferable instruments;
8. Underwriting share issues and participation in such issues;
9. Money broking;
Amendment of the Second Schedule to the principal Act.
10. Issuing of electronic money as defined in the Third
Schedule.".
" "payment institution" means a company that has been licensed in accordance with this Act or that holds an equivalent authorisation in another country in terms of the Payment Services Directive, to provide and execute payment services;".
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Act, there shall be inserted the following new Third Schedule: "THIRD SCHEDULE
(Article 2)
FINANCIAL INSTITUTIONS ISSUING ELECTRONIC MONEY
Objective
The purpose of this Schedule is to set out the activities that may be undertaken by financial institutions that issue electronic money
in terms of this Act.
Interpretation
1. In this Schedule, unless the context otherwise requires, the following definitions shall apply -
"electronic money" means electronically, including magnetically, stored monetary value as represented by a claim on the
issuer which is issued on receipt of funds for the purpose of making payment transactions as defined in paragraph 1 of the Second
Schedule and which is accepted by a natural or legal person other than the financial institutions that issued the electronic money;
"electronic money institution" means a financial institution that has been licensed in accordance with this Act and authorised
to issue electronic money or that holds an equivalent authorisation in another country in terms of the Electronic Money Directive
to issue electronic money.
Activities
2. In addition to issuing electronic money, electronic money institutions may also engage in any of the following activities:
(a) the provision of payment services listed in paragraph 2 of the Second Schedule;
(b) the granting of credit related to payment services referred to in paragraph 2(d), (e) and (g) of the Second Schedule, where the
conditions laid down in paragraph 3(e) of the Second Schedule are met;
Addition of a Third Schedule to the principal Act.
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(c) the provision of operational services and closely related ancillary services in respect of the issuing of electronic
money or to the provision of payment services referred to in point (a);
(d) the operation of payment systems as defined in the Second Schedule;
(e) business activities other than the issuance of electronic money, having regard to the applicable law regulating such activities.
Credit referred to in point (b) above shall not be granted from the funds received in exchange of electronic money and held in accordance
with safeguarding requirements prescribed.".
Amendment of the Controlled Companies (Procedure for Liquidation) Act.
Cap. 383.
Amendment of article 2 of the principal Act.
AMENDMENT OF THE CONTROLLED COMPANIES (PROCEDURE FOR LIQUIDATION) ACT
"competent authority" there shall be substituted the following:
" "competent authority" means the body appointed as the competent authority under and for
Cap. 371.
the purposes of the Banking Act;".
Amendment of the Companies Act.
Cap. 386.
Amendment of article 170 of the principal Act.
AMENDMENTS TO THE COMPANIES ACT
(a) sub-articles (5), (7) and (8) thereof shall be deleted;
and
(b sub-article (6) thereof shall be renumbered as sub-
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article (5).
(a) in paragraph (c) of sub-article (1) thereof, for the words "the Insider Dealing Act," there shall be substituted
the words "the Prevention of Financial Markets Abuse Act," and for the words "Cap. 375." in the marginal note
thereto, there shall be substituted the words "Cap. 476."; and
(b) in paragraph (f) of sub-article (3) thereof, for the words "the recognised stock exchange" there shall
be substituted the words "the regulated market".
(a) paragraph (d) of sub-article (2) thereof shall be amended as follows:
(i) in sub-paragraph (i) thereof, for the words "of not more than two hundred and thirty-two thousand and nine hundred and
thirty-seven euro and thirty-four cents (232,937.34)" there shall be substituted the words "of not more than two hundred
and thirty thousand (230,000) euro"; and
(ii) in sub-paragraph (ii) thereof, for the words "not exceeding two thousand and three hundred and twenty-nine euro
and thirty-seven cents (2,329.37), or daily default penalties not exceeding forty-six euro and fifty-nine cents (46.59) for
every day" there shall be substituted the words "not exceeding two thousand and three hundred (2,300) euro, or daily default
penalties not exceeding fifty (50) euro for every day";
(b) sub-articles (6) and (7) thereof shall be renumbered as sub-articles (8) and (9) respectively; and
(c) immediately after sub-article (5) thereof, there shall be inserted the following new sub-articles (6) and (7):
"(6) (a) The Minister may by regulations provide for the registration of company services providers with the Registrar and for
the further regulation of such providers. In this sub-article, "company services providers" refers to natural or legal
persons which by way of business provide
Amendment of article 420 of the principal Act.
Amendment of article 425 of the principal Act.
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services in respect of the formation, operation or management of companies and other commercial partnerships; including acting as
director or in a similar administrative position or as company secretary, arranging for another person to act as such or for another
person to provide nominee or other fiduciary services in respect of shares, providing registered office or business address facilities
and providing any other ancillary or related services.
(b) Without prejudice to the generality of the foregoing, regulations made by the Minister in virtue of paragraph (a) may, in particular
prescribe:
(i) the conditions to be satisfied for registration and for the renewal thereof;
(ii) the form, content and manner of application for registration;
(iii) the fees that may be levied in relation to the registration and renewal thereof;
(iv) offences and administrative penalties for failure to comply with, or for any contravention of, any provision of the regulations
made by virtue of this sub-article;
(v) powers exercisable by the Registrar in respect of company services providers, including powers to investigate their activities
and to require information, to give directives, to issue procedures and guidelines and powers to cancel registration; and
(vi) for any matter incidental to or connected with any of the above.
(7) The Minister may make regulations to transpose, implement and give effect to the provisions and requirements of Directives, Regulations
and any other legislative measures of the European Union requiring transposition and, or implementation, as they may be amended from
time to time, including any implementing measures that have been or may be issued thereunder.".
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(a) in sub-article (1) thereof, for the words "shall on conviction be liable to a fine (multa) of not more than four thousand and six hundred and fifty-eight euro and seventy-five cents (4,658.75)" there shall be substituted
the words "shall on conviction be liable to a fine (multa) of not more than two hundred and thirty thousand (230,000) euro"; and
(b) in sub-article (2) thereof, for the words "of not more than two thousand and three hundred and twenty-nine euro and thirty-seven
cents (2,329.37) and, where applicable, to a further penalty of forty-six euro and fifty-nine cents (46.59) for every day" there
shall be substituted the words "of not more than two thousand and three hundred (2,300) euro and, where applicable, to a further
penalty of fifty (50) euro for every day".
AMENDMENTS TO THE INSURANCE BUSINESS ACT
(a) for the definition "competent authority" there shall be substituted the following:
Amendment of article 426 of the principal Act.
Amendment of the Insurance Business Act. Cap. 403.
Amendment of article 2 of the principal Act.
Cap. 330.
" "competent authority" means the Malta Financial Services Authority established by the Malta Financial Services
Authority Act;"; and
(b) in the definition "insurance rule" for the words "issued by the competent authority in virtue of article
4(3);" there shall be substituted the words "issued by the competent authority in virtue of article 4(2);".
Amendment of article 3 of the principal Act.
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"Competent authority.
3. It shall be the duty of the competent authority to carry out the functions assigned to it by or under this Act and to ensure
that persons authorised to carry on the business of insurance in or from Malta comply with the provisions of this Act and of any
regulations made thereunder, with any insurance rule made by the competent authority in virtue of this Act
and of any regulations made thereunder and with the conditions specified in their respective authorisation.".
Amendment of article 4 of the principal Act.
Amendment of article 58 of the principal Act
Amendment of article 59 of the principal Act.
(b) sub-articles (2), (3), (4) and (5) thereof shall be renumbered as sub-articles (1), (2), (3) and (4) respectively.
(a) in paragraph (a) thereof, for the words "under articles 7, 13 or 21", there shall be substituted the words
"under articles 7 or 21"; and
(b) in paragraph (b) thereof, for the words "issued or held under articles 7, 13 or 21", there shall be substituted
the words "issued or held under articles 7 or 21".
"(6) Where an officer or an employee of an authorised company has reason to believe that a transaction or a proposed transaction could involve money laundering, he shall act in compliance with the reporting and other obligations set out in the
Cap. 373.
regulations made under article 12 of the Prevention of Money Laundering Act and any procedures and
guidance issued thereunder, and such disclosure shall not constitute a breach of confidentiality.".
Amendment of article 64 of the principal Act.
(a) in paragraph (i) of sub-article (1) thereof, for the
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words "being penalties not exceeding ninety-three thousand and one hundred and seventy-four euro and ninety-four cents (93,174.94),
in respect of any offence and in respect of a continuing offence of a further penalty and not exceeding two hundred and thirty-two
euro and ninety-four cents (232.94) for each day during which the offence continues." there shall be substituted the words
"being penalties not exceeding one hundred and fifty thousand (150,000) euro, in respect of any offence and in respect
of a continuing offence of a further penalty and not exceeding two hundred and thirty (230) euro for each day during which
the offence continues."; and
(b) in sub-article (2) thereof, for the words "shall be liable to a penalty of not less than two hundred and thirty-two euro
and ninety-four cents (232.94) and not exceeding ninety- three thousand and one hundred and seventy-four euro and ninety-four cents
(93,174.94), in respect of each offence and in the case of a continuing offence to a further penalty not exceeding two hundred
and thirty-two euro and ninety-four cents (232.94) for each day during which the offence continues." there
shall be substituted the words "shall be liable to a penalty of not less than two hundred and thirty (230) euro and not exceeding
one hundred and fifty thousand (150,000) euro, in respect of each offence and in the case of a continuing offence to a further penalty
not exceeding two hundred and thirty (230) euro for each day during which the offence continues.".
(a) in paragraph (b) of sub-article (5) thereof, for the words "shall not provide for a fine (multa) of less than two hundred and thirty-two euro and ninety-four cents (232.94) or greater than one hundred and sixteen thousand and
four hundred and sixty-eight euro and sixty-seven cents (116,468.67)." there shall be substituted the words “shall not provide
for a fine (multa) of less than two hundred and thirty (230) euro or greater than one hundred and sixteen thousand (116,000) euro."; and
(b) in sub-article (6) thereof:
(i) for the first proviso thereto, there shall be substituted the following:
"Provided that an administrative penalty may not be greater than a financial penalty of one
Amendment of article 67 of the principal Act.
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hundred and fifty thousand (150,000) euro in respect of any infringement and, in respect of a continuing infringement, a further
penalty not exceeding one hundred and sixteen (116) euro for each day during which the infringement continues:"; and
Amendment of article 69 of the principal Act.
Amendment of the Prevention of Financial Markets Abuse Act.
Cap. 476.
Amendment of article 2 of the principal Act.
Amendment of article 19 of the principal Act.
Amendment of article 22 of the principal Act.
(ii) in the second proviso thereto, for the words "may, in no case, exceed ninety-three thousand and one hundred and seventy-four euro and ninety-four cents (93,174.94)." there shall be substituted the words "may, in no case, exceed one hundred and fifty thousand (150,000) euro.".
AMENDMENTS TO THE PREVENTION OF FINANCIAL MARKETS ABUSE ACT
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(a) in sub-article (5) thereof, for the words "fine (multa) of not less than two thousand and three hundred and twenty- nine euro and thirty seven cents (2,329.37) and not exceeding nine hundred
and thirty one thousand and seven hundred and forty-nine euro and thirty-six cents (931,749.36)" there shall be substituted
the words "fine (multa) of not less than two thousand and five hundred (2,500) euro and not exceeding nine hundred forty thousand (940,000) euro";
(b) in sub-article (6) thereof, for the words "fine (multa) not exceeding eleven thousand and six hundred and forty -six euro and eighty-seven cents (11,646.87)" there shall be substituted
the words "fine (multa) not exceeding twelve thousand (12,000) euro"; and
(c) in sub-article (7) thereof, for the words "fine (multa) not exceeding eleven thousand and six hundred and forty-six euro and eighty-seven cents (11,646.87)" there shall be substituted
the words "fine (multa) not exceeding twelve thousand (12,000) euro".
(a) in paragraph (a) thereof, for the words "a fine (multa) of ninety-three thousand and one hundred and seventy four euro and ninety-four cents (93,174.94)" there shall be substituted
the words "a fine (multa) of ninety-five thousand (95,000) euro"; and
(b) in paragraph (b) thereof, for the words "a fine of ninety-three thousand and one hundred and seventy four euro and ninety-four
cents (93,174.94)." there shall be substituted the words "a fine of one hundred and fifty thousand (150,000) euro.".
AMENDMENT OF THE SECURITISATION ACT
Amendment of article 24 of the principal Act.
Amendment of article 25 of the principal Act.
Amendment of the Securitisation Act.
Cap. 484.
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Amendment of article 2 of the principal Act.
" "the competent authority" means the Malta
Financial Services Authority established by the
Cap. 330.
Malta Financial Services Authority Act;".
Amendment of the Insurance Intermediaries Act.
Cap. 487.
Amendment of article 2 of the principal Act.
AMENDMENTS TO THE INSURANCE INTERMEDIARIES ACT
Cap. 330.
" "competent authority" means the Malta Financial Services Authority established by the Malta Financial Services Authority Act;".
Amendment of article 3 of the principal Act.
(a) for sub-article (1) thereof, there shall be substituted the following:
"(1) The competent authority shall carry out its functions under this Act and, in particular, shall ensure compliance with
the provisions of this Act."; and
(b) in sub-article (2) thereof:
(i) for the first proviso of paragraph (h) thereof there shall be substituted the following:
"Provided that, an administrative penalty may not be greater than a financial penalty of one hundred and fifty thousand (150,000)
euro in respect of any infringement and, where an infringement continues, a further penalty not exceeding one hundred and sixteen
(116) euro for each day during which the infringement continues:";
(ii) in the second proviso of paragraph (h)
thereof, for the words "may, in no case, exceed ninety-
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three thousand and one hundred and seventy-four euro and ninety-four cents (93,174.94);" there shall be substituted the words
"may, in no case, exceed one hundred and fifty thousand (150,000) euro;"; and
(iii) in paragraph (i) thereof, for the words "being penalties of not less than two hundred and thirty-two euro and ninety-four
cents (232.94) and not exceeding ninety- three thousand and one hundred and seventy-four euro and ninety-four cents (93,174.94),
in respect of any offence and in respect of a continuing offence of a further penalty not exceeding two hundred and thirty-two euro
and ninety- four cents (232.94) for each day during which the offence continues;" there shall be substituted the words "being
penalties of not less than two hundred and thirty (230) euro and not exceeding one hundred and fifty thousand (150,000)
euro, in respect of any offence and in respect of a continuing offence of a further penalty not exceeding two hundred and thirty
(230) euro for each day during which the offence continues;".
"(6) When an officer or an employee of an enrolled company, or a person registered or enrolled, or an officer or an employee of such person, has reason to believe that an activity or proposed activity could involve money laundering, he shall act in compliance with the reporting and other obligations set out in the regulations made
Amendment of article 46 of the principal Act.
Cap. 373.
under article 12 of the Prevention of Money
Laundering Act and any procedures and guidance issued thereunder, and such disclosure shall not constitute a breach of confidentiality.".
(a) in paragraph (b) thereof, for the words "shall not provide for a fine (multa) of less than two hundred and thirty- two euro and ninety-four cents (232.94) or greater than one hundred and sixteen thousand and four hundred and sixty-eight euro and sixty-seven cents (116,468.67);" there shall be substituted the words "shall not provide for a fine (multa) of less than two hundred thirty (230) euro or greater than one hundred sixteen thousand (116,000) euro;"; and
Amendment of article 53 of the principal Act.
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(b) in paragraph (c) thereof, for the words "shall not provide for a fine (multa) of less than one hundred and sixteen euro and forty-seven cents (116.47) or greater than two hundred and thirty-two euro and ninety-four
cents (232.94) for each day during which the offence continues." there shall be substituted the words "shall not provide
for a fine (multa) of less than one hundred and sixteen (116) euro or greater than two hundred thirty (230) euro for each day during which the offence
continues.".
The object of this Bill is to implement, in part, certain provisions of Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC; in part, to implement certain provisions of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (recast); and to effect amendments to the Malta Financial Services Authority Act, the Trusts and Trustees Act, the Financial Markets Act, the Investment Services Act, the Banking Act, the Financial Institutions Act, the Companies Act, the Insurance Business Act, the Prevention of Financial Markets Abuse Act, the Securitisation Act, and the Insurance Intermediaries Act.
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