This law, called the Investment Services Act, regulates how investment businesses operate and deals with related matters. It aims to provide a framework for the provision of investment services.
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
1994 as amended by Acts: XXIV, XXV
1995; Legal Notices 191
1998 and 46
1999; Acts XVII
2002, IV
2003, XIII
2004, XII
2006; Legal Notice 318
2006; Act XX
2007; Legal Notice 425
2007; Acts XVII
2009, XIX
2010, X
2011; Legal Notice 251
2013; Act XX
2013; Legal Notice 147
2014; Acts XXII
2014, XXI
2015, XIX
2016 and XXXI
2017, XLIV
2018, V
2020, Act XLVI, LXXI
2021 and LXXII
2021 , XXV
2023 , XXXII
2024 and XI and XXIX
this Act is the Investment Services Act. 2.
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
the European Parliament and
the Council
11 December 2013 on the common organisation
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, as amended from time to time; "AIFM Directive" means Directive 2011/61/EU
the European Parliament and
the Council
8 June 2011 on Alternative Investment 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
the services listed within the Third Schedule; "ancillary services undertaking" means an undertaking, the principal activity
which consists
owning or managing property, managing data processing services, or a similar activity which is ancillary to the principal activity
one or more investment firms; "Alternative Investment Fund or AIF" means a collective investment scheme, including subfunds thereof, which raises capital from a number
investors, with a view to investing it in accordance with a defined investment policy for the benefit
those investors, and which does not qualify as a UCITS Scheme in terms
the UCITS Directive; Short title. Interpretation. Amended by: XVII. 2002.136; XX. 2007.61; XVII. 2009.3; X. 2011.23; L.N. 251
2013; XX. 2013.35; XXII. 2014.2; XXI. 2015.11; XXXI. 2017.44; XLIV.2018.5; LXXII.2021.5; XXV.2023.39; XXIX.2025.15. INVESTMENT SERVICES "binding legal instrument" means any directly applicable measures, including, but not limited to, any implementing technical standards, any regulatory technical standards or any similar measures, issued under European Union legislation; "Alternative Investment Fund Manager or AIFM" means a legal person whose regular business is the management
one or more AIFs; "certificates" means those securities which are negotiable on the capital market and which in case
a repayment
investment by the issuer are ranked above shares but below unsecured bond instruments and other similar instruments; "client" means any natural or legal person to whom an investment services licence holder provides investment or ancillary services; "close links" means a situation in which two or more natural or legal persons are linked by: (i) participation in the form
ownership, direct or by way
control,
20% or more
the voting rights or capital
an undertaking; (ii) "control" which means the relationship between a parent undertaking and a subsidiary, in all the cases referred to in Article 22
Directive 2013/34/EU, or a similar relationship between any natural or legal person and an undertaking, any subsidiary undertaking
a subsidiary undertaking also being considered to be a subsidiary
the parent undertaking which is at the head
those undertakings; (iii) a permanent link
both or all
them to the same person by a control relationship; "the BRRD" means Directive 2014/59/EU
the European Parliament and
the Council
15 May 2014 establishing a framework for the recovery and resolution
credit institutions 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,
the European Parliament and
the Council, as amended from time to time, and includes any implementing measures, implementing technical 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
its objects the collective investment
capital acquired by means
an
fer
units for subscription, sale o r exchange and which h as t he following characteristics: (a) the scheme or arrangement operates according to the principle
risk spreading; and either (b) the contributions
the participants and the profits or INVESTMENT SERVICES income out
which payments are to be made to them are pooled; or (c) at the request
the holders, units are or are to be repurchased or redeemed out
the assets
the scheme or arrangement, continuously or in blocks at short intervals; or (
units or the carrying on
an activity by a collective investment scheme issued under article 6; "commodity derivatives" shall have the same meaning as that given to the term by Article 2
the MiFIR; "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 requirements
the IFR; "Conduct
Business Rules" refers to Rules issued by the competent authority under various articles
this Act; consolidated basis" means the same as the meaning assigned to it in point
the CRR; "consolidating supervisor" means the same as the meaning assigned to it in point
the CRR; "the CRD" means Directive 2013/36/EU
the European Parliament and
the Council
26 June 2013 on access to the activity
credit institutions and the prudential supervision
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 implementing measures that have been or may be issued thereunder; "credit institution" means a credit institution as defined in point
the CRR; "the CRR," means Regulation (EU) No 575/2013
the European Parliament and
the Council
26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, as amended from time to time, and includes any implementing measures that have been or may be issued thereunder; INVESTMENT SERVICES "data reporting services provider" shall have the same meaning as that assigned to it in point
MiFIR; "depositary receipts" means those securities which are negotiable on the capital market and which represent ownership
the securities
a non-domiciled issuer while being able to be admitted to trading on a regulated market and traded independently
the securities
the nondomiciled issuer; "derivatives" means those securities giving the right to acquire or sell any transferable security or giving rise to a cash settlement 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
the Second Schedule; "Directive 2002/87/EC" means Directive 2002/87/EC
the European Parliament and
the Council
16 December 2002 on the supplementary supervision
credit institutions, insurance undertakings and investment firms in a financial conglomerate and 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
the European Parliament and
the Council
26 June 2013 on the annual financial statements, consolidated financial statements and related reports
certain types
undertakings, as may be amended from time to time; "distributed ledger technology" shall have the same meaning as that assigned to it in point
the DLT Pilot Regime Regulation; "DLT Pilot Regime Regulation" means Regulation (EU) 2022/858
the European Parliament and
the Council
30 May 2022 on a pilot regime for market infrastructures based on distributed ledger technology, and amending Regulations (EU) No 600/2014 and (EU) No 909/2014 and Directive 2014/65/EU, as amended from time to time, and includes any implementing measures that have been or may be issued thereunder; "document" or "documentation" includes information recorded in any form and, in relation to information recorded otherwise than in legible form, references to its production include references to producing a copy
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 the 2nd May, 1992 as amended by the Protocol signed at Brussels on the 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
the European Parliament and
the Council
24 November 2010; INVESTMENT SERVICES "ESRB" means the European Systemic Risk Board established by Regulation (EU) No 1092/2010
the European Parliament and
the Council
24 November 2010 on European Union macroprudential oversight
the financial system and establishing a European Systemic Risk Board; "EU parent financial holding company" means the same as the meaning assigned to it in point
the CRR; "EU parent institution" means the same as the meaning assigned to it in point
the CRR; "EU parent investment firm" shall have the same meaning as that assigned to "Union parent investment firm" in point
the IFR "EU parent investment holding company" shall have the same meaning as that assigned to "Union parent investment holding company" in point
the IFR; "EU parent mixed financial holding company" means the same as the meaning assigned to it in point
the CRR; "European investment firm" means an investment firm as defined in Article 4
the MIFID and as authorized by its European regulatory authority within the meaning
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 in accordance with Article 44
the AIFM Directive, Article 67
the MIFID, Article 97
the UCITS Directive and Article 4
the CRD to carry out each
the duties provided for under the different provisions
the said Directives; "exempted person" means a person who for any reason is exempted from any or all
the provisions
article 3; "financial holding company" means the same as the meaning assigned to it in point
the CRR; "financial institution" means a financial institution as defined in point
the IFR; "group supervisor" means the supervisory authority
a Member State or an EEA State, competent and responsible for the supervision
compliance with the group capital test
EU parent investment firms and investment firms controlled by EU parent investment holding companies or EU parent mixed financial holding companies: INVESTMENT SERVICES Provided that, for the purposes
this definition, "EU parent mixed financial holding companies" shall have the same meaning as that assigned to "Union parent mixed financial holding company" in point
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
fice
that person is situated; or (b) where the European investment firm is a legal person, the Member State or EEA State in which its registered
fice is situated; or (c) where the European investment firm has, under its national law no registered
fice, the Member State or EEA State in which its head
fice 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 which an investment services licence holder has a branch or provides investment services and, or activities; "the IFD" means Directive (EU) 2019/2034
the European Parliament and
the Council
27 November 2019 on the prudential supervision
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 legal instruments, guidelines and other measures that have been or may be issued thereunder; "the IFR" means Regulation (EU) 2019/2033
the European Parliament and
the Council
27 November 2019 on the prudential requirements
investment firms and amending Regulations (EU) No. 1093/2010, (EU) No. 575/2013, (EU) No. 600/2014 and (EU) No. 806/ 2014, as amended from time to time, and includes any binding legal instruments, guidelines and other measures that have been or may be issued thereunder; "instrument" means any instrument, contract or right falling within the Second Schedule and whether or otherwise issued in Malta, including such instruments issued by means
distributed ledger technology; " investment advertisement" means any form or medium
marketing activity or communication disseminated to the public by means
all types
media, other than a prospectus, which promotes the purchase or procurement
an investment service or instrument; "investment agreement" means any agreement the making or performance
which by either party constitutes an investment service; "investment firm" means an investment firm as defined in Article 4
the MiFID; INVESTMENT SERVICES "investment firm group" means an investment firm group as defined in point
the IFR; "investment holding company" means an investment holding company as defined in point
the IFR; "investment service" means any service and activity falling within the First Schedule when provided in relation to an instrument: Provided that the service
Management
Investments in terms
the First Schedule shall also include the collective portfolio management
assets
a collective investment scheme when provided in relation to an asset that is not an instrument within the meaning
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
this Act; "licence" means a collective investment scheme licence or an investment services licence; "licence holder" means a person who holds a licence; " M a l t a ’s i n t e r n a t i o n a l c o m m i t m e n t s " m e a n s M a l t a ’s commitments, responsibilities and obligations arising out
m e m b e r s h i p o f , o r a ff i l i a t i o n t o , o r r e l a t i o n s h i p w i t h , a n y international, global or regional organisations or grouping
countries or out
any treaty, convention or other international agreement, however called, whether bilateral, multilateral, to which Malta is a party; "management body" means the body or bodies
a licence holder, including
an investment firm, a market operator or a data reporting services provider, which are appointed in accordance with national law and are empowered to set the strategy, objectives and overall d i r e c t i o n o f t h e l i c e n c e h o l d e r, a n d o v e r s e e a n d m o n i t o r management decision making, and includes the persons who effectively direct the business
the licence holder; "market operator" means a person or persons who manages and, or operates the business
a regulated market and may be the regulated market itself; " M e m b e r St a t e " m e a n s a M e m b e r St a t e o f t h e E u r o p e a n Communities; " MIFID" means Directive 2014/65/EU
the European Parliament and
the Council
15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, as amended from time to time, and includes any implementing measures that have been or may be issued thereunder; "MiFIR" means Regulation (EU) No. 600/2014
the European Parliament and
the Council
15 May 2014 on markets in financial instruments and amending Regulation (EU) No. 648/2012, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards, INVESTMENT SERVICES guidelines and similar measures that have been or may be issued thereunder; "Minister" means the Minister responsible for the regulation
Financial Services; "mixed-activity holding company" means a parent undertaking other than a financial holding company, an investment holding company, a credit institution, an investment firm, or a mixed financial holding company within the meaning
Directive 2002/87/EC, the subsidiaries
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
the Financial Conglomerates Regulations; "multilateral system" means a multilateral system as defined in point
MiFIR; "multilateral trading facility" or "MTF" means a multilateral system, operated by an investment services licence holder or a market operator, which brings together multiple third-party buying and selling interests in instruments - in the system and in accordance with nondiscretionary rules - in a way that results in a contract in accordance with Title II
MIFID; "organised trading facility" or "OTF" means a multilateral system which is not a regulated market or an MTF and in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact in the system in a way that results in a contract in accordance with Title II
MIFID. "overseas regulatory authority" means an authority in a country or territory outside Malta that is not a Member State or EEA State which exercises any regulatory or supervisory function in relation to financial services corresponding to a function
the competent 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
the CRR; "parent institution" means the same as the meaning assigned to the term "parent institution in a Member State" in point
the CRR; "parent mixed financial holding company" means the same as the meaning assigned to the term "parent mixed financial holding company in a Member State" in point
the CRR; "parent undertaking" means a parent undertaking within the meaning
Directive 2013/34/EU; "participants" means the persons who participate in or receive, or are to participate in or receive, profits or income arising from the INVESTMENT SERVICES acquisition, holding, management or disposal
the property comprised in a collective investment scheme or sums paid out
such profits or income; "prescribed" means prescribed by regulations made under this Act; "prospectus" has the meaning assigned to it in article 2
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 in a company which represents ten per centum or more
the share capital or
the voting rights referred to in Articles 9 and 10
Directive 2004/109/EC
the European Parliament and
the Council
the 15 December 2004 on the harmonization
transparency requirements in relation to information about issuers 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 it possible to exercise a significant influence over the management
the company in which that holding subsists, and "qualifying shareholder" 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 credit institutions may hold as a result
providing the service
un de rw rit in g o r pl aci n g
fi n anc ial in stru me nt s on a firm commitment basis in terms
point 6
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
the issuer and, on the other, disposed
within one year
acquisition; "regulated market" has the meaning assigned to it under the Financial Markets Act; "Regulation (EU) No. 1092/2010" means Regulation (EU) No. 1092/2010
the European Parliament and
the Council
24 November 2010 on European Union macro-prudential oversight
the financial system and establishing a European Systemic Risk Board, as amended from time to time, and includes any implementing measures that have been or may be issued thereunder; "Regulation (EU) No. 1093/2010" means Regulation (EU) No. 1093/2010
the European Parliament and
the Council
24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/78/EC, as amended from time 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
the European Parliament and
the Council
24 INVESTMENT SERVICES November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/ 79/EC, as amended from time to time, and includes any implementing measures that have been or may be issued thereunder; "Regulation (EU) No 1095/2010" refers to Regulation (EU) No 1095/2010
the European Parliament and
the Council
24 November 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
the European Parliament and
the Council
25 O c t o b e r 2 0 11 o n w h o l e s a l e e n e r g y m a r k e t i n t e g r i t y a n d transparency; "Regulation (EU) No. 648/2012" means Regulation (EU) No. 648/2012
the European Parliament and
the Council
4 July 2 0 12 o n O T C d e r iv a t iv e s , ce nt r a l co u nt e r p a r ti e s an d t r a de repositories, as may be amended from time to time, and includes any 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
the European Parliament and
the Council
17 December 2013 establishing a common organisation
the markets in 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 it in sub-regulation
regulation 2
the Recovery and Resolution Regulations; S.L. 330.09. "resolution group" means the same as the meaning assigned to it in sub-regulation
regulation 2
the Recovery and Resolution Regulations; "Solvency II Directive" means Directive 2009/138/EC
the European Parliament and
the Council
25 November 2009 on t h e tak in g- up a n d p ur s ui t
t he bu s in e s s o f In s ur a nc e an d Reinsurance, as amended from time to time, and includes any implementing measures that have been or may be issued thereunder; "structured finance products" means those securities created to securitise and transfer credit risk associated with a pool
financial assets entitling the security holder to receive regular payments that depend on the cash flow from the underlying assets; "sub-consolidated basis" means the same as the meaning assigned to it in point
the CRR; "subsidiary" has the same meaning as that given to the term by article 2
the Companies Act; INVESTMENT SERVICES "systemic risk" means systemic risk as defined in point
the CRD; "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
the UCITS Directive as defined herein; "UCITS Directive" means Directive 2009/65/EC
the European Parliament and
the Council
13 July 2009 on the coordination
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; "UCITS management company" means a management company as defined in point (b)
the UCITS Directive; "unit" means any representation
the rights and interests
participants in a collective investment scheme; "wholesale energy product" means wholesale energy products as defined in point
Regulation (EU) No. 1227/2011; "working days" shall not include Saturdays and the days referred to in the National Holidays and Other Public Holidays Act. (1A) For the purposes
applying the requirements and supervisory powers laid down in this Act and any regulations and 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 with 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" and "parent undertaking" shall also include: (a) financial holding companies and mixed financial holding companies that have been granted approval in accordance with article 10CA
this Act and, or Article 21a
the CRD; (b) designated institutions controlled by an EU parent financial holding company, an EU parent mixed financial holding company, a parent financial holding company in a Member State or a parent mixed financial holding company in a Member State where the relevant parent is exempted in accordance with article 10CA
this Act and, or Article 21a
the CRD (c) financial holding companies, mixed financial holding companies or institutions designated pursuant to article 16AA
this Act and, or Article 21a
the CRD: Provided that for the purposes
this sub-article: (i) the term "control" means the same as the meaning assigned to it in point
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
the CRR. (1B) Reference to the "approval"
financial holding companies or mixed financial holding companies in this Act and any regulations and, or Investment Services Rules issued thereunder, means an approval granted by the competent authority in terms
article 10CA
this Act or an approval granted through the joint decision
the competent authority and any European regulatory authority in terms
article 10CA
this Act and Article 21a
the CRD as the case may be. (1C) Reference to the "exemption"
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
article 10CA
this Act or an exemption granted through the joint decision
the competent authority and any European regulatory authority in terms
article 10CA
this Act and Article 21a
the CRD, as the case may be.
this Act is, in part, to transpose and implement the provisions
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. 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; XXV.2023.40. 2A.
this Act.
the AIFM Directive, the CRD, the CRR, the DLT Pilot Regime Regulation, the MIFID, the MiFIR, the UCITS Directive, the IF D and the I FR, and the Commission
the European Union, ESMA, the EBA and European regulatory authorities shall be informed accordingly. (2A) The competent authority shall have the expertise, resources, operational capacity, powers and independence necessary to carry out INVESTMENT SERVICES its functions and exercise its powers at law.
the complaint and redress procedures which are available in Malta; (b) notify the Commission
the European Union, ESMA and the other European regulatory authorities that it is the contact point in terms
article 17
information or cooperation in terms
this Act; (c) send to ESMA and to the Commission
the European Union, a list
the categories
bonds referred to in Article 54
the UCITS Directive together with the categories
issuers authorised, in accordance with the laws and supervisory arrangements mentioned in that sub-paragraph, to issue bonds complying with the criteria set out in Article 54
the UCITS Directive. A notice specifying the status
the guarantees
fered shall be attached to those lists; (d) ensure that all information received under the third paragraph
the UCITS Directive aggregated in respect
all the management or investment companies they supervise is accessible to ESMA in accordance with Article 35
Regulation (EU) No 1095/2010, and ESRB in accordance with Article 15
Regulation (EU) No 1092/2010 for the purpose
monitoring systemic risks at European Union level; (e) subject to the conditions laid down in Article 35
Regulation (EU) No 1095/2010, provide ESMA and the ESRB with aggregated information relating to the activities
AIFMs under their responsibility; (f) provide ESMA and other European regulatory authorities with any information required for the purposes
carrying out its duties under the AIFM Directive.
this Act, the competent authority shall also have the functions, powers and duties assigned to it under the Malta Financial Services Authority Act and under any regulations made thereunder for the purposes
transposing the provisions
the BRRD. LICENSING REQUIREMENTS Requirement
licence for investment services. Amended by: XVII. 2002.138; XXXI. 2017.46. INVESTMENT SERVICES 3.
a valid investment services licence.
Malta, shall provide or hold itself out as providing an investment service in or from within a country, territory or other place outside Malta unless it is in possession
a valid investment services licence.
this Act. Requirement
licence for collective investment scheme. 4.
sub-article
it a valid collective investment scheme licence.
sub-article
Malta shall issue or create any units or carry on any activity in or from within a country, territory or other place outside Malta unless there is in respect
it a valid collective investment scheme licence.
sub-article
the scheme or from taking such steps as may be necessary for securing the authorisation
the scheme by the competent authority. APPLICATION, GRANT, REVOCATION, ETC.,
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 furthermore (
any notice or other document required or authorised to be served on him by or under this Act; INVESTMENT SERVICES (d) in the case
an investment services licence, be accompanied by a programme
operations setting out such matters as may be required to be set out by the competent authority from time to time; (e) in the case
a collective investment scheme licence, specify the nature
the collective investment scheme concerned; and (f) be accompanied by such fee as may be prescribed in respect
the licence applied for. 6.
Business Rules issued by the competent authority made under this Act and which are applicable to him; Power
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. (ii) grant an investment services licence for the provision
any investment service other than acting as trustee or custodian in relation to a collective investment scheme: (a) if the applicant is a body corporate, unless it has both its head
fice and registered
fice in Malta; (b) if the applicant is a body corporate with no registered
fice under its national law, unless it has its head
fice in Malta; or (c) if the applicant is not a body corporate unless the applicant’s head
fice is in Malta; (iii) grant an investment services licence solely for the provision
an ancillary service; (b) grant a collective investment scheme licence unless it is satisfied that the scheme will comply in all respects with any Investment Services Rules and regulations made under this Act and applicable to it and that its directors, and
ficers, or in the case
a trust, its trustees, are fit and proper persons to carry out the functions required
them in connection with the scheme; (
the applicant may pose a threat to its effective, sound and prudent management and to the adequate consideration
the interest
its clients and the integrity
the market; (e) grant a licence to an applicant unless it is satisfied that the members
the management body
the applicant are
sufficiently good repute, possess sufficient knowledge, skills and experience and commit sufficient time to perform their functions with the applicant; Added by: XXXI. 2017.47. (f)
the management body
such parent undertaking are
sufficiently good repute and possess sufficient knowledge, skills and experience to effectively perform their duties, taking into account the specific role
an investment holding company or mixed financial holding company. (
the provisions
this Act, and to transpose, implement and give effect to the provisions and requirements
Directives, Regulations and other legislative matters
the European Union requiring transposition or implementation, the competent authority may, from time to time, issue and publish Investment Services Rules and Conduct
Business Rules which shall be binding on licence holders and others as may be specified therein. Such Investment Service Rules and Conduct
Business Rules may lay down additional requirements and conditions in relation to activities
licence holders, the conduct
their business, their relations with customers, the public and other parties, their responsibilities to the competent authority, reporting requirements, financial resources, capital adequacy and related requirements, and any other matters as the competent authority may consider appropriate.
investors and the general public; (b) the protection
the reputation
Malta taking into account Malta’s international commitments; (c) the promotion
competition and choice; and (d) in the case
a collective investment scheme licence, the reputation and suitability
the applicant and all INVESTMENT SERVICES other parties connected with the scheme.
the ancillary services set out in the Third Schedule; Substituted by: XXXI. 2017.47. (b) Every collective investment scheme licence shall specify the class
collective investment scheme to which the licence relates.
sub-article
licences; (c) all licences granted to certain types
licence holders; (d) all licences in relation to particular services or schemes, as the case may be.
the submission
a properly completed application form together with the requisite documentation, the competent authority shall inform an applicant in writing
its decision whether or not to grant a licence: Provided that, the competent authority shall inform a UCITS management company which has submitted an application for authorisation
a UCITS or where applicable a self-managed UCITS, in writing, within two months
the submission
a complete application whether or not the collective investment scheme has been authorised. Where an investment company has not designated a management company, this proviso shall not apply and the first paragraph
this sub-article shall apply: Provided further that the competent authority shall inform an AIFM in writing within three months
the submission
a complete application whether or not authorisation has been granted. The competent authority may prolong this period for up to three additional months where it considers it necessary due to the specific circumstances
the case and after having notified the AIFM accordingly.
ficer
such person, and, in the case
a trust, each one
its trustees, be a fit and proper person to carry out such activities or functions.
any country outside Malta governing one or more persons with whom the applicant has close links, or their enforcement, prevent the effective exercise
its supervisory functions. (b) The competent authority may from time to time, by means
Investment Service Rules under this Act define the circumstances in which "close links" are to be regarded as existing between any two or more persons.
all holders
an investment services licence. This register, which shall be publicly available, shall also indicate the services in relation to which each investment services licence was issued and shall be updated on a regular basis.
this article. Power
competent authority to cancel or suspend licences. Amended by: XVII. 2002.140; XX. 2007.63; XX. 2013.38; XXXI. 2017.48; LXXII.2021.8; XI.2025.21. 7.
this Act.
an investment services licence, the competent authority may cancel or suspend a licence (
, or has contravened, any
the provisions
this Act or regulations made thereunder or
any applicable Investment Services Rules or Conduct
Business Rules issued by the competent authority, or has failed to satisfy or comply with any obligation or condition to which he or the licence is subject by virtue
or under this Act; or (c) if the competent authority has been furnished by or on behalf
the licence holder with information which is false, inaccurate or misleading, or if the licence holder has obtained the licence by making false statements or by any other irregular means; or (
investors and the general public, and the reputation
Malta taking into account Malta’s international commitments; or (f) at the request
the licence holder; or INVESTMENT SERVICES (g) in any
the circumstances under which the competent authority would have been precluded from issuing the licence under this Act or where under this Act it would have been entitled to refuse the grant
such licence; or (h) if the licence holder is declared bankrupt, or goes into liquidation, or makes a composition with its creditors, or is otherwise dissolved.
a collective investment scheme licence, the competent authority may cancel or suspend a licence (a) if it considers that the directors,
ficers or trustees
the scheme are not fit and proper persons to carry out the functions required
them in connection with the scheme; or (b) if it considers that the scheme to which the licence refers does not fulfil the requirements
any provision
this Act or
any Investment Services Rules or regulations made thereunder, or there has been a contravention
any such provision as aforesaid, or an obligation or condition to which the scheme or the licence is subject by virtue
or under this Act has not been satisfied or complied with; or (c) if information has been furnished to the competent authority by or on behalf
or in relation to the scheme which is false, inaccurate or misleading; or (
investors and the general public and the reputation
Malta taking into account Malta’s international commitments; or (f) at the request
the manager or trustee or custodian
the scheme, or their equivalent; or (g) if the scheme is declared bankrupt, or goes into liquidation, or makes a composition with its creditors, or is otherwise dissolved.
any cancellation
an investment services licence in terms
subarticle
a collective investment scheme, or their equivalent, notice in writing
its intention to do Notification
proposed refusal, variation, cancellation or suspension
a licence. Amended by: XVII. 2002.141. INVESTMENT SERVICES so, setting out the reasons for the decision it proposes to take.
the notice may, within such reasonable period after the service thereof as may be stated in the notice (being a period
not less than forty-eight hours and not longer than thirty days), make representations in writing to the competent authority giving reasons why the proposed decision should not be taken, and the competent authority shall consider any representation so made before arriving at a final decision.
the persons to whom notice is to be given under sub-article
CRR to certain investment firms. Added by: LXXII.2021.3. Amended by: XXV.2023.41. 8A.
the CRR pursuant to point (c)
the first subparagraph
the IFR to an investment firm to carry out any
the activities listed in points
Section A
Annex I to MiFID, where the total value
the consolidated assets
such investment firm is equal to or exceeds five billion euro (€5,000,000,000), calculated as an average
the previous twelve
the following criteria apply: (a) such investment firm carries out those activities on such a scale that the failure or the distress
the investment firm could lead to systemic risk; (b) the investment firm is a clearing member as defined in point
the IFR, or (c) the competent authority considers it to be justified in light
the size, nature, scale and complexity
the activities
the investment firm concerned, taking into account the principle
proportionality and having regard to one or more
the following factors: (i) the importance
the investment firm for the economy
Malta or
the European Union; (ii) the significance
the investment firm’s crossborder activities; (iii) the interconnectedness
the investment firm with the financial system.
the CRR to an investment firm in accordance with sub-article
the CRD as transposed in national law.
twelve consecutive months.
this article, the term "investment firm" means an investment firm licensed under this Act.
any decision taken pursuant to sub-articles
LICENCE HOLDERS AND OTHERS 9.
an investment services licence, an investment holding company or mixed financial holding company and the manager
a collective investment scheme which has been licensed under this Act, or any other person having responsibility for the day to day administration or management
such a scheme, shall provide the competent authority with particulars
any changes in the information provided under this Act as soon as such holder, manager or person becomes aware
such changes and shall notify the competent authority, on a continuous basis,
any changes or circumstances which give rise to the existence
close links within the meaning in article 6. Changes in information; payment
fees. Amended by: XVII. 2002.142; LXXII.2021.10.
a licence shall pay to the competent authority such periodic fee, and within such time, as may from time to time be prescribed. 9A.
recognition and for the variation, cancellation and supervision
reco gn iti on and g enerall y reg ulat in g the prov isio n
such administrative services. Such Investment Service Rules may in particular include provision for the following matters: (i) establishing which activities constitute administrative services for the purposes
this article; (ii) the form and the content
applications to the competent authority for recognition; (iii) the application, annual and other fees payable in respect
recognition; Persons providing administrative services. Added by: XVII. 2002.143. Amended by: XX. 2007.62; XVII. 2009.4. INVESTMENT SERVICES (
information with other regulatory bodies both in Malta and overseas; (vii) providing for the mutual recognition
persons recognised as fit to provide such services outside Malta; (viii) to provide for the imposition
administrative penalties up to a maximum
forty-five thousand euro (€45,000) or for other administrative sanctions in case
any breach
the provisions
this article or
the applicable Investment Services Rules or
any
the conditions attached to a recognition certificate, where any; (ix) generally any other matter ancillary or connected with the above.
this article or imposes an administrative penalty in terms
the applicable Investment Services Rules, an appeal shall lie to the Financial Services Tribunal and the provisions
article19
which the proportion
the voting rights or
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 become its subsidiary, (hereinafter referred to in this Act as the "proposed acquisition"), shall notify the competent authority in writing
any such decision, indicating the size
the intended shareholding and providing any relevant information as and in the manner that the competent INVESTMENT SERVICES authority may by Investment Services Rules 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 fit and proper person.
a qualifying shareholding in an investment services licence holder; (
the voting rights or
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 to be its subsidiary, shall notify the competent authority in writing
any such decision indicating the size
the intended shareholding and providing any relevant information as and in the manner that the competent authority may, by Investment Services Rules require.
whether or not any
the relevancy shares listed on a regulated market within the meaning
the Financial Markets Act or on an equivalent market which is not situated in a Member State or an EEA State.
an investment services licence holder to notify the competent authority forthwith upon becoming aware that any person has taken any action set out in sub-articles
article 10A, then, without prejudice to any other penalty which may be imposed under this Act, the competent authority shall have the power to make an order: (
no effect; (
this Act, where the influence exercised by any person acquiring or proposing to acquire a qualifying shareholding is, or is likely to, operate against the sound and prudent management
an investment services licence holder, the competent authority may issue a notice
objection and exercise any
the powers assigned to it under this Act to put an end to such situation, including the power to issue directives as it may deem reasonable and appropriate in the circumstances.
any notice served on the person concerned in terms
sub-article
Investment Services Rules issued under this Act, indicate the circumstances 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.
the notification required under article 10
the information referred to in sub-article
sixty working days as from the date
the written acknowledgement
receipt
the notification required under article 10
such information as may be determined by Investment Services Rules issued for this purpose.
the date
the expiry
the assessment period at the time
acknowledging receipt.
such period, request any further information that is necessary to complete the assessment. Such a request shall be made in writing and shall specify the additional information needed.
request for additional information by the competent authority and the receipt
a response thereto by the proposed acquirer, the assessment period shall be interrupted. The interruption period shall not exceed twenty working days. Any further requests by the competent authority for completion or clarification
the information shall be at its discretion but shall not result in an interruption
such period.
the assessment referred to in sub-article
the expiry
the assessment period, issue a notice: (
the level
shareholding that must be acquired nor examine the proposed acquisition in terms
the economic needs
the market.
the criteria set out in the Investment Services Rules referred to in article 10
such proposed acquirer or not, issue a public statement indicating such reasons.
article 22, where a qualifying shareholding in an investment services licence holder is acquired notwithstanding the refusal
the competent authority, the exercise
the corresponding voting rights shall be suspended and any
the votes cast in contravention
this sub-article shall be null and void.
sub-articles
acquisitions. Added by: XVII. 2009.
the following: (
a credit institution, insurance undertaking, reinsurance undertaking, investment firm or UCITS management company authorised in another Member State or EEA State or in a sector other than that in which the acquisition is proposed; (c) a person controlling a credit institution, insurance undertaking, reinsurance undertaking, investment firm or UCITS management company authorised in another Member State or EEA State or in a sector other than that in which the acquisition is proposed.
article 10A shall indicate any views or reservations expressed by the European regulatory authority or overseas regulatory authority responsible for the proposed acquirer. Mergers, reconstructions, divisions and changes in share capital or voting rights. Added by: XVII. 2009.8. 10C.
the competent authority given in writing shall be required before an investment services licence holder may lawfully: (a) sell or dispose
its business or any significant part thereof; (
all directors and qualifying shareholders
an investment services licence holder to notify the competent authority forthwith in writing, upon becoming aware that such investment services licence holder intends to take any
the actions set out in sub-article
receipt
such notification or receipt
such information as the competent authority may lawfully require, whichever is the later, the competent authority shall issue a notice (a) granting unconditional consent to the taking
the action; (b) granting consent to the taking
the action subject to such conditions as the competent authority may deem appropriate; or (c) refusing consent to the taking
the action, and if it refuses to grant consent, it shall inform the person or the investment services licence holder concerned in writing for the reason for its refusal.
the competent authority, then, without prejudice to any other penalty which may be imposed under this Act, the competent authority shall have the power to make an order: (
no effect; (
the competent authority acting, as the consolidating supervisor, in accordance with this article. Other financial holding companies or mixed financial holding companies, established in Malta or in another Member State or EEA State and which have an investment firm as a subsidiary, shall seek the approval or exemption, as the case may be,
the competent authority, acting as the consolidating supervisor, in accordance with this article where they are required to comply with the C R D or the C R R on a subconsolidated basis: Approval
financial holding companies and mixed financial holding companies. Added by: LXXII.2021.12. INVESTMENT SERVICES Provided that in accordance with article 10D where the competent authority is not the consolidating supervisor, financial holding companies and mixed financial holding companies established in Malta and which have an investment firm as a subsidiary, shall seek the approval or exemption, as the case may be,
the consolidating supervisor determined in accordance with Article 111
the CRD.
seeking an approval or exemption, as the case may be, in terms
sub-article
the group
which the financial holding company or the mixed financial holding company, as the case may be, forms part, with a clear indication
its subsidiaries and, where applicable, parent undertakings, and the location and type
activity undertaken by each
the entities within the group; (b) information regarding the nomination
at least two persons effectively directing the financial holding company or mixed financial holding company, as the case may be, and compliance with the requirements on the qualification
directors set out in Investment Services Rules; (c) the internal organisation and distribution
tasks within the group; (d) any other information that may be necessary to carry out the assessments referred to in sub-articles
this article shall be in such form and accompanied by such information and shall conform with any such requirements as may be established, from time to time, by Investment Services Rules.
the following conditions are fulfilled: INVESTMENT SERVICES (a) the internal arrangements and distribution
tasks within the group are adequate for the purpose
complying with the requirements imposed by this Act and any regulations made and Investment Services Rules 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
the financial holding company or mixed financial holding company, as the case may be, including, where necessary, through an adequate distribution
tasks among subsidiary institutions; (
the group
which the financial holding company or mixed financial holding company, as the case may be, is part does not obstruct or otherwise prevent the effective supervision
the subsidiary institutions or parent institutions as concerns the individual, the consolidated and, where appropriate the sub-consolidated obligations to which they are subject: Provided that the assessment
this criterion shall take into account, in particular: (i) the position
the financial holding company or the mixed financial holding company, as the case may be, in a multi-layered group; (ii) the shareholding structure (iii) the role
the financial holding company or mixed financial holding company, as the case may be, within the group; (c) the requirements on the qualification
directors laid down in Investment Services Rules, are complied with.
the following conditions are met: (a) the financial holding company’s principal activity is to acquire holdings in subsidiaries or, in the case
a mixed financial holding company, its principal activity with respect to institutions or financial institutions is to acquire holdings in subsidiaries; (b) the financial holding company or mixed financial holding company, as the case may be, has not been INVESTMENT SERVICES designated as a resolution entity in any
the group’s resolution groups in accordance with the resolution strategy determined by the relevant resolution authority pursuant to the BRRD; (
the group on a consolidated basis: Provided that where financial holding companies or mixed financial holding companies are exempted from approval in accordance with this sub-article, they shall not be excluded from the perimeter
consolidation as laid down in the provisions
this Act and any regulations made and Investment Services Rules issued thereunder transposing the CRD and in the CRR.
the group and compliance with the conditions referred to in sub-article
sub-article
the group and compliance with the conditions referred to in sub-article
this sub-article with the European regulatory authority where the financial holding company or the mixed financial holding company, as the case may be, is established.
taking decisions on the approval or the exemption from approval, as the case may be, referred to in subarticles
the CRD, where: (
an assessment referred to in Article 21a
the CRD from the European regulatory authority acting as the consolidating supervisor, shall do everything within its power to reach a joint decision on the approval or the exemption from approval, as the case may be, referred to in subarticles
the CRD, with the European regulatory authority in the Member State or EEA State where the financial holding company or the mixed financial holding company is established or with the European regulatory authority acting as the consolidating supervisor, as the case may be, within two months
receipt
that assessment: Provided that the joint decision shall be duly documented and reasoned and where the competent authority is the consolidating supervisor, it shall communicate the joint decision to the financial holding company or the mixed financial holding company, as the case may be.
a disagreement between the competent INVESTMENT SERVICES authority and the European regulatory authority acting as the consolidating supervisor or the European regulatory authority in the Member State or EEA State where the financial holding company or 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
Regulation (EU) No. 1093/2010. In such cases, the competent authority shall adopt a joint decision with the European regulatory authority acting as the consolidating supervisor or with the European regulatory authority in the Member State or EEA State where the financial holding company or the mixed financial holding company is established, as the case may be, in conformity with the decision
the EBA: Provided that the matter shall not be referred to the EBA after the end
the two-month period referred to in sub-article
mixed financial holding companies, where the coordinator appointed in terms
Directive 2002/87/EC is neither the competent authority, nor the European regulatory authority acting as the consolidating supervisor, nor the European regulatory authority in the Member State or EEA State where the mixed financial holding company is established, the agreement
the said coordinator shall be required for the purposes
the decisions or joint decisions referred to in sub-articles
the CRD, as applicable. Where the agreement
the coordinator is required, the competent authority shall refer any disagreements to the relevant European Supervisory Authority, namely, to the EBA or 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
receipt
the referral. Any decision taken in accordance with this paragraph shall be without prejudice to the obligations under Directive 2002/87/ EC or the Solvency II Directive.
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 supervisor, the competent authority shall notify the applicant
the decision and the reasons therefor within four months
receipt
the application, or where the application is incomplete, within four months
receipt
the complete information required for the decision. Refusal may be accompanied, where necessary, by any
the measures referred to in article 16AA: Provided that a decision to grant or refuse approval shall, in any event, be taken within six months
receipt
the application. INVESTMENT SERVICES
this article: (a) the term "financial institution" means the same as the meaning assigned to it in point
the CRR; (b) the term "group" means a group as defined in point
the CRR; (c) the term "institution" means an institution as defined in point
the CRR; (d) the term "investment firm" means an investment firm as defined in point
the CRR; (e) the term "parent undertaking" means a parent undertaking as defined in point
the CRR; (f) the term "resolution authority" means an authority designated by a Member State or an EEA State in accordance with Article 3
the BRRD; (g) the term "subsidiary" means a subsidiary as defined in point
the CRR.
this article shall be without prejudice to the provisions
article 10. 10D.
a third-country group having as part
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 single intermediate EU parent undertaking that is established in Malta or in another Member State or in an EEA State. Intermediate European Union parent undertaking. Added by: LXXI.2021.16.
a single intermediate EU parent undertaking would: (a) be incompatible with a mandatory requirement for separation
activities imposed by the rules or the overseas regulatory authority
the third country where the ultimate parent undertaking
the third-country group has its head
fice; or (b) render resolvability less efficient than in the case
two intermediate EU parent undertakings according to an assessment carried out by the relevant resolution authority
the intermediate EU parent undertaking.
article 7
the Banking Act or authorised in accordance with Article 8
the CRD, or a financial holding company or mixed financial holding company that has been INVESTMENT SERVICES granted approval in accordance with article 11B
the Banking Act and, or Article 21a
the CRD: Provided that, where the third-country group referred to in sub-article
the MIFID, that is subject to the BRRD.
assets in the European Union
the third-country group is less than forty billion euro (€40,000,000,000).
this article, the total value
assets in the European Union
the third-country group shall be the sum
the following: (a) the total value
assets
each investment firm and credit institution in the European Union forming part
the third-country group, as resulting from its consolidated balance sheet or as resulting from their individual balance sheet, where their balance sheet is not consolidated (b) the total value
assets
each branch
the third-country group authorised in the European Union in accordance with the CRD, MIFID or MiFIR.
each third-country group operating in Malta: (a) the names and the total value
assets
the credit institutions and investment firms belonging to a thirdcountry group; (b) the names and the total value
assets corresponding to branches authorised in Malta in accordance with the provisions
national law transposing the CRD, MIFID or MiFIR, and the types
activities that they are licensed to carry out; (c) the name and the type as referred to in sub-article
any intermediate EU parent undertaking set up in Malta and the name
the third-country group
which it is part.
a third-country group shall meet at least one
the following conditions: INVESTMENT SERVICES (
the third-country group and the third-country group does not have any credit institutions in the European Union; or (d) it is part
a third-country group with a total value
assets in the European Union
less than forty billion euro (€40,000,000,000).
derogation from sub-article
assets equal to or greater than forty billion euro (€40,000,000,000) on 27 June 2019, the investment firm established in Malta shall ensure that the intermediate EU parent undertaking referred to in sub-article
this article: (a) the term "branch" means a branch as defined in point
the CRR; (b) the term "group" means a group as defined in point
the CRR; (c) the term "investment firm" means an investment firm as defined in point
the CRR; (d) the term "parent undertaking" means a parent undertaking as defined in point
the CRR; (e) the term "resolution authority" means an authority designated by a Member State or an EEA State in accordance with Article 3
the BRRD (f) the term "third-country group" means a group
which the parent undertaking is established in a third country. 11.
Business Rules or directives to licence holders as it may consider appropriate in order to set minimum standards and requirements which are to be observed by licence holders when issuing or approving investment advertisements or issuing a prospectus in accordance with sub-article
Business Rules or directives may also include provision for such exemptions or conditions as may be specified therein and may make different provision for different cases or classes
cases, under such terms and conditions as may be prescribed.
investment advertisements, as it may consider 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
2007; XIX. 2010.53; X. 2011.26; XX. 2013.39; XXII. 2014.6; XXI. 2015.13; XXXI. 2017.51; LXXII.2021.13; XXXII.2024.42; XI.2025.22. 12.
the competent authority, may make regulations to give effect to the provisions
this Act, and without prejudice to the generality
the foregoing may, by such regulations, in particular, do any
the following: (a) amend the definitions
"ancillary services", "collective investment scheme" and "investment service" in article 2, as well as the provisions
the First, Second and Third Schedules; (b) regulate investment services and collective investment schemes, as well as services provided and activities carried on in conjunction therewith or in relation thereto; providing for any matter he may deem expedient including the creation and exercise
rights by or for the benefit
the public, the imposition
duties and obligations on the holders
a licence or persons responsible for the management or administration thereof and the regulation
any fees and, or any other charges imposed directly or indirectly on investors; provide for the safekeeping and custody
the property
collective investment schemes and for the requirement to appoint a custodian, and prescribe and regulate in the most extensive manner the functions, duties, responsibilities and obligations
the custodian; establish the qualifications and other eligibility criteria necessary to act as custodian, including residence qualifications; provide for the protection
the property
the schemes in the event
the insolvency
the custodian, and for the purpose
this paragraph "custodian" shall include a sub-custodian; require the keeping
records with respect to the transactions and financial position
collective investment schemes and for the inspection
those records, and prescribe reporting and disclosure requirements, including the preparation
periodical reports with respect to the schemes and the furnishing
those reports to the INVESTMENT SERVICES shareholders, unit-holders or other participants in the said schemes, and to others; and provide for the regulation
the free circulation
units
collective investment schemes and to regulate the management companies
such schemes; (c) establish schemes or other arrangements for the compensation
investors in cases where licence holders or any types thereof as may be specified, are unable to satisfy their obligations towards investors or claims in respect
any liability incurred by them in connection with the carrying out
any activity in regard to which they are licensed, and to regulate the management and the financing
any such schemes or arrangements and, the contributions and levies to be paid thereto, to set the minimum and maximum levels
compensation payable thereunder and may under such schemes and arrangements distinguish between different classes
investors and, exclude certain classes from compensation, and to make provision for the regulation
and for other aspect related to such schemes or arrangements and may moreover provide that such schemes or arrangements as may be prescribed shall have a legal personality distinct from that
the contributors thereto and
the competent authority and provide for the judicial and legal representation thereof; and such schemes shall be exempt from the payment
income tax as from the date
establishment
such schemes; (d) define the criteria for determining whether a holding is an indirect holding for the purposes
determining whether a qualifying shareholding exists; (e) regulate the promotion or sale by or on behalf
any person, and by any means,
an investment service or
a collective investment scheme or
any instrument, including the criteria and procedures for the granting or refusing
consent by the competent authority pursuant to the provisions
article 11
this Act; (f) amend the provisions
article 18 on the circumstances in which auditors are obliged to communicate information to the competent authority, to prescribe regulations governing the disclosure by auditors
information pursuant to article 18 and to establish supervisory and disciplinary procedures for auditors in respect
their duties under the provisions
article 18; (g) regulate the drawing-up, approval, publication and distribution in Malta
prospectuses relating to the
fer
transferable securities authorised or otherwise approved, in a country or countries outside Malta and to make provision for the recognition
such prospectuses taking into account Malta’s international INVESTMENT SERVICES commitments; (h) provide for and regulate the payment by any person, body or scheme, as the case may be,
licence or other fees and such other charges payable to the competent authority in respect
any matter provided for, by or under this Act or any regulations made under this article, including the fees and charges in respect
any permission, licence, authorisation, registration, exemption or other benefit, as well as any fees and charges in respect
the competent authority’s regulatory, supervisory or investigative functions under this Act and any regulations made or Rules issued thereunder, as may be prescribed. (i) exempt any person, service, instrument, collective investment scheme, or advertisement from any one or more
the provisions
this Act subject to such variations, additions, adaptations and modifications as may be prescribed and subject to such conditions or other requirements, including other forms
authorisation and notification procedures, as may be prescribed; (
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
the CRD and the CRR, as may be amended from time to time, including the provision
implementing technical standards as specified therein; regulate the supervision on a consolidated basis, provide for the consultation, co-ordination, co-operation and the sharing and exchange
information with European regulatory authorities and other third country regulatory authorities as may be necessary; provide for the exchange
information with the European Systemic Risk Board, central banks which are members
the European System
Central Banks, including the Central Bank
Malta, exchange
information with the European Banking Authority and the European Securities and Markets Authority, and exchange
information with other departments
government administrations in other Member States responsible for law on the supervision
institutions, financial institutions and insurance undertakings and with inspectors acting on behalf
those departments; provide for the establishment
colleges
supervisors; provide for the exercise
powers by the competent authority on investment services licence holders, credit institutions, financial holding companies, mixed financial holding companies and mixed activity holding companies, or their effective INVESTMENT SERVICES managers, as may be defined in the said regulations; provide for the establishment and imposition
administrative penalties on licence holders or others as specified therein or other measures for the contravention
any
the regulations, and to provide for appeals therefrom to the Financial Services Tribunal; provide for the obligations
the competent authority to report to the European Banking Authority, the European Commission and the European Insurance and Occupational Pensions Authority, the European Securities and Markets Authority as may be specified in the said regulations; (m) provide for reporting and other requirements and conditions which a person operating a multilateral trading facility must satisfy, on a continuing and ongoing basis and to establish the circumstances and the manner in which requirements and conditions may be varied, suspended or revoked, and to transpose the requirements
the MIFID and the MiFIR thereon; (n) transpose, implement and give effect to the provisions and requirements
Directives, Regulations and any other legislative measures
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 and relating to licence holders and others as may be specified therein; regulations made under this paragraph, and strictly related to transposition or implementation as aforesaid, may provide that any provision
this Act or
any other law shall not apply to matters falling under the regulations, and that in so far as any
the provisions
the regulations are inconsistent with the provisions
this Act or
any other law, such provisions in any such regulations shall prevail; (o) provide that any one or more
the bodies mentioned in Article 107
the UCITS Directive may, in the interests
consumers, and in accordance with the applicable laws
Malta, take action before the courts or administrative bodies
Malta, to ensure that the provisions
this Act and the Investment Services Rules and regulations issued hereunder transposing the UCITS Directive are implemented; INVESTMENT SERVICES (oa) establish and regulate limited partnerships not having legal personality, and which the deed
partnership thereof expressly limits their object either to the collective investment
their funds in securities and in other movable and immovable property, or in any
them, with the aim
giving the partners the benefit
the results
the management
their funds, and to matters ancillary or incidental thereto, and which qualifies as a collective investment scheme and is duly licensed, recognised, exempted or otherwise regulated in terms
this Act; and shall be distinct from limited partnerships as set out within the provisions
the Companies Act. Regulations made under this paragraph may provide that any provision
this Act or
any other law shall not apply to matters falling under the regulations, and that insofar as any
the provisions
the regulations are inconsistent with the provisions
this Act or
any other law, such provisions in any such regulations shall prevail; (
the above. (2A) Regulations made under this article may also contain provision for enabling a person who has entered, or
fered to enter, into an investment agreement with the holder
a licence to rescind the agreement or withdraw the
fer within such period and in such manner as may be prescribed, and in particular, but without prejudice to the generality
the foregoing, may make provision (a) for requiring the service
notice with respect to the rights exercisable under the regulations; (b) for the restitution
property and the making or recovery
payments where those rights are exercised; (c) for such other matters as are incidental to or connected with any
the above. (2B) Regulations made under this article may make provision for the constitution
common funds for investment purposes in the form
a collective investment scheme by contract or other arrangement in writing and may exempt such funds from the application
any article or provision
the Civil Code under Title V
Book Second with such modifications and variations as may be established. (2C) Regulations made under this article may also make p r o v i s i o n f o r t h e r e - o rg a n i s a t i o n a n d w i n d i n g - u p o f t h o s e investment services licence holders to which such re-organisation and winding-up is, or may be rendered, applicable in terms
the BRRD.
INVESTMENT SERVICES adaptation
the regulations as may also be so specified.
this article, the competent authority may issue Investment Services Rules and, or Conduct
Business Rules within the meaning
article 6
this Act for the better carrying out and to better implement the provisions
the regulations.
any contravention or failure
compliance not exceeding a fine (multa)
one hundred and fifty thousand euro (€150,000) or imprisonment for a term not exceeding one year, or both such fine and imprisonment; and (c) administrative penalties and fines higher than one hundred and fifty thousand euro (€150,000), where deemed necessary or appropriate for any contravention
or failure
compliance with any EU Directive or EU Regulation or
any regulations made under this article to transpose or to give effect to any EU Directive or EU Regulation. (5A) Regulations made under this article may prescribe administrative penalties and fines as provided for in sub-article
any provision
this Act or for any breach
any Investment Services Rules or Conduct
Business Rules, transposing and, or implementing any EU Directive or EU Regulation. Added by: XXXI. 2017.51.
such regulations, may be published in the English language only.
any
the powers assigned under this article shall be subject to any obligations or rights arising from Malta’s international commitments. 13.
the competent authority arising under any other law, the competent authority shall have the power to require information from: (
article 11
a licence holder; or Power
competent authority to require information. Amended by: XVII. 2002.147; XX. 2007.65; XX. 2013.40; LXXII.2021.14. INVESTMENT SERVICES (f) any other person who appears to be in possession
relevant information. (1A) Without prejudice to sub-article
sub-articles
the following: (a) to furnish to the competent authority, at such time and place and in such form as it may specify, such information and documentation as it may require, including the power to require existing telephone and existing data traffic records, with respect to any such service, scheme or advertisement as aforesaid, or with respect to any person with whom the licence holder has close links within the meaning
article 6; (
any documents furnished or provided under this article.
his knowledge, that information or documentation is, and the competent authority may require any person, whether indicated as aforesaid or not, who appears to it to be in possession
that information or documentation, to provide it. INVESTMENT SERVICES
any requirement under this article may be used in evidence against the person making the statement or providing the documentation as well as against any person to whom they relate.
this article shall not apply to information or documentation which is privileged in accordance with the provisions
article 642
the Criminal Code.
documentation under the provisions
this article shall be without prejudice to any lien or charge claimed by any person in relation to such documentation.
carrying out his functions under his appointment, have all the powers conferred on the competent authority by this article and a requirement made by him shall be deemed to be and have the same force and effect as a requirement
the competent authority.
this article, a licence holder may be required to submit to the Central Bank
Malta such information as the Bank may reasonably require for the discharge
its duties under the Central Bank
Malta Act. 14.
any persons or scheme referred to in article 13
inspectors. Amended by: XX. 2007.66; LXXII.2021.15. An inspector appointed under sub-article
that investigation, investigate the affairs
any person or scheme mentioned in sub-article
the competent authority; (c) may, and if so directed by the competent authority shall, make interim reports and on the conclusion
his investigation shall make a final report to the said authority.
, and incidental to, an investigation pursuant to this article be paid by the persons or scheme concerned.
this article inspectors may include an advocate, a person authorised to carry on the profession
accountant or auditor in terms
the Accountancy Profession Act, or a person considered by the competent authority as possessing suitable 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. INVESTMENT SERVICES 15.
the powers conferred on it by articles 13 and 14, the competent authority may, whenever it deems it necessary, and whether upon a report by an inspector appointed 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, comply 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, ceases to hold a licence granted in terms
this Act: Provided further that any directive given in terms
this article shall, unless the competent authority otherwise directs, continue to apply even when a licence holder, for whatever reason, ceases to hold a licence granted in terms
this Act.
the foregoing provisions
this article, a directive under this article may (
such a scheme, or his equivalent, and any other person who may issue, redeem, sell or purchase units in the scheme, to cease the issue, redemption, sale, or purchase
units or all or any combination
those activities, as may be specified in the directive or further directive; (c) require that any person having functions in relation to the holder
a licence be prohibited, temporarily or otherwise, suspended from carrying out activities licensable under the Act, or removed or removed and replaced by another person acceptable to the competent authority; (d) require a collective investment scheme or its directors and shareholders, or the manager or trustee or custodian
a scheme, or their equivalent, to wind it up by such date and in accordance with such procedure and other provisions as may be specified in the directive or further directive; (e) require a licence holder or any person who is or was providing, or who appears to be or to have been providing an investment service to cease operations and to wind up its affairs, in accordance with such procedures and directions as may be specified in the directive, which may provide for the appointment
a person to take possession and control
all documents, INVESTMENT SERVICES records, assets and property belonging to or in the possession or control
the licence holder or such other person; (f) require a licence holder to submit a financial recovery plan, as may be determined in the Investment Services Rules, if it considers that the interest
investors, consumers, creditors or other interested persons are likely to be prejudiced owing to a deterioration in the financial position
the licence holder; (g) require the cessation
any practice that is contrary to the provisions adopted in the implementation
the AIFM Directive, the BRRD, the CRD, the MiFID, the UCITS Directive, and the IFD; (h) require the removal
a financial instrument from trading, on trading arrangements within the meaning
the MIFID, the MiFIR other than on regulated markets in terms
the Financial Markets Act; (i) require the suspension
trading in a financial instrument; (j) request any person to take steps to reduce the size
the position or exposure; (k) limit the ability
any person from entering into a commodity derivative, including by introducing limits on the size
a position any person can hold at all times in accordance with Article 57
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
winding up the affairs
a licence holder under this Act; and such person shall be the liquidator
the licence holder for all purposes
law to the exclusion
any other person.
the provisions
this article. 15A.
the following measures: (a) appoint a person to advise the licence holder in the proper conduct
its business; (b) appoint a person to take charge
the assets
the licence holder, or any portion
them, for the purposes
safeguarding the interests
investors, consumers, creditors or, if any, shareholders,
the licence holder; (c) appoint a person to assume control
the business
the licence holder, either to carry on that business or to Power
the competent authority to protect the public interest. Added by: XX. 2013.
such business, or part thereof, including to take the necessary action for the licence holder to be dissolved and wound up, as the competent authority may direct; (
the provisions
this article, and having adopted any one or more
the measures aforesaid, the competent authority may further proceed in any one or more such measures, whether in addition thereto or in substitution therefor.
the licence holder to act in accordance with the advice given by such person unless and until the competent authority, on representation made to it, directs otherwise; (b) under sub-article
which he is placed in charge, and all the powers, functions and duties
the licence holder in respect
those assets, including, if such licence holder is a legal person, those exercisable by the legal person in a general meeting, or by the directors, or by any other person, including the legal and judicial representation
such legal person, shall be exercisable by and vest in the person appointed under the said paragraph to the exclusion
any other person; (c) under sub-article
such person and shall provide such person with such facilities as may be required to carry on that business or to carry out the functions assigned to such person under the said paragraph; and all the powers, functions and duties
the licence holder, including, if such licence holder is a legal person, those exercisable by the legal person in a general meeting, or by the directors, or by any other person, including for the purpose
the dissolution and winding up
the licence holder as well as the legal and judicial representation
such legal person in all matters, shall be exercisable by and vest in such person to the exclusion
any other person: Provided that the competent person shall not take any decision for the purpose
the dissolution and winding up
the licence holder unless the competent authority issues a directive to that effect in terms
article 15, and any such directive may contain such instructions, requirements and conditions as the competent authority may consider INVESTMENT SERVICES necessary, including with regard to the mode
winding up. (2A) Without prejudice to the powers
the competent authority in
AI explanation based on the official legal text. Indicative, not a substitute for legal advice.