Investment Services Act (Cap. 370), article 10CA

10CA. (1) Parent financial holding companies, parent mixed financial holding companies, EU parent financial holding compan ies and EU parent mixed financial holding companies, which are established in Malta or in another Member State or EEA State and which have an investment firm as a subsidiary, shall seek the a pproval or exemption, as the case may be, of the competent authority ac ting, as the consolidating supervisor, in accordance with this article. Other financial holding companies or mixed financial holding companie s, established in Malta or in another Member State or EEA State an d which have an investment firm as a subsidiary, shall seek the a pproval or exemption, as the case may be, of the competent authority, a cting as the consolidating supervisor, in accordance with this article w here they are required to comply with the CRD or the CRR on a sub- consolidated basis: 28 CAP. 370.] INVESTMENT SERVICES Provided that in accordance with article 10D where the competent authority is not the consolidating supervisor, financ ial holding companies and mixed financial holding companies establi shed in Malta and which have an investment firm as a subsidiary, sha ll seek the approval or exemption, as th e case may be, of the consolida ting supervisor determined in accord ance with Article 111 of the CRD. (2) For the purposes of seeking an approval or exemption, as the case may be, in terms of sub-article (1), financial holding companies and mixed financial holding companies referred to therein shall, where: (a) the competent authority is not the consolidating supervisor but the financial holding company or the mixed financial holding company is established in Malta; or (b) the financial holding co mpany or the mixed financial holding company is established in a Member State or an EEA State other than Malta and the competent authority is the consolidating supervisor, provide the competent authority with the following information: (a) the structural organisatio n o f t h e g r o u p o f w h i c h t h e financial holding company or the mixed financial holding company, as the cas e may be, forms part, with a clear indication of its subsidiaries and, where applicable, parent undertakings, and the location and type of activity undertaken by each of the entities within the group; (b) information regarding the nomination of 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 of directors set out in Investment Services Rules; (c) the internal organisation and distribution of tasks within the group; (d) any other information th at may be necessary to carry out the assessments referred to in sub-articles (3) and (4) as may be requested by the competent authority. (3) All applications for an approval or exemption, as the case may be, in terms of this article shall be in such form and acco mpanied by such information and shall conform with any such requirement s as may be established, from time to time, by Investment Services R ules. (4) Approval may be granted to a financial holding company or a mixed financial holding company, as the case may be, pursuant to this article only where all of t he following conditions are ful filled: INVESTMENT SERVICES [CAP. 370. 29 (a) the internal arrangements and distribution of tasks within the group are adequate for the purpose of 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 of the financial holding company or mixed financial holding company, as the case may be, including, where necessary, through an adequate distribution of tasks among subsidiary institutions; (ii) prevent or manage intra-group conflicts (iii) enforce the group-wide policies set by the parent financial holding company or parent mixed financial holding company throughout the group; (b) the structural organisation of the group of 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 of the subsidiary institutions or parent institutions as concerns the individual, the consolidated and, where appropriate the sub-consolid ated obligations to which they are subject: Provided that the assessment of this criterion shall take into account, in particular: (i) the position of the financial holding company or the mixed financial holding company, as the case may be, in a multi-layered group; (ii) the shareholding structure (iii) the role of the financial holding company or mixed financial holding company, as the case may be, within the group; (c) the requirements on the qualification of directors laid down in Investment Services Rules, are complied with. (5) An exemption may be granted to a financial holding company or mixed financial holding company, as the case may be, pursuant to this article only where all of the following conditions are met: (a) the financial holding compa ny’s principal activity is to acquire holdings in subsidiaries or, in the case of 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 30 CAP. 370.] INVESTMENT SERVICES designated as a resolution entity in any of the group’s resolution groups in accord ance with the resolution strategy determined by the relevant resolution authority pursuant to the BRRD ; (c) a subsidiary credit institution is designated as responsible to ensure the group’s compliance with prudential requirements on a consolidated basis and is given all the necessary means and legal authority to discharge those obligations in an effective manner; (d) the financial holding company or mixed financial holding company, as the case may be, does not engage in taking management, operational or financial decisions affecting the group or its subsidiaries that are institutions or financial institutions; (e) there is no impediment to the effective supervision of the group on a consolidated basis: Provided that where financial holding companies or mixed financial holdi ng companies are exempted from approval in accordance w ith this sub-article, they shall not be excluded from the perimeter of consolidation as laid down in the provisions of this Act and any regulations made and Investment Services Rules issued thereunder transposing the CRD a n d i n the CRR. (6) Where the competent authority is the consolidating supervisor, it shall monitor compliance with the conditions ref erred to in sub-article (4) or, where applicable, sub-article (5) on an ongoing basis. (7) (a) Financial holding companies and mixed financial holding companies shall provide the competent authority, where it is acting as the consolidating supervisor, with the information re quired to monitor on an ongoing basis the structural organisation of the group and compliance with the conditions referred to in sub-article ( 4). (b) Financial holding companies and mixed financial holding companies exempted in terms of sub-article (5) shall pr ovide the competent authority, where it is acting as the consolidatin g supervisor, with the information required to monitor on an ongo ing basis the structural organisation of the group and compliance w ith the conditions referred to in sub-article (5). (c) The competent authority shall share the information received in terms of this sub-article with the European regulat ory authority where the financial ho lding company or the mixed fina ncial holding company, as the case may be, is established. (8) Where the competent authority is the consolidating supervisor and has esta blished that the conditions set out in s ub-article (5) are no longer met, the financial holding company or mixed INVESTMENT SERVICES [CAP. 370. 31 financial holding company, as the case may be, shall seek appro val in accordance with this article. (9) For the purpose of taking decisions on the approval or the exemption from approval, as the case may be, referred to in sub - articles (4), (5) and (8) and, or in sub-articles (3), (4) or ( 7) of Article 21a of the CRD, where: (i) the competent authority is not the consolidating supervisor but the financial holding company or the mixed financial holding company, as the case may be, is established in Malta; or (ii) the financial holding company or the mixed financial holding company, as the case may be, is established in a Member State or an EEA State other than Malta and the competent authority is the consolidating supervisor, the competent authority shall work together with the European regulatory authority acting as the consolidating supervisor or with the European regulatory authority in the Member State or EEA State where the financial holding company or the mixed financia l holding company is established, as the case may be, in full consultation. (10) Where the competent authority is the consolidating supervisor, it shall prepare an assessment on the matters refer red to in sub-articles (4), (5) and (8), as applicable, and shall forward that assessment to the European regulatory authority in the Member S tate or EEA State where the financial holding company or the mixed financial holding company is established, as the case may be. (11) The competent authority, whether acting as the consolidating supervisor or whether it is in receipt of an asse ssment referred to in Article 21a(8) of the CRD from the European regulatory authority acting as the consolidating supervisor, shall do ever ything within its power to reach a joint decision on the approval or t he exemption from approval, as the case may be, referred to in sub - articles (4), (5) and (8) and, or in sub-articles (3), (4) and (7) of Article 21a of the CRD , with the European regulatory authority in the Member State or EEA State where the financial holding company o r the mixed financial holding company is established or with the European regulatory authority acting as the consolidating super visor, as the case may be, within two m onths of receipt of that assess ment: Provided that the joint decision shall be duly documented and reasoned and where the competent authority is the consolida ting supervisor, it shall communicate the joint decision to the fina ncial holding company or the mixed financial holding company, as the case may be. (12) In the event of a disagreement between the competent 32 CAP. 370.] INVESTMENT SERVICES authority and the Eu ropean regulatory au thority acting as the consolidating supervisor or the European regulatory authority i n the Member State or EEA State where t he financial holding company o r the mixed financial holding comp any is established, as the case may be, the competent authority shall refrain from taking the joint decision referred to in sub-article (11) and shall refer the matter to t he EBA in accordance with Article 19 of Regulation (EU) No. 1093/2010 . In such cases, the competent authority shall adopt a joint decisio n with the European regulatory author ity acting as the consolidating supervisor or with the European regulatory authority in the Mem ber State or EEA State where the financial holding company or the m ixed financial holding company is est ablished, as the case may be, i n conformity with the dec ision of the EBA: Provided that the matter shall not be referred to the EBA after the end of the two-month period referred to in sub-articl e (11) or after a joint decision has been reached. (13) In the case of mixed financi al holding companies, where th e coordinator appointed in terms of Article 10 of Directive 2002/87/EC is neither the competent authority, nor the European regulatory authority acting as the consolidating supervisor, nor the Europ ean regulatory authority in the Member State or EEA State where the mixed financial holding company is established, the agreement o f the said coordinator shall be required for the purposes of the deci sions or joint decisions referred to in sub-articles (4), (5) and (8) an d, or sub- articles (3), (4) and (7) of Article 21a of the CRD , as applicable. Where the agreement of the coordinator is required, the compete nt authority shall refer any disagreements to the relevant Europea n Supervisory Authority, namely, to the EBA or the European Supervisory Authority (European Insurance and Occupational Pensions Authority) (EIOPA), established by Regulation (EU) No. 1094/2010 , which shall take its decision within one month of receipt of the referral. Any decision ta ken in accordance with this par agraph shall be without prejudice t o the obligations under Directive 2002/87/ EC or the Solvency II Directive . (14) Where approval of a financial holding company or mixed financial holding company, as the case may be, pursuant to this article is refused and the competent authority is the consolidating sup ervisor, the competent authority shall notify the applicant of the decis ion and the reasons therefor within four months of receipt of the appli cation, or where the application is incomplete, within four months of rece ipt of the complete information required for the decision. Refusal may be accompanied, where necessary, by any of the measures referred t o in article 16AA: Provided that a decision to grant or refuse approval shall, in any event, be taken w ithin six months of receipt of the applica tion. INVESTMENT SERVICES [CAP. 370. 33 (15) For the purpose s of this article: (a) the term "financial institution" means the same as the meaning assigned to it in point (26) of Article 4(1) of the CRR; (b) the term "group" means a group as defined in point (138) of Article 4(1) of the CRR; (c) the term "institution" means an institution as defined in point (3) of Article 4(1) of the CRR; (d) the term "investment firm" means an investment firm as defined in point (2) of Article 4(1) of the CRR; (e) the term "parent undertaking" means a parent undertaking as defined in point (15) of Article 4(1) of the CRR; (f) the term "resolution authority" means an authority d e s i g n a t e d b y a M e m b e r S t a t e o r a n E E A S t a t e i n accordance w ith Article 3 of the BRRD ; (g) the term "subsidiary" means a subsidiary as defined in point (16) of Article 4(1) of the CRR. (16) The provisions of this article shall be without prejudice to the provisions of article 10. Intermediate European Union parent undertaking. Added by: LXXI.2021.16.