Investment Services Act (Cap. 370), article 16AA

16AA. (1) Without prejudice to any other power of the competent authority under this Act or any other law, where the competent authority is the consolidating supervisor and has established that the conditions set out in article 10D(4) are n ot met or have ceased to be met, the comp etent authority shall take the appropriate supervisory measures to ensure or restore, as the c ase may be, continuity and integrity of consolidated supervision and en sure compliance with the requirements laid down in this Act and any regulations made and Investment Services Rules issued thereunder transposing the CRD , in any binding legal instruments issued under the CRD , and in the CRR , on a consolidated basis. In the case of a mixed financial holding company, the supervisory measures appli ed by the competent authority as the consolidating supervisor shal l, in particular, take into account the effects on the financial cong lomerate. The supervisory measures referre d to in this sub-article shall include: (a) withdrawing the approval granted to a financial holding company or mixed financial holding company in terms of article 10D; (b) suspending the exercise of voting rights attached to the shares of the subsidiary institutions held by the financial holding company or mixed financial holding company; (c) issuing administrative measures or administrative penalties, in terms of this Act and any regulations made or Investment Services Rules issued thereunder, against the financial holding company, the mixed financial holding company or the directors and managers, subject to the provisions of national law transposing Articles 65 to 72 of the CRD; (d) issuing instructions or directions to the financial holding company or mixed financial holding company to transfer to its shareholders the participations in its subsidiary institutions; (e) issuing a directive to the financial holding company or mixed financial holding company in terms of article 15; 50 CAP. 370.] INVESTMENT SERVICES (f) designating on a temporary basis another financial holding company, mixed fin ancial holding company or institution within the group as responsible for ensuring compliance with the requirements laid down in this Act and, or any regulations made and, or Investment Services Rules issued th ereunder transposing the CRD, in the CRD and, or in the CRR on a consolidated basis; (g) restricting or prohibiting distributions or interest payments to shareholders; (h) requiring financial h olding companies or mixed financial holding companies to divest themselves from, or reduce, holdings in institutions or other financial sector entities; (i) requiring financial h olding companies or mixed financial holding companies to submit a plan on return, without delay, to compliance; (j) restraining any person within financial holding companies or mixed financi al holding companies and, or financial holding companies or mixed financial holding companies from taking, or continuing to take, any action as a result of which the conditions set out in article 10D(4) are not met or have ceased to be met; (k) requiring any person within financial holding companies or mixed financi al holding companies and, or financial holding companies or mixed financial holding companies to take such steps as may be necessary to restore the position existing immediately before any action, as a result of which the conditions set out in article 10D(4) are not met or have ceased to be met, was taken; (l) restraining any person within financial holding companies or mixed financi al holding companies and, or financial holding companies or mixed financial holding companies from exercising any rights which a lawful action, as a result of which the conditions set out in article 10D(4) are not met or have ceased to be met, would have conferred upon them, including the right to receive any payment or to exercise any voting rights attaching to the shares acquired; (m) any measure under article 15A: Provided that in exercising any of its powers under article 15A, the provisions of the said article shall apply mutatis mutandis , and provided further that any re ference to "the licence holder" shall be deemed to be reference to "the financial holding company" and, or "the mixed financial holding company", as applicable. (2) Where the competent authority intends to withdraw an approval in accordance with sub- article (1)(a), it shall serve written notice of its intention on the financial holding company or mix ed financial holding company; such notice shall specify the ground s upon INVESTMENT SERVICES [CAP. 370. 51 which the competent authority int ends to take such action and s hall specify a period, being a period not less than forty-eight hour s and not more than thirty calendar days, in which the financial holding company or mixed financial holding company shall be entitled to make representations to the competent authority as to why such actio n should not be taken. Unless the competent authority decides tha t the matter is urgent, it shall not withdraw an approval before the expiry of such period. (3) For the purpose of taking decisions on the supervisory measures referred to in sub-article (1), where the financial ho lding company or the mixed financial holding company is established i n a Member State or in an EEA State other than Malta and the compet ent authority is the consolidating supervisor, the competent author ity shall work together 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 full consultation. (4) Where the competent authority is not the consolidating supervisor but the financial holding company or the mixed finan cial holding company is established in Malta, the competent authorit y shall, for the purposes of taking decisions on the supervisory measures referred to in Article 21a(6) of the CRD , work together with the European regulatory authority ac ting as the consolidating super visor, in full consultation. (5) Where the competent authority is the consolidating supervisor and where the financial holding company or the mixed financial holding company is not established in Malta, the competent authority shall prepare an assess ment on the matters referred t o in sub- article (1), and shall forward that assessment to the European regulatory authority in the Member State or EEA State where the financial holding company or the mixed financial holding company is established. (6) The competent authority, whe ther acting as the consolidatin g supervisor or whether it is in r eceipt of an assessment referre d to in Article 21a(8) of the CRD from the European regulatory authority acting as the consolidating supervisor, shall do everything wit hin its powers to reach a joint decision on the measures referred to in sub- article (1) of this article and, or in Article 21a(6) of the CRD, with the European regulatory authority in the Member State or EEA State where the financial holding company or the mixed financial holding co mpany is established or with the European regulatory authority acting as the consolidating supervisor, as the case may be, within two months of receipt of that assessment: Provided that the joint decision shall be duly documented and reasoned and where the competent authority is the consolida ting 52 CAP. 370.] INVESTMENT SERVICES supervisor, it shall communicate the joint decision to the fina ncial holding company or the mixed financial holding company. (7) In the event of a disagreement between the competent authority and the Eu ropean regulatory au thority acting as the consolidating supervisor or with the European regulatory author ity in the Member State or EEA State where the financial holding compa ny or the mixed financial holding company is established, as the c ase may be, the competent authority shall refrain from taking the joint decision referred to in sub-article (6) a nd shall refer the matter to th e 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 (6) or after a joint decision has been reached. (8) In the case of mixed financial holding companies, where the 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-article (1) of this article and, or in Article 21a(6) of the CRD, as applicable. Where the agreement of the coordinator is required, the competent authority shall refer an y disagreements to the relevant European Supervisory Authority, namely, to the EBA or to 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 rec eipt of the referral. Any decis ion taken in accordance with this su b-article shall be without prej udice to the obligations under Directive 2002/87/EC or the Solvency II Directive . (9) For the purposes of this article: (a) the term "group" means a group as defined in point (138) of Article 4(1) of the CRR; (b) the term "institution" means an institution as defined in point (3) of Article 4(1) of the CRR; (c) the term "participation" means the same as the meaning assigned to in point (35) of Article 4(1) of the CRR; and INVESTMENT SERVICES [CAP. 370. 53 (d) the term "subsidiary" means a subsidiary as defined in point (16) of Article 4(1) of the CRR. Obligation to state grounds for decisions. Added by: XX. 2007.68. Amended by: X. 2011.29; XX. 2013.44; XXII. 2014.8; XXI. 2015.15; XXXI. 2017.54; LXXII.2021.19.