Banking Act (Cap. 371), article 14

14. (1) Any person who is a controller or director of a credit institution shall be a suitable person to exercise such control . (2) Credit institutions, financial holding companies and mixed financial holding companies shall ensure that directors are at all times of sufficiently good repute and possess sufficient knowledge, s kills and experience to pe rform their duties. (2A) Directors of credit institutions, financial holding companies and mixed financial holding companies shall, in particular, fulfil the following requirements: (a) all directors shall commit sufficient time to perform BANKING [CAP. 371. 43 their functions in the cred it institution, financial holding company or mixed financial holding company, as the case may be; (b) the number of directorships which may be held by a director at the same time shall take into account individual circumstances a nd the nature, scale and complexity of the activities of the credit institution, the financial holding company or the mixed financial holding company, as the case may be: Provided that a director of a credit institution that is significant in terms of its size, internal organisation and the nature, the scope and the complexity of its activities shall, from 1 July 2014, not hold more than one of the following combinations of directorships at the same time - (i) one directorship having an executive role with two directorships having a non-executive role; (ii) four directorships having a non-executive role; (c) for the purposes of paragraph (b), the following shall count as a single directorship - (i) directorships having an executive or non- executive role held wit hin the same group; (ii) directorships having an executive or non- executive role held within – (aa) institutions which are members of the same institutional protection scheme provided that the conditions set out in Article 113(7) of the CRR are fulfilled; or (bb) undertakings (including non-financial entities) in which the credit institution, financial holding company or the mixed financial holding company, as the case may be, holds a qualifying holding. (3) The following directorships shall not be taken into consideration for the purpo ses of sub-article (2A)( b): (a) directors who are directly or indirectly appointed to represent the interests of the Government of Malta; and (b) directors appointed in organisations which do not pursue predominantly co mmercial objectives, including directorships in non-profit-making or charitable organisations. (4) The competent authority may authorise directors to hold one additional directorship having a non-executive role. The competent authority shall notify the EBA of such authorisations on a regular basis. (5) The board of directors and, w here applicable, the management body, of credit institutions, financial holding companies and m ixed financial holding companies, s hall possess adequate collective 44 CAP. 371.] BANKING knowledge, skills and experience to be able to understand the c redit institution’s activities, including the main risks. The overall composition of the board of directors and, where applicable, th e management body, shall reflect an adequately broad range of experience. (6) Each director of a credit institution, financial holding com pany and mixed financial holding company shall act with honesty, int egrity and independence of mind to effectively assess and challenge th e decisions of the senior manag ement where necessary and to effectively oversee and monitor management decision-making: P r o v i d e d t h a t , w h e r e a d i r e c t o r i s a l s o a m e m b e r o f a n affiliated company or affiliated entity, this shall not in itse lf constitute an obstacl e to acting wi th independence of mind. (7) The directors of a financial holding company or mixed financial holding company, being a parent to a credit instituti on, shall be of sufficiently good repute and possess sufficient knowledge skills and experience as referred to in sub-articles (1) to (6) and any additional requireme nts as may be specified in a Ba nking Rule to perform those duties, taking into account the specific role of a financial holding company or mixed financial holding company, as the case may be. (8) A credit institution, financial holding company and mixed financial holding company, as the case may be, shall forthwith notify to the competent authority – (a) full particulars of all persons who are controllers or directors of the credit institution, financial holding company and mixed financial holding company, as the case may be; (b) full particulars of any person who is proposed to b e c o m e a c o n t r o l l e r o r director of the credit institution, financial holding company and mixed financial holding company, as the case may be; (c) full particulars of any person who is proposed to cease to be a controller or director of the credit institution, financial holding company and mixed financial holding company, as the case may be. (9) A credit institution, financial holding company and mixed financial holding company shall furnish the comp etent authority with any further information it may require concerning any existing or proposed controller or director. (10) If the competent authority is of the opinion that any perso n who is or is proposed to become a controller or director of a c redit institution, financial holding company or mixed financial holdi ng company, as the case may be, is not a suitable person to be a controller or director, or does not fulfil the requirements set out in sub-articles (1) to (6), or any additional requirements as may be specified in a Banking Rule, the competent authority may give a n order requiring such a person to cease to be a controller or di rector or restraining such a person from becoming a controller or dire ctor: BANKING [CAP. 371. 45 Provided that the competent aut hority shall in particular verif y whether the requirements set out in sub-articles (1) to (6) and any additional requirements as may be specified in a Banking Rule a re still fulfilled where they have reason able grounds to suspect that mo ney laundering or terrorist financing is being or has been committe d or attempted, or there is increased risk thereof in connection wit h that credit institution, financial holding company or mixed financia l holding company, as the case may be. (11) For the purposes of this article control includes the power to determine in any manner the f inancial and operating policies of a body corporate, the power to appoint or remove the majority of the members of the board of directors or, where applicable, the management body, or the power to cast the majority of votes at meetings of the boar d of directors or equivalent governing body . (12) The competent authority may issue, amend or revoke Banking Rules as may be required in order to better implement t he provisions of this article. Prohibited transactions. Substituted by: XVII. 2002.171. Amended by: IV . 2003.179; XX. 2007.85, 97; L.N. 425 of 2007; XVII. 2009.20; II. 2011.15; X. 2015.21; LXXI.2021.38.