Banking Act (Cap. 371), article 2

2. (1) In this Act, unless the c ontext otherwise requires - "account information service" shall have the same meaning as that assigned to it under article 2(1) of the Financial Institutions Act; Cap. 376. "account information service provider" shall have the same meaning as that assigned to it under article 2(1) of the Financial Institutions Act ; Cap. 376. "account servicing payment servic e provider" shall have the sam e meaning as that assigned to it under article 2(1) of the Financial Institutions Act ; "Additional Tier 1 instruments" me ans capital instruments that meet the conditions laid down in Article 52(1) of the CRR; Cap. 555. "Arbiter" means the Arbiter for Financial Services appointed un der article 14 of the Arbiter for Financial Services Act ; "bank" or "credit institution" shall have the same meaning as t hat assigned to it in point (1) of Article 4(1) of the CRR; "Banking Rule" means a Rule issued by the competent authority under various articles of this Act; "binding legal instrument" means any directly applicable measures, including, but not lim ited to, any implementing techn ical standards, regulatory technical standards or similar measures, issued under European Union legislation; "body corporate" means a body of persons having a legal personality distinct from that of its members; 2 CAP. 371.] BANKING "branch" shall have the same meaning as that assigned to it in point (17) of Article 4(1) of the CRR; "the BRRD " means Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institution s 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 , of the European Parliament and of the Council, as amended from time to time, and includes any binding legal instruments, guidelines an d other measures that have been or may be issued thereunder; "business of banking" means the business of a person who as set out in article 2A accepts deposits of money from the public withdrawable or repayable on demand or after a fixed period or after notice or who borrows or raises money from the public (including the borrowing or raising of money by the issue of debentures or debenture stock or other instruments creating or acknowledging indebtedness), in either case for the purpose of employing such money in whole or in part by lending to others o r otherwise investing for the accoun t and at the risk of the pers on accepting such money; Cap. 204. "Central Bank" means the Central Bank of Malta as defined by the Central Bank of Malta Act ; "close links" shall have the same meaning as that assigned to i t in point (38) of Article 4(1) of the CRR; "Common Equity Tier 1 instruments" means capital instruments th at meet the conditions laid down in Article 28(1) to (4), Article 29(1) to (5) or Article 31(1) of the CRR; Cap. 168. Cap. 386. "company" means a limited liability company constituted in Malta in accordance with the Commercial Partnerships Ordinance * or the Companies Act , or any law which may from time to time be in force, or a company register ed, licensed or holding an equiv alent authorisation in another country outside Malta under the laws o f any country provided that such company, if not constituted in Malta, would qualify to be so registered or licensed under the laws of Malta; Cap. 330. "competent authority" means the Malta Financial Services Authority established by the Malta Financial Services Authority Act ; "Conduct of Business Rules" means Rules, other than Banking Rules, which are issued by the competent authority in terms of article 4; "connected person" means a person whose information is provided to the bank by, or on behalf of, a customer of the bank or by, or on behalf of, a person who seeks to become a customer of the bank, in connection with services from the bank requested by such custom er, or by such person seeking to become a customer of the bank, provid ed that the information is required by the bank for the purposes o f *Repealed by Act XXV of 1995 ( Chapter 386 ). BANKING [CAP. 371. 3 fulfilling a statutory obligation; "consolidated basis" shall have t he same meaning as that assign ed to it in point (48) of Article 4(1) of the CRR; "consolidating supervisor" shall have the same meaning as that assigned to it in point (41) of Article 4(1) of the CRR; "controller" is a person who, alone or together with others, exercises control in relat ion to a body corporate; S.L. 371.09 "covered deposits" means covered deposits as defined in regulat ion 2 of the Depositor Compensation Scheme Regulations ; "the CRD " means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as amended from time to time, and includes any binding legal instruments, guidelines and other me asures that have been or may be issued thereunder; "credit facility" means the lending of a sum of money by way of an advance, overdraft or loan or any other line of credit inclu ding discounting of bills of exchange and promissory notes, guarante es, indemnities, acceptances and b ills of exchange endorsed pour aval ; "the CRR" means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 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; "deposit" means a sum of money paid-in on terms under which it will be repaid, with or without interest or a premium and eithe r on demand or at a time or in circumstances agreed by or on behalf of the person making the paymen t and the person receiving it; "Directive 2002/87/EC " means Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate a nd 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 and 2000/12/EC of the European Parliament and of the Council , as amended from time to time, and includes any binding legal instruments, guidelines and other measures that have been or ma y be issued thereunder; "Directive 2004/109/EC " means Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trad ing on a regulated market and amending Directive 2001/34/EC, as amended from time to time, and includes any binding legal instruments, guidelines and other measures that have been or ma y be issued thereunder; "Directive 2009/138/EC " means Directive 2009/138/EC of the 4 CAP. 371.] BANKING European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II), as amended from time to time, and includes any binding legal instruments, guidelines and other measures that have been or may be issued thereunder; "Directive (EU) 2015/849 " means Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/ 2012 of the European Parliament and of the Council, and repeali ng Directive 2005/60/EC of the European Parliament and of the Coun cil and Commission Directive 2006/70 /EC, as amended from time to time, and includes any binding lega l instruments, guidelines an d other measures that have been or may be issued thereunder; "Directive (EU) 2019/2034 " means Directive (EU) 2019/2034 of the European Parliament and of the Council of 27 November 2019 on the prudential supervision of 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 include s any binding legal instruments, guidelines and other measures th at have been or may be issued thereunder;"director" includes an individ ual occupying the position of director of a company, by whatever na me he may be called, empowered to carry out substantially the same functions in relation to the dir ection of the company as those carried out by a director and in r espect of a company registere d, licensed or holding an equivalent authorisation outside Malta includes a member of a local board or agent or representative o f that company: "Provided that in respect of a financial holding company or a mixed financial company established outside Malta, "director" shall also include a member of the management body of the financial holding company or mixed financial holding company; "DORA Regulation" means Regulation (EU) 2022/2554 of the European Parliament and of the Council of 14 December 2022 on digital operational resilience for the financial sector and amending Regulations (EC) No. 1060/2009, (EU) No. 648/2012, (EU) No. 600 / 2014, (EU) No. 909/2014 and (EU) 2016/1011, as may be amended from time to time, and includes any binding legal instruments, guidelines and other measures tha t have been or may be issued thereunder; "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 Europ ean 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; Cap. 376. "electronic money institution" shall have the same meaning as t hat assigned to it under ar ticle 2(1) of the Financial Institutions Act ; S.L. 371.09 "eligible deposits" means depos its that are not excluded from protection pursuant to regulation 9 of the Depositor Compensation BANKING [CAP. 371. 5 Scheme Regulations , and includes deposits held in an account entitled to compensate pursuant to regulation 12(5) Depositor Compensation Scheme Regulations ; "ESCB central banks" shall ha ve the same meaning as that assigned to it in point (45 ) of Article 4(1) of the CRR; "ESFS" means European Syste m of Financial Supervision; "ESRB " means the European Systemi c Risk Board established by Regulation (EU) No. 1092/2010 ; "EU parent financial holding company" shall have the same meaning as that assigned to it in point (31) of Article 4(1) of the CRR; "EU parent institution" shall have the same meaning as that assigned to it in point (29 ) of Article 4(1) of the CRR; "EU parent mixed financial holding company" shall have the same meaning as that assigned to it in point (33) of Article 4( 1) of the CRR; Cap. 330. "European Resolution Authority" means an authority which is situated in a country or territory outside Malta that is in a M ember State or an EEA State and which exercises any function corresponding to the functions of the Resolution Committee unde r the Malta Financial Services Authority Act and the Recovery and Resolution Regulations issued thereunder; "financial holding company" shall have the same meaning as that assigned to it in point (20 ) of Article 4(1) of the CRR; "financial institution" shall have the same meaning as that assigned to it in point (26 ) of Article 4(1) of the CRR; "financial instrument" shall ha ve the same meaning as that assigned to it in point (50 ) of Article 4(1) of the CRR; "financial sector entity" shall have the same meaning as that assigned to it in point (27 ) of Article 4(1) of the CRR; Cap. 330. "Financial Services Tribunal" or "the Tribunal" means the Financial Services Tribuna l established under the Malta Financial Services Authority Act ; "GDPR " means Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protectio n of natural persons with regard to t he processing of personal data and on the free movement of such data, and repealing Directive 95/4 6/ EC, as amended from time to time, and includes any binding lega l instruments, guidelines and other measures that have been or ma y be issued thereunder; "group" shall have the same mean ing as that assigned to it in point (138) of Article 4(1) of the CRR; Cap. 386. "holding company" has the same meaning as is assigned to the term "parent company" in the Companies Act ; "home Member State" shall have the same meaning as that assigned to it in point (43 ) of Article 4(1) of the CRR; 6 CAP. 371.] BANKING "host Member State" shall ha ve the same meaning as that assigned to it in point (44) of Article 4(1) of the CRR; "initial capital" shall have the same meaning as that assigned to it in point (51) of Article 4(1) of the CRR; "institution" shall have the same meaning as that assigned to i t in point (3) of Article 4(1) of the CRR; "insurance undertaking" shall have the same meaning as that assigned to it in point (5) of Article 4(1) of the CRR; "investment firm" shall have the same meaning as that assigned to it in point (2) of Article 4( 1) of the CRR; "licence", in relation to the bus iness of banking, means a lice nce granted in terms of article 5, 6A or 7; "Malta’s international commitments" means commitments, responsibilities and obligations arising out of European Union law, or membership of, or affiliation to, or relationship with, any international, global or regional organisations or grouping of countries or out of any treaty, convention or other internation al or reciprocity agreement, however called, whether bilateral or multilateral, to which Malta or the competent authority is a party; "management body" means the bo dy or bodies of a financial holding company or financial holding company established outsid e Malta, which are appointed in accordance with the law of the jurisdiction in which such a comp any is established, which are empowered to set the company's strategy, objectives and overall direction, and which oversee and monitor management decision- making, and include the persons who effectively direct the busi ness of the company; "manager" means a person who is placed in charge of the business or part of the business of a company or otherwise who has a substantial supervisory role with the power to make policy an d executive decisions on behalf of the company; "Member State" means a Member State of the European Union and includes an EEA State; "MiCA Regulation" means Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on market s in crypto-assets, and amending Regulations (EU) No. 1093/2010 a nd (EU) No. 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937 , as may be amended from time to time, and includes any binding l egal instruments, guidelines and other measures that have been or ma y be issued thereunder; "MiFID " means Directive 2014 /65/EU of the European Parliament and of the Council of 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 include s any binding legal instruments, guidelines and other measures th at have been or may be issued thereunder; "MiFIR " means Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in BANKING [CAP. 371. 7 financial instruments and amending Regulation (EU) No 648/2012, as may be amended from time to time, and includes any binding legal instruments, guidelines and other measures that have been or may be issued thereunder; "Minister " means the Minister responsible for the regulation of Financial Services; "mixed activity holding company" shall have the same meaning as that assigned to it in point (22) of Article 4(1) of the CRR; "mixed financial holding company" shall have the same meaning a s that assigned to it in point (21) of Article 4(1) of the CRR; Cap. 373. "money laundering" has the same meaning ascribed to it by the Prevention of Money Laundering Act ; "officer", in relation to a company, includes a director, partn er, manager or company secretary or a ny person effectively acting i n such capacity whether for mally appointed or not; "outsourcing" means an arrangement of any form between a credit institution and an outsourcing se rvice provider by means of whi ch that outsourcing service provider performs a process, a service or a n activity that would otherwise be undertaken by the credit insti tution; "outsourcing service provider" means a third-party entity that is undertaking an outsourced proces s, service or activity, or part s thereof, under an outsourcing arrangement; "overseas regulatory authority" means an authority which in a country or territory outside Malta exercises any function corresponding to the functions of the competent authority under this Act; "own funds" shall have the same meaning as that assigned to it in point (118) of Article 4(1) of the CRR; "PAD" means Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014 on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features, as may be amended from ti me to time and including and includes any binding legal instrument s, guidelines and other measures that have been or may be issued thereunder; "parent financial holding compa ny" shall have the same meaning as that assigned to the term "parent financial holding company in a Member State" in point (30) of Article 4(1) of the CRR; "parent institution" shall have the same meaning as that assign ed to the term "parent institution in a Member State" in point (28) o f Article 4(1) of the CRR; "parent mixed financial holding company" shall have the same meaning as that assigned to the term "parent mixed financial ho lding company in a Member State" in point (32) of Article 4(1) of the CRR; "parent undertaking" shall h ave the same meaning as that assigned to it in point (15 ) of Article 4(1) of the CRR; 8 CAP. 371.] BANKING Cap. 376. "payment account" shall have the same meaning as that assigned to it under article 2(1) of the Financial Institutions Act ; Cap. 376. "payment initiation service" sha ll have the same meaning as tha t assigned to it under a rticle 2(1) of the Financial Institutions Act ; Cap. 376. "payment initiation service provider" shall have the same meaning as that assigned to it under article 2(1) of the Financial Institutions Act ; Cap. 376. "payment institution" shall ha ve the same meaning as that assigned to it under a rticle 2(1) of the Financial Institutions Act ; Cap. 376. "payment service" means any business activity set out in the Second Schedule to the Financial Institutions Act ; Cap. 376. "Payment Services Directive " means Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/ EC, as may be amended from time to time, and includes any bindi ng legal instruments, guidelines and other measures that have been or may be issued thereunder; "payment service user" shall have the same meaning as that assigned to it under a rticle 2(1) of the Financial Institutions Act ; "qualifying holding" or "qualifyin g shareholding" shall have th e same meaning as that assigned to it in point (36) of Article 4( 1) of the CRR; "recognised jurisdiction" means: (a) a Member State and Switzerland; (b) any country that is a member of the Organisation for Economic Co-operation and Development (OECD); (c) a country that is a signatory of the International Organisation of Securities Commissions (IOSCO) Multilateral Memorandum of Understanding; (d) a country that is a signatory of the International Association of Insurance Supervisors (IAIS) Multilateral Memorandum of Understanding; (e) any jurisdiction which is a member of the Basel Committee on Banking Supervision; (f) any jurisdiction falling within the Recommendations on the equivalence of confidentiality regimes issued by the EBA from time to time; or (g) any other jurisdiction with whom the competent authority has signed a Memorandum of Understanding; Cap. 386. "reconstruction" has the same meaning as in the Companies Act ; "Regulation (EU) No. 1092/2010 " means Regulation (EU) No. 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of BANKING [CAP. 371. 9 the financial system and establishing a European Systemic Risk Board, as amended from time to time, and includes any binding l egal instruments, guidelines and other measures that have been or ma y be issued thereunder; "Regulation (EU) No. 1093/2010 " means Regulation (EU) No. 1093/2010 of the European Parliament and of the Council of 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 binding legal instruments, guidelines and other measures that have been or may be issued thereunder; "Regulation (EU) No. 1094/2010 " means Regulation (EU) No. 1094/2010 of the European Parliament and of the Council of 24 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 binding legal instruments, guidelines and other measures th at have been or may be issued thereunder; "Regulation (EU) No. 1095/2010 " means Regulation (EU) No. 1095/2010 of the European Parliament and of the Council of 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, as amended from time to time, and includes any binding legal instruments, guidelines and other measures that have been or ma y be issued thereunder; "Regulation (EU) 2019/2033 " means Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 20 19 on the prudential requirements of 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; "reinsurance undertaking" shall have the same meaning as that assigned to it in point (6) of Article 4(1) of the CRR; "representative office" means, in relation to a body corporate, unincorporated body or association formed in accordance with or existing under the laws of a country outside Malta, premises in Malta from which the business of banking is promoted or assiste d in any way, and in relation to a body corporate, unincorporated body or association formed in acco rdance with and existing unde r the laws of Malta, premises outside Malta from which the busine ss of banking is promoted or assisted in any way; "resolution authority" means an authority designated by a Member State in accordance with Article 3 of the BRRD ; S.L. 330.09. "resolution entity" shall have t he same meaning as that assigne d to it in regulation 2(1) of the Recovery and Resolution Regulations ; 10 CAP. 371.] BANKING S.L. 330.09. "Resolution Fund" means the resolution financing arrangement under the Recovery and Resolution Regulations ; S.L. 330.09. "resolution group" shall have the same meaning as that assigned to it in regulation 2(1) of the Recovery and Resolution Regulations ; S.L. 371.09 "Scheme" means the Depositor Compensation Scheme established under regulation 4 of the Depositor Compensation Scheme Regulations ; "senior management" means thos e natural persons who exercise executive function within a credit institution and who are responsible, and accountable to the board of directors, for the day- to-day management of the credit institution; "sub-consolidated basis" shall have the same meaning as that assigned to it in point (49) of Article 4(1) of the CRR; "subsidiary" shall have the same meaning as that assigned to it in point (16) of Article 4(1) of the CRR; "third country" means a country that is not a Member State; "third-country group" means a group of which the parent undertaking is established in a third country; "Tier 2 instruments" means capital instruments or subordinated loans that meet the conditions l aid down in Article 63 of the CRR; Cap. 330. "Third-Country Resolution Authority" means an authority which is in a country or territory that is not a Member State and is responsible for carrying out fun ctions comparable or equivalent to those of the Resolution Committee under the Malta Financial Services Authority Act and the Recovery and Resolution Regulations issued thereunder; "UCITS" means undertakings for collective investment in transferable securities in terms of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transfera ble securities (UCITS) (recast), as amended from time to time, including any implementing measures that have been or may be issued thereunder; Cap. 252. "working days" means days other than Saturdays, Sundays and the Public Holidays and the Nati onal Holidays referred to in th e National Holidays and Other Public Holidays Act . (1A) For the purposes of applying the requirements and supervisory powers laid down in this Act and any regulations an d Banking 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-consol idated basis in accordance with this Act and any regulations and Banking Rules made or issued thereunder transposing the CRD , any binding legal instruments issued under the CRD, and with the CRR , the terms "institution", "parent institution", "EU parent institution" and "parent undertaking" shall also include: (a) financial holding companies and mixed financial BANKING [CAP. 371. 11 holding companies that have been granted approval in accordance with article 11B and, or Article 21a of 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 11B(5) a nd, or Article 2 1a(4) of the CRD (c) financial holding companies, mixed financial holding companies or institutions designated pursuant to article 29AA(1)(f) and, or Article 21a(6)(d) of the CRD. (1B) For the purposes of applying the requirements and supervisory powers laid down in Articles 4(5), 14(2), 14(2A), 14(5), 17E, 19(1), 19(3), 20(1), 25(7), 25(10), 30A on a consolidated or sub-consolidated basis in accordance with this Act and any regulations and Banking Ru les made or issued thereunder transposing the CRD , any binding legal instruments issued under the CRD, and with the CRR, the term "credit institution" shall also include: (a) financial holding companies and mixed financial holding companies that have been granted approval in accordance with article 11B of this Act and, or Article 21a of 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 11B(5) a nd, or Article 2 1a(4) of the CRD; (c) financial holding companies, mixed financial holding companies or institutions designated pursuant to article 29AA(1)(f) and, or Article 21a(6)(d) of the CRD. (1C) Reference to the "approval" of financial holding companies or mixed financial holding companies in this Act and any regulations and, or Banking Rules issued thereunder, shall mean an approval granted by the compete nt authority in terms of article 11B or an approval granted through the joint decision of the compet ent authority and an overseas regulat ory authority in terms of arti cle 11B of this Act and Article 21a of the CRD, as the case may be. (1D) Reference to the "exemption" of financial holding companies or mixed financial holding companies in this Act and any regulations and, or Banking Rules issued thereunder, shall mean an exemption granted by the competent authority in terms of article 11B or an exemption granted through the joint decision of the competent authority and an overseas regulatory authority in 12 CAP. 371.] BANKING terms of article 11B of this Act and Article 21a of the CRD, as the case may be. (2) The business activities of a credit institution may, besides the business of banking, include any or all of the additional activities listed in the First Schedule as may be determined by the competent authority. (3) The objective of this Act is , in part, to transpose and implement the relevant provisions of the BRRD , the CRD and the CRR, and shall be interpreted and applied accordingly. (4) In this Act and in any regulations made thereunder, if there is any conflict between the Engl ish and the Maltese texts, the English text shall prevail. Prohibition from undertaking the business of banking. Added by: X. 2015.3. Amended by: LXXI.2021.20.