Banking Act (Cap. 371), article 7

7. (1) No company shall be g ranted a licence unless - (a) its initial capital amounts to not less than five million euro (€5,000,000) or an equivalent amount in another currency as may be speci fied in a Banking Rule: Provided that the competent authority may, by a provision contained in a Banking Rule or as required through a condition in a credit institution’s licence, increase the amount laid d own in this paragraph: Provided further that the initial capital shall comprise only one or more of the items referred to in Article 26(1)(a) to (e) of the CRR; (b) there are at least two individuals who effectively direct the business of the company; (c) the competent authority is notified of the identities of the shareholders or members whether direct or 20 CAP. 371.] BANKING indirect, that have qualifying holdings and of the amounts of those holdings or, where there are no qualifying holdings, of the twenty largest shareholders or members: Provided that in determining whether the criteria for a qualifying holding are fulfilled, the voting rights referred to in Articles 9 and 10 of Directive 2004/109/ EC and the conditions regarding aggregation thereof set out in Article 12(4) and (5) of that Directive, shall be taken into account: Provided further that voting rights or shares which credit institutions hold as a result of providing the underwriting of financial instruments or placing of financial instruments on a firm commitment basis included under point (6) of Section A of Annex I to MiFID shall not be taken into account, provided that those rights are not exercised or otherwise used to intervene in the management of the issuer and are disposed of within one year of acquisition; (d) the competent authority is satisfied that the shareholders or members mentioned in paragraph ( c), controllers and all individuals who will effectively direct the business of the credit institution are suitable persons to ensure its sound and prudent management. The competent authority shall be satisfied with the suitability of the individuals who will effectively direct the business if the requirements referred to in article 14(2) and (2A) are met. The competent authority shall be satisfied of the suitability of the shareholders or members mentioned in paragraph (c), in accordance with the criteria set out in article 13A(9). Article 13A(8) and (10) and article 13B shall apply; (e) the competent authority is satisfied that, where there are close links between the company and another person or persons, such links do not through any law, regulation, administrative provision or in any other manner prevent it from exercising effective supervision of the company, once in possession of a licence, under the provisions of this Act and any regulations made and, or Banking Rules and, or Conduct of Business Rules issued thereunder: Provided that the competent authority shall not grant a licence where the laws, regulations or administrative provisions of a third country governing one or more persons with which the credit institution has close links, or difficulties invo lved in the enforcement of those laws, regulations and administrative provisions, prevent the effective exercise of its supervisory functions: Provided further that in r espect of this paragraph ( e), the credit institution shall inform the competent authority forthwith of any change in circumstances BANKING [CAP. 371. 21 concerning the application of this said paragraph ( e) and shall further provide the competent authority with the information necessary to monitor compliance with the conditions referred to in this paragraph ( e) on a continuous basis; (f) the competent authority is satisfied that the arrangements, processes and mechanisms referred to in article 17B enable sound and effective risk management by that credit institution. (2) The competent authority sha ll determine each application for a licence within six months of receipt of the application o r, if the application does not comply w ith article 6(2) or additional information is required, within six months of compliance with t he said sub-article or the furnishing of the information as the ca se may be, whichever be the later. In any event an application shall b e determined within twelve months of its receipt. (3) The competent authority shall determine an application by doing any of the following: (a) granting a licence without conditions; (b) granting a licence subject to such conditions as it may deem appropriate; (c) refusing to g rant a licence: and if it refuses an applicati on it shall inform the applicant, in writing, of the reasons for the refusal within the time-frames referred to in sub- article (2). (4) In granting a licence the comp etent authority may subject it to such conditions as it may deem appropriate, and having grant ed a licence it may, from time to time, vary or revoke any condition so imposed or impose new conditions. ( 5 ) W h e r e t h e c o m p e t e n t a u t h o r i t y f o r a n y r e a s o n f a i l s t o determine an application for a li cence within the time prescrib ed under sub-article (2), such fact s hall be deemed to constitute a refusal to grant a licence and sh all be subject to a right of a ppeal in accordance with article 10. (6) A credit institution licensed under this Act shall provide t he competent authority with particulars of any changes in the information provided under this Act as soon as such credit institution becomes aware of such change. (7) A credit institution licensed in terms of this article shall have its head office and its registered office in Malta. (8) The competent authority shall notify the EBA of every licence issued to a credit institution in terms of the Act and any regu lations or Banking Rules made thereunder. 22 CAP. 371.] BANKING Right of redemption. Added by: XVII. 2002.163. Amended by: IX. 2003.77; XX. 2007.90; L.N. 425 of 2007.