Cap. 376 Art. 2Interpretation.

(1) In this Act, unless the context otherwise requires:

"account information service" means an online service to provide consolidated information on one or more payment accounts held by the payment service user with either another payment service provider or with more than one payment service provider;

"account information service provider" means a payment service provider that has been registered in accordance with this Act or that holds an equivalent registration in another country in terms of the Payment Services Directive to provide solely account information services;

"account servicing payment service provider" means a payment service provider providing and maintaining a payment account for a payer;

"acquiring of payment transactions" means a payment service provided by a payment service provider contracting with a payee to accept and process payment transactions that result in a transfer of funds to the payee;

"agent" means a person who acts on behalf of a financial institution in providing those services listed under the First Schedule, other than issuing electronic money;

"alternative investment fund" shall have the same meaning as assigned to it in the Investment Services Act

(Notified CISs) Regulations;

"alternative investment fund manager" shall have the same meaning as assigned to it in the Investment Services Act

(Notified CISs) Regulations; "Arbiter" means the Arbiter for Financial Services appointed under article 14 of the Arbiter for Financial Services Act;

"authentication" means a procedure which allows the payment service provider to verify the identity of a payment service user or the validity of the use of a specific payment instrument, including the use of the user’s personalised security credentials;

"average outstanding electronic money" means the average total amount of financial liabilities related to the electronic money in issue at the end of each calendar day over the preceding six calendar months, calculated on the first calendar day of each calendar month, and applied for that calendar month;

"body corporate" means a body of persons having a legal personality distinct from that of its members;

"branch" means a place of business other than the head office which is a part of a financial institution not having a legal personality and which carries out directly some or all of the transactions as licensed or registered, inherent in the business of a financial institution; all the places of business set up in Malta by a financial institution with a head office in another Member State shall be regarded as a single branch;

"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 it in paragraph (38) of Article 4(1) of the CRR;

"Commission Delegated Regulation (EU) No. 241/ 2014" means Commission Delegated Regulation (EU) No. 241/ 2014 of 7 January 2014 supplementing Regulation (EU) No. 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for Own Funds requirements for institutions, as may be amended from time to time;

"Common Equity Tier 1 capital" shall have the same meaning as that assigned to it in Article 50 of the CRR;

"company" means a limited liability company constituted in Malta in accordance with the Companies Act or any law which may from time to time be in force;

"competent authority" means the Malta Financial Services Authority established by the Malta Financial Services Authority Act;

"consumer" means a natural person who in payment service contracts covered by the provisions of the Payment Services Directive, as transposed in directives issued by the Central Bank under the Central Bank of Malta Act, is acting for purposes other than his or her trade, business or profession;

"control" in relation to a body corporate means the power to determine in any manner the financial and operating policies of the body corporate;

"controller" means a person who alone or together with others exercises control in relation to a body corporate;

" 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 may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures 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, including discounting of bills of exchange and promissory notes, guarantees, indemnities, acceptances, bills of exchange endorsed and financial leasing; pour aval

"credit institution" shall have the same meaning as that assigned to it in the Banking Act;

"credit transfer" means a payment service for crediting a payee’s payment account with a payment transaction or a series of payment transactions from a payer’s payment account by the payment service provider that holds the payer’s payment account, based on an instruction given by the payer;

"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 amending Regulation (EU) No. 648/2012, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder; "digital content" means goods or services which are produced and supplied in digital form, the use or consumption of which is restricted to a technical device and that do not include in any way the use or consumption of physical goods or services;

"Directive 86/635/EEC" means Council Directive 86/ 635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions, as amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder;

"Directive 2002/21/EC" means Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder;

"Directive 2004/39/EC" means Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/ EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder;

"Directive 2008/48/EC" means Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC, as amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder;

"Directive 2013/34/EU" means Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/ EEC and 83/349/EEC, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar 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 repealing Directive 2005/ 60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC, as amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder;

"director" includes an individual occupying the position of director of a company, by whatever name he may be called, empowered to carry out substantially the same functions in relation to the direction of the company as those carried out by a director; and in respect of a company registered or incorporated outside Malta, includes a member of a local board or agent or representative of that company;

"direct debit" means a payment service for debiting a payer’s payment account, where a payment transaction is initiated by the payee on the basis of the consent given by the payer to the payee, to the payee’s payment service provider, or to the payer’s own payment service provider;

"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 that have been or may be issued thereunder;

"EBA" means the European Banking Authority established by 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 may be amended from time to time;

"EEA State" means a State which is a contracting party to the agreement on the European 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;

"electronic communications network" means a network as defined in paragraph (a) of Article 2 of Directive 2002/21/ EC;

"electronic communications service" means a service as defined in paragraph (c) of Article 2 of Directive 2002/21/EC;

"electronic money" means electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions and that is accepted by a person other than the financial institutions that issued the electronic money;

"Electronic Money Directive" means Directive 2009/ 110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder;

"electronic money institution" means a financial institution that has been licensed in accordance with this Act and authorised to issue electronic money or that holds an equivalent authorisation in another country in terms of the Electronic Money Directive to issue electronic money;

"equity release financial products" means products consisting of equity release credit agreements where the creditor:

(a) grants on loan a lump sum, periodic payments or other forms of credit disbursement in return for a sum deriving from the future sale of a residential immovable property or a right relating to residential immovable property; and

(b) will not seek repayment of the credit until the occurrence of the death of the consumer or his move to long-term care or any one or more other specified life events of the consumer as may be defined by the competent authority, unless the consumer breaches his contractual obligations which allows the creditor to terminate the credit agreement: Provided that the creditor cannot commence proceedings, judicial or otherwise, for the sale or other transfer of the property securing the equity release financial product for a period of at least thirty six (36) months from the death of the consumer or his move to long-term care:

Provided further that, in the case of a move into long-term care, the creditor and the consumer may agree to retain the equity release financial product even after the lapse of such thirty six (36) month period, for so long as such agreement subsists, until the death of the consumer;

and any such other product as may be defined as an equity release financial product by the competent authority from time to time;

"European regulatory authority" means a body that is in another Member State and is empowered by law or regulation to supervise payment institutions, electronic money institutions and, or account information service providers;

"European right" means the right of establishment and, or the freedom to provide services;

"EuSEF Regulation" means Regulation (EU) No. 346/ 2013 of the European Parliament and of the Council of 17 April 2013 on European social entrepreneurship funds, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards, guidelines and similar measures that have been or may be issued thereunder;

"EuVECA Regulation" means Regulation (EU) No. 345/2013 of the European Parliament and of the Council of 17 April 2013 on European venture capital funds, as may be amended from time to time, and includes any implementing measures, implementing technical standards, regulatory technical standards, guidelines and similar measures that have been or may be issued thereunder;

"financial institution" means any person who regularly or habitually undertakes the carrying out of any activity listed in the First Schedule for the account and at the risk of the person carrying out the activity and who is licensed or registered under this Act:

Provided that any person offering equity release financial products shall be considered a financial institution irrespective of whether such equity release financial products are offered on a regular or habitual basis, or otherwise; "Financial Institutions Rules" means a Rule issued by the competent authority to regulate financial institutions in terms of the powers under this Act, and "Rule" shall be read accordingly;

"Financial Services Tribunal" or "Tribunal" means the Financial Services Tribunal established under the Malta Financial Services Authority Act;

"framework contract" means a payment service contract which governs the future execution of individual and successive payment transactions and that may contain the obligation and conditions for setting up a payment account;

"fund manager" shall have the same meaning as assigned to it in the Investment Services Act (Notified CISs)

Regulations;

"funding of terrorism" has the same meaning as that assigned to it by the Prevention of Money Laundering Act, as may be amended from time to time;

"funds" means banknotes and coins, scriptural money and electronic money;

"group" means a group of undertakings which are linked to each other by a relationship referred to in Article 22(1), (2) or (7) of Directive 2013/34/EU or undertakings as defined in Articles 4, 5, 6 and 7 of Commission Delegated Regulation

(EU) No. 241/2014 that are linked to each other by a relationship referred to in Article 10(1) or in Article 113(6) or

(7) of the CRR;

"holding company" or "parent company" has the same meaning as that assigned to the term "parent company" in the Companies Act;

"home Member State" means either of the following:

(a) the Member State in which the registered office of the payment service provider is situated; or

(b) if the payment service provider has no registered office under its national law, the Member State in which its head office is situated;

"host Member State" means the Member State other than the home Member State in which a payment service provider has an agent or a branch, or provides payment services;

"initial capital" means paid up capital and reserves as defined in a Financial Institutions Rule; "issuing of payment instruments" means a payment service by a payment service provider contracting to provide a payer with a payment instrument to initiate and process the payer’s payment transactions;

"licence" means a licence granted under this Act to provide any of the activities listed in the First Schedule;

"loan acquisition" means the acquisition of one (1) or more loans or portfolios of loans which give rise to a direct legal relationship between the acquirer as lender and the borrower or borrowers;

"Member State" means a Member State of the European Union and includes an EEA State;

"the Minister" means the Minister responsible for the regulation of Financial Services;

"money laundering" has the same meaning as that assigned to it by the Prevention of Money Laundering Act, as may be amended from time to time;

"money remittance" means a payment service where funds are received from a payer without any payment accounts being created in the name of the payer or the payee, for the sole purpose of transferring a corresponding amount to a payee or to another payment service provider acting on behalf of the payee and, or where such funds are received on behalf of and made available to the payee;

"officer", in relation to a company, includes a director, partner, manager or company secretary or any person effectively acting in such capacity whether formally appointed or not;

"outsourcing" means the use of a third party (the outsourcing service provider) by a financial institution to perform activities and, or operational functions that would normally be undertaken by the financial institution;

"outsourcing service provider" means a supplier of goods, services or facilities, and which may be an affiliated entity within a corporate group or an entity that is external to the group;

"overseas regulatory authority" means an authority that in a country or territory outside Malta exercises any function corresponding to the functions of the competent authority under this Act; "own funds" means funds as defined in paragraph 118 of Article 4(1) of the CRR where at least 75% of the Tier 1 capital is in the form of Common Equity Tier 1 capital as referred to in Article 50 of that Regulation and Tier 2 capital is equal to or less than one third of Tier 1 capital;

"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 time to time and including any implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder;

"payee" means a person who is the intended recipient of funds that have been the subject of a payment transaction;

"payer" means a person who holds a payment account and allows a payment order from that payment account or where there is no payment account, a person who gives a payment order;

"payment account" means an account held in the name of one or more payment service users which is used for the execution of payment transactions;

"payment initiation service" means a service to initiate a payment order at the request of the payment service user with respect to a payment account held at another payment service provider;

"payment initiation service provider" means a payment service provider that has been licensed under this Act or that holds an equivalent authorisation in another country in terms of the Payment Services Directive to provide payment initiation services;

"payment institution" means a company that has been licensed in accordance with this Act or that holds an equivalent authorisation in another country in terms of the Payment Services Directive to provide and execute payment services throughout the European Union;

"payment instrument" means any personalised device and, or set of procedures agreed between the payment service user and the payment service provider and used in order to initiate a payment order;

"payment order" means an instruction by a payer or payee to his payment service provider requesting the execution of a payment transaction;

"payment service" means any business activity set out in paragraph 2 of the Second Schedule;

"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 implementing measures, implementing technical standards, regulatory technical standards and similar measures that have been or may be issued thereunder;

"payment service provider" means:

(a) credit institutions, including branches thereof as defined in article 2(1) of the Banking Act where such branches are located in the European Union, irrespective of whether the head offices of those branches are located within the European Union or, in accordance with Article 47 of the CRD and national law, if they are located outside the European Union;

(b) electronic money institutions, being companies that have been granted authorisation under