Cap. 371 Art. 9Withdrawal and restriction of a licence.

(1) A licence shall automatically cease to have any effect if the holder -

(a) renounces the licence; or

(aa) uses its licence exclusively to engage in the activities referred to in point (1)(b) of Article 4(1) of the CRR

and has, for a period of five consecutive years, average total assets below the thresholds set out in that Article;

(b) is declared bankrupt or goes into liquidation or change in its authorisation to conduct the business or is otherwise dissolved; or

(c) has ceased to operate as a result of a merger with another credit institution; or

(d) in the case of a credit institution licensed or holding an equivalent authorisation in a third country and which has been granted a licence under this Act to open a branch in Malta, has had its authorisation withdrawn by the overseas regulatory authority in the third country within which the credit institution has been authorised.

(2) The competent authority may only restrict or withdraw the licence issued to a credit institution in any of the following cases where such a credit institution -

(a) does not make use of the licence within twelve months, expressly renounces the licence or has ceased to engage in business for more than six months, if no provision was made for the licence to lapse in such cases;

(b) has obtained the licence through false statements or any other irregular means;

(c) no longer fulfils the conditions under which the licence was issued;

(d) no longer meets the prudential requirements set out in Parts Three, Four or Six of the CRR, except for the requirements laid down in Articles 92a and 92b of the

CRR, or imposed under regulations 9(1)(a) and 10(1) and (2) of the Banking Act (Supervisory Review) Regulations or can no longer be relied on to fulfil its obligations towards its creditors, and, in particular, no longer provides security for the assets entrusted to it by its depositors;

(e) commits one of the breaches referred to in regulation 7(1) of the Administrative Penalties, Measures and

Investigatory Powers Regulations;

(f) conceals from, or fails to notify to the competent authority of any document or information or change therein which it was its duty to reveal or notify under this Act or any regulations made or any Banking Rules or Conduct of Business Rules issued thereunder;

(g) fails to comply with any of the provisions of this Act or any regulations made or Banking Rules issued thereunder or with the conditions under which the licence is issued;

(h) has insufficient assets to cover its liabilities;

(i) has suspended payment or is about to suspend payment.

(3) Restrictions imposed by the competent authority pursuant to sub-article (2) shall be such restrictions as the competent authority shall consider appropriate for the proper compliance by the credit institution with the provisions of this Act and any regulations made and, or Banking Rules and, or Conduct of Business Rules issued thereunder and the conditions, if any, of its licence and for the protection of depositors and may include (without prejudice to the generality hereof) -

(a) the removal of any officer of the credit institution or the replacement of any officer by such person as the competent authority may designate;

(b) the requirement for any person who directly or indirectly possesses a qualifying shareholding in the credit institution to divest himself of all or part of that holding;

(c) the requirement for the credit institution to take or refrain from any action;

(d) the requirement that the credit institution be prohibited from undertaking any transaction or transactions or any class of business or be permitted to undertake any transaction or transactions or any class of business only upon such terms as the competent authority may prescribe.

(4) The competent authority shall have the power to vary or remove any restrictions imposed under this article.

(5) Where the competent authority intends to restrict or withdraw a licence or to vary any restriction, it shall serve written notice of its intention on the credit institution; such notice shall specify the grounds upon which the competent authority intends to take action and shall specify a period, being a period not less than forty-eight hours and not longer than thirty calendar days, in which the credit institution shall be entitled to make representations to the competent authority as to why such action should not be taken. Unless the competent authority decides that the matter is urgent, it shall not impose or vary any restriction or withdraw a licence before the expiry of such period.

(6) A licence granted for the establishment in Malta of a branch of a credit institution licensed or holding an equivalent authorisation in a third country may only be withdrawn after consultation with the overseas regulatory authorities of the country within which it has been authorised, unless the competent authority decides that the matter is urgent or that there are circumstances which make such prior consultation inappropriate.

(7) Upon the restriction or withdrawal of a licence of a credit institution licensed in Malta, the competent authority shall inform the overseas regulatory authorities of the countries in which the credit institution or its subsidiaries are carrying on the business of banking. The competent authority shall notify the EBA of every withdrawal of a licence together with the reasons for such a withdrawal.

(8) Where the competent authority is satisfied that the circumstances so warrant, it may at any time make public any action it has taken under this article.