Cap. 618 Art. 11Conditions for a deposit liability transfer.     Cap. 204.

(1) The Authority may, by virtue of one (1) or more deposit liability transfer instruments and subject to such terms and conditions as may be set out therein, require a solvent credit institution to transfer such of its deposit liabilities and the corresponding deposit assets to the Fund, together with all of the property or rights pertaining to such deposits, if the following conditions are met:

(a) the licence granted to the credit institution has been withdrawn in terms of the applicable legislation; and, or

(b) the credit institution is in the process of being dissolved and consequently wound-up under any applicable law; and

(c) for each deposit liability transfer instrument, the credit institution’s deposit liabilities, which are the subject of such instrument, are covered by liquid assets of the credit institution.

(2) The transferring conditions set out in sub-article (1) shall be considered to have been satisfied notwithstanding that the credit institution or any aggrieved person may have filed any action or proceedings against the withdrawal of the credit institution’s licence or the dissolution and consequential winding-up thereof.

(3) The Authority may, by giving notice in writing to a credit institution, require that the relevant credit institution make available, in such form as the Authority may request, such information, data and documents as the Authority considers to be relevant for the purposes of making a determination under sub-article (1).

(4) The deposit liabilities and the corresponding deposit assets that shall be transferred in accordance with the deposit liability transfer instrument shall include such deposit liabilities and the corresponding deposit assets that:

(a) are subject to a court order and, or any other order made in terms of the law by an entity empowered by law to issue such an order, including monitoring orders, freezing orders, investigation orders and attachment orders; and

(b) are, for whatever reason, subject to checks relating to anti-money laundering and funding of terrorism.

(5) A deposit liability transfer shall, unless otherwise determined by the Authority, take place without obtaining the consent of the shareholders or officers of the transferring institution or any third party, including (for the avoidance of doubt) the creditor or counterparty of any deposit liability, and without complying with any procedural requirements which would otherwise apply, except when such procedural requirements are established by this Act or any regulations issued under this Act.

(6) The deposit liability transfer instrument shall:

(a) provide for the transfer of the deposit liabilities and corresponding deposit assets and all property and, or rights pertaining to such deposits from the transferring institution to the Fund, that shall be placed in a deposit liability portfolio;

(b) provide for the right to repayment of the transferred deposit liabilities, subject to the provisions of this Act and any regulations issued thereunder;

(c) specify all the deposit liabilities and the corresponding deposit assets that shall be transferred by the credit institution.

(7) The deposit liability transfer instrument may:

(a) provide for any amendments to the form and, or terms of a transferred deposit liability, including amendments to:

(i) modify the terms, or the effect of the terms, of a transferred deposit liability;

(ii) suspend the rights of transferred depositors to receive amounts payable in respect of transferred deposit liabilities; and, or

(iii) suspend the rights of transferred depositors to receive the benefit of their contractual rights to banking services in respect of transferred deposit liabilities including, but not limited to, any right to make payments, to transfer money or to withdraw money;

(b) modify any transferred deposit liabilities from one form or class of liability to another, including, but not limited to:

(i) converting any transferred deposit liability that is a deposit, whether payable on demand or otherwise, into a liability that is repayable only upon a specified maturity date or a perpetual obligation; and, or

(ii) when the Authority makes a determination whereby the provisions of article 13(1)(e) shall not apply, amending the basis on which interest accrues on such transferred deposit liability until such time as the transferred deposit liability is released in accordance with the provisions of this Act and any regulations issued thereunder, where this is applicable;

(c) provide for incidental, consequential or transitional provisions including:

(i) provisions generally or only for specified purposes, cases or circumstances;

(ii) different provisions for different purposes, cases or circumstances; and, or

(iii) any additional obligations that shall be imposed on the transferring institution in connection with the deposit liability transfer; and, or

(d) make any other provision that the Authority considers necessary or desirable for the purposes of, or in connection with the deposit liability transfer.

(8) Notwithstanding any provision of this Act or any other law, until such time as the deposit liability transfer is completed, and notwithstanding that such deposit liability transfer may have been ordered following the withdrawal of the transferring institution’s licence, the Authority may exercise its powers under this Act or any other Act, or any regulations issued thereunder, to ensure that the deposit liability transfer is effectively completed.

(9) Where the Authority is considering a deposit liability transfer in relation to a credit institution which it considers to be:

(a) of relevance to the stability of Malta’s financial system, the Authority shall consult with the Joint Financial

Stability Board established by virtue of article 17B of the

Central Bank of Malta Act;

(b) of systemic importance to Malta’s economy, the Authority shall, apart from consulting the Joint Financial Stability Board in line with paragraph (a), also inform the European Central Bank established by virtue of Article 13 of the Treaty on European Union, before ordering such a credit institution to carry out a deposit liability transfer.