Cap. 376 Art. 13Powers and duties of the competent authority.

(1) It shall be the duty of the competent authority to carry out the functions assigned to it by this Act and any regulations and, or Rules issued thereunder and to ensure that financial institutions carrying out business in or from Malta comply with this Act, any regulations and, or Rules issued thereunder and with the conditions of their licence or registration. In carrying out such functions, the competent authority shall ensure that the controls exercised for checking continued compliance in terms of this Act, and any regulations and, or Rules issued thereunder are proportionate, adequate and responsive to the risks to which financial institutions are exposed. The said functions consist, , of the inter alia following:

(a) to require the financial institution, in terms of article 14, to provide any information needed to monitor compliance specifying the purpose of the request as appropriate and the time limit by which the information is to be provided;

(b) to carry out on-site inspections at the financial institution, at any agent or branch thereof providing services under the responsibility of the financial institution, or at any entity to which activities are outsourced;

(c) to withdraw, suspend or restrict any licence or registration pursuant to article 6; and

(d) to issue non-binding recommendations and guidelines, Rules within the meaning of this article and binding administrative provisions in terms of this Act and any regulations and, or Rules issued thereunder.

(1A) Notwithstanding the requirements of article 5A(1), (2A) and (2) and Articles 7 and 9 of the Payment Services Directive, the competent authority may take steps as referred to in sub-article (1) to ensure sufficient capital for the activities carried out by a financial institution and, or to ensure compliance with Article 5(1B), in particular where the activities of a financial institution other than those listed in the Schedules impair or are likely to impair the financial soundness of the financial institution concerned.

(1B) Without prejudice to the procedures for the withdrawal of a licence or a registration, or to article 22, or to national provisions of criminal law and to any other power granted to the competent authority under the provisions of this Act and any regulations and, or Rules issued thereunder or under the provisions of the Malta Financial Services Authority Act, where the competent authority is satisfied that a financial institution’s conduct amounts to a breach of any of the provisions of this Act or any regulations and, or Rules issued thereunder, or of any directive, restriction and, or suspension imposed, or of any other request or order made by the competent authority pursuant to the provisions of this Act or any regulations and, or Rules issued thereunder, or the Malta Financial Services Authority Act, or a licence condition, or a condition required for the granting of a licence or a registration; the competent authority may adopt or impose on any such financial institution and, or on those who effectively control the business of such financial institution, any measures as it may deem appropriate aimed specifically at ending observed breaches or the causes of such breaches.

(1C) The competent authority shall possess all powers and adequate resources necessary for the performance of its duties and shall guarantee independence from economic bodies and avoid conflicts of interest.

(2) The competent authority may issue, amend or revoke any Financial Institutions Rule as may be required for carrying into effect any of the provisions of this Act and any regulations and, or Financial Institution Rules issued thereunder. The said Rules may establish additional requirements and conditions in relation to activities of financial institutions, the conduct of their business, their relations with customers, the public and other parties, their responsibilities to the competent authority, reporting requirements and any other matters, as the competent authority may consider appropriate.

(2A) The competent authority may issue, amend or revoke any Financial Institutions Rule as may be required for the purpose of implementing any guidelines, recommendations, decisions, opinions or any other instrument issued by the EBA, as may be required.

(2B) A Financial Institutions Rule shall be binding on financial institutions and others as may be specified therein.

(3) A Financial Institutions Rule and any amendment or revocation thereof shall be officially communicated to all financial institutions and the competent authority shall make copies thereof available to the public, upon request.

(4) Financial Institutions Rules made under this Act may provide for different regulatory requirements to be applicable to different classes of financial institutions, licensed under this Act, to ensure that business is conducted in a prudent manner.

(5) Deleted by XXVI.2019.47.

(6) The competent authority shall, as soon as possible, notify the European Commission that it has been designated in part, to ensure and monitor the effective compliance with the Payment Services Directive. The competent authority shall inform the European Commission of the provisions of the Payment Services Directive for which it is responsible. The competent authority that has been designated in part, to ensure and monitor effective compliance with the Payment Services Directive, shall immediately notify the European Commission of any subsequent change concerning its designation and competence.

(7) Nothing in this Act shall be taken to imply that the competent authority is required to supervise activities of financial institutions other than for the provision of the services listed in the Schedules to this Act.

(8) The powers, functions and duties conferred upon the competent authority in this Act and any regulations and, or Rules issued thereunder transposing Title II of the Payment Services Directive, shall be vested in the competent authority when the competent authority is the home Member State.

(9) The competent authority shall ensure that financial institutions do not derogate to the detriment of their customers, from the provisions of this Act and any regulations and, or Rules issued thereunder, except where explicitly provided for therein:

Provided that financial institutions may, without prejudice to article 10, decide to grant more favourable terms to their customers.