MFSA considers proposals on Acquisitions Directive

The MFSA is evaluating feedback received following the conclusion of consultations on the transposition of the Acquisitions Directive (Directive 2007/44/EC of the European Parliament and of the Council of 5 September 2007).

Three separate sets of Consultation Papers were issued, proposing amendments to the Banking Act, the Investment Services Act and the Insurance Business Act and the Insurance Intermediaries Act. These amendments primarily relate the procedural rules and evaluation criteria for the prudential assessment of acquisitions and increase of holdings in the financial sector as well as new approval requirements relating to the mergers and reconstructions of investment services licence holders.

The main aim of the Acquisitions Directive is to improve considerably the process of supervisory approvals for acquisitions of licensed entities, including authorised companies by increasing legal certainty, clarity and transparency.

Other amendments contained in the relevant Consultation Papers include changes amending the definition of “close links” in the Banking Act with the definition found in Directive 2006/48/EC and 2006/49/EC (the “Capital Requirements Directive” – CRD) as well as to include the definition of control as found in the CRD. A new sub-article (3) is also being proposed to be inserted under article 16A in order to transpose article 10 of the CRD which states that where there is a merger of two or more credit institutions, the own funds of the credit institutions which result from the merger cannot fall below the total own funds of the credit institutions at the time of the merger.

The Consultation Paper relating to the Investment Services Act also includes a clarification of the legal regime applicable to recognised fund administrators in terms of Article 9A.

The consultation papers can be accessed from the MFSA website www.mfsa.com.mt under Announcements – Consultation Papers.

SECURITIES REGULATION

The Committee of European Securities Regulators (CESR) is currently undergoing an open consultation process with the aim of obtaining feedback from market participants on practical issues related to divergences in securities regulation in different Member States. The contributions received from market participants will be assessed by the CESR Review Panel appointed for the purpose and, where appropriate, reflected in the work programme for 2009.

The MFSA has already circulated the relevant CESR consultation paper entitled “Paper on the Proposals for the Review Panel Work Plan” to its licence holders. Interested Parties are also being invited to submit their comments through the questionnaire forming part of the Consultation Paper and which may be accessed through the following webpage: http://www.cesr-eu.org/popup2.php?id=5641. Responses may be sent via CESR’s website (www.cesr.eu) under section “Consultations”. The consultation closes on 7 April 2009.