Cap. 403 Art. 38Changes in shareholding of an authorised undertaking.

(1) Notwithstanding anything contained in any other law, any person or persons acting in concert (hereinafter referred to in this Act as the "proposed acquirer"), who have taken a decision either to -

(a) acquire, directly or indirectly, a qualifying share-

holding in an authorised insurance or reinsurance undertaking;

(b) increase, directly or indirectly, an existing shareholding which is not a qualifying shareholding so as to cause it to become a qualifying shareholding in an authorised insurance or reinsurance undertaking; or

(c) further increase, directly or indirectly, such qualifying shareholding in an authorised insurance or reinsurance undertaking as a result of which the proportion of the voting rights or of the capital held would reach or exceed twenty per centum, thirty per centum or fifty per centum or so that the authorised insurance or reinsurance undertaking would become its subsidiary, (hereinafter referred to as the "proposed acquisition"), shall notify the competent authority in writing of any such decision, indicating the size of the intended shareholding and providing any relevant information as and in the manner that the competent authority may by Insurance Rules require, including the form in which such notification shall be made and the criteria adopted by the competent authority in determining whether such person is a fit and proper person.

(2) Notwithstanding anything contained in any other law, any person who has taken a decision either to -

(a) dispose, directly or indirectly, of a qualifying shareholding in an authorised insurance or reinsurance undertaking;

(b) reduce, directly or indirectly, a qualifying shareholding so as to cause it to cease to be a qualifying shareholding; or

(c) reduce, directly or indirectly, a qualifying shareholding so that the proportion of the voting rights or of the capital held would fall below twenty per centum, thirty per centum or fifty per centum or so that the authorised insurance or reinsurance undertaking would cease to be its subsidiary, shall notify the competent authority in writing of any such decision indicating the size of the intended shareholding and providing any relevant information as and in the manner that the competent authority may by Insurance Rules require.

(3) Sub-articles (1) and (2) shall apply irrespective of whether or not any of the relevant shares are shares listed on any regulated market.

(4) Notwithstanding the provisions of sub-articles (1) and (2), it shall be the duty of an authorised insurance or reinsurance undertaking and of the directors thereof, to notify the competent authority forthwith upon becoming aware that any person intends to take any of the actions set out in these sub-articles.

(5) If any person or any authorised insurance or reinsurance undertaking takes or intends to take any action set out in sub-article

(1) or (2) without notifying the competent authority or obtaining its approval in terms of article 38A, then, without prejudice to any other penalty which may be imposed under this Act, the competent authority shall have the power to make an order:

(a) restraining such person or authorised insurance or reinsurance undertaking from taking, or continuing with, such action;

(b) declaring such action to be void and of no effect;

(c) requiring such person or authorised insurance or reinsurance undertaking to take such steps as may be necessary to restore the position existing immediately before the action was taken;

(d) restraining such person or authorised insurance or reinsurance undertaking from exercising any rights which such action would, if lawful, have conferred upon them, including the right to receive any payment or to exercise any voting rights attaching to the shares acquired;

(e) restraining such person or authorised insurance or reinsurance undertaking from taking any similar action or any other action within the categories set out in sub-articles (1) and (2).

(6) Without prejudice to any other provision of this Act, where the influence exercised by any person acquiring or proposing to acquire a qualifying shareholding is, or is likely to, operate against the sound and prudent management of an authorised insurance or reinsurance undertaking, the competent authority may exercise any of its powers under this Act to put an end to such situation, including the power to issue directives as it may deem reasonable in the circumstances.

(7) In the case of a third country insurance or reinsurance undertaking authorised under this Act to carry on in or from Malta the business of insurance, the provisions of this article shall apply to the extent only of requiring such undertaking to give to the competent authority, not later than thirty days from such change or occurrence, as the case may be, the information therein referred to.

(8) The competent authority, may, by means of Insurance Rules issued under this Act, indicate the circumstances when persons are to be regarded as "acting in concert".