S.L. 330.9 Art. 33BPower to suspend certain obligations.

(1) The Resolution Committee shall, after consulting the

Authority, which shall reply in a timely manner, have the power to suspend any payment or obligations pursuant to any contract to which an institution or entity referred to in paragraphs (b), (c) or

(d) of the definition "entity" in regulation 2(1) is a party, where all of the following conditions are met:

(a) a determination that the institution or entity is failing or likely to fail has been made under paragraph (a) of regulation 32(1);

(b) there is no immediately available private sector measure referred to in paragraph (b) of regulation 32(1) that would prevent the failure of the institution or entity;

(c) the exercise of the power to suspend is deemed necessary to avoid the further deterioration of the financial conditions of the institution or entity; and

(d) the exercise of the power to suspend is either:

(i) necessary to reach the determination provided for in paragraph (c) of regulation 32(1); or

(ii) necessary to choose the appropriate resolution actions or to ensure the effective application of one or more resolution tools.

(2) The power referred to in sub-regulation (1) shall not apply to payment or delivery obligations to the following:

(a) systems and operators of systems designated in accordance with Directive 98/26/EC;

(b) central counterparties authorised in the Union pursuant to Article 14 of Regulation (EU) No 648/2012 and third-country central counterparties recognised by ESMA pursuant to Article 25 of the said Regulation;

(c) the Central Banks.

Provided that, the Resolution Committee shall set the scope of the power referred to in sub-regulation (1), having regard to the circumstances of each case and shall carefully assess the appropriateness of extending the suspension to eligible deposits in accordance with point (4) of Article 2(1) of Directive 2014/49/EU, in particular, covered deposits held by natural persons and micro, small and medium-sized enterprises.

(3) The Resolution Committee shall, when exercising the power to suspend payment or delivery obligation under sub-regulation

(1) in respect of eligible deposits, ensure that depositors have access to an appropriate daily amount from those deposits.

(4) The period of the suspension pursuant to sub-regulation

(1) shall be as short as possible and shall not exceed the minimum period of time that the Resolution Committee considers necessary for the purposes indicated in paragraphs (c) and (d) of sub-regulation (1), and in any event shall not last longer than the period from the publication of a notice of suspension pursuant to sub-regulation (8) to midnight at the end of the business day following the day of the publication.

Provided that, at the expiry of the period of suspension referred to in this sub-regulation, the suspension shall cease to have effect.

(5) In exercising the power referred to in sub-regulation (1), the Resolution Committee shall have regard to the impact the exercise of that power might have on the orderly functioning of financial markets and shall consider the existing national rules, as well as supervisory and judicial powers, to safeguard creditors’ rights and equal treatment of creditors in normal insolvency proceedings. The Resolution Committee shall have regard to the potential application of national insolvency proceedings to the institution or entity as a result of the determination in paragraph (c) of regulation 32(1) and shall make arrangements that the Resolution Committee deems appropriate to ensure adequate coordination with the relevant national, administrative and, or judicial authorities.

(6) Where the obligations of payment or delivery under a contract are suspended pursuant to sub-regulation (1), the obligations of payment or delivery of any counterparty to the said contract shall be suspended for the same period of time.

(7) Obligations of payment or delivery which would have been due during the period of suspension shall be due immediately upon the expiry of the period of suspension.

(8) The Resolution Committee shall, without delay, notify the institution or entity referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1), and the authorities refer to paragraphs (a) to (h) of regulation 83(2) when exercising the power referred to in sub-regulation (1), after a determination has been made that the institution is failing, or likely to fail, pursuant to paragraph (a) of regulation 32(1) and before the resolution decision is taken.

Provided that, the Resolution Committee shall publish or ensure the publication of the order or instrument by which payment or delivery obligations are suspended under this regulation and the terms and period of suspension, by the means referred to in regulation 83(4).

(9) This regulation is without prejudice to Maltese Law granting powers to suspend payment or delivery obligations of the institutions or entities referred to in sub-regulation (1), before a determination is made that those institutions or entities are failing or likely to fail under paragraph (a) of regulation 32(1), or to suspend payment or delivery obligations of institutions or entities which are to be wound up under normal insolvency proceedings and that exceed the scope, duration and conditions provided for in this regulation.

Provided that, such powers shall be exercised in accordance with the scope, duration and conditions provided for in the relevant Maltese legislation.

Provided further that, the conditions provided for in this regulation shall be without prejudice to the conditions related to such power of suspension payment or delivery obligations..

(10) Where the Resolution Committee exercises the power to suspend payment or delivery obligations with respect to an institution or an entity referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1) in accordance with sub-regulation (1), the Resolution Committee may, for the duration of the suspension, exercise the power to:

(a) restrict secured creditors of an institution or an entity referred to in paragraphs (b), (c) or (d) of the definition "entity" in regulation 2(1), from enforcing security interests in relation to any of the assets of the said institution or entity for the same duration, in which case regulation 70(2), (3) and (4) shall apply; and

(b) suspend the termination rights of any party to a contract with that institution or entity for the same duration, in which case regulation 71(2) to (8) shall apply.

(11) Where the Resolution Committee has exercised the power to suspend payment or delivery obligations in instances set out in sub-regulations (1) to (10), after making a determination that an institution or entity is failing or likely to fail pursuant to paragraph (a) of article 32(1), and if resolution action is subsequently taken with respect to the relevant institution or entity, the Resolution Committee shall not exercise its powers under regulation 69(1), 70(1) or 71(1) with respect to the said relevant institution or entity.