S.L. 370.20 Art. 14Breaches by European management companies.

(1) Where a European management company which has a branch or provides services in Malta is in breach or is likely to breach the provisions of the Act or of any regulations or Investment

Services Rules made thereunder, the competent authority shall require, in writing, the European management company concerned to put an end to the breach and shall inform the European regulatory authority of the European management company home Member State or EEA State of such request.

(2) Where the European management company concerned refuses to provide the competent authority with the information falling under its responsibility or fails to take the necessary steps to put an end to the breach referred to in sub-regulation (1), the competent authority shall inform the European regulatory authority of the European management company home Member State or EEA State accordingly.

(3) Where a European management company continues in its refusal to provide information requested by the competent authority in terms of regulation 13 or persists in its breach of legal or regulatory requirements despite the measures taken by the European regulatory authority of the European management company home Member State or EEA State or due to the inadequacy or unavailability of such measures in the said Member State or EEA State, the competent authority may take either of the following actions:

(a) after informing the European regulatory authority of the European management company home Member State or EEA State, take appropriate measures, including measures under articles 13 to 16B of the Act in order to prevent or penalize further irregularities and, in so far as necessary, to prevent that European management company from initiating any further transactions in Malta; or

(b) where it considers that the European regulatory authority of the European management company home Member State or EEA State has not acted adequately, refer the matter to ESMA.

(4) The competent authority shall ensure that it is possible to serve the legal documents necessary in order to enforce the aforementioned measures.

(5) Where the service provided within the territory of Malta is the management of a Maltese UCITS, the competent authority may require the European management company to cease managing that Maltese UCITS.

(6) The competent authority shall inform the European regulatory authority of the European management company home Member State or EEA State of any measures taken pursuant to sub-regulation (3) and which involve measures and penalties or restrictions on the activities of the European management company concerned.

(7) Any action taken pursuant to sub-regulations (2), (3) and

(5) involving measures or penalties shall be properly justified and communicated to the European management company concerned.

(8) In cases where following the procedure outlined in this regulation would result in delays that could prejudice the interests of investors and others for whom services are provided, the competent authority may, prior to initiating such procedure, take any precautionary measures it may deem necessary: Provided that, ESMA, the European Commission and the European regulatory authorities of all other Member States or EEA States concerned shall be informed of such measures as soon as possible.

(9) The competent authority shall take all appropriate measures to safeguard the interests of investors. Such measures may include decisions preventing a European management company from initiating any further transactions within the territory of Malta.

(10) A European management company shall have a right to appeal to the Financial Services Tribunal in terms of the Act from a decision of the competent authority to take measures in accordance with sub-regulation (3).