S.L. 371.9 Art. 23Financing of the Scheme.

(1) The competent authority shall ensure that:

(a) the Scheme has in place adequate systems to determine its potential liabilities; and

(b) the available financial means of the Scheme is proportionate to those liabilities.

(2) The available financial means of the Scheme shall reach a target level of the covered deposits of its members as follows:

(a) 1.10% from 1 January 2022 until 31 December 2022;

(b) 1.20% from 1 January 2023 until 31 December 2023;

(c) 1.30% from 1 January 2024 until 31 December 2024 and for every subsequent year; or such higher target level as may be established by banking rules in accordance with regulation 42: Provided that:

(a) where the financing capacity falls short of such target level, the payment of contributions shall resume at least until the target level is reached again;

(b) if the available financial means have been reduced to less than two-thirds of such target level, the regular contribution shall be set at a level allowing such target level to be reached within six years;

(c) if the available financial means have been reduced to a level which is more than two-thirds of such target level, the regular contribution shall be set at a level allowing such target level to be reached within four years;

(d) subject to the overriding provision of regulation 23(3), but notwithstanding the maximum portion of a Compensation Contribution which by reference to the relative financial year can be provided as payment commitment in regulation 25(8), where the available financial means of the Scheme have been reduced on account of the Scheme having paid compensation to depositors under Part III of these regulations, the Scheme may provide in its absolute discretion that the payment of contributions by members under paragraphs (a), (b) and, or (c), as the case may be, be provided in whole or in part to the Scheme by means of a payment commitment;

(e) the payment of contributions under paragraph (a) and paragraph (b) and, or paragraph (c) shall be determined by the Scheme in accordance with regulation 25(3).

(f) the regular contribution shall take due account of the phase of the business cycle, and the impact procyclical contributions may have when setting annual contributions in the context of these regulations.

(3) The available financial means to be taken into account in order to reach the target level may include payment commitments. The total share of payment commitments shall not exceed 30% of the total amount of available financial means raised in accordance with this regulation: Provided that the competent authority may issue banking rules pursuant to regulation 42 on payment commitments, account being taken of any guidelines issued by the European Banking Authority.

(4) The target level referred to in sub-regulation (2) shall not include contributions to resolution financing arrangements under Directive 2014/59/EU, including available financial means to be taken into account in order to reach the target level of the resolution financing arrangements under Directive 2014/59/EU.

(5) The Scheme shall ensure that it has in place adequate alternative funding arrangements to enable it to obtain short-term funding to meet claims against the Scheme.

(6) The Scheme shall, by 31 March each year, inform the European Banking Authority of the amount of covered deposits in Malta and of the amount of the available financial means of the Scheme on 31 December of the preceding year.