S.L. 376.7 Art. 4Application for the exercise of a European right by European financial institutions - branch.

(1) A European financial institution seeking to establish a branch in Malta in the exercise of a European right shall communicate to its European regulatory authority the information specified in sub-regulation (2) and shall thereafter be exempt from the provision of article 3 of the Act.

(2) The information referred to in sub-regulation (1) shall be the following:

(i) its intention to establish a branch in Malta to provide payment services and, or issue and, or distribute and, or redeem electronic money;

(ii) the name, the address and, where applicable, the authorisation number and the unique identification number of the European financial institution;

(iii) whether the European financial institution intends to issue and, or distribute and, or redeem electronic money in Malta and, or which payment services activities it intends to carry out;

(iv) the address of the proposed branch in Malta;

(v) the identity of those responsible for the management of the proposed branch;

(vi) a description of the organisational structure of the proposed branch;

(vii) a business plan including a forecast budget calculation for the first three financial years which demonstrates that the European financial institution is able to employ the appropriate and proportionate systems, resources and procedures to operate soundly with regard to the proposed provision of payment services and, or the issuance and, or the distribution and, or the redemption of the electronic money through the proposed branch in Malta;

(viii) a description of the European financial institution’s governance arrangements and internal control mechanisms, including administrative, risk management and accounting procedures, which demonstrates that those governance arrangements, control mechanisms and procedures are proportionate, appropriate, sound and adequate with regard to the proposed provision of payment services and, or the INSTITUTIONS

issuance, distribution or redemption of the electronic money through the proposed branch in Malta;

(ix) where the European financial institution intends to outsource operational functions of payment services and, or of the issuance and, or distribution and, or redemption of electronic money to other entities in Malta, the operational functions of payment services and, or of the issuance and, or distribution and, or redemption of electronic money which it will be outsourcing to other entities in Malta; and

(x) any other information which may be required in terms of Article 6(1) of the Commission Delegated Regulation.

(3) Within one month of receipt of all of the information referred to in sub-regulation (2), the competent authority shall, in terms of Article 28(2) of the Payment Services Directive, receive the said information from the European regulatory authority by means of the template set out in Annex II to the Commission Delegated Regulation.

(4) Where the competent authority receives all the information referred to in sub-regulation (2) from the European regulatory authority in accordance with sub-regulation (3), it shall, within one month of receipt of the said information, assess that information and provide the European regulatory authority with relevant information in connection with the intended provision of payment services and, or issuance and, or distribution and, or redemption of electronic money by the relevant European financial institution in the exercise of a European right.

(5) If the competent authority has any reasonable grounds for concern in connection with the intended establishment of the branch in Malta with regard to money laundering or terrorist financing within the meaning of Directive (EU) 2015/849, it shall inform the European regulatory authority accordingly.

(6) Where the European regulatory authority does not agree with the assessment of the competent authority, the latter shall, in terms of Article 28(2) of the Payment Services Directive, be informed of the reasons for its decision.

(7) Within three months of receipt of all of the information referred to in sub-regulation (2), the competent authority shall, in terms of Article 28(3) of the Payment Services Directive, receive communication of the European regulatory authority’s decision.

(8) Upon entry in the public register of the home Member State in terms of Article 14 of the Payment Services Directive, the European financial institution may commence its activities in Malta through the branch. The competent authority shall enter the branch of the European financial institution in the register established and maintained by the competent authority in accordance with article 8D of the Act.

(9) The competent authority shall, in terms of Article 18(3) of the Payment Services Directive, be informed by the European regulatory authority of the date from which the European financial institution shall commence its activities in Malta through the branch by means of the template set out in Annex VI to the Commission Delegated Regulation.

(10) In the event of a change regarding the information communicated in accordance with sub-regulation (2), including any additional branches or entities to which activities are outsourced in Malta, the competent authority shall, in terms of Article 28(4) of the Payment Services Directive and Article 8 of the Commission Delegated Regulation, be informed of such changes by the European regulatory authority concerned and, in such cases, the provisions of sub-regulations (3) to (9) shall apply.