S.L. 378.10 Art. 22FSupervision of credit intermediaries (Malta as home Member State).

(1) Maltese credit intermediaries shall comply with these regulations and shall be subject to supervision of their ongoing activities by the competent authorities:

Provided that where Maltese credit intermediaries provide services within the territory of another Member State through the establishment of a branch:

(a) Maltese credit intermediaries shall, with respect to the services provided within the territory of the Member State concerned, comply with the obligations laid down in Articles 7(1), 8, 9, 10, 11, 13, 14, 15, 16, 17, 20, 22 and 39 of the MCD and with any measures adopted pursuant thereto by the host Member State concerned; and

(b) the European regulatory authority of the host Member State concerned shall, in accordance with Article 34(3) of the MCD, have the right to examine branch arrangements and to request such changes as may be strictly needed to fulfil its obligations under Article 34(2) of the MCD and to enable the Director General to enforce the obligations under regulation 5(2), (3) and (4) and any measures adopted pursuant thereto by the Director General with respect to the services provided by the branch.

(2) Where Malta is the home Member State, the competent authorities shall determine on a case-by-case basis, whether tied credit intermediaries who are admitted in terms of these regulations and who act for and on behalf of a Maltese creditor, are to be subject to supervision directly or as part of the supervision of the creditor on behalf of which they act: Provided that if such tied credit intermediaries provide services in another Member State, such tied credit intermediaries shall be subject to supervision directly.

(3) Where Malta is the home Member State, a European regulatory authority may, in accordance with Article 34(2) of the MCD, where it ascertains that a Maltese credit intermediary providing services within its territory through the establishment of a branch is in breach of the measures adopted in the relevant host Member State pursuant to regulations Articles 7(1), 8, 9, 10, 11, 13, 14, 15, 16, 17, 20, 22 and 39 of the MCD, require the Maltese credit intermediary concerned to put an end to its irregular situation: Provided that if the Maltese credit intermediary concerned fails to take the necessary steps, the European regulatory authority of the host Member State concerned may, in accordance with Article 34(2) of the MCD, take all appropriate action to ensure that the Maltese credit intermediary concerned puts an end to its irregular situation:

Provided further that in such cases, the European regulatory authority shall, in accordance with Article 34(2) of the MCD communicate the nature of any such action to the MFSA.

(4) In the event that, despite the action taken by the European regulatory authority of the host Member State concerned in accordance with Article 34(2) of the MCD, the Maltese credit intermediary persists in breaching the measures referred to in Article 34(2) of the MCD in force in the host Member State concerned, the European regulatory authority of the host Member State may, in accordance with Article 34(2) of the MCD, take appropriate action to prevent or to penalise further irregularities and, in so far as necessary, to prevent the Maltese credit intermediary from initiating any further transactions within its territory: Provided that where the MFSA or the Director General, as the case may be, disagrees with any such actions taken by the European regulatory authority of the host Member State concerned, the Director General may refer the matter to the EBA and request its assistance in accordance with Article 19 of Regulation (EU) No 1093/2010.

(5) Where Malta is the home Member State and the European regulatory authority of a host Member State refers findings to the MFSA in accordance with Article 34(4) of the MCD, with respect to breaches by Maltese credit intermediaries acting under the freedom to provide services or the freedom of establishment in the host Member State concerned, of the obligations arising from the measures adopted pursuant to the MCD other than those specified in Article 34(2) of the MCD, the MFSA or the Director General, as the case may be, shall take appropriate action: Provided that where the MFSA or the Director General, as the case may be, fail to take any such action within one month from obtaining those findings, or where, despite any such action taken by the MFSA or the Director General, as the case may be, the Maltese credit intermediary concerned persists in acting in a manner that is clearly prejudicial to the interests of the consumers of the relevant host Member State or the orderly functioning of the markets, the European regulatory authority of the host Member State concerned may, in accordance with Article 34(4) of MCD:

(a) after having informed the MFSA, take all appropriate action needed to protect consumers and ensure the proper functioning of the markets, including by preventing the offending Maltese credit intermediary form initiating any further transactions within the territory of the host Member State;

(b) refer the matter to the EBA and request its assistance in accordance with Article 19 of Regulation (EU) No 1093/2010.

(6) The MFSA shall forward to the Director General any information received from European regulatory authorities of host Member States in accordance sub-regulations (3) and (5).

(7) Where Malta is the home Member State and a Maltese credit intermediary provides services within the territory of another Member State through the establishment of a branch, the MFSA and the Director General may, in the exercise of their responsibilities and in accordance with Article 34(5) of the MCD, carry out on-site inspections in that branch: Provided that such on-site inspections shall only be carried out following a notification by the MFSA to the European regulatory authority of the host Member State concerned.

(8) For the purposes of this regulation, the Director General and the MFSA shall collaborate closely and shall cooperate whenever necessary, including by exchanging all the necessary information in order for such competent authorities to be able to fulfil their respective duties, responsibilities and obligations.