S.L. 378.10 Art. 22GSupervision of credit intermediaries (Malta as host Member State).

(1) Branches in Malta of European credit intermediaries shall comply with the obligations laid down in regulations 4A, 5(1),

6, 7, 7A, 8, 8A, 8B, 12A, 19, 21 and 24A and with any measures adopted pursuant thereto by the MFSA and, or the Director General, as the case may be, and shall be subject to supervision by such competent authorities of their ongoing activities with respect to such obligations and measures: Provided that where Malta is the host Member State, the MFSA and, or the Director General, as the case may be, shall also have the right to examine branch arrangements and to request such changes as are strictly needed to fulfil their responsibilities under Article 34(2) of the MCD and to enable the European regulatory authority of the home Member State concerned to enforce the obligations under Articles 7(2), (3) and (4) of the MCD and any measures adopted pursuant thereto by the home Member State concerned with respect to the services provided by the branch of the European credit intermediary.

(2) Where Malta is the host Member State and the MFSA and, or the Director General, as the case may be, ascertain that a European credit intermediary providing services in Malta through the establishment of a branch is in breach of the measures adopted in Malta pursuant to regulations 4A, 5(1), 6, 7, 7A, 8, 8A, 8B, 12A, 19, 21 and 24A, such competent authorities shall require the European credit intermediary concerned to put an end to its irregular situation.

(3) In the event that a European credit intermediary providing its services in Malta through the establishment of a branch fails to take the necessary steps following a request made by the MFSA and, or the Director General, as the case may be, in accordance with sub-regulation (2), such competent authorities shall take appropriate action to ensure that the European credit intermediary concerned puts an end to its irregular situation:

Provided that the MFSA shall communicate the nature of such action to the European regulatory authority of the home Member State concerned.

(4) In the event that, despite the action taken by the MFSA and, or the Director General, as the case may be, in accordance with sub-regulation (3), the European credit intermediary concerned persists in breaching the measures referred to in sub-regulation (2), the MFSA and, or the Director General, as the case may be, may take appropriate action to prevent or to penalise further irregularities and, in so far as necessary, to prevent the European credit intermediary form initiating any further transactions in Malta: Provided that in any such case, the MFSA shall:

(a) before any appropriate action is taken by the MFSA and, or the Director General, as the case may be, in accordance with this sub-regulation, inform the European regulatory authority of the home Member State concerned;

(b) inform the European Commission of any such action without undue delay:

Provided further that where the European regulatory authority of the home Member State concerned disagrees with any such action taken by the MFSA and, or the Director General, as the case may be, the European regulatory authority concerned may, in accordance with Article 34(2) of the MCD, 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 host Member State and the MFSA and, or the Director General, as the case may be, have clear and demonstrable grounds for concluding that a European credit intermediary acting within its territory under the freedom to provide services is in breach of the obligations arising from the measures adopted pursuant to the provisions of these regulations transposing the MCD, or that a European credit intermediary that has a branch in Malta is in breach of the obligations arising from the measures adopted pursuant to the provisions of these regulations transposing the MCD other than those specified in Article 34(2) of the MCD, the MFSA shall refer those findings to the European regulatory authority of the home Member State concerned, which shall, in accordance with Article 34(4) of the MCD, take appropriate action.

(6) In the event that the European regulatory authority of the home Member State concerned fails to take any action in accordance with Article 34(4) the MCD, or where, despite the action taken by the European regulatory authority of the home Member State concerned, the European credit intermediary concerned persists in acting in a manner that is clearly prejudicial to the interests of Maltese consumers or orderly functioning of the markets:

(a) the MFSA and, or the Director General, as the case may be, shall take all appropriate action needed to protect consumers and ensure the proper functioning of the markets, including by preventing the defaulting European credit intermediary from initiating any further transactions in Malta: Provided that prior to taking any such action, the MFSA shall inform the European regulatory authority of the home Member State concerned: Provided further that the MFSA shall inform the European Commission and the EBA of any action taken by the MFSA and, or the Director General, as the case may be, in accordance with this paragraph without undue delay;

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

(7) Where Malta is the host Member State and a European credit intermediary provides services in Malta through the establishment of a branch, the European regulatory authority of the home Member State may, in accordance with Article 34(5) of the MCD, in the exercise of its responsibilities and after having informed the MFSA, carry out on-site inspections in that branch: Provided that the MFSA shall forward to the Director General any information received from the European regulatory authority concerned in accordance with Article 34(5) of the MCD.

(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.