S.L. 645.1 Art. 4Supervision of European credit servicers.

(1) Without prejudice to regulation 2, where a

European credit servicer performs credit servicing activities in Malta, the European regulatory authority of the home Member State, the competent authority and, where appropriate, the competent authority of the Member State where the credit was granted, when different from the European regulatory authority of the home Member State and the competent authority, shall cooperate closely in the performance of their functions and duties, in particular when carrying out checks, investigations and on-site inspections.

(2) The competent authority may be requested, by the European regulatory authority of the home Member State, to assist the said European regulatory authority in carrying out an on-site inspection of a branch set up, or of a credit service provider appointed, in Malta:

Provided that an inspection as referred to in this sub-regulation shall be conducted in accordance with Maltese law.

(3) The competent authority shall be entitled to decide on the most appropriate measures to be taken in each individual case in order to meet the request for assistance made by the European regulatory authority of the home Member State, as referred to in sub-regulation (2).

(4) Where the competent authority decides to conduct on-site inspections on behalf of the European regulatory authority of the home Member State, it shall inform the said European regulatory authority of the results thereof without delay.

(5) The competent authority may, on its own initiative, conduct verifications, inspections, and investigations in respect of credit servicing activities provided in Malta by a European credit servicer: (PASSPORTING)

Provided that the competent authority shall provide the results of those verifications, inspections and investigations to the European regulatory authority of the home Member State without delay.

(6) Where the competent authority has evidence that a European credit servicer performing credit servicing activities in Malta, in accordance with the national law of the Member State of such European credit servicer transposing Article 13 of the NPL Directive, infringes any applicable provision of the law, including national law transposing the NPL Directive, they shall transmit that evidence to the European regulatory authority of the home Member State and request that it takes appropriate measures.

(7) The provisions of sub-regulation (6) shall be without prejudice to the supervisory, investigatory and sanctioning powers of the competent authority in relation to the European credit servicer under Maltese legislation, namely those applicable to the credit or the credit agreement.

(8) Where a credit servicer continues to infringe any applicable provision of the law, including national law transposing the NPL Directive, and after the competent authority has informed the European regulatory authority of the home Member State thereof, the competent authority may impose appropriate administrative penalties and remedial measures in order to ensure compliance with the provisions of the Act, and any regulations made, and Credit Servicing Rules and Conduct of Business Rules issued, thereunder, when either of the following apply:

(a) no adequate and effective steps were taken by the European credit servicer to rectify the infringement in a reasonable time; or

(b) in an urgent case, where immediate action is necessary in order to address a serious threat to the collective interests of the borrowers:

Provided that the competent authority may impose administrative penalties and remedial measures as referred to in this sub-regulation notwithstanding any administrative penalties and remedial measures already imposed by the European regulatory authority of the home Member State.

(9) Without prejudice to sub-regulation (8), the competent authority may prohibit further activities of a European credit servicer that infringes any applicable provision of the law, including national law transposing the NPL Directive, until such time as an adequate decision is taken by the European regulatory authority of the home Member State or the credit servicer takes steps to remedy the infringement.