Cap. 345 Art. 39CAAdministrative penalties and other administrative measures in relation to covered bonds.

(1) Without prejudice to the powers of the competent authority under this Act or any other law, where the competent authority is satisfied that a person’s conduct amounts to a breach of any of the provisions of Part IV or any regulations or Covered bis

Bonds Rules issued thereunder, or that a person has contravened or failed to comply with any condition, obligation, requirement or directives made or given by the competent authority under any of the provisions of this Act or any regulations or Covered Bonds Rules issued thereunder, including failure to co-operate in an investigation, the competent authority may, by notice in writing and without recourse to a court hearing, impose on such person an administrative penalty which may not exceed one hundred and fifty thousand euro (€150,000) for each breach or failure to comply, as the case may be and, or any other administrative measure, as it may deem necessary.

(2) Without prejudice to the generality of sub-article (1), the competent authority may impose administrative penalties and other administrative measures in at least the following circumstances:

(a) a credit institution has acquired an approval for a covered bond programme by means of false statements or other irregular means;

(b) a credit institution no longer fulfils the conditions under which approval for a covered bond programme was granted;

(c) a credit institution issues covered bonds without obtaining the approval of the competent authority in accordance with articles 31D and 31E;

(d) a credit institution issuing covered bonds fails to meet the requirements set out in article 31I and in regulation 108(1) of the Recovery and Resolution Regulations;

(e) a credit institution issues covered bonds that do not comply with article 31I and with regulation 68(7) of the Recovery and Resolution Regulations;

(f) a credit institution issues covered bonds that are not collateralised in accordance with regulation 3 of the Financial Markets Act (Covered Bonds) Regulations;

(g) a credit institution issues covered bonds that are collateralised by assets located outside the European Union in breach of regulation 4 of the Financial Markets Act (Covered

Bonds) Regulations;

(h) a credit institution collateralises covered bonds in an intragroup pooled covered bond structure in breach of regulation 5 of the Financial Markets Act (Covered Bonds) Regulations;

(i) a credit institution issuing covered bonds fails to fulfil the conditions for joint funding laid down in regulation 6 of the Financial Markets Act (Covered Bonds) Regulations;

(j) a credit institution issuing covered bonds fails to meet the requirements of composition of the cover pool laid down in regulation 7 of the Financial Markets Act (Covered Bonds) Regulations;

(k) a credit institution issuing covered bonds fails to meet the requirements regarding derivative contracts in the cover pool laid down in regulation 8 of the Financial Markets Act (Covered Bonds) Regulations;

(l) a credit institution issuing covered bonds fails to comply with the requirements of the segregation of cover assets in accordance with regulation 9 of the Financial Markets Act

(Covered Bonds) Regulations;

(m) a credit institution issuing covered bonds fails to report information or provides incomplete or inaccurate information in breach of regulation 11 of the Financial Markets Act (Covered Bonds) Regulations;

(n) a credit institution issuing covered bonds repeatedly or persistently fails to maintain a cover pool liquidity buffer in breach of regulation 13 of the Financial Markets Act (Covered Bonds) Regulations;

(o) a credit institution that issues covered bonds with extendable maturity structures fails to fulfil the conditions for extendable maturity structures laid down in regulation 14 of the

Financial Markets Act (Covered Bonds) Regulations;

(p) a credit institution issuing covered bonds fails to report information or provides incomplete or inaccurate information on its obligations in breach of the requirements on reporting set out in regulation 15(3) of the Financial Markets Act (Covered Bonds) Regulations;

(q) where it has been determined that a credit institution issuing covered bonds has committed a serious, repeated or systematic breach, or a combination thereof, of the

Prevention of Money Laundering Act, of any regulations made thereunder or of any procedures or guidance issued in terms of any such regulations; and, or

(r) a credit institution issuing covered bonds fails to cooperate with the competent authority.

(3) Without prejudice to the generality of sub-article (1), the administrative measures referred to therein shall include at least the following:

(a) a withdrawal of an approval for a covered bond programme;

(b) a public statement which indicates the identity of the natural or legal person and the nature of the breach in accordance with article 39GA;

(c) an order requiring the natural or legal person to cease the conduct and to desist from a repetition of that conduct; and, or

(d) a directive issued in terms of article 39K.

(4) Any administrative penalties and other administrative measures imposed by the competent authority in terms of this article shall be effective, proportionate and dissuasive.

(5) The competent authority shall ensure that any administrative penalties and other administrative measures imposed by it in terms of this article are effectively implemented.

(6) When determining the type of administrative penalties or other administrative measures and the amount of administrative penalties to be imposed, the competent authority shall take into account the following circumstances, where relevant:

(a) the gravity and the duration of the breach;

(b) the degree of responsibility of the natural or legal person responsible for the breach;

(c) the financial strength of the natural or legal person responsible for the breach, including by reference to the total turnover of the legal person or the annual income of the natural person;

(d) the importance of profits gained or losses avoided because of the breach by the natural or legal person responsible for the breach, insofar as those profits or losses can be determined;

(e) the losses caused to third parties by the breach, insofar as those losses can be determined;

(f) the level of cooperation by the natural or legal person responsible for the breach with the competent authority;

(g) any previous breaches by the natural or legal person responsible for the breach;

(h) any actual or potential systemic consequences of the breach.

(7) Without prejudice to sub-article (1), where the provisions of Part IV bis, or any regulations or Covered Bonds Rules issued thereunder, apply to legal persons, the administrative penalties and other administrative measures referred to in this article may also be imposed by the competent authority on members of the board of directors of any such legal person and on other individuals who under national law are responsible for the breach.

(8) Administrative penalties that may be imposed by the competent authority under this article, may be imposed in the form of a fixed penalty, a daily penalty, or both.

(9) The imposition by the competent authority of an administrative penalty in terms of this article shall be without prejudice to any other consequences of the act or omission of the offender under civil or criminal law:

Provided that in all cases where the competent authority imposes an administrative penalty in respect of anything done or omitted to be done by any person and such act or omission also constitutes a criminal offence, no proceedings may be taken or continued against the said person in respect of such criminal offence.