Consultation on the proposed amendments to the Banking Act and Financial Institutions Act
News    ·   01-02-2018

AUTHOR: Diane Bugeja

On 24 January 2018, the Malta Financial Services Authority (MFSA) launched a consultation process in respect of amendments being proposed to the Banking Act and Financial Institutions Act. The proposed amendments purport to transpose the Second Payment Services Directive (Directive 2015/2366) as well as provide the Minister responsible for Financial Services with the possibility to implement, at any future point in time, certain options provided to Member States by the Payment Accounts Directive (Directive 2014/92/EU).

Specifically in relation to changes brought about by the Second Payment Services Directive, the FIA contemplates two new payment services, namely payment initiation and account information services, which were previously not licensable but which now require authorisation and registration respectively, as well as a number of ongoing compliance obligations such as capital requirements and professional indemnity insurance coverage. Other proposed amendments relate to, inter alia, the streamlining of definitions, changes to the consumer complaints process, and amendments to the licensing process and applicable exemptions. The amendments proposed in this round of consultation complement the revised Directive No. 1 of the Central Bank of Malta on the Provision and Use of Payment Services, the final text of which was released on 9 January 2018. In the near future, it is expected that the MFSA will further consult on changes to subsidiary legislation and to Financial Institutions Rules issued under the Financial Institutions Act as part of this transposition exercise.

The consultation closes on 7 February 2018 and the consultation documents can be accessed here.

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