untitled COMPANY SERVICE PROVIDERS [CAP. 529. 1
CHAPTER 529
COMPANY SERVICE PROVIDERS ACT To make provision with respect to company service providers and to
provide for matters ancillary or incidental thereto, and to amend various financial services laws.
24th December, 2013 ACT XX of 2013.
General Provisions Short title and scope.
1. (1) The short title of this Act is the Company Service Providers Act.
(2) The purpose of this Act is to implement Article 36 of Directive 2005/60/EC of the European Parliament and of the Council of 29 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, in so far as the said article applies to company service providers.
Cap. 330.
(3) For the purposes of Article 36 of Directive 2005/60/EC referred to in sub-art icle (2) , the Malta Financial Services Authority established in terms of article 3 of the Malta Financial Services Authority Act shall be the competent authority responsible for the registration and supervision of company service providers.
Interpretation.2. (1) In this Act, unless the context otherwise requires: "approved jurisdiction" means an EEA State or an EU Member
State or any other jurisdiction which has an equal or comparable level of regulation regarding company service providers to that in Malta;
Cap. 330. "the Authority" means the Malta Financial Services Authority
established in terms of the Malta Financial Services Authority Act; "company service provider" means any natural or legal person
which, by way of business, provides any of the following services to third parties:
(a) formation of companies or other legal entities; (b) acting as or arranging for another person to act as
director or secretary of a company, a partner in a partnership or in a similar position in relation to other legal entities;
(c) provision of a registered office, a business correspondence or administrative address and other related services for a company, a partnership or any other legal entity;
"Minister" means the Minister responsible for finance; "operating in or from Malta" includes the existence of an office,
branch, or other centre of professional or commercial activities of a
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regular nature in Malta , and does not include one or more unconnected and sporadic acts;
Cap. 330.
"overseas regulatory authority" means an authority in any country or territory outside Malta which exercises any regulatory or supervisory function in relation to financial services corresponding to a function of the Authority as defined in the Malta Financial Services Authority Act;
"prescribed" means prescribed by regulations made under this Act;
"registered person" means a person in relation to whom a registration to act as a company service provider has been issued by the Authority in terms of this Act.
(2) Any reference in this Act to any law, or provision thereof, shall be construed as a reference to that law or provision as from time to time in force, and shall include a reference to any enactment replacing such law or provision, and to any subsidiary legislation made thereunder.
(3) Words and expressions used in this Act with reference to any other law shall, so far as necessary to give effect to this Act and consistently with the provisions thereof, have the same meaning as they have in the law with reference to which they are used in the Act.
(4) In this Act and in any regulations made thereunder, if there is any conflict between the English and Maltese text, the English text shall prevail.
Requirement of registration for company service providers.
3. (1) Any person resident or operating in or from Malta who acts as a company service provider by way of business, shall apply for registration with the Authority in terms of this Act:
Provided that the following persons shall not be required to be registered with the Authority in terms of this Act:
(a) a person in possession of a warrant, or equivalent, to carry out the profession of advocate, notary public, legal procurator or certified public accountant; and
Cap. 331. (b) a person authorised to act as a trustee or to provide
other fiduciary duties in terms of the Trusts and Trustees Act.
Cap. 370. (2) A person in possession of another licence, authorisation or
recognition in terms of the Investment Services Act who intends providing company services by way of business shall apply for registration and, in such case, the Authority shall consider any due diligence process already carried out by it.
Cap. 373.
(3) The persons referred to in sub-article (1)(a) and (b) shall notify the Financial Intelligence Analysis Unit established under the Prevention of Money Laundering Act, that they are acting as company service providers by way of business and that they are not required to register with the Authority under this Act.
(4) In the event of reasonable doubt as to whether the carrying out of a particular activity would be subject to registration in terms
COMPANY SERVICE PROVIDERS [CAP. 529. 3
of this Act, the matter shall be conclusively determined by the Authority.
(5) (a) Any person having a licence or registration to provide company service, issued by the relevant regulatory authority in an approved jurisdiction, shall not be subject to registration under this Act, provided that such person notifies the Authority, in writing, of its intention to provide company service in Malta at least forty-five days prior to commencing such activities in Malta and that such person receives from the Authority a confirmation in writ ing that i t does not object thereto.
(b) A notification under this sub-article shall outline the proposed activities and shall be accompanied by such information as may be required by the Authority from time to time.
(c) To the extent that the Authority lays down any restrictions or conditions for such activities, on initial response to a notification or at any other time, such restrictions and conditions shall come into effect as stated in the response or by subsequent notice of the Authority.
Application for registration.
4. An application for registration as a company service provider in terms of article 3 shall be made to the Authority and shall:
(a) contain or be accompanied by such information and particulars and be in such form as the Authority may require;
(b) be verified in the manner and to the extent required by the Authority;
(c) indicate the address in Malta for service on the applicant for registration, of any notice or other document required or authorised to be served on him in terms of this Act; and
(d) be accompanied by a non-refundable application fee, as may be prescribed, irrespective of whether the registration is granted or not by the Authority.
Power of the Authority to refuse or grant a registration.
5. (1) The Authority may register or refuse an application for registration made under this Act. Such registration may be general or may be restricted to particular specified activities. The Authority shall not, without prejudice to article 3, grant a registration applied for under this Act unless it is satisfied that:
(a) the applicant is a fit and proper person to provide the services concerned and that the applicant will comply with and observe the requirements of this Act and any rules made thereunder and which are applicable to him;
(b) where the applicant is a natural person, such person is resident or operating in Malta;
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(c) where the applicant is a company or other type of legal entity:
(i) its objects include acting as company service provider and carrying on activities ancillary or incidental thereto, and do not include objects which are not compatible with the services of a company service provider;
(ii) its actual activities are compatible with its objects in terms of sub-paragraph (i);
(iii) the directors of the company are not less than two in number and are individuals who are fit and proper persons;
(iv) every person who directly or indirectly owns or controls 25% or more of the shares or voting rights in the company, or otherwise exercises control over the management of the company, is a fit and proper person;
(v) the name of the company is not inconsistent with its activities as outlined in sub-paragraphs (i) and (ii); and
S.L. 373.01.
(vi) where the company is not formed and registered in Malta, it is formed, constituted or incorporated in a reputable jurisdiction. For the purposes of this sub-paragraph, reputable jurisdiction shall have the meaning assigned to it in the Prevention of Money Laundering and Funding of Terrorism Regulations.
(2) When considering whether to grant or refuse to grant a registration under this Act, the Authority shall, in particular, have regard to:
(a) the protection of investors and the general public; (b) the protection of the reputation of Malta taking into
account Malta’s international commitments; (c) the promotion of competition and choice.
(3) In granting registration, the Authority may subject the applicant to such conditions as it may deem appropriate. After having granted registration, the Authority may, from time to time, vary or revoke any condition so imposed or otherwise impose new conditions.
(4) The Authority shall notify any applicant of its decision whether to grant or refuse registration applied for, within six months from the receipt of a complete application, accompanied by the prescribed application fee and made in accordance with the applicable provisions of this Act and any rules made thereunder.
(5) Any person to whom a registration has been granted in terms of this Act shall be subject to a registration fee as may be prescribed, which is payable on the date on which such registration is granted and, thereaf ter, to a supervisory fee , as may be prescribed, which is payable annually upon the anniversary of the date of such registration.
COMPANY SERVICE PROVIDERS [CAP. 529. 5
(6) A register of all company service providers to whom regis t ra t ion has been granted in terms of this Act shal l be established by the Authority. The register shall be publicly available on the Authority’s website and shall indicate the names of the persons to whom such registration has been granted, as well as their contact details, and it shall be updated on a regular basis.
(7) A company service provider shall notify the Authority of any change or circumstance which would have a bearing upon its status as a registered person and, in the case of any change in its charter, statute, memorandum or articles of association or other instrument constituting the company, or any change of its directors or members, such changes shall not be effective until they are notified and approved by the Authority.
Power of the Authority to cancel registration.
6. (1) The Authority may, at any time, cancel a registration granted in terms of this Act where:
(a) the registered person is no longer deemed to be a fit and proper person;
(b) the registered person has contravened any of the provisions of this Act or any rules made thereunder or has failed to satisfy or comply with any obligation or condition to which such registered person or the registration is subject by virtue of this Act and any rules issued thereunder;
(c) the registered person or someone acting on behalf of such registered person has knowingly supplied the Authority with information that is false, inaccurate or misleading;
(d) the registered person has ceased to act as a company service provider;
(e) the cancellation of such registration is considered desirable for the protection of the general public or the reputation of Malta;
(f) the registered person has so requested; or (g) there are other circumstances under which the
Authority would have been precluded from granting registration under this Act or where the Authority would have otherwise refused the granting of such registration.
(2) The Authority shall make public the fact that the registration of a company service provider has been cancelled.
(3) Any person whose registration has been cancelled shall, wi th in s ix ty days f rom the date of the cancel la t ion of the registration, ensure that the services he had been providing to companies or other legal persons in terms of its registration are transferred to another person which is duly registered in terms of this Act.
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Notification of proposed refusal or cancellation of registration.
7. (1) Where the Authority intends - (a) to vary any condition to which the registration is
subject or to impose a new condition thereon; or (b) to refuse an application for the registration or to cancel
a registration, it shall give the applicant or the registered person, as the case may be, a notice in writing of this intention, setting out the reasons for such decision.
(2) A notice given under sub-article (1) shall state that the recipient of the notice may, within such reasonable period of time after receipt thereof as may be stated in such notice, being a period of not less than forty-eight hours and not longer than thirty days, make representations in writing to the Authority giving reasons why the proposed decision should not be taken, and the Authority shall consider any representation so made before arriving at a decision.
(3) The Authority shall, as soon as practicable, notify its final decision in writing to the applicant or the registered person, as the case may be.
Power of the Authority to issue rules.
8. (1) The Authority may issue rules applicable to company service providers as may be required, for the carrying into effect of this Act and may, in particular, but without prejudice to the generality of the foregoing, by such rules:
(a) lay down requirements, conditions and criteria for the carrying out of activities by company service providers;
(b) lay down the conduct, duties and obligations of company service providers;
(c) lay down the responsibilities of company service providers towards the Authority and provide for the form of applications, returns, statements or notices to be made or given to the Authority;
(d) lay down the criteria which the Authority shall take into account when determining whether a person is a fit and proper person for the purpose of this Act, including an indication of the type and nature of academic qualifications and experience as well as the additional areas of expertise which would be acceptable to the Authority when determining whether a person qualifies to be a fit and proper person;
(e) lay down the criteria as to when a person shall be deemed by the Authority to be carrying on the activities of a company service provider by way of business;
(f) provide for any other matters as the Authority may consider appropriate in relation to company service providers and the conduct of their activities.
(2) Such rules shall be binding on company service providers.
COMPANY SERVICE PROVIDERS [CAP. 529. 7
Administrative penalties and other measures.
9. (1) Where the Authority is satisfied that a registered person’s conduct amounts to a breach of any of the provisions of this Act or of the rules issued thereunder, including failure to cooperate in an investigation, the Authority may, by notice in writing and without recourse to a court hearing, impose on the registered person and, or any other person, as the case may be, an administrative penalty which may not exceed twenty-five thousand euro (€25,000) for each infringement or failure to comply, as the case may be.
(2) An administrative penalty imposed in terms of sub-article (1) may be imposed in the form of a fixed penalty, a daily penalty or both:
Provided that when an administrative penalty in terms of sub-article (1) is imposed on a daily cumulative basis, such accumulated penalty shall not exceed twenty-five thousand euro (€25,000).
(3) The imposition by the Authority of an administrative penalty in terms of this article shall be without prejudice to any other consequence of the act or omission of the offender under civil or criminal law.
(4) The Authority shall, by means of a public statement, disclose the name of the person sanctioned, the particular breach of the p rov is ion o f th i s Ac t o r the ru les , and the pena l ty o r administrative measure imposed.
REGULATORY AND INVESTIGATIVE POWERS Power to require information.
10. (1) Notwithstanding any other provision of this Act, the Authority may, by notice in writing, require any person who is or who was acting, or who appears to be or to have been acting, as a company service provider or who was providing services which require registration according to this Act, and any other person who appears to be in possession of relevant information, to do all or any of the following:
(a) to furnish to the Authority, at such time and place and in such form as it may specify, such information and documentation as it may require with respect to any such activities as aforesaid;
(b) to furnish to the Authority any information or documentation aforesaid, verified in such manner as it may specify;
(c) to attend before the Authority, or before a person appointed by it, at such time and place as it may specify, to answer questions and provide information and documentation with respect to any such activities as aforesaid.
(2) The Authority may take copies of any documents furnished or provided under this article.
(3) Where the person required to provide information or documentation under this article does not have the relevant information or documentation, he shall disclose to the Authority
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where , to the bes t o f h i s knowledge , tha t in fo rmat ion o r documentation is, and the Authority may require any person, whether indicated as aforesaid or not, who appears to it to be in possession of that information or documentation, to provide it.
(4) A statement made and documentation provided in pursuance of any requirement under this article may be used in evidence against the person making the statement or providing the documentation, as well as against any person to whom they relate.
Cap. 9. Cap. 12.
Cap. 377.
(5) Without prejudice to that provided in article 642(1) of the Criminal Code and in article 588(1) of the Code of Organization and Civil Procedure, the provisions of this article shall apply to all information or documentation, notwithstanding the provisions of the Professional Secrecy Act.
(6) The power to require the production of documentation under the provisions of this article shall be without prejudice to any l i en o r cha rge c la imed by any pe r son in r e la t ion to such documentation.
(7) Where the Authority has appointed a person under sub- article (1)(c), such person shall, for the purposes of carrying out the functions in relation to such appointment, have all the powers conferred on the Authority by this article and a requirement made by such appointed person shall be deemed to be and have the same force and effect as a requirement of the Authority.
Power to issue directives.
11. (1) Without prejudice to any of the powers conferred on it by this Act, the Authority may, whenever it deems it necessary, give, by not ice in wri t ing, such direct ives as i t may deem appropriate in the circumstances. Any person to whom or to which the notice is given shall obey, comply with and otherwise give effect to any such directive within the time and in the manner stated in the directive.
(2) Without prejudice to the generality of the foregoing provisions of this article, a directive under this article may -
(a) require anything to be done or be omitted to be done, or impose any prohibition, restriction or limitation, or any other requirement, and confer powers, with respect to any transaction or other act, or to any assets, or to any other thing whatsoever;
(b) require that any person having functions of a company service provider be removed or replaced by another person acceptable to the Authority;
(c) require a company service provider to cease operations and to wind up its affairs, in accordance with such procedures and directions as may be specified in the directive, which may provide for the appointment of a person to take possession and control of all documents, records, assets and property belonging to or in the possession or control of the registered company service provider.
(3) The power to give directives under this article shall include
COMPANY SERVICE PROVIDERS [CAP. 529. 9
the power to vary, alter, add to or withdraw any directive, as well as the power to issue new or further directives.
(4) Where the Authority is satisfied that the circumstances so warrant, it may at any time make public any directive it has given under any of the provisions of this article.
Exchange of information and collaboration. Cap. 330.
12. (1) In relation to company service providers, the provisions of article 17 of the Malta Financial Services Authority Act shall apply mutatis mutandis.
(2) The Authority may exercise the powers granted to it by virtue of this Act at the request of, or for the purposes of, assisting an overseas regulatory authority:
(a) where the assistance is required by the overseas regulatory authority for the purposes of the exercise of one or more of its regulatory functions; or
(b) where so required within the terms of Malta’s international commitments; or
(c) where so required within the terms of undertakings assumed in bilateral or multilateral agreements for the exchange of information and other forms of collaboration with overseas regulatory authorities including a request under a memorandum of understanding concluded with the Authority.
Right of entry.13. (1) Any officer, employee or agent of the Authority, on producing, if required, evidence of his authority, may enter premises occupied by a person on whom a notice has been served under this Act for the purpose of obtaining the information or documents required by that notice, or otherwise for the purpose of the investigation, and of exercising any of the powers conferred upon it.
(2) Where any officer, employee or agent of the Authority has reasonable cause to believe that if such notice as is referred to in sub-article (1) were served it would not be complied with or that any documents to which i t could relate would be removed, tampered with or destroyed, such person may, even though a notice in terms of sub-article (1) has not been served, on producing, if required, evidence of his authority, enter any premises referred to in sub-article (1) for the purpose of obtaining any information or documents specif ied in the authori ty, being information or documents that could have been required under such notice as is referred to in sub-article (1).
(3) For the purposes of any action taken under the provisions of this article, the Authority may request the assistance of the Commissioner of Police, who may for such purpose exercise such powers as are vested in him for the prevention of offences and the enforcement of law and order.
Power to make regulations.
14. (1) The Minister may, on the advice of the Authority, make regulations for the better carrying out of any of the provisions of this Act, and may, in particular, but without prejudice to the generality of the foregoing, by any such regulations:
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(a) further regulate the activities of company service providers as well as the services provided and activities carried on or in conjunction therewith or in relation thereto, providing for any matter deemed expedient;
(b) exempt any activities or classes of persons from the requirements of articles 3 and 4 and impose conditions deemed fit for eligibility for exemption;
(c) provide for and regulate the payment by any person, as the case may be, of application, registration or supervisory fees and such other charges payable to the Authority in respect of any matter provided for, by or under this Act or any regulations made under this article, as may be prescribed;
(d) transpose, implement and give effect to the provisions and requirements of Directives, Regulations and any other legislative measures of the European Union requiring transposition and, or implementation, as they may be amended from time to time, including any implementing measures that have been or may be issued thereunder relating to corporate service providers and others as may be specified therein or to any other matter falling within the terms of this Act;
(e) provide that any provision in any other law shall not apply to matters falling under the regulations;
(f) prescribe any matter that may be or is to be prescribed. (2) Regulations made under the provisions of this Act may be
made in the English language only.
SANCTIONS AND APPEALS
Offences. 15. (1) Any person who contravenes or fails to comply with any of the provisions of this Act, or contravenes or fails to comply with any registration, condition, obligation, requirement, directive or order made or given under any of the provisions of this Act, shall be guilty of an offence.
(2) Any person who for the purposes of, or pursuant to, any of the provisions of this Act or of any rules or regulations made thereunder, or any condition, obligation, requirement, directive or order made or given as aforesaid, furnishes information or makes a statement which he knows to be inaccurate, false or misleading in any material respect, or recklessly furnishes information or makes a statement which is inaccurate, false or misleading in any material respect, shall be guilty of an offence.
(3) Any person who with intent to avoid detection of the commission of an offence under this Act removes, destroys, conceals or fraudulently alters any book, document or other paper, shall be guilty of an offence.
(4) Any person who intentionally obstructs a person exercising rights conferred by this Act shall be guilty of an offence.
COMPANY SERVICE PROVIDERS [CAP. 529. 11
(5) Any person who acts or purports to act as a company service provider in Malta without being registered to do so by the Authority, when so required in terms of this Act, shall be guilty of an offence.
(6) Any person who is guilty of an offence under sub-articles (1), (2), (3), (4) and, or (5) and saving any higher punishment which may be provided under any other law, shall be liable, on conviction, to a fine (multa) not exceeding four hundred and sixty- six thousand euro (€466,000) or to a term of imprisonment not exceeding four years, or to both such fine and imprisonment.
(7) Where an offence in terms of sub-articles (1) to (5) is committed by a body or other associat ion of persons, be i t corporate or unincorporated, every person who at the time of the commission of the offence was a director, manager or other similar officer of such body or association, or was purporting to act in any such capacity, shall be guilty of that offence, unless he proves that the offence was committed without his knowledge and that he exercised all due diligence to prevent the commission of such offence.
(8) Without prejudice to sub-article (7), where the offence is committed by a body or other associat ion of persons, be i t corporate or unincorporated, or by a person within and for the benefit of that body or other association of persons, such body or association, these shall also be liable to an administrative penalty which may not exceed twenty-five thousand euro (€25,000).
Appeals. Cap. 330.
16. (1) In this article, the Financial Services Tribunal means the tribunal established under article 21 of the Malta Financial Services Authority Act.
(2) Subject to the provisions of this Act, an appeal shall lie to the Financial Services Tribunal with respect to:
(a) any failure to inform an applicant or a registered company service provider of the refusal of its application or of the cancellation of its registration in terms of article 7;
(b) any administrative penalty imposed under article 9 and article 15(8);
(c) any refusal of an application for registration or cancellation of registration in terms of articles 5 and 6;
(d) any directive given under article 11 or under article 16(2)(b) of the Malta Financial Services Authority Act;
(e) the variation of any condition or the imposition of any new condition in terms of article 7.
Cap. 330.(3) The provisions of article 21 of the Malta Financial Services Authority Act shall apply mutatis mutandis to appeals that may be brought before the Financial Services Tribunal in terms of this article.
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DISQUALIFICATION AS A COMPANY SERVICE PROVIDER Persons not qualified to act as company service providers.
Cap. 386.
17. A person shall not qualify for registration as a company service provider if such person:
(a) is subject to any of the disqualifications under article 142(1) of the Companies Act;
Cap. 330. Cap. 370. Cap. 371. Cap. 376. Cap. 487. Cap. 345. Cap. 403. Cap. 476. Cap. 373. Cap. 331.
(b) has been convicted of any of the offences under the Malta Financial Services Authority Act, the Investment Services Act, the Banking Act, the Financial Institutions Act, the Insurance Intermediaries Act, the Financial Markets Act, the Insurance Business Act, the Prevention of Financial Markets Abuse Act, the Prevention of Money Laundering Act, the Trusts and Trustees Act, and any regulations made thereunder;
(c) is a minor; or
Cap. 386. (d) is subject to a disqualification order under article 320
of the Companies Act.
TRANSITORY PROVISIONS Transitory provisions.
18. (1) Any person who, on the date of the coming into force of this Act, is carrying out the services of a company service provider within the meaning of this Act, shall, within three months from the date of coming into force of this Act, apply to the Authority for registration in terms of article 4.
(2) The Authority shall accept all the applications referred to in sub-article (1) and shall process the said applications within six months from the receipt of a complete application, including receipt of all supporting documentation and fees as may be required by the Authority in processing such application.