A BILL entitled

AN ACT to amend the of Act, Cap. 204.

BE IT ENACTED by the President, by and with the advice and consent of the House of Representatives, in this present Parliament assembled, and by the authority of the same, as follows:-

Short title and coming into force. Cap. 204.

1. (1) The short title of this Act is the Central Bank of Malta (Amendment) Act, 2015, and this Act shall be read and construed as one with the Central Bank of Malta Act, hereinafter referred to as "the Act".

[(2) The provisions of this Act shall come into force on such a date as the Minister responsible for Finance may by notice in the Gazette establish, and different dates may be so established for different provisions or different purposes of this Act.]

2. The Arrangement of the Act shall be substituted by the following:

Articles Part I Preliminary 1 - 2 Part II Establishment and Conduct of Affairs of Bank 3 - 18 Part III Financial Provisions 19 - 22 Part IV Collection of Statistical and other Information 23 - 24 Part V Relations with Government 25 - 29 Part VI Relations with Credit and Financial Institutions 30 - 33 Part VII Payment Systems and Payment Services 34 - 35 Part VIII Relations with the Competent Authority 36 - 38 Part IX Relations with International and other Organisations 39 - 41 Part X Currency 42 - 55 Part XI General 56 - 61 Part XII Transitional Provisions for the 62 – 63

Schedule

3. Article 24 of the Act shall be substituted by the following new article:

Establishment of a Central Credit Register

“24. (1) There shall be established a Central Credit Register (hereinafter the “Register”) at the Bank with non-anonymised granular information on actual and contingent exposures arising from credit and other facilities granted to natural or legal persons or entities, either resident or non-resident in Malta, to be used for the following purposes:

(a) centralisation of information on credit exposures; (b) analysis of the stability of the financial system; (c) implementation of ; (d) compilation of statistics; and (e) facilitating the assessment of credit risk. (2) The Bank may issue, amend or revoke directives imposing requirements on credit and other institutions to provide information in relation to the Register and setting out the conditions for granting access to the information held on the Register. The transfer of information into or from the Register under the conditions laid down by the Bank’s directives shall not be deemed to be a breach of banking secrecy and confidentiality obligations under any other law; provided that institutions and other entities granted access to the information held on the Register shall ensure that the information is protected against misuse and remains secret as if it were information on their own clients.

(3) Borrowers shall have the right to have an extract of the information kept on them in the Register.

(4) Without prejudice to article 41, the Bank may provide access to the information held on the Register on the basis of reciprocity arrangements to central banks and other institutions of Member States of the that create databases comparable to the Register, provided that the conditions of access to this information and the confidentiality requirements in the Member State in question meet the criteria as laid down by this Act.

(5) The Bank may impose fees for information provided or access granted to the Register to institutions, persons or other entities.

(6) Notwithstanding the provisions of the Malta Statistics Authority Act (Cap. 422), the Bank may require the National Statistics Office to pass to it any information in possession of or accessible to the National Statistics Office which is necessary for the Bank in the discharge of its duties in relation to the Register and the National Statistics Office shall comply with such request.”

(7) The Bank, as part of its duties, shall forward extracts of the information as received under sub-article (6) of this article to nominated persons of credit and other institutions in accordance with sub-article (1) of this article who are required to use this information only for the purpose of sub-article (1) of this article to the extent and at the level of detail necessary for the performance of their respective tasks.

4. In article 56(b) of the Act the words “article 23” there shall be replaced by the words “articles 23 or 24”.

CENTRAL BANK OF MALTA

DIRECTIVE NO 14

in terms of the

CENTRAL BANK OF MALTA ACT (CAP. 204)

CENTRAL CREDIT REGISTER

Ref:

DIRECTIVE NO 14

CENTRAL CREDIT REGISTER

Issued on______

INTRODUCTION 1. In terms of article 24(2) of the Central Bank of Malta Act (Cap. 204) (hereinafter referred to as “the Act”), the Central Bank of Malta (hereinafter referred to as “the Bank”) has been empowered to make directives in respect of, inter alia, the organisation and functioning of a Central Credit Register (hereinafter referred to as “the Register”) held at the Bank. For the purposes of this Directive, terms used in this Directive shall have the same meaning as is assigned to them under the Act.

SCOPE AND APPLICATION 2. This Directive lays down rules concerning the obligations of credit institutions to provide information in relation to the Register and their right of access to information held on the Register.

3. This Directive shall apply without prejudice to the Data Protection Act (Cap. 440 of the Laws of Malta).

DEFINITIONS

4. In this Directive, unless the context otherwise requires:

‘Counterparty’ is a physical or legal person who has an exposure with a credit institution in Comment [d1]: Need to add a Malta, excluding a credit institution, whether licensed in Malta or abroad, and the Bank; definition on CIs Comment [d2]: Not clear what is meant ‘Exposure’ means loans, advances, overdrafts, credit lines, guarantees or any other credit here facility in any currency. Comment [d3]: The term exposures is used in CRR including also securities – to possibly consider another term? In the context of AnaCredit Regulation we use the term instruments REPORTING REQUIREMENTS

5. Credit institutions shall provide the information to be held on the Register as specified in Annex I of this Directive. Every credit institution shall report to the Bank the end-of- month balances of exposures related to the credit operations as listed in Annex I by the fifteenth calendar day of the month following the reference month to which they relate. The first reference month shall be the first month following the date of issuance of this Directive.

6. Credit institutions shall be fully responsible for the correctness and completeness of the information they provide in relation to the Register. They are exclusively responsible for amending or rectifying it, on their own initiative or at the request of their counterparties or the Bank, whenever errors or omissions occur.

7. Only the data submitted in relation to the previous twenty-four months up to the latest reference period shall be available on the Register. Data related to exposures that were written-off shall be available on the Register for a period of five years.

RIGHT TO ACCESS INFORMATION

8. A credit institution may access information held on the Register as indicated in Annex I. Information accessed shall not include reference to the credit institution granting it. The information accessed shall be used exclusively by the requesting credit institution and shall not be transmitted to third parties, in full or in part. Institutions granted access to the Register shall only use the information accessed for the assessment of credit risk. Comment [d4]: Should they also add here the indebtedness of the borrowers?

9. The credit institution making a request for information held on the Register shall provide evidence by written or electronic means of an application or request signed by the counterparty for the granting of credit or any other service leading to an exposure of the credit institution to the counterparty. The request may be made in accordance with Annex II.

10. The credit institution shall designate up to three of its employees as its authorised representatives for the purpose of granting exclusive access to the Register in accordance with Paragraph 8 above and shall notify the Bank in writing.

11. Counterparties, or their lawful representatives, requesting to exercise the right to have an extract of the information kept on them on the Register under article 24(3) of the Act shall first make such request in writing and subsequently call at the Bank by appointment, presenting an identity card or passport in case of an individual or the relevant certificates of incorporation in case of a legal person. The lawful representative should also present his identity card and proof, to the satisfaction of the Bank, of a power of attorney or other certification confirming that he is authorised to act as the counterparty’s representative.

MISCELLANEOUS

12. The Schedule of Fees in Annex III of this Directive shall be applicable in respect of credit institutions requesting access to the information held on the Register and to counterparties who are legal persons requesting an extract of information kept on them on the Register.

13. In case of breach of this Directive, the Bank shall have the right to impose sanctions in accordance with article 56 of the Act and the provisions of Central Bank of Malta Directive No 12 on Administrative Measures and Penalties for Infringements under the Act. ANNEX I – FORM

(Paragraphs 5 and 8)

Section 1: Outline of the credit register granular exposure template

The following is a list of data attributes which shall be held on the Register. Comparison is made to the existing granular data reported by a large number of Comment [d5]: Definition should be domestic banks for stress testing purposes to the Stress Testing and Risk Models Team (STRM). added

Table1: Data attributes and variables to be reported and attributes included in feedback to lenders and counterparties

Feedback to Feedback to Data attributes Definition lenders counterparty Comment [d6]: Does this distinction mean that inter CIs loans and other instruments will not be collected (for this General (non-granular data) reason, in the context of AnaCredit we don’t make such distinction) General Reference period Reporting date   Lender Lender identifier LEI Code  attributes Comment [d7]: Here they should mention if available (SMEs normally do not have a LEI) Granular data Counterparty Counterparty Households and sole traders   attributes identifier ID cards numbers in the case of Maltese individuals and passport number otherwise.

Legal entities For MT companies provide the C numbers for registered companies. If this is not available provide the VAT Registration Number. If none is available, provide the NSO Business Register code. In the case of foreign companies report the registration number provided by the respective jurisdiction or the full name if not available.

In the case of joint exposures, separate each counterparty’s identifier with a “,”. For example: 123456M,C54321 Counterparty Counterparty’s 2 letter ISO code of country of residence of counterparty   attributes country of (continued) residence Counterparty’s Institutional sector (or sub-sector) of the counterparty, in accordance with ESA   institutional 2010 classification sector Counterparty’s Classification of (financial and non-financial) counterparties according to their   sector of economic activities using the category letter representing the NACE rev.2 economic statistical classification as per Section II. activity Enterprise size Classification of enterprises by size (into large, medium, small and micro) as   defined in EU recommendation 2003/361 As given by NSO Credit data Exposure IBAN number code  variables identifier Currency ISO code of currency in which the exposure is denominated   denomination Type of exposure Type of facility granted, such as loans, overdrafts and credit cards. Kindly refer to   Annex 1. Inception date Date when the sanction letter/contract is signed.   Legal final Legal final maturity date of the exposure as stipulated in the exposure transaction   maturity date documents. Original maturity Original maturity date of the exposure as stipulated in the initial exposure  date (in case transaction documents. restructured) Date of overdue Date of last payment in the case overdue

payment Comment [d8]: This could also be of Impairment Categories describing the motives for which the counterparty can be at default as interest for a counterparty

status regards CRR EU 575/2013, as follows: Non-impaired; Impaired but not in default; Default because of both, unlikely to pay and past due more than 90 days; Default because of unlikely to pay; and Default because of past due more than 90 days Credit lines Full authorised amount of loan   (Limit) Utilised balance Amount availed of from the authorised amount  

Outstanding Amount outstanding at the end of the reference date following repayment of   balance utilised amount excluding write-offs Credit data variables Group of If the counterparty belongs to a group of connected counterparties, all the (continued) connected identifiers of related companies or individuals have to be included. The counterparties counterparty identifiers have to be separated by a “,”. Joint-exposure Indicate whether this is a joint-exposure (=1) or not (blank)   Credit data Amount in Payments (amounts) on the principal as well as interest payments on an exposure,   measures arrears which are past due by 90 days Collateral: Reflects the market value of the asset which backs the exposure as per latest Market value (by valuation type) Collateral: Amount of collateral that can be considered at the reporting date for credit risk Extendible value mitigation (extendible value) (by type) Specific credit The amount of provisioning against credit risk risk adjustment Risk-weighted Risk-weighted exposure amounts in accordance with the CRR EU 575/2013 assets External Rating from external credit assessment institutions (ECAIs) where available. Refer   counterparty to Annex 1 rating

Credit rating Name of rating agency assigning the rating. Refer to Annex 1   Agency Interest rate is calculated on the basis of the Annualised Agreed Rate(AAR)   Interest rate type Indicate whether fixed, variable or mixed interest rate applies   Date of default The date when the exposure defaulted or became impaired Date of Date of restructuring or forbearance of the exposure restructuring/ forbearance Date of write-off Date when the exposure was written-off 

Additional information provided to lenders

The lenders will be provided additional information extracted by the system. This information includes:

• Number of days by which an exposure is past due in excess of 90 days • Granular information on those exposures which have been written-off. This information will be provided for a period of 5 years from write-off Section II: Entries associated with data attributes

Counterparty’s institutional sector Non-financial corporations Financial corporations Central bank Deposit-taking corporations excluding the central bank Money market funds Non-MMF investment funds Other financial intermediaries, except insurance corporations and pension funds (OFIs) Financial auxiliaries Captive financial institutions and money lenders Insurance corporations Pension funds General government Households Non-profit institutions serving households

Counterparty’s sector of economic activity A Agriculture, forestry and fishing B Mining and quarrying C Manufacturing D Electricity, gas, steam and air conditioning supply E Water supply; sewerage waste management and remediation activities F Construction G Wholesale and retail trade; repair of motor vehicles and motor cycles H Accommodation and food service activities I Transportation and storage J Information and communication K Financial and insurance activities L Real estate activities M Professional, scientific and technical activities N Administrative and support service activities O Public administration and defence; compulsory social security P Education Q Human health and social work activities R Arts, entertainment and recreation S Other service activities T1 Households – Acquisition of land/dwelling for own use T2 Households – Construction, extension and completion of self-owned dwellings T3 Households – Purchase of goods and services T4 Households – Other loans U Activities of extraterritorial organisations and bodies

Enterprise size Micro Small Medium Large N/a Comment [d9]: The definition of size is missing (it should be in line with the EU one)

[DATE]

Type of Exposure For loans and overdrafts: Credit cards Factoring Advances Factoring Receivables Loans Loans to Subsidiaries Overdrafts Overdrafts to Subsidiaries Syndicate Loan Other (please specify type so that the list is updated) For overdrawn deposit accounts Current Account Savings Account Other (please specify type so that the list is updated)

Impairment status Non-impaired Default because of unlikely to pay Impaired but not in default Default because of past due more than 90 days Default because of both unlikely to pay and past due more than 90 days

External counterparty rating A A+ AA- Aaa B1 Ba3 BB- BBB+ Caa3 D A A1 AA+ AAA B2 Baa1 BB+ C CC A- A2 Aa1 B B3 Baa2 BBB Ca CCC A- A3 Aa2 B- Ba1 Baa3 BBB- Caa1 CCC- A+ AA Aa3 B+ Ba2 BB BBB+ Caa2 CCC+

Credit Agency S&P Moody's Fitch DBRS Other

Interest rate type Fixed Variable Mixed

[DATE]

ANNEX II – INFORMATION REQUEST FORM

(Paragraph 9)

[Date]

Re. Exposure [insert reference number of exposure]

N.B. The term “exposure” is defined in the Central Bank of Malta Directive no.14 entitled “Central Credit Register.”

I, ______[details of the counterparty, including name and counterparty identification number], hereby authorise [details of the credit institution] to request information on myself from the Central Credit Register in accordance with the Central Bank of Malta

Directive no.14 entitled “Central Credit Register”.

[signature of counterparty]

[DATE]

ANNEX III – SCHEDULE OF FEES

(Paragraph 12)

(a) The following fees shall apply to credit institutions accessing the Register:

(i) an annual fee of € … in respect of each credit account operated by the credit institution, calculated on the basis of the infrastructure and administrative cost incurred by the Bank to host the Register and the credit institution’s share in credit exposure among participating credit institutions in the previous calendar year; and

(ii) a fee of € … in respect of a request for an extract of the information kept on the Register in relation to a counterparty.

(b) A fee of € … in relation to each request made by a counterparty for an extract of the information kept on the Register in relation to that counterparty.

[DATE]