Credit & Financial Institutions

Whilst credit institutions are regulated in terms of the Banking Act (CAP.371), financial Institutions, including Electronic Money Institutions (EMIs) and Payment Services Providers (PSPs) are regulated by the Financial Institutions Act (CAP.376).

The Capital Requirements Directive – CRD IV Package, which is made up of the Capital Requirements Regulation (CRR) (which is directly applicable) and the Fourth Capital Requirements Directive (implemented through national law), have been published in the Official Journal of the European Union on 27 June 2013. Most of the rules of the CRD IV Package shall apply from 1 January 2014.

The Electronic Money Directive (EMD) as well as the Payment Services Directive (PSD) have been transposed in the Financial Institutions Act and the respective Financial Institution Rules.

The specific activities licensable under the provisions of the Banking Act and of the Financial Institutions Act can be set out as follows:

Banking

Acceptance of deposits of money from the public (whether as principal or agent) that may be withdrawn or repayable on demand or after a fixed period; or borrowing or raising money from the public for the purpose of employing all or part of such money by lending to others or investing such money at its own risk.

Additional Activities

1. Financial leasing
2. Payment Services
3. Issuing and administering other means of payment (travellers’ cheques, bankers’ drafts and similar instruments)
4. Guarantees and commitments
5. Trading for own account or for account of customers in:
   (a) money market instruments (cheques, bills, certificates of deposit, and similar instruments)
   (b) foreign exchange
   (c) financial futures and options
   (d) exchange and interest-rate instruments
   (e) transferable securities
6. Participation in securities issues and the provision of services related to such issues
7. Advice to undertakings on capital structure, industrial strategy and related questions and advice as well as services relating to mergers and the purchase of undertakings
8. Money broking
9. Portfolio management and advice
10. Safekeeping and administration of securities
11. Credit reference services
12. Safe custody services
13. Issuing electronic money

Financial Institutions

(Source: Financial Institutions Act Chap 376, First Schedule)

1. Lending (including personal credits, mortgage credits, factoring with or without recourse, financing of commercial transactions including forfeiting)
2. Financial leasing
3. Venture or risk capital
4. Payment services
5. Issuing and administering other means of payment (travellers cheques, bankers’ drafts and similar instruments) in so far as this activity is not covered by point IV above
6. Guarantees and commitments
7. Trading for own account or for account of customers in:
   (a) money market instruments (cheques, bills, certificates of deposits and similar instruments)
   (b) foreign exchange
   (c) financial futures and options
   (d) exchange and interest rate instruments
   (e) transferable instruments
8. Underwriting share issues and the participation in such issues
9. Money broking
10. Issuing of electronic money