Publications

MDB to implement the Interest Rate Subsidy scheme complementing the COVID-19 Guarantee Scheme

Authors: James Debono
Published on April 22, 2020
Practices: Banking Regulatory
Earlier this month the Malta Development Bank (“MDB”) has launched the EU Commission-approved MDB COVID-19 Guarantee Scheme (the “Guarantee Scheme”), which mainly provides guarantees to commercial banks to facilitate access to bank financing to businesses established and operating in Malta (both, SMEs having up to 250 employees, as well as large enterprises with more than 250 employees), who are facing liquidity and cashflow problems due to the pandemic. The Guarantee Scheme mainly entails a fund of €350 million for the guaranteeing of loans granted by banks, which banks would in turn be able to leverage the Government’s guarantees up to a total portfolio volume of €777.8 million to support all types of businesses. For more information on the eligibility and features of the Guarantee Scheme visit the MDB website from the link below:

COVID-19: Listing Authority’s policy regarding the automatic suspension of securities

Authors: Beppe Degiorgio
Published on April 17, 2020
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Practices: Capital Markets
The MFSA has published a circular (the “Circular”) about the suspension of one of the Listing Authority’s policies which, under normal circumstances, requires the Malta Stock Exchange to suspend the trading of financial instruments admitted to trading when issuers fail to publish, inter alia, audited annual financial statements or their interim financial statements within the timeframes stipulated in the Listing Rules, particularly LR 5.56 and 5.85 (the “Suspension Policy”). The Suspension Policy ensures that investors have sufficient information to properly assess the financial position of the company in which they have invested. The Suspension Policy also protects potential investors who were considering making an investment without the required updated information on the issuer’s financial situation.

COVID-19 and the Dividends Dilemma

Authors: Stuart Firman, Rosette Aquilina
Published on April 16, 2020
Practices: Corporate
As the COVID-19 virus continues to dominate our lives, we are coming across more and more headlines like these: “Coronavirus: Big banks stop shareholder dividends until the end of 2020” (news.sky.com), “JPMorgan warns it could suspend dividend in ‘extreme’ scenario (ft.com)”.

The Distance Marketing Directive and its application to interest rate agreements amending existing loan agreements

Authors: Ria Micallef
Published on April 16, 2020
On 12 March 2020, the Court of Justice of the European Union (the “CJEU”) published an opinion of Advocate General Sharpston on KH v Sparkasse Südholstein (Case C-639/18) concerning the application of the Distance Marketing Directive (Directive 2002/65/EC) (the “Directive”) to agreements concluded at a distance that set new interest rates to loan agreements that were already in place.

UPDATED: Interim Measures for the Processing of Physical Documentation

Authors: Bettina Gatt
Published on April 15, 2020
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The Malta Financial Services Authority (“the Authority”) has issued a circular stating that documentation to be submitted to the MFSA shall as of the 24 March 2020 be submitted electronically. Such an approach shall be taken until further communications are made by the Authority. The circular issued by the MFSA makes reference to documents being submitted by:

EBA Guidelines on legislative and non-legislative moratoria on loan payments applied in the light of the COVID-19 crisis

Authors: James Debono
Published on April 14, 2020
Practices: Banking Regulatory
The COVID-19 pandemic has triggered several response measures across the globe, which consequently ripple into considerable economic stress, particularly for small businesses and households that find themselves faced with liquidity struggles in paying their financial commitments on time. On the other side of the spectrum, credit defaults or payment delays may affect banks, which would in turn need to increase their own funds. In order to mitigate the credit and systematic risks caused by liquidity and operational difficulties being faced by borrowers, Member States have issued a wide number of support measures, including moratorium on payments of credit obligations.

New COVID-19 regulations on moratoria measures on credit facilities

Authors: James Debono
Published on April 14, 2020
Practices: Banking Regulatory
In light of the COVID-19 outbreak, the Government of Malta issued on the 13th April 2020, the Moratorium on Credit Facilities in Exceptional Circumstances Regulations (the “Regulations”) through Legal Notice 142 of 2020. The main scope of the Regulation is to regulate the provision of a moratorium by credit and financial institutions on credit facilities in order to mitigate systemic exposure to the Maltese economy by supporting economically vulnerable persons who have been materially affected by the COVID-19 pandemic.