{"id":820,"date":"2022-02-26T16:43:00","date_gmt":"2022-02-26T16:43:00","guid":{"rendered":"https:\/\/contiadv.com\/contiwp\/?p=820"},"modified":"2022-05-04T15:27:19","modified_gmt":"2022-05-04T15:27:19","slug":"insights-into-appointment","status":"publish","type":"post","link":"https:\/\/contiadv.com\/contiwp\/2022\/02\/26\/insights-into-appointment\/","title":{"rendered":"Insights into the appointment of a competent person pursuant to the Banking Act"},"content":{"rendered":"\t\t
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Insights into the appointment of a competent\nperson pursuant to the Banking Act<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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February 2022<\/h5>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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The appointment of a competent person under the Banking Act to take charge of a bank\u2019s assets for the purpose of safeguarding the interests of depositors and\/or to \u00a0assume control of the bank\u2019s business to carry out that business or other functions assigned to the said competent person, is relatively new to Malta.\u00a0 Whilst giving the competent person control and possession over a bank\u2019s assets and business, the law fails to provide detail on what powers, rights and obligations the said competent person has in carrying out the said functions.<\/p>

It is however clear that upon taking charge of the bank\u2019s assets or assuming control of its business, the bank\u2019s assets or business, do not become the assets and the business of the competent person, but remain the assets and business of the bank, separate and distinct from those of the competent person.\u00a0 The appointment of the competent person does not affect the legal personality of the bank which remains in existence.\u00a0 Decisions taken by the competent person regarding the bank\u2019s assets and business, are decisions taken for and on behalf of the bank.\u00a0 Pursuant to the Banking Act, the bank (not being a physical person) does not continue to act through its board of directors or a general meeting, but through the competent person (in relation to matters with respect to which the competent person is competent).<\/p>

This does not mean that the competent person assumes all powers, rights, and obligations of directors and shareholders.\u00a0\u00a0 Powers vested in the competent person are limited to taking charge of the assets or assuming control of the bank\u2019s business, to the exclusion of everyone else.\u00a0\u00a0 Decisions on any other matter remain vested in the directors and shareholders.\u00a0 Thus, directors retain residual powers to take action on behalf of the bank, as for example to contest the competent authority\u2019s directives against the bank[1]<\/a>; directors retain certain duties pursuant to the Companies Act such as for example with respect to certain notifications with the Malta Business Registry.\u00a0<\/p>

The converse is that upon its appointment, the competent person does not substitute and become a director or shareholder of the bank, and the competent person should not be expected to take all action normally required of a company\u2019s directors or shareholders.<\/p>

The competent person\u2019s powers are limited in scope and purpose and will depend on the terms of its appointment and the limitations imposed at law.\u00a0 According to the Banking Act, the appointment of the competent person to take charge of the assets is made to safeguard the interests of depositors.\u00a0 Thus a competent person\u2019s powers in this respect are limited to preserving the assets in the interests of depositors.\u00a0 A competent person taking control of the business, will need to act pursuant to the directions of the competent authority who may require the competent person to continue the business or to carry out other functions, which functions will need to be determined by the competent authority itself.\u00a0<\/p>

Obligations arising pursuant to general principles of law that apply to for example liquidators, provisional administrators, special controllers and directors, who albeit have different functions and powers are all entrusted with property belonging to others, would here apply.\u00a0 Such would be fiduciary obligations, and an obligation to exercise diligence, skill and care in the execution of one\u2019s duties.<\/p>

As the institution evolves with the appointment of various persons appointed for the role in recent years, so likewise will specific duties of such competent persons become clearer in time.<\/p>

[1]<\/a> Heikki Niemela pro et noe vs L-Awtorita ghas-Servizzi Finanzjarji ta\u2019 Malta, Court of Appeal, Inferior Jurisdiction, 5 November 2018<\/h6>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

The appointment of a competent person under the Banking Act to take charge of a bank\u2019s assets for the purpose of safeguarding the interests of depositors and\/or to assume control of the bank\u2019s business to carry out that business or \u2026<\/p>\n","protected":false},"author":1,"featured_media":1062,"comment_status":"open","ping_status":"open","sticky":false,"template":"elementor_header_footer","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-820","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/contiadv.com\/contiwp\/wp-json\/wp\/v2\/posts\/820","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/contiadv.com\/contiwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/contiadv.com\/contiwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/contiadv.com\/contiwp\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/contiadv.com\/contiwp\/wp-json\/wp\/v2\/comments?post=820"}],"version-history":[{"count":23,"href":"https:\/\/contiadv.com\/contiwp\/wp-json\/wp\/v2\/posts\/820\/revisions"}],"predecessor-version":[{"id":1232,"href":"https:\/\/contiadv.com\/contiwp\/wp-json\/wp\/v2\/posts\/820\/revisions\/1232"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/contiadv.com\/contiwp\/wp-json\/wp\/v2\/media\/1062"}],"wp:attachment":[{"href":"https:\/\/contiadv.com\/contiwp\/wp-json\/wp\/v2\/media?parent=820"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/contiadv.com\/contiwp\/wp-json\/wp\/v2\/categories?post=820"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/contiadv.com\/contiwp\/wp-json\/wp\/v2\/tags?post=820"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}