Collective Investment Schemes (CIS) - Malta Investment Funds

Malta is AIFMD Ready

03 Jul 2013

3 min read

With approximately a month to go from the transposition deadline, Malta has announced that it is first member state to have fully transposed the Alternative Investment Fund Management Directive (“AIFMD / Directive”).

On the 27th June the MFSA launched the new Investment Services Rulebooks which include the new parts regulating Alternative Investment Fund Managers and Alternative Investment Funds. These parts shall permit the MFSA, as from the 22nd July 2013, to commence accepting new licence applications for:

  • investment management services provided to Collective Investment Schemes which are not UCITS which will be issued pursuant to the provisions of the Investment Services Act and in compliance with the revised Investment Services Rules for Investment Services Providers, in particular with the new Part BIII regulating Alternative Investment Fund Managers (AIFMs); and
  • new licences for Collective Investment Schemes targeting professional investors which will be issued in compliance with new Investment Services Rules for Alternative Investment Funds (AIFs). The new AIF regime will sit alongside the established PIF regime which will apply to:
    1. applicants who opt to apply to be licensed as a ‘de minimis’ self-managed AIF;
    2. applicants who opt to apply for a PIF licence provided the PIF is managed by a de minimis AIFM;
    3. applicants who opt to apply for a PIF licence provided the PIF is managed by a AIFM in full compliance with the AIFMD;
    4. applicants who opt to apply for a PIF licence provided the PIF is managed by a non-EU AIFM in terms of the relevant conditions of the AIFMD under which other EU-Member States may allow them to market to professional investors in their territory;

An important derogation which the MFSA successfully negotiated at EU level is that AIFs (self-managed) and AIFMs licenced in Malta would, until the 22nd July 2017, be able to appoint a depositary which is AIFMD compliant from another EU or EEA Member State. After such date, the AIFM licenced in Malta would be required to appoint a depositary duly licenced in Malta.

Furthermore, the MFSA has interpreted the requirements contained in the Directive with respect to the remuneration policies and practices as applying at the level of the AIFM. Thus such approach   does not require the entities to which portfolio management or risk management activities may have been delegated to be subject to such remuneration requirements.

It is also good to note that the MFSA has signed co-operation agreements with 34 regulators from non-EU jurisdictions including USA, Canada, Brazil, India, Switzerland, Australia, Hong Kong and Singapore. This will allow AIFMs from such jurisdictions access to the EU markets in terms of the AIFMD.

The issuance of the new Investment Services Rulebooks in advance of the transposition deadline and the consultation process leading to such issuance have been welcomed by the industry as it has been given the opportunity and time to assess and regularise itself accordingly. This is symptomatic of the underlying robust legislative framework within which financial services players operate in Malta.

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