MFSA Seeks Feedback on Self-Managed NPIF Expansion

The framework regulating Notified Professional Investor Funds (NPIFs), launched by the Malta Financial Services Authority (MFSA) on 18th December 2023, currently prohibits the self-management of NPIFs and thus requires the appointment of a third-party manager. Now, less than a year after the implementation of the NPIF regime, on 12th June 2024, the MFSA issued a consultation document seeking stakeholder feedback on the possible extension of the said regime to Self-Managed NPIFs.

The new proposed framework would aim to build upon the existing one, introducing provisions for Self-Managed NPIFs in a dedicated section of the Rulebook: Supplementary Rules for Self-Managed NPIFs. While Self-Managed NPIFs would adhere to the same requirements as those managed by a third-party manager, they would also be subject to new requirements, as follows:

• Capital: Aligning changes in capital requirements to be the same as those of a licensed Self-Managed PIF.
• Governance: Requiring the appointment of at least three Investment Committee members, including one Portfolio Manager.
• Due Diligence: Due Diligence Service Providers (DDSPs) would be required to conduct fitness and properness assessments on the Portfolio Manager and Investment Committee Members.
• Reporting: Internally managed NPIFs would be required to comply with Article 3(3) of the AIFM Directive by submitting Annex 1 – AIFM-Specific Information and Annex 2 – AIF-Specific Information of the PIF Rules to the MFSA in their entirety. This differs from the current NPIF framework, where only an abridged return is required.
• Terms of Reference: The NPIF would be required to have in place terms of reference regulating the procedures of the Investment Committee.

Next Steps

The MFSA invites comments on the inclusion of Self-Managed NPIFs and their proposed features by July 12, 2024. This feedback will assist in shaping the final NPIF framework.

Disclaimer: The information provided in this article does not, and is not intended to, constitute legal advice. The content is for general informational purposes only.

For any further information about the NPIF framework or the several fund regimes available in Malta, please contact us at corporate@gvzh.mt