What constitutes a Collective Investment Scheme?

The term Collective Investment Scheme (“Malta CIS”) is a generic term that refers to any scheme or arrangement which has as its object the collective investment of capital acquired by means of an offer of units for subscription, sale or exchange and which, additionally, also possesses the following characteristics:

• the scheme or arrangement operates according to the principle of risk spreading; and either:
• the contributions of the participants and the profits or income out of which payments are to be made to them are pooled; or
  at the request of the holders, units are repurchased or redeemed out of the assets of the scheme or arrangement, continuously or in blocks at short intervals; or
  units are, or have been, or will be issued continuously or in blocks at short intervals.

It is to be noted however that the following Malta CIS are exempted from the requirement to operate according to the principle of risk spreading:

• alternative investment funds marketed to professional investors;
• a collective investment scheme licensed as a professional investor fund targeting qualifying investors in terms of the Investment Services Rules; and
• a collective investment scheme licensed as a professional investor fund targeting extraordinary investors in terms of the Investment Services Rules.

For further information about how GVZH Advocates can help you with your collective investment scheme enquiry kindly contact us on finance@gvzh.mt.