In a bid to increase its efficiency, the MFSA has announced that its will be consolidating and reducing the number of fund frameworks which are currently available to fund promoters in Malta.
Malta currently offers fund promoters the total of twelve fund regimes which are divided into the following categories:
These include UCITS, Non-UCITS Retail Schemes, Overseas Based Non-UCITS Retail Schemes and Retail AIFs.
PIFs are currently subdivided into three sub-categories namely:
- PIFs promoted to Experienced Investors with a minimum investment requirement of € 10,000;
- PIFs promoted to Qualifying Investors with a minimum investment requirement of € 75,000; and
- PIFs promoted to Extraordinary Investors with a minimum investment requirement of € 750,000.
The current AIF regime consists of the following 4 categorized (other than Retail AIFs) namely:
- AIFs promoted to Experienced Investors with a minimum investment requirement of € 10,000;
- AIFs promoted to Qualifying Investors with a minimum investment requirement of € 75,000;
- AIFs promoted to Extraordinary Investors with a minimum investment requirement of € 750,000; and
- AIFs promoted to Professional Investors with no minimum investment requirement.
It is to be noted that the only AIFs promoted to Professional Investors benefit from the passport in terms of the AIFMD.
After a careful assessment of all the available regimes, the MFSA took the informed decision to consolidate the fund regimes as follows:
The MFSA will be slowly phasing out Non-UCITS Retail Schemes and Overseas Based Non-UCITS Retail Schemes. Thus the only retail funds available in Malta will be the UCITS Schemes and Retail AIFs
Professional Investor Funds
The 3 PIFs sub-categories will merge into the PIF promoted to Qualifying Investors. The definition and criteria for Qualifying Investors will be amended. The main change will consist of an increase in the minimum initial investment from € 75,000 to € 100,000.
It is to be noted that existing PIFs for Experienced, Extraordinary and Qualifying Investors (the latter with a minimum initial investment limit of EUR 75,000) will continue to operate under their respective current regulatory regime however new applications will not be accepted.
Alternative Investment Funds
Going forward there will be only 2 sub-categories of AIFs (apart from Retail AIFs), namely those marketed to Professional Investors as defined in MiFID II and/or to Qualifying Investors having a minimum investment requirement of € 100,000
Notified AIFs (“NAIFs”)
By June 2016, Malta will also offer NAIFs which are alternative investment funds meeting the requirements prescribed in the Alternative Investment Fund Managers Directive. These will be established by way of a notification by the AIFM (established in Malta or elsewhere in the EU) to the MFSA upon fulfilment of the conditions prescribed in the aforementioned regulations and the applicable Investment Services Rules. Malta, together with Luxembourg, is one of the first two jurisdictions in Europe to adopt the new framework.
Image source: MFSA
With effect from 3 June 2016, the MFSA will only be accepting:
- any applications for the licensing of the following collective investment schemes:
- UCITS Retail Schemes,
- AIF Retails Schemes
- PIFs targeting Qualifying Investors
- AIFs targeting Qualifying Investors
- AIFs targeting Professional Investors
- Notification from AIFMs for the establishment of NAIFs