Malta – Streamlining its PIF and AIF regimes

On the 10th of March 2015 the Malta Financial Services Authority (“MFSA”) published a consultation paper on the regulatory approach applicable to collective investment schemes licensed as professional investor funds (“PIFs”) and alternative investment funds (“AIFs”) in terms of the Investment Services Act.

During the transposition of the AIFMD into Maltese law, the MFSA made a conscious decision to retain the PIF regime. This was made possible by the fact that the AIFMD is not a product oriented Directive and thus the obligations deriving from the said Directive are incumbent primarily on the AIFM rather than on the fund itself.

Therefore, currently, a PIF may be managed by:

  • non-EU AIFMs; and
  • below threshold (de minimis) AIFMS;
  • (full) AIFMs.

With respect to the latter scenario, the PIF would be required to be managed by the AIFM in full compliance with the AIFMD whilst also complying with the PIF rulebook. Thus, the PIF would be (i) exposed to two bodies of regulation (AIFMD and PIF Rules) (ii) essentially be managed as if it were an AIF albeit not having the possibility of marketing its units across the EU by means of the passporting procedure.

By means of the consultation paper, the MFSA is inviting feedback from the industry as to whether the PIF and AIF regime should be kept separate. It is be noted that the MFSA has expressed its preference to the said separation and thus to amend the current situation. This would ensure that the full AIFMs would only manage AIFs to the exclusion of PIFs.

The consultation on the discussion paper will run until the 30th March 2015. Following a clear assessment of the feedback received, the MFSA will finalise its policy decision and establish a way forward. Please forward any queries and/or feedback regarding this consultation paper or seek advice in connection with any of these activities here.

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