On the 17th April 2012, the Companies Act (Recognised Incorporated Cell Companies) Regulations were incorporated into Maltese law by virtue of L.N. 119 of 2012. The said Regulations are supplemented by the MFSA Investment Services Rules for Recognised Incorporated Cell Companies (“RICC”) and Incorporated Cells which have been integrated into the existing MFSA investment services regulatory framework.
The Regulations are consistent with the “cellular” concept developed under Maltese legislation in recent years and aim, in particular, to improve on the ICC SICAV regime, introduced in February 2011.
Accordingly, the new regime seeks to accommodate popular international demand by introducing a ‘platform’ type of model comprising an incorporated cell company providing standardised administrative services to any number of incorporated cells, each duly licensed as a collective investment scheme, which administrative services largely consist of routine contractual matters and start-up support. Specifically, in terms of the Schedule to the said Regulations, RICCs may carry out any one or more of the following services:
- Provision of administrative services related to the establishment of incorporated cells;
- Procurement of external service providers and approval of any changes thereto;
- Negotiation of service provision agreements and changes thereto;
- Submission of any model agreements to be used by incorporated cells;
- Submission to the competent authority of any changes or amendments to model agreements and submission of any new model agreements negotiated with service providers for the approval of the competent authority;
- Signature of tripartite agreements between service providers, the RICC and an incorporated cell based on the model agreements;
- Standardisation of any other documentation to be used by incorporated cells;
- Approval and joint signature of any applications for licences (including variations, extensions thereof) to be submitted by or on behalf of incorporated cells which are in the course of being formed;
- Provision of written declarations identifying any changes to model agreements already submitted to the competent authority, including a NIL declaration confirming that no changes have been made;
- Provision of ancillary services as may be approved by the competent authority.
Whereas the SICAV ICC structure requires the incorporated cell company to qualify as a collective investment scheme in its own right, the new RICC regime provides promoters with a more flexible ICC structure that may be used as a vehicle to achieve various objectives including the setting up of a fund platform. Accordingly, the RICC will not operate under a CIS Licence but under a Recognition Certificate.
In terms of the Regulations, a RICC must be established as a limited liability company and may not carry out any licensable activity that may require a licence under the Investment Services Act or other legislation. A RICC may establish an incorporated cell by virtue of a resolution of its board of directors. An incorporated cell of a RICC is constituted as a collective investment scheme in its own right and requires a licence to operate as such from the MFSA. An incorporated cell is endowed with separate legal personality and is not a subsidiary of its RICC solely by virtue of the fact of it being an incorporated cell of its RICC.
The RICC framework is also structured to allow incorporated cells to migrate in and out of the RICC they share with other incorporated cells and either relocate to another ICC or establish themselves as separate independent schemes.
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