Wednesday August 9 2017

News Source: Fund Regulation

Focus: Other

Type: General

Country: Malta




On 7th August 2017, the Malta Financial Services Authority (MFSA) published a consultation on proposed amendments to Notified Investment Funds Regime (NAIFs).

On 1st April 2016, the MFSA launched a framework for the establishment of Notified Alternative Investment Funds. The framework was regulated by the Investment Services Act (List of Notified AIFs) Regulations and by ad hoc SLCs (“the NAIF Rules”) included in Part BIII of the Investment Services Rules for Investment Services Providers.

Following the publication of the regime regulating the NAIFs, the Authority committed itself to review the said regime within 12 months of publication to ensure that the framework for NAIFs kept developing within the framework of the AIFMD.

In light of the above review, MFSA has proposed the following:

  • SLC 11.04 is being reviewed to allow for the possibility of NAIFs to invest directly in immovable property or infrastructure. In this respect, the Authority has decided that the MFSA Property Funds Policy shall no longer be applicable to NAIFs and regulated AIFs. Therefore the Property Funds Policy will remain applicable solely and exclusively to Professional Investor Funds. Alternative Investment Funds targeting retail investors cannot be established as property funds.
  • The Authority is also seeking feedback from the industry on the possibility of extending the scope of the funds which can be established as NAIFs to those funds which invest in non-financial assets.
  • SLC 11.06 is being reviewed to further emphasise the independence requirement of the Board of Directors of the NAIF.
  • SLC 11.09 is being reviewed to formalise the requirement of the AIFM, to submit to the Authority a copy of the updated Terms of Reference and the Risk Management Policy (as applicable), following the listing of the NAIF. Furthermore, the AIFM is being required to ensure that the relevant Valuation Policy and Procedures are updated and to submit for the Authority’s consideration and approval any new valuation arrangements which it will be implementing in respect of the NAIF.
  • SLC 11.27 is being revised to further qualify who can be appointed as MLRO of the NAIF.
  • SLC 11.43 is being reviewed to clarify that any amendments to the Prospectus shall become effective once they are acknowledged and noted by the MFSA.

Additionally, the Authority is proposing the following additional changes:

  1. a) the Authority is currently reviewing the Continuation of Companies Regulations for the purpose of providing for the possibility of continuation of a scheme licenced in another jurisdiction as a NAIF upon completion of the re-domiciliation procedures. The Regulations on the Continuation of Companies [LN 344 of 2002] and the Guidelines published by the MFSA will be modified accordingly.

The following Regulations are also being reviewed:

  • Investment Services Act (Prospectus of Collective Investment Schemes) Regulations (SL.370.04); and
  • Investment Services Act (Performance Fees) Regulations (SL. 370.12).

Interested parties are to send their comments in writing by not later than 01 September 2017. Any comments and feedback are to be addressed to communications@mfsa.com.mt.

Click on the above link for further information.