MALTA: MFSA publishes guidance on limits applicable to cross sub-fund investments

Thursday February 6 2014

The Malta Financial Services Authority (“MFSA”) has published guidance on cross sub-fund investments under the Investment Services Rules.

The Authority has recently been requested by the industry to clarify the manner in which the 50% limitation applicable to cross Sub-Fund Investments [SLC 1.42(b) and SLC 1.41(b) of Part BII and Part BIII of the Investment Services Rules for Professional Investor Funds as well as SLC 4.08(b) of Part B of the Investment Services Rules for Alternative Investment Funds] should apply.

The MFSA has clarified that the 50% limitation on cross-investments by a sub-fund applies for an investment in any one other sub-fund of the same scheme, but not to the collectivity of investments by such sub-fund in all the other sub-funds of the same scheme.

The MFSA has stated it will in due course be amending the relevant Rulebooks in order to ensure clarity and consistency in the interpretation.

Click on the above link for the Explanatory Note.