Following the conclusion of a Consultation Exercise on the regulatory approach applicable to licensed PIFs and AIFs which ran from 10th March 2015 to 30th March 2015, and having duly considered the corresponding submissions received from representatives of the financial services industry, the Malta Financial Services Authority (MFSA) has issued a Circular to the industry confirming that, as of the 1^st June 2015, AIFMs will only be able to act as investment managers for AIFs.

Accordingly, with effect from the 1^st June 2015:

• An EU AIFM can establish an AIF;
• A de minimis EU AIFM can only establish a PIF; however if the fund manager transitions to an EU AIFM, the fund will have to be converted to an AIF;
• A third country fund manager can establish a PIF or an AIF, subject to compliance with special provisions applicable to non-EU AIFMs managing EU AIFs;
• A self-managed de minimis fund can only be established as a PIF;
• A self-managed fund which is above prescribed de minimis threshold can only be established as an AIF.

The MFSA confirmed that its decision was based on the feedback received from the industry indicating a preference for this Option as opposed to the alternative option allowing AIFMs to manage any type of collective investment scheme whether PIF or AIF, ostensibly with a view to bolstering clarity in relation to the applicable responsibilities and obligations and reducing possible misunderstandings regarding the applicable requirements.

licensed PIFs which have been established by AIFMs have a one-year transitional period within which to comply

Accordingly, the MFSA informed the industry that any applications submitted for the licensing of PIFs or AIFs going forward should be streamlined as outlined above.

Moreover, licensed PIFs which have been established by AIFMs have a one-year transitional period within which to comply with the above.