The Malta Financial Services Authority (the ‘MFSA’) has published a second consultation document together with draft legislation regulating the Notified PIF (‘NPIF’) framework.
NPIFs will be subject to a notification process, rather than full licensing, which process may be completed within 10 working days
The proposed NPIF regime will effectively replicate the notification process currently applicable to the Notified Alternative Investment Fund (‘NAIF’) regime, with the key difference being that the NPIF regime will be available to funds targeting ‘qualifying investors’.
Accordingly, like the NAIF regime, NPIFs will be subject to a notification process, rather than full licensing, which process may be completed within 10 working days from the submission of a complete notification pack to the MFSA.
NPIFs may be managed by:
A Malta licensed de minimisAIFM;
An EU licensed de minimisAIFM; or
A third country licensed AIFM (subject to certain conditions).
As such, Managers will benefit from streamlined setup and operational costs as well as enhanced speed-to-market when establishing NPIFs in Malta. In terms of the draft legislation:
- NPIFs will not be subject to statutory investment restrictions except for certain ‘lending’ activities;
- NPIFs will not be required to obtain approval from the MFSA in respect of the Offering Documents; and
- NPIFs may, but are not required to, appoint a custodian – on the basis that appropriate safekeeping arrangements are in place.
The NPIF framework presupposes that a NPIF must, inter alia:
- only be offered to certain ‘qualifying investors’;
- appoint at least one Malta resident person to its governing body;
- appoint a fund administrator established and authorised to operate in Malta;
- appoint a third-party service provider to be responsible for conducting due diligence with respect to the NPIF, both at notification stage and on an ongoing basis;
- appoint a MLRO; and
- comply with certain limited ongoing compliance obligations.
The Consultation Period relative to the aforesaid proposed legislation closes on the 22nd June 2023. It is expected that the new fund framework will be formally rolled out shortly thereafter.