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A well-established EU financial services and Fintech centre, Malta hosts a variety of financial services businesses and structures. CSB Fintech can assist with the regulatory framework and application process.
Background on Funds in Malta
A well-established EU financial services and Fintech centre, Malta hosts a variety of financial services businesses and structures. Malta Funds include Professional Investor Funds (PIFs), Alternative Investor Funds (AIFs), Notified Alternative Investor Funds as well as UCITS.
Malta has established Supplementary Licence Conditions under the Professional Investor Fund Regime which allows such Funds to be established as PIFs investing in crypto assets.
Malta PIFs are regulated investment vehicles but are not classified as an Alternative Investor Fund (AIF) which fall under the AIFM Directive. PIFs can be sold to Qualifying Investors with a minimum investment amount of €100,000.
Legal Framework of Investment Funds
The main body of law is the Investment Services Act, 1994 “Act” as has and may be subsequently amended from time to time. The Act founds the regulatory framework for Collective Investment Schemes as well as MiFID companies. Supplementing the Act are the Investment Services Rules for Professional Investor Funds.
Upon the satisfactory submission of a complete and vetted application file to the Malta Financial Services Authority (MFSA) a PIF licence is issued. Due to the nature of the underlying investments the MFSA shall require additional application documents to be submitted.
A PIFs investing in cryptocurrencies may be established either as investment companies, limited partnerships or unit trusts. Malta Cryptocurrency Funds may invest either directly or indirectly through a trading company/Special Purpose Vehicle in cryptocurrencies. The maximum size of a PIF established as a crypto fund is of €100m or equivalent in another currency.
A PIF may either be managed by a third-party manager or be self-managed. In the event of being self-managed the Portfolio
Manager must have sufficient knowledge and expertise in the field of information technology, virtual currencies, DLT and other related underlying technologies.
- Board of Directors;
- Compliance Officer;
- Manager (including internal committee);
- External valuer;
The directors and all service providers are required to have sufficient knowledge and experience in the field cryptocurrencies as well as underlying technologies, including but not limited to DLT. The Fund must have at least three directors one of which is to be located in Malta. The Investment Manager (or Portfolio Manager if self-managed) needs to ensure that appropriate searches are carried out to assess the quality of cryptocurrencies being invested into. The Manager would need to establish an internal investment committee with at least one person. Such individual would possess the necessary competence and expertise in the field of virtual currencies.
The Investment Manager (or Portfolio Manager if self-managed) must assess whether the risk profile of the cryptocurrency/ies in which the Fund shall be investing in fall within the scope of that Fund’s risk management policy. Adequate liquidity management and procedures to monitor the liquidity risk profile of the Fund is required.
Our Crypto Funds Services
- Meetings with the MFSA;
- Drafting of Fund Offering Documentation;
- Drafting of Resolutions & Other Fund related documentation;
- Collation of all MFSA Due Diligence Documentation;
- Preparation of all MFSA Application Documents;
- Company Formation – including opening of Bank Accounts;
- Company Secretarial & annual MFSA & ROC Compliance;
- Directorship Services;
- Introduction to local service providers (fund administrators, auditors, banks etc.);
- Offices & Residential Accommodation.
VFA, Blockchain & Fintech
We offer the following related services.