The Notified AIF Solution

MEDIA ROOM

In line with the Irish QIAIF and the RAIF within the Lux Rule books, Malta has now the Notified AIF (“NAIF”) regime in terms of the Investment Services Act (List of Notified AIFs) Regulations 2016.  Such structure will make it easier for fund promoters to launch their investment vehicle as the timing to market is limited to 10 working days, i.e. the period required by the MFSA to include the AIF in the List of Notified AIFs.  Needless to say, such period is subject to the completeness of the notification pack as required by the Authority.

Structures of the NAIF

An AIF, in relation to which a notification may be submitted, may still opt for any one structure available within the Maltese Investment Services rule books, namely a SICAV, an INVCO an Incorporated Cell Company within a RICC, a Cell Company within a SICAV ICC, a Limited Partnership and a Contractual Fund.

Main Features

The shorter time to market is predominantly achieved by shifting the onus onto the AIFM.  This entails that the “fit and proper” exercise and ongoing supervision on the relevant service providers and governance of the structure are the AIFM’s responsibility.  Such records are to be kept on file by the AIFM and update the MFSA accordingly in cases of any changes.

The fund manager establishing and managing the NAIF may either be a full-scope AIFM authorised in terms of the Investment Services Act or, alternatively, an EU AIFM in possession of a management passport as listed in Article 33 of the AIFM Directive.

It is empirical to note that any structures whose investment strategies fall within Section C of Annex I of the MIFID, and thus being classified as non-financial assets, fall outside the scope of such a regime.  The same applies for Loan and Real-Estate Funds.

Investor Base

Where the AIFM intends to market the NAIF on a cross-border basis, the NAIF shall be marketed to Professional Investors as defined by MIFID.  Should the AIFM not trigger the passporting rights under the AIFMD, then the newly defined Qualifying Investors may be targeted.

The Notification Process

In order for the Fund to make the List of Notified AIFs within the MFSA’s register, the Authority is to receive a notification pack.  Such pack should mainly include, above others, the Prospectus of the Fund together with written resolutions by the Fund’s Directors certifying such a document.  The AIFM is to submit such pack to the MFSA within 30 days from the date of the Directors’ resolution.

The competent authority should include the AIF in the List of Notified AIFs within ten (10) working days from the date of filing of the notification request whilst the Fund can start its operations accordingly.

Removal from the List of Notified AIFs

The MFSA retains the discretion to remove the NAIF from the List of Notified AIFs. The Regulations further specify the following instances when the AIFM may request the Authority to remove a NAIF or a sub-fund of a NAIF from the List of Notified AIFs.  Upon removal from the List, the AIF must cease trading other than for the purpose of winding down the operations of the AIF or sub-fund and the AIF or sub-fund must then be liquidated or otherwise terminated in accordance with the requirements of Maltese law.Fund-Services-Bjorn-Grech

About the Author

Bjorn joined CSB Group in 2016 as Head of Funds Services, CSB Group.  He is responsible for the overall regulatory and licensing procedures for investment service clients wishing to choose Malta as country of Domicile.

Bjorn brings with him years of experience in fund services and asset management and hence complementing CSB Group’s excellent customer-driven services by enhancing the provision of Fund and Investment Services.

For more information, kindly direct your request to [email protected]