Malta Retains Professional Investor Fund Regime, Offers Alternative Options Post-AIFMD
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Malta has announced that it will retain its Professional Investor Fund (PIF) regime, alongside the Alternative Investment Fund Managers Directive (AIFMD), in a move aimed at maintaining its competitiveness as a financial hub.
Transitional Period for Existing Fund Managers and Self-Managed Schemes
Existing fund managers and self-managed schemes have a one-year transitional period, effective from July 22nd, 2013, to register as a ‘de minimis’ AIFM or apply for a full AIFM license, meeting the requirements of the AIFMD. The Maltese Financial Services Authority (MFSA) has recommended that relevant self-assessment questionnaire forms be filed by March 31st, 2014.
Options Under the Retained PIF Regime
The retained PIF regime will offer fund managers and investors a range of options, including:
- UCITS Schemes
- Non-UCITS Retail Schemes (Retail AIFs for AIFMs)
- Professional Investor Funds (AIFs for de minimis AIFMs or non-EU AIFMs)
- Alternative Investment Funds (AIFs for full AIFMs)
Regulatory Reporting Requirements Under the AIFMD
Under the AIFMD, AIF Managers (AIFMS) will be required to provide specific information to investors prior to investment decisions. This includes:
Pre-Investment Disclosure
- Description of investment strategy, objectives, and restrictions
- Details on leverage techniques and associated risks
Annual Reports
Annual reports on performance, risk evaluation, and use of instruments or strategies will also be required.
Quarterly/Semi-Annual Reports to the Authority
AIFMs will also need to submit quarterly or semi-annual reports to the Authority, depending on their assets under management (AUM). These reports must include information such as:
- Balance sheet or statement of assets and liabilities
- Income and expenditure account for the financial year
- Report on activities during the financial year
Impact on Non-EU AIFMs
The directive will apply to non-EU AIFMs managing or marketing Alternative Investment Funds (AIFs) in the EU. To operate in the EU, non-EU AIFMs must:
Authorization and Representation
- Obtain prior authorization from their Member State of reference
- Have a legal representative established in the Member State of reference
Reporting Requirements
Comply with reporting requirements.
The Member State of reference is typically the state with which the AIFM has its closest connection. Non-EU AIFMs seeking authorization must also have an OECD-compliant tax treaty in place.
Conclusion
Malta’s decision to retain the PIF regime and offer alternative options post-AIFMD is expected to attract more fund managers and investors to the jurisdiction, maintaining its position as a major financial hub in Europe.