COLLECTIVE INVESTMENT SCHEMES

Mamo TCV’s services offered to local and foreign funds, their promoters and service providers include: 

 

Collective investment schemes (“CISs”) are regulated by and under the Investment Services Act (Chapter 370 of the Laws of Malta) (the “ISA”). For regulatory purposes, collective investment schemes are divided in the following categories: 

 

Retail Collective Investment Schemes: UCITS and non-UCITS collective investment schemes; 

Professional Investor Funds (“PIFs”): PIFs promoted to Experienced Investors, Qualifying Investors and Extraordinary Investors; and 

Private Collective Investment Schemes (such schemes are exempt from the licensing requirement if they are recognised by the MFSA). 

 

A tailored regime was put in place for Retirement Funds, which are regulated by and under the Special Funds (Regulation) Act (Chapter 450 of the Laws of Malta). 

 

Licensing and ongoing requirements 

 

Collective investment schemes that issue or create units or carry on any activity in or from within Malta require a collective investment scheme licence in terms of the ISA. A CIS formed in accordance with or existing under the laws of Malta and operating in or from within a country, territory or other place outside Malta must also be licensed. A collective investment scheme or each of its sub-funds in the case of an umbrella fund, seeking a primary or secondary listing on a Recognised Investment Exchange (“RIE”) must be licensed before it can be listed.  

 

UCITS based in another EU/EEA State do not require authorisation for active promotion in Malta nor is a licence a pre-requisite for listing on a RIE, provided that the notification procedure in terms of the UCITS Directives,as implemented locally, is complied with. Other exemptions from the CIS licensing requirement apply to, for example, Private Collective Investment Schemes (if they are recognised by the MFSA), and employee schemes. 

 

The ongoing requirements for licensed and recognised funds and for UCITS passporting into Malta are laid down in the ISA, subsidiary legislation and the Investment Services Rules issued by the MFSA. Professional Investor Funds are subject to a more lenient and flexible regulatory regime than retail funds and the level of regulation depends on the type of investors targeted by the PIF: Experienced Investors, Qualifying Investors or Extraordinary Investors.  

 

Redomiciliation of collective investment schemes 

 

Under Maltese law, a body corporate formed and incorporated or registered under the laws of an approved foreign jurisdiction which is similar in nature to a company as known under the laws of Malta, may be continued in Malta under the Companies Act (Chapter 386 of the Laws of Malta) if the law of that jurisdiction and its constitutive documents authorise it to do so. Thus, an overseas collective investment schemes that takes the form of an investment company may be relocated to Malta, subject to the provisions of the Continuation of Companies Regulations (Legal Notice 344 of 2002, as amended) and provided that it obtains the appropriate licence from the MFSA. 

 

Taxation 

 

The tax treatment of the income of the collective investment schemes and of the capital gains or dividends derived by the investors depends on whether the relevant fund of the scheme qualifies as a “prescribed fund” or a “non-prescribed fund”. Essentially, a fund of a Malta based collective investment scheme is classified as a prescribed fund if the value of the assets situated in Malta is at least 85% of the value of the total assets; other funds of a Malta based scheme and all funds of an overseas collective investment scheme are classified as non-prescribed funds. A very favourable tax regime applies in particular to Maltese collective investment schemes operating non-prescribed funds, and their non-resident investors. 

 

 

For further information about funds, view the firm's Funds Brochure