Securities and Management Companies Regulations, 2004

L.N. 207 of 2004

INVESTMENT SERVICES ACT

(CAP. 370)

Undertakings for Collective Investment in Transferable

Securities and Management Companies Regulations, 2004

IN exercise of the powers conferred by article 12 of the

Investment Services Act, the Prime Minister and Minister of Finance

acting on the advice of the Malta Financial Services Authority, as

the competent authority appointed for the purposes of the Act, has

made the following regulations>-

Preliminary

(1) The title of these regulations is the Undertakings for Citation and

commencement.

Collective Investment in Transferable Securities and Management

Companies Regulations, 2004.

(2)

These regulations shall come into force on the 1st

May, 2004.

(1)

In these regulations, unless the context otherwise Interpretation.

requires -

“Act” means the Investment Services Act<

“branch” means a place of business which is a part of the

management company, and which has no legal personality and

which provides the services for which the management company

has been authorised< all the places of business set up in the

same Member State or EEA State by a management company

with headquarters in another Member State or EEA State shall

be regarded as a single branch<

“Commission” means the Commission of the European

Communities<

“competent authority” means the Malta Financial Services

Authority appointed under article 2A of the Act<

“custodian” means any institution entrusted with the duties

of depositary as specified by means of Guidelines and includes

a custodian licensed in terms of the Act<

“Directive” means Council Directive of 20 December, 1985

(85#611#EEC) on the coordination of laws, regulations and

administrative provisions relating to undertakings for collective

investment in transferable securities (UCITS) as amended from

time to time<

“EEA State” means a State which is a contracting party to

the agreement on the European Economic Area signed at Oporto

on the 2nd May 1992 as amended by the Protocol signed at

Brussels on the 17th March 1993 and as amended from time to

time<

“European management company” means a management

company authorised by its supervisory authority within the

meaning of Article 5 of the Directive or authorised by a foreign

authority in an EEA State<

“European right” means the entitlement of a management

company to establish a branch, or provide services, in a Member

State or an EEA State other than that in which it has its head

office -

(a) in accordance with the Treaty as applied in the

Member State or EEA State < and

(b) subject to the requirements of the Directive and

subject to any rules, regulations or Guidelines issued under

the Act implementing such requirements<

“European UCITS” means -

(a) with regard to a UCITS constituted as a unit trust or

a common fund, a UCITS whose management company’s

registered office and head office are situated in a Member State

or an EEA State<

(b) with regard to a UCITS constituted as an investment

company, a UCITS whose investment company’s registered

office and head office are situated in a Member State or an EEA

State<

harmonised in accordance with the Directive and authorised

by a foreign authority of a Member State or EEA State<

“foreign authority” means the body or bodies designated

by a Member State or an EEA State>

(a) to act as a supervisory authority in relation to

the European management company or the European

UCITS concerned in that Member State or EEA State

within the meaning of the Directive< or

(b) to carry out the duties provided for in the

Directive in relation to a Maltese management company

exercising or proposing to exercise a European right or in

relation to a Maltese UCITS<

“home Member State or EEA State” means -

(a) with regard to a UCITS constituted as a unit trust

or a common fund, the Member State or EEA State in which

the management company’s registered office and head

office are situated<

(b) with regard to a UCITS constituted as an

investment company, the Member State or EEA State in

which the investment company’s registered office and head

office are situated< or

(c) with regard to a management company the

Member State or an EEA State in which the registered

office and head office are situated<

“host Member State or EEA State” means>

(a) the Member State or EEA State, other than the

home Member State or EEA State of a UCITS, in which

the units of the common fund or unit trust or of the

investment company are marketed< or

(b) the Member State or EEA State, other than the

home Member State or EEA State, within the territory of

which a management company has a branch or provides

services<

“Maltese management company” means a management

company licensed in terms of the Act, whose head office is in

Malta and which is entitled to carry on an activity in a Member

State or an EEA State other than Malta in exercise of a European

right<

“Maltese rules” means rules -

(a)

made in accordance with the Directive< and

(b) which are the responsibility of the competent

authority (as to implementation, supervision and compliance)

in accordance with the Directive and if necessary, indicate the

conditions, including the rules mentioned in regulation 20 in

force in Malta and the rules of conduct to be respected in the

case of provision of the portfolio management service and of

investment advisory services and custody, under which, in the

interest of the general good, that business must be carried on in

Malta<

“Maltese UCITS” means -

(a) with regard to a UCITS constituted as a unit trust or

a common fund, a UCITS whose management company’s

registered office and head office are situated in Malta<

(b) with regard to a UCITS constituted as investment

company, a UCITS whose investment company’s registered

office and head office are situated in Malta<

(c) harmonised in accordance with the Directive and

licensed in terms of the Act<

“Member State” means a Member State of the European

Communities<

“supervisory authority” means the foreign authority in a

Member State or EEA State<

“transferable securities” means -

(a) shares in companies and other securities

equivalent to shares in companies <

(b)

bonds and other forms of debt securities < or

(c) any other negotiable securities which carry the

right to acquire any such transferable securities by

subscription or exchange, excluding the techniques and

instruments referred to in Article 21 of the Directive<

“Treaty” means Treaty of Rome signed in 1957,

establishing the European Economic Community as

subsequently amended<

“Tribunal” means the Financial Services Tribunal

established in terms of the Malta Financial Services Authority Cap. 330.

Act<

“UCITS” means the undertakings for collective investment

in transferable securities in terms of subregulation (2) of

regulation 3 of these regulations<

(2) Words and expressions which are also used in the

Act shall have the same meaning as in the Act.

Scope

(1) These regulations apply to Maltese and European Scope.

UCITS, their management companies and custodians.

(2) For the purpose of these regulations, UCITS shall be

undertakings which are harmonised in accordance with the Directive

and which have -

(a) as sole object the collective investment in transferable

securities and, or in other liquid financial assets as specified by

means of Guidelines, of capital raised from the public and which

operate on the principle of risk-spreading< and

(b) units which, at the request of holders, may be re-

purchased or redeemed, directly or indirectly, out of those

undertakings’ assets. Action taken by a UCITS to ensure that

the stock exchange value of its units does not significantly vary

from their net asset value shall be regarded as equivalent to

such re-purchase or redemption.

(3)

Such undertakings may be constituted as -

(a) mutual funds or other equivalent contractual schemes

(managed by management companies)<

(b) investment companies or limited partnerships with

variable share capital< or

(c)

unit trusts.

(4) Such undertakings may only engage in activities

outlined in subregulation (2) of this regulation.

(5) Investment companies the assets of which are invested

through the intermediary of subsidiary companies mainly otherwise

than in transferable securities shall not, however, be subject to these

regulations.

(6)

These regulations shall not apply to -

(a)

UCITS of the closed-ended type<

(b) UCITS which raise capital without promoting the sale

of their units to the public within the Community or any part of

(c) UCITS the units of which, under the fund rules or

under the trust deed or the investment company’s articles, may

be sold only to the public in non-member countries<

(d) categories of UCITS whose investment and borrowing

policies do not conform with those specified by means of

Guidelines< or

(e) UCITS that are not harmonised in accordance with

the Directive.

(7) A UCITS which is subject to these regulations shall

not convert itself into a collective investment undertaking which

would not be subject to these regulations and any purported

conversion shall be null and void.

The competent authority

(1) The competent authority is hereby designated to carry

out the duties provided for in Article 49 of the Directive and shall

have all powers necessary for that purpose.

(2) In particular, but without prejudice to the generality

of the foregoing, the competent authority shall have the power to

issue a certificate to the effect that a scheme formed in accordance

with or existing under the laws of Malta complies with these

regulations and qualifies as a Maltese UCITS. This shall constitute

“authorization” for the purpose of the Directive.

Maltese UCITS

(1) A Maltese UCITS shall comply with the provisions Maltese UCITS .

laid down in these regulations and as specified by means of

Guidelines.

(2) A UCITS shall not qualify as a Maltese UCITS if it

is prevented, through a provision in the fund rules or instruments of

incorporation, from marketing its units or shares in Malta.

Investment Policies of Maltese UCITS

(1) A Maltese UCITS shall observe its investment policies Investment

policies

and restrictions as specified by means of Guidelines.

and restrictions.

(2) The competent authority shall send the Commission Obligation to

full information and any subsequent changes in the regulation inform

Commission.

concerning the methods used to calculate the risk exposures pursuant

to Article 21 of the Directive.

Marketing of Maltese UCITS

(1) Where a Maltese UCITS proposes to market its units Marketing of

in another Member State or EEA State, it shall prior to Maltese UCITS.

commencement of marketing, send a written notification of its

intention to the competent authority.

(2) It must inform the foreign authority of that other

Member State or EEA State and must simultaneously send the latter

authority -

(a) an attestation by the competent authority to the effect

that it fulfils the conditions imposed by the Directive<

(b)

its fund rules or its instruments of incorporation<

(c)

its full and simplified prospectus<

(d) where appropriate, its latest annual report and any

subsequent half-yearly report, and

(e) details of the arrangements made of the marketing of

its units in that other Member State or EEA State.

(3) The Maltese UCITS may commence marketing its

units in another Member State or EEA State at the expiry of two

months after the requirements of subregulation (2) of this regulation

have been complied with unless the foreign authority of that other

Member State or EEA State establishes, in a reasoned decision taken

before the expiry of that period of two months, notified to the UCITS

concerned and to the competent authority, that the arrangements

made for the marketing of units do not comply with the provisions

of this regulation.

(4) A Maltese UCITS which markets its units in another

Member State or EEA State must comply with the laws, regulations

and administrative provisions in force in that State which do not fall

within the field governed by the Directive.

(5) A Maltese UCITS which markets its units in another

Member State or EEA State must comply with any laws, regulations

and administrative provisions in force in that Member State or EEA

State governing advertising in that State.

(6) A Maltese UCITS which markets its units in a

Member State or EEA State must distribute in that Member State or

EEA State the following documents and information in the official

language or in one of the official languages of that State or in a

language approved by the foreign authority of that Member State or

EEA State, and in accordance with the procedure as may be specified

by means of Guidelines>

(a)

the full and simplified prospectus<

(b)

the annual and half-yearly reports< and

(c)

the fund rules and instruments of incorporation.

(7) The Maltese UCITS must, inter alia, in accordance

with the laws, regulations and administrative provisions in force in

the host Member State or EEA State, take the measures necessary to

ensure that facilities are available in that State for making payments

to unit-holders, re-purchasing or redeeming units and making

available the information which Maltese UCITS are obliged to

provide.

Marketing of European UCITS

(1) A European UCITS may market its units in Malta and Marketing of

European UCITS.

shall be exempt from the provisions of article 4 of the Act provided that

it shall prior to commencement of marketing, send written notification

of its intention to the competent authority together with -

(a) a confirmation by the foreign authority to the effect

that it fulfils the conditions imposed by the Directive<

(b)

its fund rules or its instruments of incorporation<

(c) its full and simplified prospectuses including any

amendments<

(d) where appropriate, its latest Annual Report and any

subsequent half yearly report< and

(e) details of arrangements made for the marketing of its

units in Malta.

(2) The European UCITS may commence marketing its

units in Malta at the expiry of two months after the requirements of

subregulation (1) of this regulation have been complied with unless

the competent authority establishes, in a reasoned decision taken

before the expiry of that period of two months, notified to the

European UCITS concerned and to the foreign authority, that the

arrangements made for the marketing of units do not comply with

the provisions of this regulation.

(3) A European UCITS which has received authorization

from the foreign authority to market its units in Malta shall comply

with the law, regulations and administrative provisions in force in

Malta which do not fall within the field governed by the Directive.

(4) A European UCITS which advertises its units in Malta

as part of its marketing activities within Malta shall comply with

any law, regulations and administrative provisions in force governing

such advertising.

(5) A European UCITS which markets its units in Malta

must satisfy the competent authority that adequate measures have

been taken to ensure that facilities are available in Malta for making

payments to unit holders, repurchasing or redeeming units and

making available the information which European UCITS are obliged

to provide.

(6) A European UCITS which markets its units in Malta

must distribute within Malta, in at least one of Malta’s official

languages, the following documents and information in accordance

with the procedure provided for in its home Member State or EEA

State>

(a)

the full and simplified prospectus<

(b)

the annual and half-yearly reports< and

(c)

the fund rules and instruments of incorporation.

(7) Where there is a temporary suspension of the

repurchase or redemption of its units, the European UCITS must

without delay communicate its decision to the competent authority

and to its supervisory authority.

(8) A European UCITS may use the same generic name

as it uses in the home Member State or EEA State. In the event of

any danger of confusion, the competent authority may, for the

purpose of clarification, require that the name be accompanied by

certain explanatory particulars.

Custodians

(1) A custodian must either have its registered office in

the same Member State or EEA State as that of a Maltese or European

UCITS or be established in that Member State or EEA State if its

registered office is in another Member State or EEA State.

(2) A custodian shall fulfil the obligations as specified

by means of Guidelines by the competent authority.

Obligations regarding Maltese management companies

A Maltese management company may not engage in

activities other than the management of Maltese and European

UCITS except the additional management of other collective

investment undertakings which are not covered by the Directive and

for which the management company is subject to prudential

supervision but which cannot be marketed in other Member States

or EEA States under the Directive>

Provided that the activity of management of unit trusts or

common funds and of investment companies may include other

functions referred to in the Directive and as specified by means of

Guidelines.

Exercise of Passport Rights by Maltese management

companies

(1) A Maltese management company may exercise a Exercise of

European right to establish a branch if it satisfies the requirements passport

Maltese

set out in the following provisions of this regulation.

management

companies -

establishment.

(2) The Maltese management company shall give the

competent authority a notice of intention to establish a branch which

shall contain -

(a) the Member State or EEA State within the territory

of which the management company plans to establish a branch<

(b) a programme of operations identifying the activities

which it seeks to carry on through the branch<

(c) the address of the proposed branch from where

documents may be obtained<

(d) the proposed organisational structure of the branch

and the names of the proposed managers< and

(e) such other information as may be specified by means

of Guidelines.

(3) Without prejudice to subregulations (6) and (8) of

this regulation the competent authority shall give a consent notice

within the terms of subregulation (4) of this regulation to the

foreign authority within three months of receiving a complete notice

of intention and shall inform the Maltese management company

accordingly.

(4)

The “consent notice” shall -

(a)

be given in accordance with the Directive<

(b) certify that the Maltese management company is

licensed to act as such a management company by the competent

authority<

(c)

identify the activities to which consent relates<

(d) contain the information stated in the notice of

intention of the Maltese management company<

(e) contain details of any compensation scheme which is

intended to protect the branch’s investors< and

(f) include such other information as may be specified

by means of Guidelines.

(5) The foreign authority shall be informed by the

competent authority of any change in the details of a compensation

scheme referred to in subregulation (4) of this regulation.

(6) If the European right of the Maltese management

company derives from the Directive and the requirements specified

in subregulation (2) of this regulation are satisfied, the competent

authority shall issue a consent notice to the foreign authority unless

it has reason to doubt the adequacy of the administrative structure

or the financial situation of the Maltese management company,

taking into account the activities envisaged>

Provided that in the event of change in any of the particulars

referred to in this subregulation the competent authority shall inform

the foreign authority accordingly.

(7) If the competent authority decides to refuse to give a

consent notice -

(a) it shall, within two months from the date when it

received a complete notice of intention, give the person who

gave that notice the reasons for its decision in writing< and

(b) that person may appeal to the Tribunal and the

provisions of article 19 of the Act shall apply mutatis mutandis.

(8) A branch of the Maltese management company shall

not commence business unless -

(a) the foreign authority notifies the Maltese management

company of the applicable provisions< or

(b) two months have elapsed from the date on which the

competent authority has given the consent notice without receipt

of any communication from the foreign authority

(9) In the event of change in any of the particulars

communicated in accordance with paragraphs (b), (c) and (d) of

subregulation (2) of this regulation, the Maltese management

company shall give written notice of that change to the competent

authority and the foreign authority at least one month before

implementing the change.

(10) The prudential supervision of a Maltese management

company shall be the responsibility of the competent authority

whether the management company establishes a branch or provides

services in another Member State or EEA State or not, without

prejudice to those provisions of the Directive which give

responsibility to the foreign authority.

(11) In this regulation, “applicable provisions” means the

host state rules with which the Maltese management company will

be required to comply when conducting business through the

proposed branch in the Member State or EEA State concerned.

(12)

In this regulations, “host state rules” means rules -

(a)

made in accordance with the Directive< and

(b) which are the responsibility of the foreign authority

of the Member State or EEA State concerned ( as to

implementation, supervision and compliance) in accordance

with the Directive.

(13) The competent authority shall inform the

Commission of the number and type of cases in which there have

been refusals in terms of subregulation (7) of this regulation.

(1) A Maltese management company may not exercise Exercise of

passport rights by

a European right to provide services unless the Maltese management Maltese

company has given the competent authority, a notice of its intention management

companies -

to provide services as specified in subregulation (2) of this regulation. services.

(2) For the purposes of this regulation, a notice of

intention shall -

(a) identify the services which it intends to provide

together with a programme of operations<

(b) set out the Member State or EEA State in which it

intends to operate< and

(c) include such other information as may be specified

by means of Guidelines

(3) If the European right of the Maltese management

company derives from the Directive, the competent authority shall,

within one month of receiving a notice of intention, send a copy of

it to the foreign authority. It shall also communicate details of any

applicable compensation scheme intended to protect investors.

(4) When the competent authority sends the copy under

subregulation (3) of this regulation or gives a consent notice, it shall

give written notice to the Maltese management company concerned.

The Maltese management company may then start to provide the

service or services in question in the host Member State or EEA

State>

Provided that where appropriate, the foreign authority shall,

on receipt of the information from the competent authority, indicate

to the Maltese management company the conditions, including the

rules of conduct to be respected in the case of provision of the

portfolio management service and of investment advisory services

and custody, with which, in the interest of the general good, the

provider of the services in question shall comply in the host Member

State or EEA State.

(5) In the event of change of any of the particulars

provided by the Maltese management company in accordance with

paragraph (a) of subregulation (2) of this regulation, the Maltese

management company shall give written notice of that change to the

competent authority and the foreign authority before implementing

such change.

A Maltese management company shall also be subject to

notification procedure laid down in this regulation in cases where it

entrusts a third party with the marketing of the units in a host Member

State or EEA State.

Exercise of Passport Rights by European management

companies

(1) A European management company which is seeking

to establish a branch in Malta in exercise of a European right shall

satisfy the establishment conditions specified in subregulation (2)

of this regulation and shall be exempt from the provisions of article

3 of the Act.

(2) The establishment conditions for the purposes of this

regulation are that -

(a) the European management company has given the

supervisory authority in its home Member State or EEA State a

notice with the requisite details of that State in accordance with

the Directive< and

(b) the competent authority has received a consent notice

in accordance with subregulation (3) of this regulation, from

the supervisory authority of such European management

company stating that it has given its consent to the European

management company to establish a branch in Malta.

(3)

The consent notice shall -

(a)

be given in accordance with the Directive<

(b) certify that the European management company is

authorised to act as such a management company by the foreign

authority<

(c)

identify the activities to which the consent relates<

(d) contain the information stated in the notice given by

the European management company in terms of paragraph (a)

above< and

(e) contain details of any compensation scheme which is

intended to protect the branch’s investors.

(4) The supervisory authority of the European

management company shall inform the competent authority of any

change in the details of a compensation scheme referred to in

subregulation (3) of this regulation.

(5) A branch of a European management company shall

not commence business unless -

(a) it has been informed by the competent authority of

any applicable provisions and that it may establish the branch<

(b) two months have elapsed from the date when the

competent authority received the consent notice.

(6) In the event of a change in any of the following

particulars, the European management company shall give written

notice of that change to the competent authority and to its supervisory

authority at least one month before implementing the change -

(a) the programme of operations setting out inter alia

the types of business envisaged and the organizational structure

of the branch<

(b) the address in Malta from where documents may be

obtained< and

(c) the names of those responsible for the management

of the branch.

(7) For the purposes of this regulation “applicable

provisions” means the Maltese rules with which the European

management company is required to comply when carrying on an

activity identified in the consent notice through a branch in Malta.

(1) A European management company which is seeking

to provide services in Malta in exercise of a European right shall

satisfy the service conditions specified in subregulation (2) of this

regulation and shall be exempt from the provisions of article 3 of

the Act.

(2) The service conditions for the purposes of this

regulation are that -

(a) the European management company has given its

supervisory authority a notice of intention to provide services

in Malta with the requisite details in accordance with the

Directive< and

(b) the competent authority has received a notice of such

intention from the supervisory authority of the European

management company.

(3) When the competent authority has received such a

notice and has been informed of the intention of the European

management company to provide services in Malta, it shall, where

appropriate-

(a) prepare for the supervision of the European

management company < and

(b) notify the European management company of the

applicable provisions, if any.

(4) A notice under paragraph (b) of subregulation 3 of

this regulation shall be given before the end of the period of two

months from the day on which the competent authority received the

notice from the foreign authority and was informed of the intention

of the European management company.

(5) In the event of a change in the content of the

information given in relation to the programme of operations setting

in particular the service or services which the European management

company intends to provide, the European management company

shall give written notice of that change to the competent authority

and its supervisory authority before implementing such change.

(6) For the purposes of this regulation “applicable

provisions” means the Maltese rules with which the European

management company is required to comply when carrying on an

activity identified in the notice from the supervisory authority of

the European management company by providing services in Malta.

(1) The competent authority may, for statistical Reporting to the

competent

purposes, require a European management company which has authority.

established a branch in Malta in terms of these regulations, to report

periodically on its activities in Malta.

(2) In discharging its responsibilities within the meaning

of Article 6c of the Directive, the competent authority may require

such a European management company to provide the same

particulars as Maltese management companies for that purpose.

(3) The competent authority may require a European

management company providing services in Malta, to provide the

information necessary for the monitoring of its compliance with the

standards set by the competent authority to the extent permitted by

the Directive.

A European management company shall not be prohibited Advertising.

from advertising its services through any available means of

communication in Malta provided that it complies with any

applicable laws and Guidelines.

(1) Where a European management company carries on

business in Malta in exercise of a European right, its supervisory

authority may, after informing the competent authority, either directly

or through an intermediary it appoints for the purpose, carry out on-

site verification of the information within the meaning of Article

52a as referred to in Article 52b of the Directive.

(2) The foreign authority may also ask the competent

authority to have such on-site verification carried out. The competent

authority shall, within the framework of its powers under the law,

act upon the request by carrying out verifications itself or by allowing

the requesting authority to carry it out or by allowing auditors or

experts to do so.

(3) This regulation shall not affect the right of the

competent authority, in discharging its responsibilities under the

Directive, to carry out on-the-spot verifications of branches

established in Malta.

Contraventions by European management companies and

European UCITS

(1) Where the competent authority ascertains that a

European management company which has a branch or provides

services in Malta>

(a) has contravened or is likely to contravene the Maltese

rules or any provision of the Act or any rules or regulations

made thereunder< or

(b) in purported compliance with any such provision, has

furnished it with false, inaccurate or misleading information,

the competent authority shall in writing require the management

company concerned to remedy and rectify its position.

(2) If the European management company concerned fails

to take the necessary steps to remedy and rectify its position, the

competent authority shall inform the foreign authority of such failure.

(3) If despite the actions taken by the foreign authority

or because such actions prove inadequate or are not available in

Malta, the European management company persists in violating the

legal or regulatory provisions referred to in subregulation (1) of this

regulation in force in Malta, the competent authority may, after

informing the foreign authority, take appropriate measures to prevent

or to penalize further irregularities and, in so far as necessary, to

prevent that European management company from initiating any

further transactions in Malta.

(4) The foregoing subregulations shall not affect the

powers of the competent authority to take appropriate measures to

prevent or penalize irregularities committed in Malta which are

contrary to legal or regulatory provisions adopted in the interest of

the general good. Measures may include the possibility of preventing

European management companies that have committed such

irregularities from initiating any further transactions in Malta.

The competent authority shall inform the foreign authority of

any such measures.

(5) Any measure adopted pursuant to this regulation shall

be communicated to the European management company concerned

in writing, together with reasons justifying such measure and shall

be subject to a right of appeal to the Tribunal and the provisions of

article 19 of the Act shall apply mutatis mutandis.

(6)

A prohibition under this regulation may be -

(a)

absolute< or

(b) limited, that is, imposed for a specified event or until

specified conditions are complied with,

and any period, event or conditions specified in the case of a limited

prohibition may be varied by the competent authority and any such

notice shall take effect on such date as is specified in the notice.

(7) Before following the procedure laid down in the

preceding subregulations, the competent authority may, in

exceptional circumstances, take any precautionary measures

necessary to protect the interests of investors and others for whom

services are provided. The competent authority shall inform the

Commission and the foreign authority of such measures at the earliest

opportunity.

(8) In the event of withdrawal of authorization by the

foreign authority, the competent authority shall be informed by the

said authority and shall take appropriate measures to prevent the

management company concerned from initiating any further

transactions in Malta and to safeguard investors’ interests.

(9) The competent authority shall inform the Commission

of the number and type of cases in which measures have been taken

pursuant to subregulation (3) of this regulation.

(10) The provisions of this regulation shall apply mutatis

mutandis to European UCITS marketing its units in Malta

contravening or failing to comply with any of the requirements

imposed in regulation 8 of these regulations. For this purpose, and

where appropriate, unless the context otherwise requires, references

to a European management company shall be considered as

references to a European UCITS.

Special Provisions in Relation to the competent authority

(1) The competent authority shall collaborate closely

with the foreign authorities in other Member States or EEA States

in order to carry out its authorization and supervision duties under

these regulations and shall for those purposes alone communicate to

the foreign authorities in other Member States or EEA States all

information required by them.

(2) The competent authority shall without delay inform

the host Member State or EEA State of the Maltese UCITS of any

decision to withdraw authorization, or any other serious measure

taken against a Maltese UCITS, or any suspension of re-purchase or

redemption imposed upon it.

(3) The competent authority shall inform the Commission -

(a) of the licensing of any management company which

is the direct or indirect subsidiary of a parent undertaking

governed by the law of a State other than a Member State or

EEA State, specifying the structure of the group<

(b) whenever such a parent undertaking acquires a

holding in a Maltese management company such that the latter

would become its subsidiary.

(4) The competent authority shall inform the Commission

of any general difficulties which Maltese management companies

encounter in establishing themselves or providing services in a State

other than a Member State or EEA State.

Inspection and Enforcement Powers of the competent

authority

Every management company, investment company or Compliance.

trustee to which these regulations apply shall comply with such

additional supervisory and reporting requirements or conditions

relating to its business as the competent authority considers prudent

to impose on it from time to time for the purposes and in the interest

of the proper and orderly regulation of Maltese or European UCITS

in accordance with these regulations.

In addition to any books or other records to be kept by or Keeping of books.

under any other enactment, every management company, investment

company or trustee of Maltese or European UCITS shall keep at an

office or offices within Malta such books and sufficient records to

be able to demonstrate compliance with these regulations.

Applicability Provisions

(1) A person who on the date of the coming into force Applicability

Provisions.

of these regulations is in possession of a licence issued by the

competent authority which covers the management of collective

investment schemes, shall qualify as a Maltese management company

for the purposes of these regulations provided that>

(a) such person conforms with all applicable Guidelines

issued by the said competent authority< and

(b) such person notifies the competent authority of its

intention to act as Maltese management company for the

purposes of these regulations.

(2) Every licence issued after the coming into force of

these regulations shall indicate whether a management company is

a Maltese management company in terms of these regulations.

(3) A UCITS which, on the date of the coming into force

of these regulations is in possession of a licence issued by the

competent authority, and, or is authorised by the competent authority

to market its units in Malta, shall qualify as a European UCITS for

the purposes of these regulations and may continue marketing its

units in Malta provided that>

(a) the foreign authority and the competent authority are

notified of such intention by the UCITS<

(b) the competent authority receives a confirmation from

the foreign authority that the UCITS fulfils the conditions

imposed on it by the Directive< and

(c) the UCITS conforms with all applicable Guidelines

and the applicable provisions of these regulations.

Interpretation

(1) The purpose of these regulations is to implement the

provisions of the Directive as amended from time to time and shall

be interpreted and applied accordingly.

(2) In the event that any of these regulations conflicts

with the provisions of the Directive, the latter shall prevail.

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press