Share Capital) Regulations, 2006

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 17,982, 13 ta’ Ottubru, 2006

L.N. 241 of 2006

COMPANIES ACT

(CAP. 386)

Companies Act (Investment Companies with Variable

Share Capital) Regulations, 2006

IN exercise of the powers conferred by sub-article (10) of article

84 of the Companies Act, the Prime Minister and Minister of Finance,

acting on the advice of the Malta Financial Services Authority, has made

the following regulations>

The title of these regulations is the Companies Act (Investment Citation.

Companies with Variable Share Capital) Regulations, 2006.

In these regulations, unless the context otherwise requires>

Interpretation.

“the Act” means the Companies Act<

“base currency” means the currency in which a class of shares

is denominated<

“the Competent Authority” means the Competent Authority

under the Investment Services Act<

“currency” means, in addition to the Maltese lira, any

convertible currency in terms of article 186 of the Act<

“fractional share” means a fraction of a whole share in any

class of shares issued by a SICAV<

“multi class company” means a SICAV falling within the

terms of regulation 5<

“multi fund company” means a SICAV falling within the

terms of regulation 7 and such a SICAV may also be referred to as

an umbrella company<

“SICAV” means an investment company with variable share

capital licensed, recognised, exempted or otherwise regulated in

terms of the Investment Services Act.

(1) A SICAV may, if so authorised by its memorandum of

association, issue fractional shares up to such number of decimal places,

not being less than three, as shall be specified in the memorandum of

association, and under such terms and conditions as may be stipulated

therein.

(2) Fractional shares shall be automatically consolidated into

a whole share of the same class when the fractional shares held by one

shareholder become equal to a whole share.

(3) A fractional share shall carry no voting rights in general

meetings of the company.

Notwithstanding anything contained in the definition of

Company Secretary.

company secretary in article 2, and in sub-article (3) of article 138 of

the Act, a SICAV shall, with the written approval of the Competent

Authority, appoint to the office of company secretary, any person who

may be either an individual or otherwise.

(1) A SICAV may be constituted as a multi class company,

if in terms of its memorandum of association, its share capital is, or is

capable of being, divided into different classes of shares not constituting

any distinct sub-fund.

(2) A multi class company may, with the written approval

of the Competent Authority, issue a new class or classes of shares. Such

class or classes of shares shall not constitute a distinct sub-fund or sub-

funds of the company.

(3) Each class of shares in a multi class company may be

denominated in a different currency provided that a class of shares may

be denominated only in one currency.

(4) A multi class company may not elect for the segregation

of any of its assets and liabilities.

(1) A multi class company having its share capital

denominated in different currencies shall draw up its annual accounts

in any one of such currencies.

(2) The provisions of sub-regulation (1) shall mutatis

mutandis apply to the drawing up of any other reports or financial

statements which may be required under the Act or by the Competent

Authority.

(3) For the purposes of sub-regulations (1) and (2), the

conversion from the base currency of a class of shares into the currency

in which the annual accounts of the multi class company are to be drawn

up shall be in accordance with generally accepted accounting principles.

(1) A SICAV may be constituted as a multi fund company, Multi fund

companies.

where in terms of its memorandum of association, its share capital is,

or is capable of being divided into different classes of shares where one

class or a group of classes of shares constitute a distinct sub-fund of the

company>

Provided that the initial share capital may or may not be

organized in one or more sub-funds in terms of this regulation.

(2) A multi fund company may, with the written approval

of the Competent Authority, create and issue a new class or classes of

shares which may constitute a new sub-fund or be comprised in an

existing sub-fund or sub-funds of the company.

(3) A class or classes of shares constituting a sub-fund in a

multi fund company may be denominated in a different currency

provided that a class of shares may be denominated only in one currency.

(4) For the purposes of this regulation, a “sub-fund” means

the distinct class or classes of shares constituting that sub-fund in a

multi fund company to which are allocated assets and liabilities distinct

from other assets and liabilities allocated to other sub-funds in the same

company.

(1) A multi fund company having its share capital Accounts of multi

fund companies.

denominated in different currencies shall draw up its annual accounts

in any one of such currencies.

(2) The directors of a multi fund company shall maintain

proper accounting records of the assets and liabilities of each sub-fund

in the base currency of any class of shares constituting that sub-fund.

(3) The provisions of sub-regulation (1) shall mutatis

mutandis apply to the drawing up of any other reports or financial

statements which may be required under the Act or by the Competent

Authority.

(4) For the purposes of sub-regulations (1) and (3), the

conversion from the base currency of a class of shares into the currency

in which the annual accounts of the multi fund company are to be drawn

up shall be in accordance with generally accepted accounting principles.

(1) A multi fund company may in its memorandum of

assets and liabilities

association elect to have the assets and liabilities of each sub-fund

comprised in that company treated for all intents and purposes of law

as a patrimony separate from the assets and liabilities of each other

sub-fund of such company. Where a multi fund company makes the

election aforementioned the assets and liabilities of each sub-fund of

that multi fund company shall, for all intents and purposes of law be

deemed to constitute a patrimony separate from the assets and liabilities

of each other sub-fund of such a company.

(2) (a) Save for such proportion of the liabilities of a multi

fund company which by virtue of the memorandum of association of

the company or by virtue of the terms of issue of the shares constituting

a sub-fund are, or are to be attributable to, one or more sub-funds in the

proportion established therein, the liabilities incurred in respect of each

sub-fund shall be paid out of the assets forming part of its patrimony

and the creditors in respect thereof shall have no claim or right of action

against the other assets of the company, and the following rules shall

apply>

(i) proceedings in relation to the company shall respect the

legal status of each sub-fund as a patrimony separate from the

assets and liabilities of each other sub-fund of the company in

terms of this regulation<

(ii) proceedings under the Act shall apply mutatis mutandis

to the sub-fund as though it were a distinct legal entity and with

such modifications as are necessary to accommodate the fact that

the sub-fund is not a company< and any proceedings in relation to

one sub-fund shall not have any effect on the assets of any other

sub-fund of the company or of the company itself< and

(iii) where, for the avoidance of doubt, a sub-fund which

comprises a separate patrimony in terms of this regulation is being

wound up, the liquidator of such sub-fund shall carry out his

functions in accordance with the provisions of the Act< and

accordingly all the powers of the directors and company secretary

in respect solely of that sub-fund shall cease.

(b) “Proceedings” in this regulation refers to any

proceedings in terms of Title II of Part V and Part VI of the Act.

(3) When a SICAV is established as a multi fund company

and elects to have the assets and liabilities of its sub-funds treated as

distinct patrimonies, the memorandum shall provide that the actual value

of the paid up share capital of any sub-fund shall be at all times equal to

the value of the assets of any kind of the particular sub-fund after the

deduction of such sub-fund’s liabilities and this in lieu of what is stated

in sub-paragraph (i) of paragraph (c) of sub-article (2) of article 84 of

the Act.

(4) The directors of a multi fund company shall hold or cause

to be held such separate records, accounts, statements and other

documents as may be necessary to evidence the liabilities and assets of

each sub-fund as distinct and separate from the assets and liabilities of

other sub-funds in the same company.

(5) These regulations shall have effect with respect to sub-

funds of multi fund companies established before the coming into effect

of these regulations, from the date of issue of the first shares in the class

or classes constituting a sub-fund.

(1) The provisions of article 73 of the Act shall apply to Applicability of

article 73 to

SICAVs, other than SICAVs licensed by the Competent Authority as SICAVS.

Professional Investor Funds, subject to the following variations,

conditions and modifications>

(a)

sub-articles (1), (4) and (7) shall continue to apply

thereto<

(b) sub-article (2) shall apply thereto and be read as if for

the words therein “transferred to the company within five years

from the date the company is authorized to commence business.”,

there were substituted the words “transferred to the company before

the company is authorized to commence business.”<

(c) sub-article (3) shall apply thereto and be read as if for

the words therein “transferred within five years from the date of

the decision to issue shares.”, there were substituted the words

“transferred to the company not later than the date of the issue of

the shares.” <

(d) sub-article (5) shall apply thereto and be read as if for

the words therein “correspond at least to the number and nominal

value, and, where applicable, to the premium on the shares to be

issued for them.”, there were substituted the words “at least

correspond to the net asset value of the shares to be issued for

them.”< and

(e) sub-article (6) shall apply and be read as if for the words

therein “and in default, the Registrar shall accordingly refuse to

register the company or the return of the allotments of the shares

so issued, and, in the latter case, the issue shall be considered null

and void.”, there were substituted the words “and in default, the

Registrar shall accordingly refuse to register the company and, in

the case of a new issue, the issue shall be considered null and

void.”.

(2) The provisions of article 73 of the Act shall apply to

SICAVs licensed by the Competent Authority as Professional Investor

Funds with the following variations, conditions and modifications>

(a)

sub-articles (1), (2), (3) and (7) shall continue to apply

thereto<

(b) sub-article (4) shall apply thereto and be read as if for

the words “by one or more experts who are independent of the

company and approved by the Registrar.” , these were substituted

the words> “in accordance with Guidelines issued for that purpose

by the Competent Authority from time to time.”< and

(c) sub-articles (5) and (6) shall not apply thereto provided

that the “report” mentioned therein and in sub-article (4) that the

“report” shall be drawn up in such manner and shall contain such

particulars as may be required by Guidelines issued for that purpose

by the Competent Authority.

The provisions of articles 186 and sub-article (1) of article

187 of the Act shall not apply to SICAVs constituted as multi fund or

multi class companies.

For the better carrying out of the provisions of these

regulations, the Competent Authority may issue guidelines in terms of

paragraph (b) of sub-article (2) of article 6 of the Investment Services

Act.

The Competent Authority may issue guidelines in terms of

paragraph (b) of sub-article (2) of article 6 of the Investment Services

Act, to establish transitional arrangements in relation to SICAVs already

set up prior to the coming into force of these regulations and in this

regard to impose any relevant conditions and regulate any related

documents, as it may deem appropriate.

The Companies Act (Investment Companies with Variable

Share Capital) Regulations, 1996, are hereby repealed.

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