Capital) (Amendment) Regulations, 2008

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 18,360, 30 ta’ Diçembru, 2008

L.N. 361 of 2008

COMPANIES ACT

(CAP. 386)

Companies Act (Investment Companies with Variable Share

Capital) (Amendment) Regulations, 2008

IN exercise of the powers conferred by article 84(10) of the

Companies Act, the Minister of Finance, the Economy and Investment

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

competent authority for the purposes of the Act, has made the following

regulations>

(1) The title of these regulations is the Companies Act Title and

commencement.

(Investment Companies with Variable Share Capital) (Amendment)

Regulations, 2008 and shall be read and construed as one with the

Companies Act (Investment Companies with Variable Share Capital), L.N. 241 of 2006, as

amended.

2006 hereinafter referred to as “the principal regulations”.

(2) These regulations shall come into force upon publication.

Regulation 13 of the principal regulations shall be renumbered Renumbering of

regulation 13.

as regulation 16 thereof.

Immediately after regulation 12, there shall be added the Addition of new

regulations 13, 14

following new regulations 13,14 and 15>

and 15.

“Non-

The provisions of article 120 of the Act shall not

applicability

apply to a SICAV and all notices of transfers or transmissions

of article

120 of the

of securities issued by a SICAV shall be given to the SICAV.

Act.

(1) The provisions of article 122 of the Act shall

Non-

applicability

not

apply

to a SICAV and the pledge of securities in a SICAV

of article 122

of the Act.

shall be subject to the provisions of this regulation.

(2) Securities may, unless otherwise provided in

the memorandum or articles of the SICAV or under the

conditions of issue of those securities, be pledged by their

holder in favour of any person as security for an obligation.

The pledge of securities shall be constituted by means of an

instrument in writing entered into between the pledgor and

the pledgee>

Provided that in the case of a private SICAV, securities

may not be pledged unless the memorandum or articles of

the SICAV specifically so provide.

(3) Notice of the pledge shall be delivered by the

pledgor or the pledgee to the SICAV within fourteen days of

the granting of the pledge. The pledge of securities shall be

recorded in the register of the holders of the respective

securities.

(4) The pledge of securities shall be effective in relation

to a third party only from the date of the recording of the

pledge in the register of the holders of the respective securities

referred to in subregulation (3)>

Provided that the SICAV shall, upon a request in writing

made by a third party who may show an interest therein,

disclose whether a pledge of securities has been recorded in

the register of the holders of the respective securities, including

the name of the pledgor and the pledgee, the amount of

securities pledged and the date of the recording of the pledge.

(5) Saving the provisions of subregulation (4), during

the existence of a pledge of securities, any transfer or other

assignment of the pledged securities made by the pledgor,

whether by onerous or gratuitous title, shall be null and void>

Provided that any such transfer or other assignment made

with the consent of the pledgee shall be valid and the securities

to be transferred or assigned shall continue to be subject to

the pledge.

(6) Notwithstanding the provisions of the Civil Code

or of the memorandum or articles of the SICAV, in the event

of a default under the agreement of pledge and upon giving

notice by judicial act to the pledgor and the SICAV, the

pledgee shall be entitled to -

(i) dispose of the securities which are pledged in

his favour< or

(ii) appropriate and acquire the securities himself<

or

(iii) request the SICAV to purchase the pledged

securitiesin settlement of the debt due to him or of part

thereof< and for this purpose, the value of the securities

which are pledged shall be their current net asset value>

Provided that in the case of a public SICAV the

memorandum or articles of which require any

shareholder wishing to transfer shares in the SICAV to

offer them on a pre-emptive basis to other shareholders

of the SICAV, the pledgee shall be obliged, prior to the

exercise of the rights granted by this subregulation, to

offer any such shares at their current net asset value to

those shareholders, which offer shall be kept open for at

least ten working days.

(7) In the case of a private SICAV, any restriction on

the transfer of shares by members resulting from the

memorandum or articles shall be deemed not to apply to the

rights granted to the pledgee in terms of subregulation (6)>

Provided that the pledgee shall be obliged, prior to the

exercise of the rights granted by subregulation (6), to offer

any such shares at their current net asset value to other

shareholders of the SICAV in accordance with any pre-

emption rights relating to the transfer of shares as laid down

in the memorandum or articles of the SICAV, and, failing

such pre-emption rights, to all other shareholders of the

SICAV in proportion to their holdings, which offer shall be

kept open for at least ten working days.

(8) In the exercise of his rights under this regulation,

the pledgee shall only dispose of, appropriate and acquire or

request the purchase of such number of securities as are needed

to raise sufficient proceeds to repay the debt due. All

remaining securities shall be released to the pledgor.

(9) It shall be lawful for the parties to an agreement of

pledge of securities to agree on the person or persons who

shall exercise all the rights belonging to the holder of securities

including voting rights and the right to receive income,

dividends, interest or any other payments due on such

securities>

Provided that, should the agreement between the parties

not make provision for such matters, all rights belonging to a

holder of securities shall, for the duration of the pledge, be

exercised by the pledgor until such time as he defaults under

the agreement of pledge or until the pledgee enforces his

security< and in any such case, upon giving notice by a judicial

act to the pledgor and the SICAV, all the rights belonging to

the pledgor shall immediately become exercisable by the

pledgee<

Provided further that, unless the pledgor and the pledgee

have otherwise agreed in the pledge agreement and notice

thereof has been given to the SICAV, income, dividends,

interests or any other payments due on securities which are

pledged shall, during such time as the pledge is registered in

the register of the holders of the respective securities, be paid

by the SICAV to the pledgee who shall appropriate any such

amounts received to the interest due on the debt secured by

the pledge, and, if there is an excess, to the capital.

(10) Notice of termination of the pledge shall be

delivered by the pledgee to the SICAV within fourteen days

of the termination of the pledge. The termination of the pledge

shall be recorded in the register of the holders of the respective

securities.

(11) (a) In the case of a pledge of securities in a public

SICAV which securities are listed and traded on a Maltese

regulated market and in respect of which arrangements have

been made for the maintenance by such regulated market of

the relevant register of the holders thereof, the provisions of

subregulations (3) to (7) and (10) shall not apply to such listed

and traded securities. The following provisions shall apply

instead>

(i) the pledgor or the pledgee shall deliver within

fourteen days of the granting of the pledge of a listed

and traded security a notice of the pledge to the Maltese

regulated market, which shall also be served with a notice

of termination of the pledge by the pledgee within

fourteen days of the termination of the pledge<

(ii) the SICAV whose listed and traded securities

have been pledged shall also be notified of the pledge

and of its termination within the said periods and the

SICAV shall record that fact in the register of the holders

of the respective securities<

(iii) such pledge of securities shall be effective

in relation to a third party only from the date of delivery

of the notice of the pledge to the Maltese regulated

market and any transfer or other assignment made

therefrom by the pledgor, whether by onerous or

gratuitous title, of the pledged securities shall be null

and void< and

(iv) the pledgee shall, in the event of a default

under the agreement of pledge and upon giving notice

by judicial act to the pledgor, the Maltese regulated

market and the SICAV, have the securities sold through

a person duly licensed under the Investment Services Cap. 370.

Act.

(b) In the case of a pledge of securities in a public

SICAV which are listed and traded on a regulated market

other than a Maltese regulated market, or on an equivalent

market in a non-Member State or non-EEA State, the

provisions of subarticles (3) to (7) and (10) shall not apply

and in the event of a default under the agreement of pledge,

the pledgee shall, upon notice in writing to the pledgor and

the SICAV have the shares sold through a person duly

authorised for this purpose.

(c) References in this regulation to the maintenance

by a regulated market including a Maltese regulated market

or an equivalent market as referred to in paragraphs (a) and

(b) of this regulation of the register of the holders of the

respective securities shall be deemed to include a reference

to the maintenance of the said register by a duly authorised

central securities depositary and the delivery of the notices

referred to in this regulation shall be construed accordingly.

Issue of shares

(1) It shall be lawful for a SICAV licensed by

at a discount.

the competent authority as a professional investor fund the

units of which are held solely by Qualifying investors or

Extraordinary investors as defined by Investment Services

Rules issued by the competent authority, to make a discount

to an existing member who has committed by written

agreement with the SICAV to subscribe for any shares in the

SICAV, which discount shall be in consideration for such

commitment, provided that -

(a) such discount shall apply exclusively to any

outstanding commitment arising under the above

mentioned agreement<

(b) authority therefor is given by the memorandum

or articles<

(c) the nature of the discount shall be disclosed in

the manner required by sub-regulation 3< and

(d) in no event shall the value of such shares issued

at a discount, be reduced to below the net asset value at

the time the member, to whom the discount is being

granted, first subscribed for the shares in terms of the

aforementioned agreement.

(2) If shares are issued at a discount which is in excess

of that permitted by this regulation, the holder thereof shall

be bound to pay the SICAV an amount equal to such excess,

with annual interest at the rate of two percentage points over

the minimum bid rate set by the European Central Bank for

the main re-financing operations of the Eurosystem.

(3) The conditions specified in sub-regulation 1 shall

be clearly disclosed in the prospectus and any other offering

document issued by the SICAV.

(4) To the extent that these regulations are inconsistent

with the provisions of sub-article 9 of article 84 of the Act,

these regulations shall prevail.”.

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