Regulations, 2010

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 18,692, 28 ta’ Diċembru, 2010

Taqsima B

L.N. 559 of 2010

COMPANIES ACT

(CAP. 386)

Companies Act (SICAV Incorporated Cell Companies)

Regulations, 2010

IN exercise of the powers conferred by article 84D of the

Companies Act, the Minister of Finance, the Economy and

Investment, acting on the advice of the Malta Financial Services

Authority, has made the following regulations:-

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

commencement.

(SICAV Incorporated Cell Companies) Regulations, 2010.

(2) These regulations shall come into force on such date as the

Minister of Finance may by notice in the Gazette appoint.

(1)

In these regulations, unless the context otherwise Interpretation.

requires -

"the Act" means the Companies Act;

"collective investment scheme" shall have the same meaning as Cap. 370.

that assigned to the term in article 2 of the Investment Services Act;

"the competent authority" means the Malta Financial Services

Authority established by article 3 of the Malta Financial Services Cap. 330.

Authority Act and appointed under article 2A of the Investment Cap. 370.

Services Act;

"the Continuation Regulations" means the Companies Act S.L. 386.05

(Continuation of Companies) Regulations;

"Financial Services Tribunal" means the Tribunal referred to in

article 21 of the Malta Financial Services Authority Act, and the term Cap. 330.

"Tribunal" shall be construed accordingly;

"incorporation agreement" means an agreement setting out the

terms upon which a non-cellular company becomes an incorporated

cell of an incorporated cell company in accordance with the

provisions of regulation 23(5)(a);

"incorporated cell" means a cell of an incorporated cell

company created in accordance with the provisions of these

regulations;

"incorporated cell company" means a SICAV formed and

registered as, continued as or transformed or divided into, an

incorporated cell company in accordance with the provisions of these

regulations and any other applicable law;

"non-cellular company" means a company which is not an

incorporated cell company, an incorporated cell or a segregated multi-

fund company;

"relocation agreement" means an agreement setting out the

terms upon which the relocation of an incorporated cell from one

incorporated cell company to another is to take place in accordance

with the provisions of regulation 24;

"segregated multi-fund company" means a multi-fund SICAV

with one or more segregated sub-funds, each treated for all intents

and purposes of law as a patrimony separate from the assets and

liabilities of each other sub-fund of the company in accordance with

the provisions of regulation 9 of the SICAV Regulations;

"SICAV" means an investment company with variable share

capital established under the Act and the SICAV Regulations;

"SICAV Regulations" means the Companies Act (Investment

Companies with Variable Share Capital) Regulations.

(2) Words and expressions used in the Act shall, in these

regulations, have the same meaning as in the Act.

A SICAV may be formed or constituted as an incorporated

cell company and may establish incorporated cells in accordance with

these regulations.

(1)

Subject to the provisions of the Continuation

Regulations

(a) a body corporate with variable share capital,

registered, incorporated or constituted under the laws of an

approved country or jurisdiction outside Malta and carrying on

the activity of a collective investment scheme, which is similar

in nature to an incorporated cell company as known under the

laws of Malta may be continued as an incorporated cell

company

Provided that if such body corporate as aforesaid has a cell

or cells which are similar in nature to incorporated cells as

known under the laws of Malta, the continuation of the body

corporate shall require the simultaneous continuation of all such

cells as incorporated cells;

(b) a body corporate, registered, incorporated or

constituted under the laws of an approved country or

jurisdiction outside Malta, and carrying on the activity of a

collective investment scheme, which is similar in nature to a

non-cellular company as known under the laws of Malta may be

continued as an incorporated cell of an incorporated cell

company;

(c)

an incorporated cell company may be continued as a

body corporate similar in nature to an incorporated cell

company as known under the laws of Malta under the laws of a

country outside Malta

Provided that if such incorporated cell company has an

incorporated cell or incorporated cells in existence, the

continuation of the incorporated cell company shall require the

simultaneous continuation of all such incorporated cells under

the laws of such country outside Malta; or

(d) an incorporated cell may be continued as a body

corporate under the laws of a country outside Malta.

(2) For the purpose of sub-regulation (1), the expression

"approved country or jurisdiction" means such country or jurisdiction

as may be established from time to time by guidelines issued by the

Registrar of Companies pursuant to the Continuation Regulations.

(1) No event described in regulation 3 or 4 shall take Powers of the

place except in accordance with the terms and conditions of the prior competent

authority.

written approval of the competent authority which shall only be

granted in the case of a body corporate which is or which is to be

licensed in terms of article 4 of the Investment Services Act as a Cap. 370.

collective investment scheme.

(2) The competent authority may in terms of article 6 of the

Investment Services Act issue Investment Services Rules applicable Cap. 370.

to incorporated cell companies and incorporated cells.

The memorandum of an incorporated cell company shall, Memorandum

in addition to the matters required by articles 69 and 84 of the Act, of

cell company.

state that it is an incorporated cell company.

The name of an incorporated cell company shall, in Name of

addition to compliance with the provisions of article 70 of the Act, incorporated

cell company.

include the expression "Incorporated Cell Company" or its

abbreviation "ICC".

(1) The Act shall, subject to the provisions of these

regulations, and unless the context requires otherwise, apply to an

incorporated cell company and to an incorporated cell.

(2) In so far as the provisions of the Act are inconsistent with

the provisions of the Investment Services Act or these regulations, the

provisions of the Investment Services Act and of these regulations

shall prevail and the provisions of the Act shall, to the extent of the

inconsistency, not apply to an incorporated cell company or to an

incorporated cell.

(1) An incorporated cell company may establish an

incorporated cell by virtue of a resolution of the board of directors

(the "cell resolution") which

(a) approves the name of the incorporated cell being

established;

(b) approves the terms of the memorandum and articles

of association of the incorporated cell and resolves that the said

memorandum and articles of association are to be entered into

by the incorporated cell company; and

(c)

authorises, if applicable, the subscription by the

incorporated cell company of a share or shares in the

incorporated cell.

(2) An incorporated cell shall not be validly constituted unless

a copy of the resolution shall be delivered to the Registrar and the

memorandum and articles is entered into as is described in sub-

regulation (3) and a certificate of registration is issued in terms of the

Act in respect thereof.

(3) The memorandum and articles of association of an

incorporated cell shall be entered into by

(a)

the incorporated cell company, whether the

incorporated cell company is subscribing to a share or shares in

the incorporated cell or otherwise; and

(b) such persons, other than the incorporated cell

company, subscribing to shares in the incorporated cell.

(4) The memorandum of association of an incorporated cell

shall state that it is an incorporated cell.

(5) The memorandum or articles of association of an

incorporated cell shall contain a provision that the incorporated cell

may not own shares in its incorporated cell company.

(6) Without prejudice to article 110 of the Act and unless

expressly prohibited by the articles of association of the incorporated

cell, an incorporated cell shall be permitted to own shares in any other

incorporated cell of its incorporated cell company.

Without prejudice and in addition to compliance with the Name of

provisions of article 70 of the Act, the name of an incorporated cell: incorporated

cell.

(a)

shall include the expression "Incorporated Cell";

and

(b) may be similar to that of the incorporated cell

company of which it forms part but shall not be so similar as, in

the opinion of the Registrar, it could create confusion.

(1) An incorporated cell is a limited liability company Status of an

incorporated

with separate legal personality.

cell.

(2) An incorporated cell is not a subsidiary of its incorporated

cell company solely by virtue of the fact of it being an incorporated

cell of its incorporated cell company.

(3) An incorporated cell may not itself be an incorporated cell

company or a segregated multi-fund company.

(4) An incorporated cell established in terms of regulation 9

may be a SICAV or an investment company with fixed share capital.

(5) An incorporated cell shall have the same registered office

as its incorporated cell company at all times.

(6) Without prejudice to the requirements of article 6 of the

Act, an incorporated cell company and an incorporated cell shall also

indicate in a suitable manner in all of their business letters and forms

that they are an incorporated cell company or an incorporated cell, as

applicable.

(1) It shall be the duty of the directors of an Separation of

incorporated cell company and of the directors of each incorporated assets

liabilities.

cell, as applicable

(a)

to keep the assets and liabilities of the incorporated

cell company separate and separately identifiable from the

assets and liabilities of its incorporated cells;

(b) to keep the assets and liabilities of each incorporated

cell separate and separately identifiable from the assets and

liabilities of the other incorporated cells of the incorporated cell

company.

(2) The duty imposed by sub-regulation (1) is not breached by

reason only that the directors cause or permit assets of the

incorporated cell company or of any of its incorporated cells to be

collectively invested, or collectively managed by an investment

manager

Provided that the assets so invested or managed shall remain

separately identifiable in accordance with sub-regulation (1).

(1) An incorporated cell company shall have no power,

by virtue of its position as an incorporated cell company, to enter into

transactions on behalf of any of its incorporated cells.

(2) An incorporated cell shall have no power, by virtue of its

position as an incorporated cell, to enter into transactions on behalf of

its incorporated cell company.

(3) The directors or officers of an incorporated cell company

or of an incorporated cell shall ensure that, in respect of every

transaction entered into, it is identified or specified whether that

transaction is being entered into by the incorporated cell company or

by the incorporated cell, and if the transaction is entered into by an

incorporated cell, which incorporated cell.

Save as otherwise provided by these regulations, the

provisions of the Act and the Investment Services Act shall apply to

an incorporated cell company and to an incorporated cell as if a

reference in the Act and in the Investment Services Act

(a)

to a company were a reference to an incorporated

cell company or an incorporated cell;

(b) to the directors of a company were a reference to the

directors of the incorporated cell company or an incorporated

cell;

(c)

to the memorandum or articles of association of a

company were a reference to the memorandum or articles of the

incorporated cell company or an incorporated cell;

(d) to the members of a company were a reference to the

members of the incorporated cell company or an incorporated

cell;

(e)

to shares in a company were a reference to shares in

the incorporated cell company or an incorporated cell;

(f)

to assets and liabilities of a company were a

reference to the assets and liabilities of the incorporated cell

company or an incorporated cell; and

(g) to the share capital of a company were a reference to

the share capital of the incorporated cell company or an

incorporated cell.

(1) Notwithstanding anything contained in the Company

definition "company secretary" in article 2 and in article 138(3) of the secretary

single-member

Act, the company secretary of an incorporated cell company and of an incorporated

cells.

incorporated cell may be a body corporate.

(2) Notwithstanding the provisions of the Act, an incorporated

cell may have its incorporated cell company as its only member and

the provisions of articles 212 and 214(2)(b)(i) of the Act shall not

apply in relation thereto in such case.

An incorporated cell company and an incorporated cell Annual return.

shall each submit an annual return containing the information

required by the Seventh Schedule to the Act.

The financial statements of an incorporated cell shall not Consolidated

be consolidated with those of an incorporated cell company or of accounts.

other incorporated cells except when the incorporated cell is a

subsidiary of the incorporated cell company and only to such extent.

In addition to the requirements of article 177 of the Act, Directors’

the directors’ report of the incorporated cell company shall also report.

include the names and registration numbers of all of its incorporated

cells.

(1) An incorporated cell company shall be dissolved Winding up.

and wound up in accordance with Title II of the Act and any

regulations issued thereunder.

(2) An incorporated cell company that has been dissolved and

wound up shall not be struck off the register until each of its

incorporated cells have been either -

(a)

transformed into non-cellular

companies

in

accordance with regulation 23; or

(b) relocated to another incorporated cell company

under regulation 24; or

(c)

expelled under regulation 25; or

(d) continued as a body corporate under the law of

another jurisdiction under regulation 4; or

(e)

struck-off,

and the Registrar has obtained the consent of the competent authority.

(1) Without prejudice to the provisions of regulation

19(1), the appointment of a liquidator in respect of an incorporated

cell company shall not affect the position of its incorporated cells

subject to any direction to the contrary given during the course of a

winding up by

(a)

the Court; or

(b)

the competent authority.

(2) The competent authority may make an application to the

Court for the Court to give a direction under sub-regulation (1).

The competent authority may be heard on any application

to the Court requesting the dissolution and winding up of an

incorporated cell company or an incorporated cell.

The memorandum and articles of association of an

incorporated cell may be amended by an extraordinary resolution of

the incorporated cell following the written approval of its

incorporated cell company.

(1) A SICAV may, by extraordinary resolution in

accordance with article 79 of the Act and any other applicable

provisions of the Act, and in compliance with these regulations, and

provided it is authorised to do so by its memorandum of association,

be transformed

(a)

from a non-cellular company into an incorporated

cell company or into an incorporated cell;

(b) from an incorporated cell company having no

incorporated cells or from an incorporated cell, into a non-

cellular company;

(c)

from a segregated multi-fund company established

under the Act and regulation 9 of the SICAV Regulations having

no segregated sub-funds, into an incorporated cell company;

(d) from an incorporated cell company having no

incorporated cells into a segregated multi-fund company.

(2) (a)

A segregated multi-fund company established under

the Act and regulation 9 of the SICAV Regulations which has one or

more segregated sub-funds may, in accordance with Part IX of the

Act and any other applicable provisions of the Act, and in compliance

with these regulations, be divided into an incorporated cell company

and one or more incorporated cells.

(b) Where a segregated multi-fund company is divided

in accordance with paragraph (a), the non-cellular assets, rights,

liabilities and obligations of the company and all claims, actions and

legal proceedings concerning the non-cellular part of the company

shall be allocated and delivered to the recipient incorporated cell

company; and the assets, rights, liabilities and obligations of each

segregated sub-fund and all claims, actions and legal proceedings

concerning each segregated sub-fund shall be allocated and delivered

to a separate recipient company constituting an incorporated cell.

(3) (a)

A company shall not carry out any of the operations

mentioned in sub-regulation (1) except with the approval of the board

of directors.

(b) In a division of a segregated multi-fund company as

is mentioned in sub-regulation (2), each of the directors of the

company shall sign a declaration stating that he has made a full

enquiry into the affairs of the company and each of its segregated

sub-funds, and that, having so done, he is of the opinion that the

company and each of its segregated sub-funds are able to discharge

their liabilities as they fall due and that there are no creditors of the

company or of the segregated sub-funds whose interests will be

unfairly prejudiced by the division.

(4) The operations mentioned in sub-regulations (1) and (2)

shall not be carried out except with the prior written approval of the

competent authority and in accordance with such terms and

conditions as the competent authority may establish and such

directives as the competent authority may issue.

(5) (a)

A non-cellular company that intends to transform

itself into an incorporated cell shall enter into an incorporation

agreement with an incorporated cell company. The incorporation

agreement shall be approved by

(i) the board of directors and by an extraordinary

resolution of both the non-cellular company and the

incorporated cell company; and

(ii) the competent authority.

(b) An incorporated cell that intends to transform itself

into a non-cellular company shall, within fourteen days of the

extraordinary resolution taken to so transform, notify its incorporated

cell company in writing of such decision.

(6) In addition to any document which is required to be

delivered to the Registrar for registration in accordance with the

applicable provisions of the Act, a company which intends to carry

out -

(a)

any of the operations mentioned in sub-regulations

(1) and (2), shall deliver to the Registrar for registration

evidence of the written approval of the competent authority

required under sub-regulation (4);

(b) any of the operations mentioned in sub-regulation

(1), shall deliver to the Registrar for registration evidence of the

approval by the board of directors required under sub-regulation

(3)(a);

(c)

the operation mentioned in sub-regulation (2), shall

deliver to the Registrar for registration the declaration

mentioned in sub-regulation (3)(b).

(1) An incorporated cell that intends to relocate from

one incorporated cell company (the "Exiting ICC") to another

incorporated cell company (the "Recipient ICC") shall notify the

competent authority of its intention. The competent authority may

impose such conditions and issue such directives as it may deem

necessary in the circumstances.

(2) The relocation of the incorporated cell shall only take

place if

(a)

it has the written consent of the competent authority

to so relocate;

(b) the incorporated cell passes an extraordinary

resolution to so relocate and amends its memorandum and

articles of association accordingly; and

(c)

a relocation agreement has been entered into

between the incorporated cell and the Recipient ICC and is

approved in accordance with sub-regulation (3).

(3) (a)

A relocation agreement shall be submitted to the

competent authority for prior approval.

(b)

A relocation agreement shall also be approved by

(i) the board of directors and an extraordinary

resolution of the incorporated cell;

(ii) the board of directors and an extraordinary

resolution of the Recipient ICC; and

(iii) the board of directors of the Exiting ICC.

(4) An Exiting ICC shall, within seven days of the approval by

its board of directors of the relocation agreement, ensure that all

records, documents and other information pertaining to the

incorporated cell are duly transferred to the Recipient ICC.

(5) The Recipient ICC shall, within fourteen days of a

relocation agreement, deliver to the Registrar for registration

(a)

evidence of the competent authority’s written

consent;

(b) a copy of the extraordinary resolution described in

sub-regulation (2)(b) together with the memorandum and

articles of association of the incorporated cell being relocated;

(c)

a copy of the relocation agreement and the

respective resolutions approving such agreement;

(d) a declaration made in accordance with sub-

regulation (6), signed by each director of the incorporated cell

which is being relocated; and

(e)

the incorporated cell’s original certificate of

registration.

(6) The declaration referred to in sub-regulation (5)(d) shall

state that each such director believes on reasonable grounds that

(a)

the incorporated cell being relocated is able to

discharge its liabilities as they fall due;

(b) there are no creditors of the incorporated cell being

relocated whose interests will be unfairly prejudiced by the

transfer; and

(c)

the relocation agreement has been approved and

executed in accordance with this regulation.

(7) Upon delivery to the Registrar of the documents referred to

in sub-regulation (5), the Registrar shall, if those documents comply

with this regulation

(a)

register the relocation of the incorporated cell and

the new memorandum and articles of the incorporated cell;

(b) issue to the incorporated cell a new certificate of

registration indicating the name of the Recipient ICC; and

(c)

record that the incorporated cell has ceased to be an

incorporated cell of the Exiting ICC.

(8) Upon the issue of the new certificate of registration as

aforesaid

(a)

the incorporated cell ceases to be an incorporated

cell of the Exiting ICC;

(b) the incorporated cell becomes an incorporated cell

of the Recipient ICC;

(c)

all property and rights to which the incorporated cell

was entitled immediately before the issue of the new certificate

remain the property and rights of the incorporated cell;

(d) all liabilities and all contracts, debts and other

obligations to which the incorporated cell was subject

immediately before the issue of the new certificate remain the

liabilities, contracts, debts and other obligations of the

incorporated cell; and

(e)

all actions and other legal proceedings which,

immediately before the issue of the new certificate were

pending by or against the incorporated cell may be continued by

or against the incorporated cell.

(9) The operation of sub-regulation (8) shall not be regarded

(a)

as a breach of any contractual provision prohibiting,

restricting or regulating the assignment or transfer of rights or

liabilities or change of control; or

(b) as giving rise to any remedy by a party to a contract

or other instrument, as an event of default under any contract or

other instrument or as causing or permitting the termination of

any contract or other instrument, or of any obligation or

relationship.

(10) An incorporated cell may not be relocated under this

regulation if the relocation were to be inconsistent with the

memorandum or articles of association of

(a)

the incorporated cell; or

(b)

the Recipient ICC.

(1) An incorporated cell company may, subject to Expulsion of an

approval by the competent authority and on the grounds listed in sub- incorporated

cell.

regulation (2), expel an incorporated cell.

(2) The grounds referred to in sub-regulation (1) are

(a)

that the affairs of the incorporated cell are being or

have been conducted in a manner which is unfairly prejudicial

to its incorporated cell company or any incorporated cell of that

company or its incorporated cells;

(b) that the incorporated cell is being or has been used

for fraudulent purposes; or

(c)

that to fail to do so would have a serious adverse

effect upon the members of the incorporated cell.

(3) In determining whether to approve an expulsion in terms of

sub-regulation (1), the competent authority shall take into

consideration any representations made to it by the incorporated cell

company, the liquidator (where applicable), the incorporated cell and

any other party deemed to have a material interest in the business of

the relevant incorporated cell, and may give such directions as it

deems fit.

(4) The provisions of this regulation are without prejudice to

any and all powers granted to the competent authority under the

Investment Services Act.

(1) Any person who feels aggrieved by a decision of the Appeals.

competent authority -

(a)

to refuse to issue an approval for a company to be

formed or constituted as an incorporated cell company;

(b) to refuse to issue an approval to an incorporated cell

company to establish incorporated cells;

(c)

to refuse to issue an approval for a non-cellular

company carrying on the activity of a collective investment

scheme to transform itself into an incorporated cell company;

(d) to refuse to issue an approval for a segregated multi-

fund company to be divided into an incorporated cell company

and incorporated cells;

(e)

to refuse to issue an approval for an incorporated

cell to transform itself into a non-cellular company carrying on

the activity of a collective investment scheme;

(f)

to refuse to issue an approval for an incorporated

cell to relocate from one incorporated cell company to another

incorporated cell company; and

(g) to refuse to issue an approval for a non-cellular

company carrying on the activity of a collective investment

scheme to transform itself into an incorporated cell,

may appeal against the decision to the Financial Services Tribunal.

(2) The provisions of article 21 of the Malta Financial

Services Authority Act shall apply mutatis mutandis to appeals that

may be brought before the Tribunal under this regulation.