Regulations, 2011

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 18,769, 28 ta’ Ġunju, 2011 B 3135

Taqsima B

L.N. 241 of 2011

INVESTMENT SERVICES ACT

(CAP. 370)

Investment Services Act (Marketing of UCITS)

Regulations, 2011

IN exercise of the powers conferred by article 12 of the

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

Investment, acting on the advice of the Malta Financial Services

Authority, has made the following regulations:-

PRELIMINARY

(1)

The title of these regulations is the Investment Citation,

commencement

Services Act (Marketing of UCITS) Regulations, 2011.

and scope.

(2) These regulations shall come into force on 1st July, 2011.

(3) These regulations provide for the requirements applicable

to the marketing of Maltese UCITS in other Member States or EEA

States, and to the marketing of European UCITS in Malta.

(4) These regulations have the purpose of implementing

Articles 1, 2(1)(b) and (e), 3, 91(1) and (3), 92, 93, 94, 96 and 108 of

Directive 2009/65/EC of the UCITS Directive and Article 30 of the

Implementing Directive, and they shall be interpreted and applied

accordingly.

[Regulation 8(7)]

The following categories of information on the relevant laws, regulations and

administrative provisions are to be made available on the competent authority’s

website in terms of regulation 8(7)

(a)

the definition of the term "marketing of UCITS" or the

equivalent legal term either as stated in national legislation or as developed

in practice;

(b)

requirements for the contents, format and manner of

presentation of marketing communications, including all compulsory

warnings and restrictions of the use of certain words or phrases;

(c)

without prejudice to Chapter IX of the UCITS Directive, details

of any additional information required to be disclosed to investors;

(d)

details of any exemptions from rules or requirements governing

arrangements made for marketing applicable in Malta with respect to certain

classes of UCITS or certain categories of investors;

(e)

requirements for any reporting or transmission of information to

the competent authority and the procedure for lodging updated versions of

required documents;

(f)

requirements for any fees or other sums to be paid to the

competent authority or any other statutory body in Malta either when

marketing commences or periodically thereafter;

(g)

requirements in relation to the facilities to be made available for

the purposes of making payments to unit holders, repurchasing or redeeming

units and making available the information which UCITS are required to

provide to unit holders;

(h)

conditions for the termination of marketing of units of UCITS in

Malta by a European UCITS;

(i)

detailed contents of the information required by Malta to be

included in part B of the notification letter as referred to in Article 1 of

Regulation No. 584/2010;

(j)

the e-mail address designated for the purposes of receiving

notification of updates and amendments to the documents referred to in

regulation 4(3).

€0.63

(1)

In these regulations, unless the context otherwise Interpretation

requires

"the Act" means the Investment Services Act;

"closed ended scheme" means a collective investment scheme

with fixed share capital, which complies with any additional criteria

established in the Investment Services Rules issued by the competent

authority in terms of the Act;

"ESMA" means the European Securities and Markets Authority

established in terms of Article 1 of Regulation (EU) No 1095/2010 of

the European Parliament and of the Council of 24 November, 2010;

"European management company" means a management

company authorised by a European regulatory authority in a Member

State or EEA State, other than Malta, and the regular business of

which is the management of UCITS;

"European UCITS" means a UCITS authorised by a European

regulatory authority in a Member State or EEA State, other than in

Malta;

"feeder UCITS" means a UCITS or subfund thereof which has

been approved to invest at least eighty five per cent of its assets in

units of another UCITS or subfund thereof in terms of the UCITS

Directive;

"Implementing Directive" means Commission Directive 2010/

42/EU of 1 July 2010 implementing Directive 2009/65/EC of the

European Parliament and of the Council as regards certain provisions

concerning fund mergers, master-feeder structures and notification

procedure;

"key investor information" shall have the same meaning

assigned to it in the Investment Services Rules;

"Maltese management company" means a management

company licensed by the competent authority, having its head office

and registered office situated in Malta, and the regular business of

which is the management of UCITS;

"Maltese UCITS" means

(a)

an investment company, a partnership en

commandite or a limited partnership with its registered office

and head office situated in Malta and licensed in terms of the

Act;

(b)

where the UCITS is constituted as a common fund,

a UCITS domiciled in Malta in terms of the Investment Services

Act (Contractual Funds) Regulations, and licensed in terms of

the Act;

(c)

where the UCITS is established as a unit trust, a

unit trust whose proper law is the law of Malta;

"master UCITS" means a UCITS which

(a)

has, among its unit-holders, at least one feeder

UCITS;

(b)

is not itself a feeder UCITS; and

(c)

does not hold units of a feeder UCITS;

"Member State" means a Member State of the European Union;

"Regulation No. 584/2010" means Commission Regulation

(EU) No. 584/2010 of 1 July 2010 implementing Directive 2009/65/

EC of the European Parliament and of the Council as regards the form

and content of the standard notification letter and UCITS attestation,

the use of electronic communication between competent authorities

for the purpose of notification, and procedures for on-the-spot

verifications and investigations and the exchange of information

between competent authorities;

"UCITS" means the undertaking for collective investment in

transferable securities in terms of regulation 3(2). For the purpose of

these regulations, a UCITS shall also include subfunds thereof;

"UCITS Directive" means Directive 2009/65/EC of the

European Parliament and of the Council of 13 July 2009 on the

coordination of laws, regulations and administrative provisions

relating to undertakings for collective investment in transferable

securities (UCITS) (recast) and includes any implementing measures

that have been or may be issued thereunder;

"UCITS home Member State or EEA State" means the Member

State or EEA State in which the UCITS is authorised pursuant to

Article 5 of the UCITS Directive.

(2) For the purposes of these regulations

(a)

"common fund" shall be construed as referring to

UCITS constituted as contractual funds and unit trusts; and

(b)

"constitutional documents" shall be construed as

referring to the fund rules, trust deeds and instruments of

incorporation, as the case may be.

(3) Words and expressions which are also used in the Act but

which are not defined herein shall have the same meaning as in the

Act.

(4) In the event that any of these regulations conflicts with the

provisions of the UCITS Directive, the latter shall prevail.

SCOPE

(1)

These regulations shall apply to Maltese UCITS Scope.

wishing to market their units in a Member State or an EEA State, and

also to European UCITS wishing to market their units in Malta, in

terms of the UCITS Directive.

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

undertakings which are harmonised in accordance with the UCITS

Directive and which have -

(a)

as sole object the collective investment in

transferable securities or in other liquid financial assets, as

specified in the Investment Services Rules, of capital raised

from the public and which operate on the principle of risk-

spreading; and

(b)

units which are, at the request of holders,

repurchased 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

repurchase or redemption

Provided that if a master UCITS has at least two feeder UCITS

as unit holders, paragraph (a) shall not apply, giving the master

UCITS the choice whether or not to raise capital from other investors.

(3) The undertakings referred to in sub-regulation (2) may be

constituted as

(a)

common funds which are managed either by

Maltese or European management companies; or

(b)

investment companies or limited partnerships with

variable share capital.

(4) These regulations shall not apply to

(a)

investment companies and limited partnerships, the

assets of which are invested through the intermediary of

subsidiary companies mainly otherwise than in transferable

securities;

(b)

collective investment schemes of the closed-ended

type;

(c)

collective investment schemes which raise capital

without promoting the sale of their units to the public within the

European Union or EEA States or any part thereof

Provided that if a master UCITS has at least two feeder

UCITS as unit holders, it shall have the choice as to whether or

not to raise capital from other investors;

(d)

collective investment schemes the units of which,

under the constitutional documents, may be sold only to the

public in third countries;

(e)

categories of UCITS whose investment and

borrowing policies do not conform with those specified in the

provisions of the Investment Services Rules;

(f)

collective investment schemes that are

not

harmonised in accordance with the UCITS Directive; or

(g)

a Maltese UCITS which is a master UCITS and

which does not raise capital from the public in Malta, but has

one or more feeder UCITS established in Malta.

(5) A Maltese UCITS which is subject to these regulations

shall not convert itself into a collective investment scheme which

would not be subject to these regulations, and any purported

conversion shall be null and void.

MARKETING OF MALTESE UCITS IN A MEMBER STATE

OR IN AN EEA STATE

(1)

Where a Maltese UCITS proposes to market its Marketing of

units in a Member State or EEA State other than Malta, it shall first Maltese UCITS.

submit a written notification letter of its intention to the competent

authority.

(2) The notification letter shall be made in the form and

manner prescribed in Regulation No. 584/2010 and shall furthermore

include the following information

(a)

information on the arrangements made for

marketing of the units of the Maltese UCITS in the Member

State or EEA State, including where relevant in respect of share

classes; and

(b)

an indication that the units of the Maltese UCITS

will be marketed by the management company that manages the

Maltese UCITS.

(3) The Maltese UCITS shall enclose the following documents

with the notification letter

(a)

the latest version of its constitutional documents

and its prospectus;

(b)

where appropriate, its latest annual report and any

subsequent half-yearly report translated in accordance with

regulation 5; and

(c)

the key investor information document as provided

for in the Investment Services Rules and translated in

accordance with regulation 5.

(4) The competent authority shall verify whether the

information and documentation submitted by the Maltese UCITS in

accordance with sub-regulations (2) and (3) is complete and, if

satisfied, shall produce an attestation that the Maltese UCITS fulfils

the conditions imposed by the UCITS Directive in the manner and

form prescribed by Regulation No. 584/2010.

(5) The competent authority shall transmit the complete

information and documentation referred to in sub-regulations (1), (2)

and (3) to the European regulatory authority of the Member State or

EEA State in which the Maltese UCITS proposes to market its units,

by not later than ten working days from the date of receipt of the

notification letter accompanied by the complete documentation

referred to in sub-regulation (3). The competent authority shall also

transmit to such European regulatory authority the attestation issued

pursuant to sub-regulation (4)

Provided that in transmitting the notification to the European

regulatory authority of the Member State or EEA State, the competent

authority shall comply with the requirements of the provisions of

Regulation No. 584/2010.

(6) The notification letter referred to in sub-regulation (2), and

the attestation referred to in sub-regulation (4), shall be provided in a

language customary in the sphere of international finance, unless the

competent authority and the European authority of the Member State

or EEA State in which the Maltese UCITS wishes to market its units

agree that the said documents be provided in an official language of

both Member States.

(7) Upon transmission of the documentation, the competent

authority shall immediately notify the Maltese UCITS thereof and the

Maltese UCITS may commence marketing its units in the Member

State or EEA State as from the date of such notification.

(8) For the purposes of the notification procedure under this

regulation, the Maltese UCITS shall not be required by the European

regulatory authority of the Member State or EEA State in which it

wishes to market its units, to submit any additional documents,

certificates or information other than those requested in this

regulation.

(9) The European regulatory authority of the Member State or

EEA State in which the Maltese UCITS intends to market its units

shall have access, by electronic means, to the documents referred to

in sub-regulation (3) and, if applicable, to any translation thereof.

(10) The Maltese UCITS shall keep the documentation referred

to in sub-regulation (3) and the translations thereof updated. The

Maltese UCITS shall notify any amendments to the documents

referred to in sub-regulation (3) to the European regulatory authority

of the Member State or EEA State in which it is marketing its units

and shall indicate where those documents can be obtained

electronically.

(11) In the event of a change in the information regarding the

arrangements made for marketing communicated in the notification

letter in accordance with subregulations (1) and (2), or a change

regarding share classes to be marketed, the Maltese UCITS shall give

written notice thereof to the European regulatory authority of the

Member State or EEA State in which it is currently marketing its units

prior to implementing the change.

(1)

Where a Maltese UCITS markets its units in Documents and

another Member State or EEA State, it shall provide investors within information

be provided to

the territory of such Member State or EEA State with the key investor investors

Maltese UCITS.

information document translated in the official language, or one of

the official languages of the Member State or EEA State in which it is

marketing its units or into a language approved by the European

regulatory authority of such Member State or EEA State, together

with the following information and documents prescribed hereunder

free of charge and upon request

(a)

a prospectus;

(b)

an annual report for each financial year; and

(c)

a half-yearly report covering the first six months of

the financial year.

(2) The information and documents prescribed in sub-

regulation (1)(a) to (c) shall be provided to investors in the manner

prescribed by the European regulatory authority of the Member State

or EEA State in which the Maltese UCITS is marketing its units.

(3) The Maltese UCITS shall, at its discretion, translate the

documents referred to in sub-regulation (1)(a) to (c) into the official

language or one of the official languages of the Member State or EEA

State in which it markets its units, into a language approved by the

European regulatory authority of that Member State or EEA State or

in a language customary in the sphere of international finance.

(4) The Maltese UCITS shall be responsible to provide

accurate translations of the information or documents referred to in

sub-regulation (1), and such translations shall faithfully reflect the

content of the original information.

(5) The requirements prescribed in sub-regulations (1) to (4)

shall also be applicable to any changes to the information and

documents referred to therein.

(6) The frequency of the publication of the issue, sale,

repurchase or redemption price of units of the Maltese UCITS in

terms of sub-regulation (1)(c) shall be subject to applicable

provisions prescribed in the Investment Services Rules.

(7) The Maltese UCITS proposing to market its units in

another Member State or EEA State shall, in accordance with the

laws, regulations and administrative provisions in force in that

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

that facilities are available therein for making payments to unit

holders, re-purchasing or redeeming units and making available the

information which the Maltese UCITS is obliged to provide.

(8) For the purpose of pursuing its activities, the Maltese

UCITS may use the same reference to its legal form in terms of

regulation 3(3), in its designation in the Member State or EEA State

in which it markets its units as it uses in Malta.

(9) A Maltese UCITS shall make public in an appropriate

manner the issue, sale, repurchase or redemption price of its units

each time it issues, sells, repurchases or redeems them, in accordance

with Investment Services Rules.

The competent authority shall take appropriate measures if

it receives notification from the European regulatory authority of the

Member State or EEA State in which the Maltese UCITS is marketing

its units, that such European regulatory authority has clear and

demonstrable grounds to believe that a Maltese UCITS, the units of

which are being marketed within its territory, is in breach of the

obligations arising from the provisions of the UCITS Directive, and

which provisions do not however confer supervisory and regulatory

powers on such European regulatory authority.

(1)

The competent authority alone shall have the Supervision of

power to take action against a Maltese UCITS if it infringes the Maltese

marketing units

provisions of the Act, any regulations issued thereunder or any in

State or EEA

applicable Investment Services Rules, as well as any regulation laid State other than

Malta.

down in the constitutional documents or prospectus.

(2) Where the units of a Maltese UCITS are being marketed in

a Member State or EEA State other than Malta, the competent

authority shall, without delay, notify the European regulatory

authority of that Member State or EEA State of any decision to

withdraw the authorisation of the Maltese UCITS, or any other

serious measure taken against a Maltese UCITS, or any suspension of

the issue, repurchase or redemption of the units of a Maltese UCITS

imposed upon it.

(3) Where the units of the Maltese UCITS are marketed by a

European management company, the competent authority shall also

proceed to notify any measure taken in accordance with sub-

regulation (2) to the European regulatory authority of the Member

State or EEA State where the European management company is

registered.

MARKETING OF EUROPEAN UCITS IN MALTA

(1)

A European UCITS may market its units in Malta Marketing of

and shall be exempt from the provisions of article 4 of the Act, European

UCITS in

provided that prior to commencement of its marketing in Malta, the Malta.

competent authority has received from the European regulatory

authority of the UCITS home Member State or EEA State a

notification letter made in the form and manner prescribed in

Regulation No. 584/2010, which notification letter shall furthermore

include the following information

(a)

information on the arrangements made for

marketing by the European UCITS of its units in Malta,

including where relevant in respect of share classes; and

(b)

an indication that the units of the European UCITS

will be marketed by the management company that manages the

European UCITS.

(2) Together with the notification letter, the European UCITS

shall enclose the following

(a)

the latest version of its constitutional documents

and its prospectus in Maltese or English;

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

subsequent half-yearly report in Maltese or English;

(c)

the key investor information document as provided

for in the Investment Services Rules in Maltese or English; and

(d)

an attestation drawn up by the European regulatory

authority that the European UCITS fulfils the conditions of the

UCITS Directive, prepared in the manner and form prescribed

by Regulation No. 584/2010.

(3) The competent authority shall ensure that a European

UCITS is able to market its units in Malta upon notification, in

accordance with sub-regulations (1) and (2).

(4) The European UCITS may access the Maltese market as

from the date of notification to the competent authority by the

European regulatory authority of the UCITS home Member State or

EEA State in accordance with sub-regulations (1) and (2).

(5) The competent authority shall receive the complete

documentation and information referred to in sub-regulation (1) and

(2) from the European regulatory authority of the UCITS home

Member State or EEA State in the manner prescribed by Articles 3

and 4 of Regulation No. 584/2010

Provided that the notification letter and the attestation referred

to in sub-regulations (1) and (2) shall be provided to the competent

authority in a language customary in the sphere of international

finance, unless the competent authority and the European regulatory

authority of the UCITS home Member State or EEA State agree that

said documents be provided in an official language of both Member

States.

(6) For the purpose of the notification procedure set out in this

regulation, the competent authority shall not request any additional

documents, certificates or information other than those provided in

this regulation. In addition, the competent authority shall not impose

any additional requirements or administrative procedures on the

European UCITS in respect of the field governed by the UCITS

Directive.

(7) Any laws, regulations and administrative provisions which

do not fall within the field governed by the UCITS Directive relating

to the matters referred to in Schedule A and which are specifically

relevant to the arrangements made for marketing of units in Malta by

a European UCITS, shall be easily accessible and, for this purpose,

shall, in a clear and unambiguous manner, be made available in the

English language on the competent authority’s website, which shall

be regularly updated. Such information may be provided by the

competent authority in the form of a narrative description, or a

combination of a narrative description and a series of references or

links to source documents.

(8) The competent authority shall have access by electronic

means, to the documents referred to in sub-regulation (2)(a), (b) and

(c) and, if applicable, to any translation thereof.

(9) The European UCITS shall keep the documentation

referred to in sub-regulation (2) and the translations thereof up to

date. In addition it shall notify the competent authority of any

amendments to the documents referred to in sub-regulation (2) and

shall indicate where such documentation can be obtained

electronically.

(10) In the event of a change in the information regarding the

arrangements made for marketing communicated in the notification

letter in accordance with sub-regulation (1), or a change regarding

share classes to be marketed, the European UCITS shall give written

notice thereof to the competent authority prior to implementation of

the change.

(1)

Where a European UCITS markets its units in Documents and

Malta, it shall provide investors in Malta with the key investor information

be provided to

information document in English or in Maltese and with the following Maltese

investors by the

information and documents prescribed hereunder free of charge and European

UCITS.

upon request

(a)

a prospectus;

(b)

an annual report for each financial year; and

(c)

a half-yearly report covering the first six months of

the financial year.

(2) The information and documents prescribed in sub-

regulation (1)(a) to (c) shall be provided to investors in the manner

prescribed by the Investment Services Rules. This information and

documentation shall be translated, at the choice of the European

UCITS, into the official language or one of the official languages of

Malta, into a language approved by the competent authority or into a

language customary in the sphere of international finance.

(3) The European UCITS shall be responsible for providing

accurate translations of the information referred to in sub-regulations

(1) and (2), which translation shall faithfully reflect the content of the

original information.

(4) The requirements prescribed in sub-regulations (1) to (3)

shall also be applicable to any changes to the information and

documents referred to therein.

(5) The European UCITS marketing its units in Malta shall, in

accordance with the laws, regulations and administrative provisions

in force in Malta, take the measures necessary to ensure that facilities

are available in Malta for making payments to unit holders, re-

purchasing or redeeming units and making available the information

which the European UCITS is obliged to provide.

(6) For the purpose of pursuing its activities, the European

UCITS may use the same reference to its legal form in its designation

in Malta as it uses in the home Member State or EEA State in which it

is authorised.

(7) A European UCITS marketing its units in Malta shall, in

an appropriate manner, make public the issue, sale, repurchase or

redemption price of its units each time it issues, sells, repurchases or

redeems them, in accordance with Investment Services Rules.

(1)

The European regulatory authority of the UCITS

home Member State or EEA State shall have the sole power to take

action against a European UCITS marketing its units in Malta, if the

European UCITS infringes any law, regulation or administrative

provision of the UCITS home Member State or EEA State or any

regulation laid down in constitutional documents. However, the

competent authority may nonetheless take action against that

European UCITS if it infringes any laws, regulations and

administrative provisions in force in Malta, falling outside the scope

of the UCITS Directive or the requirements set out in Articles 92 and

94 of the said Directive.

(2) Where the competent authority has clear and demonstrable

grounds to believe that a European UCITS, the units of which are

being marketed in Malta, is in breach of the obligations arising from

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

Rules, which do not confer supervisory and regulatory powers on the

competent authority, the competent authority shall refer those

findings to the European regulatory authority of the UCITS home

Member State or EEA State, which shall take appropriate measures.

(3) If, despite the measures taken by the European regulatory

authority of the UCITS home Member State or EEA State, or because

such measures prove to be inadequate, or because the European

regulatory authority of the UCITS home Member State or EEA State

fails to act within a reasonable timeframe, the European UCITS

persists in acting in a manner that is clearly prejudicial to the interests

of the Maltese investors, the competent authority may, as a

consequence, take either of the following actions

(a)

after informing the European regulatory authority

of the UCITS home Member State or EEA State, the competent

authority may take all the appropriate measures needed in order

to protect investors, including the possibility of preventing the

European UCITS concerned from carrying out any further

marketing of its units in Malta; or

(b)

if necessary, bring the matter to the attention of

ESMA.

(4) The competent authority shall, without delay, inform the

European Commission and ESMA of any measure taken pursuant to

sub-regulation (3)(a).

MISCELLANEOUS

The Undertakings for Collective Investments in Revocation.

Transferable Securities and Management Companies Regulations, L.N.

2004. 2004 are hereby repealed.

B B 3148