Regulations, 2012

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 18,902, 17 ta’ April, 2012

L.N. 119 of 2012

COMPANIES ACT

(CAP. 386)

Companies Act (Recognised Incorporated Cell Companies)

Regulations, 2012

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

The title of these regulations is the Companies Act Citation.

(Recognised Incorporated Cell Companies) Regulations, 2012.

(Regulation 3)

Administrative Services which may be carried out

by Recognised Incorporated Cell Companies

A Recognised Incorporated Cell Company shall require recognition in terms

of Article 9A of the Investment Services Act to provide one or more of the

following services

(i)

Provision of administrative services related to the establishment

of incorporated cells;

(ii) Procurement of external service providers and approval of any

changes thereto;

(iii)

Negotiation of service provision agreements and changes thereto;

(iv) Submission of any model agreements to be used by incorporated

cells of a recognised incorporated cell company;

(v) Submission to the competent authority of any changes or

amendments to model agreements and submission of any new model

agreements negotiated with service providers for the approval of the

competent authority;

(vi) Signature of tripartite agreements between service providers, the

recognised incorporated cell company and an incorporated cell based on the

model agreements;

(vii) Standardisation of any other documentation to be used by

incorporated cells;

(viii) Approval and joint signature of any applications for licences

(including variations, extensions thereof) to be submitted by or on behalf of

incorporated cells which are in the course of being formed;

(ix) Provision of written declarations identifying any changes to

model agreements already submitted to the competent authority, including a

NIL declaration confirming that no changes have been made;

(x) Provision of ancillary services as may be approved by the

competent authority.

€0.72

(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

that assigned to the term in article 2 of the Investment Services Act; Cap. 370.

"competent authority" means the Malta Financial Services

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

Authority Act;

"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, unless otherwise specified, a cell of a

recognised incorporated cell company created in accordance with the

provisions of these regulations and licensed as a collective investment

scheme in terms of article 4 of the Investment Services Act;

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

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

fund company;

"recognised incorporated cell company" means a limited

liability company formed, continued as, transformed or divided into

an incorporated cell company in accordance with the provisions of

these regulations and recognised by the competent authority in terms

of article 9A of the Investment Services Act;

"relocation agreement" means an agreement setting out the

terms upon which the relocation of an incorporated cell from one

recognised incorporated cell company to another or to a SICAV

incorporated cell company is to take place in accordance with the

provisions of regulation 23;

"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 incorporated cell company" means an incorporated cell

company established under the Companies Act (SICAV Incorporated

Cell Companies) 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.

(1) A limited liability company may be formed or

constituted as a recognised incorporated cell company to establish

incorporated cells formed and constituted in accordance with these

regulations and to provide such incorporated cells with administrative

services.

(2) A recognised incorporated cell company shall require a

recognition by the competent authority in terms of article 9A of the

Investment Services Act to provide incorporated cells with

administrative services.

(3) The administrative services which a recognised

incorporated cell company may provide to its incorporated cells are

listed in the Schedule, and the recognised incorporated cell company

shall provide such administrative services in accordance with the

applicable rules and conditions prescribed by the competent authority.

(4) An incorporated cell established by a recognised

incorporated cell company shall require a licence to carry out the

activities of a collective investment scheme in terms of article 4 of the

Investment Services Act.

(5) The competent authority may, in terms of articles 6 and 9A

of the Investment Services Act, issue Investment Services Rules Cap. 370.

applicable to recognised incorporated cell companies and to

incorporated cells established under these regulations.

(1)

Subject to the provisions of the Continuation Continuation.

Regulations

(a) a body corporate registered, incorporated or

constituted under the laws of an approved country or

jurisdiction outside Malta, which carries out similar activities to

those of a recognised incorporated cell company as herein

defined, may be continued as a recognised incorporated cell

company in Malta

Provided that if such body corporate as aforesaid has a cell

or cells which are similar in nature to incorporated cells as

herein defined, the continuation of the body corporate in Malta

shall also require the simultaneous continuation of all such cells

as incorporated cells in Malta;

(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

cellular or non-cellular company as known under the laws of

Malta, may be continued as an incorporated cell of a recognised

incorporated cell company;

(c)

a recognised incorporated cell company may be

continued as a body corporate similar in nature to a recognised

incorporated cell company as known under the laws of Malta

under the laws of a country outside Malta

Provided that if such recognised incorporated cell

company has an incorporated cell or incorporated cells in

existence, the continuation of the recognised 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.

No event described in regulation 4 shall take place except

in accordance with the terms and conditions of the prior written

approval of the competent authority which shall only be granted

(a)

in the case of a body corporate which is or which is

to be granted recognition as a recognised incorporated cell

company in terms of article 9A of the Investment Services Act;

(b) in the case of a body corporate which is or which is

to be licensed as an incorporated cell in terms of article 4 of the

Investment Services Act as a collective investment scheme.

The memorandum of a recognised incorporated cell

company shall, in addition to the matters prescribed by article 69 of

the Act, state that it is a recognised incorporated cell company.

The name of a recognised incorporated cell company shall,

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

include the expression "Recognised Incorporated Cell Company" or

its abbreviation "RICC".

(1) Subject to the provisions of these regulations, and

unless the context otherwise requires, the provisions of the Act shall

apply to a recognised incorporated cell company and to an

incorporated cell established under these regulations.

(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 a recognised incorporated cell company or

to an incorporated cell.

(1) A recognised 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 recognised incorporated cell company; and

(c)

authorises, if applicable, the subscription by the

recognised 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 cell resolution is delivered to the Registrar, the

memorandum and articles of association are entered into in

accordance with the provisions of sub-regulation (3) and a certificate

of registration is issued in terms of the Act.

(3) The memorandum and articles of association of an

incorporated cell shall be entered into by

(a)

the recognised incorporated cell company, whether

the recognised incorporated cell company is subscribing to a

share or shares in the incorporated cell or not; and

(b) such persons, other than the recognised 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 provide that the incorporated cell may not own

shares in its recognised incorporated cell company.

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

expressly prohibited by any applicable rules or regulations or by its

articles of association, an incorporated cell shall be permitted to own

shares in any other incorporated cell of its recognised incorporated

cell company subject to any conditions that may apply in terms of the

licence issued to it by the competent authority.

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" or

the abbreviation "IC"; and

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

cell company of which it forms part but shall not be so similar

as, in the opinion of the Registrar, 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 recognised

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

incorporated cell of its recognised incorporated cell company.

(3) An incorporated cell may not itself be a recognised

incorporated cell company.

(4) An incorporated cell may be a SICAV or an investment

company with fixed share capital.

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

as its recognised incorporated cell company at all times.

(6) Subject to the requirements of Directive 2003/71/EC on

the prospectus to be published when securities are offered to the

public or admitted to trading and of Directive 2004/109/EC on the

harmonisation of transparency requirements in relation to information

about issuers whose securities are admitted to trading on a regulated

market, as may be amended from time to time, an incorporated cell

shall use the standard form documents provided by its recognised

incorporated cell company and shall not amend or alter such

documents in any manner without the prior written approval of the

recognised incorporated cell company

Provided that nothing stated in this sub-regulation shall

prejudice the rights and interests of investors in the incorporated cell

or affect the relationship between the incorporated cell and its

investors.

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

Act, a recognised 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 a recognised incorporated cell company or an

incorporated cell, as applicable.

(1) It shall be the duty of the directors of a recognised

incorporated cell company and of the directors of each incorporated

cell, as applicable

(a)

to keep the assets and liabilities of the recognised

incorporated cell company separate and separately identifiable

from the assets and liabilities of its incorporated cells at all

times;

(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 recognised

incorporated cell company at all times.

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

reason only that the directors of the recognised incorporated cell

company cause or permit assets of the recognised incorporated cell

company or of any of its incorporated cells to be collectively

managed by an investment manager

Provided that the assets so managed shall remain separately

identifiable in accordance with sub-regulation (1).

(1) A recognised incorporated cell company shall have Recognised

no power, by virtue of its position as a recognised incorporated cell incorporated

cell company

company, to enter into transactions on behalf of any of its cannot

on behalf of its

incorporated cells.

incorporated

cells and vice

versa.

(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 recognised incorporated cell company.

(3) The directors or officers of a recognised 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 recognised 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 Application of

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

to a recognised 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 a recognised

incorporated cell company or an incorporated cell;

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

directors of a recognised 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 a

recognised incorporated cell company or an incorporated cell;

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

members of a recognised incorporated cell company or an

incorporated cell;

(e)

to shares in a company were a reference to shares in

a recognised incorporated cell company or an incorporated cell;

(f)

to assets and liabilities of a company were a

reference to the assets and liabilities of a recognised

incorporated cell company or an incorporated cell; and

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

the share capital of a recognised incorporated cell company or

an incorporated cell.

(1) Notwithstanding anything contained in the

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

Act, the company secretary of a recognised incorporated cell

company and of an incorporated cell may be a body corporate.

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

cell may have its recognised 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.

A recognised incorporated cell company and an

incorporated cell 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

be consolidated with those of a recognised incorporated cell company

or of other incorporated cells except when the incorporated cell is a

subsidiary of the recognised incorporated cell company and only to

such extent.

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

the directors’ report of a recognised incorporated cell company shall

also include the names and registration numbers of all its

incorporated cells.

(1) A recognised incorporated cell company shall be

dissolved and wound up in accordance with the provisions of Title II

of the Act and any regulations made thereunder.

(2) A recognised 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 under

regulation 23; or

(b) relocated to another recognised incorporated cell

company under regulation 24 or to an incorporated cell

company under regulation 24 of the Companies Act (SICAV

Incorporated Cell Companies) Regulations; or

(c)

expelled under regulation 25; or

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

another jurisdiction; or

(e)

struck-off,

and the Registrar has obtained the consent of the competent authority

to the striking-off of the recognised incorporated cell company.

(1) Without prejudice to the provisions of regulation Directions

19(1), the appointment of a liquidator in respect of a recognised during

up.

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 Competent

to the court requesting the dissolution and winding up of a recognised authority

be heard by

incorporated cell company or an incorporated cell.

Court in respect

of winding up.

The memorandum and articles of association of an Amendments to

incorporated cell may be amended by an extraordinary resolution of memorandum

and articles of

the incorporated cell following the written approval of its recognised association.

incorporated cell company.

(1) A limited liability company may, by extraordinary Transformation

resolution in accordance with article 79 of the Act and any other and division.

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 a recognised

incorporated cell company or into an incorporated cell;

(b) from a recognised 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 into an

incorporated cell;

(d) from an incorporated cell into a segregated multi-

fund company

Provided that a transformation from a non-cellular SICAV into a

recognised incorporated cell company, or vice versa, shall be

prohibited.

(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 one or more incorporated cells

of a recognised incorporated cell company.

(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; 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

referred to 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 a recognised 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 recognised

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 recognised 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) For the purposes of this regulation, the term Relocation of an

"incorporated cell company" or "ICC" shall be deemed to refer both incorporated

cell.

to a recognised incorporated cell company established under these

regulations and to an incorporated cell company established under the

Companies Act (SICAV Incorporated Cell Companies) Regulations. S.L. 386.14

(2) 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.

(3) The relocation of an 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 (4).

(4) (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.

(5) 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.

(6) 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 (3)(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 (7), signed by each director of the incorporated cell

which is being relocated; and

(e)

the incorporated cell’s original certificate of

registration.

(7) The declaration referred to in sub-regulation (6)(d) must

state that each director of the incorporated cell being relocated

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.

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

in sub-regulation (6), 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.

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

aforesaid

(a)

the incorporated cell shall cease to be an

incorporated cell of the Exiting ICC;

(b) the incorporated cell shall become 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

shall 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 shall 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.

(10) The operation of sub-regulation (9) 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.

(11) An incorporated cell shall not be relocated under this

regulation if such relocation is inconsistent with the memorandum or

articles of association of

(a)

the incorporated cell; or

(b)

the Recipient ICC.

(1) A recognised incorporated cell company may,

subject to approval by the competent authority and on the grounds

listed in sub-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 recognised incorporated cell company or any other

incorporated cell of that company;

(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 or on the

recognised incorporated cell company.

(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 recognised

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)

An appeal shall lie to the Financial Services Appeals.

Tribunal from a decision of the competent authority

(a)

to refuse to issue a recognition for a company to be

formed or constituted as a recognised incorporated cell

company;

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

fund company to be divided into a recognised incorporated cell

company and incorporated cells;

(c)

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;

(d) to refuse to issue an approval for an incorporated

cell to relocate from one incorporated cell company to another

incorporated cell company; and

(e)

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.

(2) The provisions of article 21 of the Malta Financial Cap. 330.

Services Authority Act shall, mutatis mutandis, apply to appeals

brought before the Tribunal under this regulation.