Regulations, 2014

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 19,227, 28 ta’ Marzu, 2014

L.N. 105 of 2014

INVESTMENT SERVICES ACT

(CAP. 370)

Investment Services Act (European Venture Capital Funds)

Regulations, 2014

IN exercise of the powers conferred by article 12 of the

Investment Services Act, the Minister for Finance, acting on the

advice of the Malta Financial Services Authority, has made the

following regulations:-

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

scope.

Services Act (European Venture Capital Funds) Regulations, 2014.

(2) The purpose of these regulations is to implement the

relevant provisions of the EU Regulation, as hereinafter defined, on

European Venture Capital Funds, and these regulations shall be

interpreted and applied accordingly.

In these regulations, unless the context otherwise requires - Interpretation.

"the Act" means the Investment Services Act;

"AIF" means an alternative investment fund which is a

collective investment scheme, including the subfunds thereof, which

raises capital from a number of investors, with a view to investing it

in accordance with a defined investment policy for the benefit of

those investors, and which does not qualify as a UCITS Scheme in

terms of 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);

"ESMA" means the European Securities and Markets Authority

established by Regulation (EU) No. 1095/2010 of the European

Parliament and of the Council of 24 November 2010;

"EU Regulation" means Regulation (EU) No. 345/2013 of the

European Parliament and of the Council of 17 April 2013 on

European venture capital funds, as amended from time to time and as

applicable to the managers of qualifying venture capital funds that

wish to use the designation "EuVECA" in relation to the marketing of

qualifying venture capital funds in the European Union;

"European manager of qualifying venture capital funds" means

a manager of qualifying venture capital funds, which manager is

established in an EU Member State or EEA State other than Malta

and is subject to registration with the regulatory authority of its home

Member State in accordance with the EU Regulation;

"Financial Services Tribunal” means the tribunal established in

terms of article 21 of the Malta Financial Services Authority Act;

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

State where the manager of a qualifying venture capital fund is

established and is subject to registration with its regulatory authority;

"host Member State" means the EU Member State or EEA State,

other than Malta, where the manager of a qualifying venture capital

fund markets qualifying venture capital funds in accordance with the

EU Regulation;

"host regulatory authority" means the national authority which a

host Member State may designate, by law or regulation, to undertake

the registration of managers of qualifying venture capital funds in

terms of the EU Regulation;

"Maltese manager of qualifying venture capital funds" means a

manager of qualifying venture capital funds, which manager is

established in Malta and is licensed with the competent authority in

accordance with the EU Regulation and in terms of the Act; and

"qualifying venture capital fund" means a collective investment

scheme licensed as an AIF that

(a)

intends to invest at least 70% of its aggregate capital

contributions and uncalled committed capital in assets that are

qualifying investments, calculated on the basis of amounts

investible after deduction of all relevant costs and holdings in

cash and cash equivalents, within a time frame laid down in its

rules or instruments of incorporation;

(b) does not use more than 30% of its aggregate capital

contributions and uncalled committed capital for the acquisition

of assets other than qualifying investments, calculated on the

basis of amounts investible after deduction of all relevant costs

and holdings in cash and cash equivalents; and

(c)

is established within the territory of an EU Member

State or EEA State, including Malta.

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

regulations, have the same meaning as is assigned to them in the Act.

(3) In the event that any of these regulations conflict with the

provisions of the EU Regulation, the latter shall prevail.

The Malta Financial Services Authority, established by the Competent

Malta Financial Services Authority Act, shall be the designated authority.

competent authority in Malta for the purposes of implementing the

relevant provisions of the EU Regulation, and any reference in these

regulations to the competent authority shall be read and construed

accordingly.

(1) The competent authority shall exercise all the Applicability of

functions, obligations and powers and shall satisfy all the the

Regulation to

requirements imposed on competent authorities by the EU the

authority.

Regulation.

(2) Without prejudice to sub-regulation (1), the competent

authority may, for the better implementation of the EU Regulation,

exercise any of the powers assigned to it under the Act in relation to

Maltese managers of qualifying venture capital funds and European

managers of qualifying venture capital funds marketing their funds in

Malta.

For the better carrying out of the provisions of the EU Investment

Regulation and of these regulations, the competent authority may, Services Rules.

from time to time, issue and publish Investment Services Rules which

shall be binding on all Maltese managers of qualifying venture capital

funds. Such rules may lay down additional requirements and

conditions in relation to such managers and any other matters as the

competent authority may deem appropriate including

(a)

the operation of the EU Regulation or of these

regulations;

(b) any matter relating to the functions, obligations and

powers of the competent authority under the EU Regulation;

and

(c)

any other matter arising in connection with the EU

Regulation or these regulations.

The competent authority shall supervise compliance with Powers of the

the requirements prescribed in the EU Regulation by Maltese competent

authority.

managers of qualifying venture capital funds and by European

managers of qualifying venture capital funds marketing their funds in

Malta.

(1) In the case of a Maltese manager of qualifying

venture funds marketed in a host Member State, where there are clear

and demonstrable grounds that lead the host regulatory authority to

believe that the Maltese manager is in breach of the EU Regulation in

the host Member State, and upon receipt of the relevant notification,

the competent authority shall take appropriate measures.

(2) Where, despite the measures taken by the competent

authority, or because the competent authority has failed to take

measures within a reasonable time, the Maltese manager persists in

acting in a manner that is clearly in breach of the EU Regulation, the

competent authority shall receive notification by the host regulatory

authority of any measures proposed to be taken in order to protect the

investors of the relevant qualifying venture capital fund, including the

possibility of preventing the Maltese manager from carrying out any

further marketing of its qualifying venture capital funds in the host

Member State.

(1) Where the Maltese manager of a qualifying venture

capital fund contravenes or fails to comply with any provisions of the

EU Regulation, these regulations and any Investment Services Rules

issued thereunder, the competent authority may, by notice in writing

and without recourse to a court hearing, impose on such manager an

administrative penalty not exceeding one hundred and fifty thousand

euro (€150,000).

(2) The competent authority shall notify the European

Commission and ESMA of the provisions on administrative penalties

and measures applicable to breaches of the provisions of the EU

Regulation, the Act, these regulations and any Investment Services

Rules issued thereunder by 16 May 2015. The competent authority

shall also notify the European Commission and ESMA of any

subsequent amendment thereto.

A right of appeal to the Financial Services Tribunal shall

lie from a decision of the competent authority

(a)

to impose a penalty in terms of regulation 8; or

(b) made in the exercise of its functions under Chapter

III of the EU Regulation.

(1) Where there are clear and demonstrable grounds that

lead the competent authority to believe that a European manager of

qualifying venture capital funds is in breach of the EU Regulation in

Malta, it shall promptly inform the regulatory authority of the home

Member State of the European manager. The regulatory authority of

the home Member State shall take the necessary measures.

(2) Where, despite the measures taken by the regulatory

authority of the home Member State, or because the regulatory

authority has failed to take measures within a reasonable time, the

European manager of qualifying venture capital funds persists in

acting in a manner that is clearly in breach of the EU Regulation, the

competent authority may, after informing the regulatory authority of

the home Member State, take all the appropriate measures in order to

protect the investors of the relevant qualifying venture capital funds,

including the possibility of preventing the European manager from

carrying out any further marketing of its qualifying venture capital

funds in Malta.

€0.27