Investment Services Act (List of Notified AIFs) Regulations, 2016

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 19,589, 10 ta’ Ġunju, 2016

L.N. 219 of 2016

INVESTMENT SERVICES ACT

(CAP. 370)

Investment Services Act (List of Notified AIFs) Regulations, 2016

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 (List of Notified AIFs) Regulations, 2016.

(2) These regulations shall not apply to alternative investment

funds which at any time are in possession of a collective investment

scheme licence granted by the competent authority in terms of article

4 of the Act. A licensed collective investment scheme may not be

converted into a Notified AIF.

(1)

In these regulations, unless the context otherwise Interpretation.

requires

"the Act" shall mean the Investment Services Act;

"alternative investment fund" or "AIF" means any collective

investment scheme, including 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 also referred to as the "UCITS Directive";

"alternative investment fund manager" or "AIFM" means a legal

person whose regular business is managing one or more AIFs;

"Alternative Investment Fund Managers Directive" or "AIFMD"

means Directive 2011/61/EU of the European Parliament and of the

Council of 8 June 2011 on Alternative Investment Fund Managers

and amending Directives 2003/41/EC and 2009/65/EC and

Regulations (EC) No 1060/2009 and (EU) No 1095/2010, as amended

from time to time, and includes any implementing measures that have

been or may be issued thereunder;

"competent authority" means the Malta Financial Services

Authority established by the Malta Financial Services Authority Act;

"Directive 2004/39/EC" means Directive 2004/39/EC of the

European Parliament and of the Council of 21 April 2004 on markets

in financial instruments as amended from time to time, and includes

any implementing measures that have been or may be issued

thereunder;

"governing body" means the body with ultimate decision

making authority in an AIFM or in an alternative investment fund, as

the case may be, comprising the supervisory and the managerial

functions;

"List of Notified AIFs" shall be understood as referring to the

List of Notified AIFs which is held by the competent authority on its

website in terms of these regulations;

"Notified AIF" means an AIF which has been notified to the

competent authority by the AIFM for inclusion in the List of Notified

AIFs and is included in the List of Notified AIFs maintained by the

competent authority in terms of regulation 6;

"professional investor" shall be understood as referring to the

investor category defined in regulation 8(1)(a);

"qualifying investor" shall be understood as referring to the

investor category defined in regulation 8(1)(b);

"Regulation (EU) No 694/2014" means Commission Delegated

Regulation (EU) No 694/2014 of 17 December 2013 supplementing

Directive 2011/61/EU of the European Parliament and of the Council

with regard to regulatory technical standards determining types of

alternative investment fund managers.

(2) Words and expressions used in these regulations which are

also used in the Act but which are not defined herein shall have the

same meaning as in the Act.

An AIFM may submit to the competent authority a request

for inclusion in the List of Notified AIFs as an AIF established in

Malta and meeting the criteria prescribed in regulation 4, provided

that the AIFM fulfils at least one of the following conditions

(a) the AIFM is in possession of an investment services

licence granted in terms of article 3 of the Act to provide fund

management services to AIFs established in Malta; or

(b) the AIFM is authorised to provide services to an AIF

established in Malta in accordance with regulations 6 and 7 of

the Investment Services Act (Alternative Investment Fund S.L. 370.22

Manager) (Passport) Regulations.

(1) An AIF in relation to which a notification may be AIFs.

submitted in terms of these regulations may be established using any

one of the following structures

(a) an investment company with variable share capital

under the Companies Act (Investment Companies with Variable S.L. 386.02

Share Capital) Regulations;

(b) an investment company with fixed share capital

under the Companies Act (Investment Companies with Fixed S.L. 386.04

Share Capital) Regulations;

(c)

an incorporated cell company under the Companies S.L. 386.14

Act (SICAV Incorporated Cell Company) Regulations;

(d) an incorporated cell of a Recognised Incorporated S.L. 386.15

Cell Company under the Companies Act (Recognised

Incorporated Cell Companies) Regulations;

(e)

a limited partnership under the Companies Act;

(f)

a unit trust under the Trusts and Trustees Act; or

(g) a contractual fund under the Investment Services S.L. 370.16

Act (Contractual Fund) Regulations.

(2) The AIF can be established as an open-ended or a closed-

ended collective investment scheme as defined in Regulation (EU)

No 694/2014.

(3) The AIFM may not submit a notification, in terms of

regulation 5, to the competent authority for the following categories

of collective investment schemes

(a)

AIFs which are not externally managed by an

AIFM;

(b) AIFs which are not marketed and sold exclusively to

professional and, or qualifying investors;

(c)

AIFs established to invest through loans in terms of

the Act and regulated by the applicable Investment Services

Rules; or

(d)

AIFs which invest in non-financial assets as

specified by the competent authority.

(4) For the better carrying out of the provisions of these

regulations, the competent authority may issue and publish

Investment Services Rules laying down additional requirements in

relation to the conditions for inclusion and retention of AIFs on the

List of Notified AIFs including but not limited to the conditions

related to the notification of specific categories of AIFs.

Where the provisions of these regulations conflict with the

provisions of the regulations referred to in regulation 4(1), the

provisions of these regulations shall prevail.

(1) A written request for an AIF or for one or more

subfunds of a Notified AIF to be included in the List of Notified AIFs

shall be made in accordance with the provisions of this regulation.

(2) Prior to the submission of a written request for notification

by the AIFM, the governing body of the AIF shall approve a

resolution certifying that the prospectus of the AIF satisfies the

minimum criteria prescribed by the competent authority in the

applicable Investment Services Rules.

(3) The request for notification of an AIF referred to in sub-

regulation (1) shall be made in the form and manner required by the

competent authority and shall contain such information as the

authority may prescribe. The request for notification shall be

accompanied by such fee as may be prescribed by the competent

authority.

(4) The competent authority shall reject notifications which do

not comply with the requirements prescribed in these regulations and

the applicable Investment Services Rules.

(5) The AIFM shall submit the duly completed written

notification request together with the accompanying documents to the

competent authority within thirty (30) calendar days from the date of

the resolution of the governing body of the AIF approving the AIF’s

prospectus in terms of sub-regulation (2) and prior to the effective

date of the prospectus

Provided that the effective date of the prospectus shall be a

date after the inclusion of the AIF in the List of Notified AIFs.

(6) The competent authority shall, within ten (10) working

days from the date of filing of the duly completed notification request

together with the accompanying documents, include the AIF in the

List of Notified AIFs and, thereafter, the prospectus may be dated.

(7) Where the competent authority decides to reject a request

for notification of an AIF, it shall give notice in writing thereof to the

AIFM.

(8) The inclusion of an AIF in the List of Notified AIFs shall

not imply that the AIF is in possession of a licence granted in terms of

article 4 of the Act.

(9) The competent authority shall have the right to remove an

AIF from the List of Notified AIFs at any time after it has been placed

on such list.

(10) The inclusion of an AIF in the List of Notified AIFs is a

concession and a privilege revocable by the competent authority at

any time at its sole discretion on notice to the AIFM. The burden of

proving that the AIF should be retained on the List of Notified AIFs

shall rest at all times on the AIFM.

(11) For the better carrying out of the provisions of these

regulations, the competent authority may issue and publish

Investment Services Rules laying down additional requirements in

relation to the following

(a) the contents and format of the request for

notification of an AIF; and

(b) the accompanying documentation and the contents

and formats thereof including, inter alia, the prospectus.

(1) Prior to submitting a request for notification of an Due diligence.

AIF, the AIFM shall carry out the necessary due diligence process to

ensure that the service providers and the governing body of the AIF

satisfy, at the time of notification, the high standards of fitness and

properness specified by the competent authority.

(2) The AIFM shall undertake and ensure that each service

provider and member of the governing body of the AIF maintain such

standards on an ongoing basis and immediately notify the competent

authority of any change in such circumstances as they become known

to the AIFM.

(3) The AIFM shall keep records of all evidence of, and

correspondence regarding, the due diligence process carried out in

relation to the service providers and the members of the governing

body of the AIF. Such records shall be made available for inspection

upon request by the competent authority.

(4) For the better carrying out of the provisions of these

regulations, the competent authority may issue and publish

Investment Services Rules laying down requirements in relation to

the fitness and properness standards expected by the competent

authority.

(1) Notified AIFs may only be marketed to the

following categories of investors

(a) professional investors, being investors which are

considered to be professional clients or may, on request, be

treated as professional clients within the meaning of Annex II to

Directive 2004/39/EC; and, or

(b) qualifying investors, being investors that fulfil the

following criteria

(i) invest a minimum amount of EUR 100,000 or

its currency equivalent in the AIF which investment may

not be reduced below this minimum amount at any time by

way of a partial redemption; and

(ii) declare in writing to the AIFM and the AIF

that they are aware of and accept the risks associated with

the proposed investment.

(2) Where the AIFM intends to market the Notified AIF on a

cross-border basis under the Investment Services Act (Marketing of

Alternative Investment Funds) Regulations, the Notified AIF shall be

marketed to professional investors as defined in sub-regulation (1)(a)

or as otherwise permitted in the applicable jurisdiction where the

AIFM is marketing the AIF.

(3) For the better carrying out of the provisions of these

regulations, the competent authority may issue and publish

Investment Services Rules laying down the investor eligibility criteria

applicable to qualifying investors.

The AIFM shall ensure that an AIF included in the List of

Notified AIFs complies on an ongoing basis with the provisions of

the Act, any applicable rules or regulations issued thereunder,

including these regulations

Provided that where applicable the AIFM shall also

comply with any obligations in respect of the AIF, its investors and

the AIFM’s regulator under AIFMD and the relevant rules and

regulations thereunder;

Provided further that for the better carrying out of the

provisions of these regulations, the competent authority may issue

and publish Investment Services Rules outlining the ongoing

obligations which must be complied with by the AIFM in relation to

the Notified AIF.

(1) The AIFM shall appoint a money laundering Appointment of

reporting officer to carry out the money laundering reporting function Money

Laundering

in relation to the Notified AIF.

Reporting

Officer.

(2) The AIFM may delegate the money laundering reporting

function to the fund administrator of the Notified AIF. In such cases,

the fund administrator shall be responsible for fulfilling the reporting

obligations of the Notified AIF

Provided that where the AIFM has delegated the money

laundering function in accordance with this sub-regulation, the

administrator of the Notified AIF shall be required to confirm to the

AIFM and the governing body of the AIF that the record-keeping,

reporting, ongoing monitoring, risk management and any other

measure being conducted by the administrator comply with the

requirements prescribed in the Prevention of Money Laundering and S.L. 373.01

Funding of Terrorism Regulations and the Implementing Procedures

issued thereunder.

(3) For the better carrying out of the provisions of these

regulations, the competent authority may issue and publish

Investment Services Rules laying down the obligations of the

Notified AIF and the AIFM pursuant to the Prevention of Money S.L. 373.01

Laundering and Funding of Terrorism Regulations and the

Implementing Procedures issued thereunder.

(1) The AIFM shall submit a request to the competent Removal of the

authority for removal of the Notified AIF from the List of Notified AIF

List of Notified

AIFs in the following circumstances

AIFs.

(a)

upon expiration of the duration of the AIF or its

winding up;

(b) in any case where the custodian has given notice of

termination under the custody agreement or is in liquidation or

subject to bankruptcy proceedings or has had its license to

provide custody services in respect of AIFs suspended or

cancelled

Provided that the AIFM shall request the competent

authority to remove the Notified AIF from the List of Notified

AIFs where the transitional period agreed to between the parties

in terms of regulation 8 of the Investment Services Act

(Custodians of Collective Investment Schemes) Regulations,

2016, will expire in less than ten (10) working days and the

AIFM has not entered in any arrangements with a substitute

custodian or where at any time during such transitional period,

it becomes clear to the AIFM that a replacement custodian will

not be appointed before the end of the transitional period;

(c)

in any case where the AIFM has given notice of

termination or is in liquidation or subject to bankruptcy

proceedings or has had its license to act as an AIFM suspended

or cancelled and an eligible replacement AIFM has not been

appointed;

(d) in any case where any member of the governing

body of the AIF or any service provider appointed by the AIF or

by the AIFM on behalf of the Notified AIF fails to comply on an

ongoing basis with the required high standards of fitness and

properness and the AIFM has not arranged for a replacement

member of the governing body or service provider to be

appointed;

(e)

in all other cases as may be specified in the

agreement between the Notified AIF and the AIFM as grounds

for requesting removal of the Notified AIF from the List of

Notified AIFs in terms of this regulation;

(f)

in all other cases as may be specified in the custody

agreement between the Notified AIF or the AIFM on behalf of

the Notified AIF and the custodian as grounds for requesting

removal of the Notified AIF from the List of Notified AIFs in

terms of this regulation; and

(g) in all other cases as may be prescribed in the

Investment Services Rules.

(2) Upon removal from the List of Notified AIFs, the AIF

must cease trading other than for the purpose of winding down the

operations of the AIF or subfund and the AIF or subfund must then be

liquidated or otherwise terminated in accordance with the

requirements of Maltese law.

(3) For the better carrying out of the provisions of these

regulations, the competent authority may issue and publish

Investment Services Rules laying down the conditions applicable in

relation to the removal of the AIF from the List of Notified AIFs.

(1) The AIFM shall submit a notification to the Amendments to

competent authority of any amendments to the prospectus of a the

of a Notified

Notified AIF together with an updated copy thereof provided that the AIF.

prospectus complies with the applicable Investment Services Rules.

In addition, the AIFM shall also submit a resolution of the governing

body of the AIF certifying that the amendments to the prospectus

comply with the standards prescribed in the Investment Services

Rules.

(2) The AIFM shall submit a notification in terms of sub-

regulation (1) within thirty calendar (30) days from the date of the

resolution of the governing body of the AIF approving the

amendments to the prospectus of the Notified AIF.

(3) The competent authority shall acknowledge receipt of the

amendments to the prospectus within ten (10) working days from the

date of filing of the notification request with the competent authority.

(4) Changes to the prospectus shall not be effective until such

time as they are acknowledged by the competent authority.

For the better carrying out of the provisions of these Power to issue

regulations, the competent authority may from time to time issue and Rules.

publish Investment Services Rules outlining additional requirements

in respect of these regulations.

B

€0.45