Investment Services Act (List of Notified AIFs)

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 21,166, 15 ta’ Diċembru, 2023

L.N. 294 of 2023

INVESTMENT SERVICES ACT

(CAP. 370)

Investment Services Act (List of Notified AIFs)

(Amendment) Regulations, 2023

IN EXERCISE of the powers conferred by article 12 of the

Investment Services Act, the Minister responsible for the regulation of

financial services, acting on the advice of the Malta Financial Services

Authority, has made the following regulations

The title of these regulations is the Investment Services Act Citation.

(List of Notified AIFs) (Amendment) Regulations, 2023, and these

regulations shall be read and construed as one with the Investment

Services Act (List of Notified AIFs) Regulations, hereinafter referred S.L. 370.34.

to as "the principal regulations".

In the title of the principal regulations, for the words "List Amends the title

of Notified AIFs" there shall be substituted the words "Notified CISs". of

regulations.

Regulation 1 of the principal regulations shall be amended Amends

regulation 1 of

as follows

the principal

regulations.

(a) in sub-regulation (1) thereof, for the words "(List of

Notified AIFs)", there shall be substituted the words "(Notified

CISs)";

(b) immediately after sub-regulation (1) thereof, there

shall be added the following new sub-regulation

"(1a) Unless the context otherwise requires, any

references in any other law or in any rule issued by the

competent authority, made to the Investment Services Act

(List of Notified AIFs) Regulations shall be read and

construed as a reference to these regulations."; and

(c) in sub-regulation (2) thereof, immediately after the

words "alternative investment funds" there shall be added the

words "and professional investor funds,".

Sub-regulation (1) of regulation 2 of the principal Amends

regulation 2 of

regulations shall be amended as follows

the principal

regulations.

(a) immediately after the definition "competent

authority", there shall be added the following new definition

" "custodian" means a licence holder authorised in

terms of the Act to provide custodian services and which

qualifies as a Depositary or Depositary Lite in terms of the

Investment Services Rules;";

(b) immediately after the definition "Directive 2004/39/

EC", there shall be added the following new definitions

" "Due Diligence Service Provider" means a service

provider appointed in terms of regulation 18, that shall

satisfy the requirements laid out in the applicable

Investment Services Rules;

"fund manager" means a legal person who manages

one or more Notified PIFs;";

(c) in the definition "governing body", immediately after

the words "alternative investment fund", there shall be added the

words "or in a professional investor fund,";

(d) immediately after the definition "List of Notified

AIFs", there shall be added the following new definition

" "List of Notified PIFs" shall be construed as a

reference to the List of Notified PIFs which is held by the

competent authority on its website in terms of these

regulations;";

(e) immediately after the definition "Notified AIF", there

shall be added the following new definitions

" "Notified CIS" means a Notified AIF or a Notified PIF;

"Notified PIF" means a PIF which has been notified to the

competent authority for inclusion in the List of Notified PIFs

and is included in the List of Notified PIFs held by the competent

authority in terms of regulation 17;

" "professional investor fund" or "PIF" means a collective

investment scheme which qualifies as a professional investor

fund in terms of the Investment Services Rules;";

(f)

the definition "professional investor" shall be deleted;

(g)

the definition "qualifying investor" shall be deleted.

Immediately after regulation 2 of the principal regulations,

there shall be added the following new heading and new regulation

"Part A: Notified AIFs

2A. For the purposes of this Part

Interpretation Part A.

"professional investor" shall be construed as a

reference to the investor category, in relation to

Notified AIFs, as defined in Investment Services Rules

issued pursuant to regulation 8(3);

"qualifying investor" shall be construed as a

reference to the investor category, in relation to Notfied

AIFs, as defined in Investment Services Rules issued

pursuant to regulation 8(3)".

Sub-regulation (3) of regulation 4 of the principal Amends

regulation 4 of

regulations shall be amended as follows

the principal

regulations.

(a) for the words "AIFM may not", there shall be

substituted the words "AIFM shall not"; and

(b) in paragraph (d) thereof, for the words "as specified

by the competent authority.", there shall be substituted the words

"as laid down in Investment Services Rules.".

In sub-regulation (3) of regulation 6 of the principal Amends

regulations, for the words "as the authority may prescribe. The request regulation

the principal

for notification shall be accompanied by such fee as may be prescribed regulations.

by the competent authority.", there shall be substituted the words, "as

may be prescribed or as may be laid down by the competent authority

in the Investment Services Rules. The request for notification shall be

accompanied by such fee as may be prescribed.".

Regulation 8 of the principal regulations shall be amended Amends

regulation 8 of

as follows

the principal

regulations.

(a) sub-regulation (1) thereof shall be substituted by the

following new sub-regulation

"(1) Notified AIFs shall only be marketed to

professional investors and, or qualifying investors.";

(b) in sub-regulation (2) thereof, the words "as defined in

sub-regulation (1)(a)" shall be deleted; and

(c) in sub-regulation (3) thereof, the words "applicable to

qualifying investors" shall be deleted.

In regulation 13 of the principal regulations, for the words Amends

"the provisions of these regulations", there shall be substituted the regulation

the principal

regulations.

words "the provisions of this Part" and for the words "in respect of

these regulations", there shall be substituted the words "in respect of

this Part".

Immediately after regulation 13, there shall be added the

following new Parts and the following new regulations

"Part B: Notified PIFs

For purposes of this Part

Interpretation Part B.

"professional investor" shall be construed as

a reference to the investor category, in relation to

Notified PIFs, as defined in Investment Services

Rules issued by the competent authority pursuant

to regulation 25.

"qualifying investor" shall be construed as a

reference to the investor category, in relation to

Notified PIFs, as defined in Investment Services

Rules issued by the competent authority pursuant

to regulation 25.

PIFs .

(1) A PIF in relation to which a

notification may be 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 Share

Capital) Regulations;

(b) an investment company with fixed

share capital under the Companies Act

SL. 386.04.

(Investment Companies with Fixed Share Capital)

Regulations;

(c) an incorporated cell company under

the Companies Act (SICAV Incorporated Cell

S.L 386.14.

Company) Regulations;

(d) an incorporated cell of a Recognised

Incorporated 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 Act (Contractual Fund)

Regulations.

(2) A notification to the competent authority in

terms of regulation 17, shall not be submitted for the

following categories of collective investment schemes

(a) PIFs which are not externally managed

by a fund manager as defined in regulation 2;

(b) PIFs which are not marketed and sold

exclusively to qualifying investors and, or

professional investors;

(c) PIFs which invest in non-eligible

assets as laid down in Investment Services Rules.

Where the provisions of these regulations

conflict with the provisions of the regulations referred

to in regulation 15(1), the provisions of these

regulations shall prevail.

(1) A written request for a PIF or for one

Notification process.

or more sub-funds of a Notified PIF to be included in

the List of Notified PIFs shall be made in accordance

with the provisions of this regulation.

(2) Prior to the submission of a written request

for notification under this regulation, the governing

body of the PIF shall approve a resolution certifying

that the Offering Memorandum of the PIF satisfies the

minimum criteria laid down by the competent authority

in the applicable Investment Services Rules.

(3) The request for notification of a PIF 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 may be prescribed or as

may be laid down by the competent authority in the

Investment Services Rules. The request for notification

shall be accompanied by such fee as may be prescribed.

(4) The competent authority shall reject

notifications which do not comply with the

requirements prescribed in these regulations and the

applicable Investment Services Rules, including where

the competent authority determines that anyone referred

to in sub-regulation (1) or sub-regulation (2) does not

meet the competent authority’s standards for fitness and

properness.

(5) The PIF, or a person duly authorised by it to

act on its behalf, 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 PIF approving

the PIF’s Offering Memorandum in terms of sub-

regulation (2), and prior to the effective date of the

Offering Memorandum

Provided that the effective date of the

Offering Memorandum shall be a date subsequent to the

date of inclusion of the PIF in the List of Notified PIFs.

(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, which shall be to the

satisfaction of the competent authority, include the PIF

in the List of Notified PIFs and, thereafter, the Offering

Memorandum shall be dated.

(7) Where the competent authority decides to

reject a request for notification of a PIF, it shall give

notice in writing thereof to the PIF.

(8) The inclusion of a PIF in the List of Notified

PIFs shall not imply that the PIF 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 a PIF from the List of Notified PIFs at any

time after it has been placed on such list where the

competent authority deems this fit in the interest of

safeguarding investors, the integrity of the markets and,

or the stability and reputation of the financial sector,

including in those circumstances where

(a) it considers that any of the members of

the governing body, any service provider,

including the Due Diligence Service Provider, or

functionary that the PIF may appoint is not a fit

and proper person to carry out the functions

required of them in connection with the Notified

PIF;

(b) it considers that the Notified PIF does

not fulfil the requirements of any provision of the

Act, or of any Investment Services Rules or

regulations made thereunder, or there has been a

contravention of any such provision as aforesaid,

or an obligation or condition to which the

Notified PIF is subject, has not been satisfied or

complied with;

(c) information has been furnished to the

competent authority by or on behalf of or in

relation to the Notified PIF which is false,

inaccurate or misleading;

(d) the Notified PIF has not commenced

those activities in relation to which it was placed

by the competent authority on the List of Notified

PIFs, or has ceased to carry on such activities;

(e) for any other reason, it considers it

desirable to remove the Notified PIF from the list

of Notfied PIFs for the protection of investors and

the general public and the reputation of Malta

taking into account Malta’s international

commitments;

(f) the Notified PIF is either declared

bankrupt, or goes into liquidation, or makes a

composition with its creditors, or is otherwise

dissolved; or

(g) made pursuant to a request under

regulation 22.

(10) The inclusion of a PIF in the List of Notified

PIFs is a concession and a privilege revocable by the

competent authority at any time at its sole discretion on

notice to the Notified PIF. The burden of proving that

the Notified PIF should be retained on the List of

Notified PIFs shall rest at all times on the Notified PIF.

(1) Prior to submitting a request for

notification of a PIF, the PIF shall appoint a Due

Diligence Service Provider to carry out the necessary

due diligence process to ensure that the governing body,

founder shareholders, Money Laundering Reporting

Officer (MLRO) and any other service providers or

functionaries the PIF may appoint, satisfy at the time of

notification, the high standards of fitness and

properness required by the competent authority in terms

of the Investment Services Rules.

(2) The Due Diligence Service Provider

appointed in terms of this regulation shall undertake

and ensure that each member of the governing body,

founder shareholder, Money Laundering Reporting

Officer (MLRO) and any other service provider or

functionary the PIF may appoint, maintains such

standards on an ongoing basis, and shall immediately

notify the competent authority of any change in such

circumstances as they become known to such Due

Diligence Service Provider.

(3) The Due Diligence Service Provider

appointed in terms of this regulation shall keep records

of all evidence of, and correspondence regarding, the

due diligence process carried out in relation to the

governing body of the PIF, founder shareholders,

Money Laundering Reporting Officer (MLRO), and

any other services providers or functionaries the PIF

may appoint. Such records shall be made available for

inspection upon request by the competent authority.

(4) Without prejudice to any other power of the

competent authority in terms of the Act and any other

law, the provisions of articles 13, 15 and 16 of the Act

shall mutatis mutandis apply to any Due Diligence

Service Providers appointed in terms of this regulation.

(1) Notified PIFs may only be marketed to

Target investor base.

professional investors and, or qualifying investors.

(2) A Notified PIF may only be promoted in

jurisdictions outside Malta if it satisfies the relevant

rules of such jurisdictions.

(1) The Notified PIF shall ensure that it

ongoing obligations.

complies on an ongoing basis with the provisions of the

Act, any applicable rules or regulations issued

thereunder, including these regulations

Provided

that

notwithstanding

the

provisions of this Act or any other law, the governing

body of the Notified PIF shall be jointly and severally

liable with the Notified PIF.

(2) A Due Diligence Service Provider appointed

or proposed to be appointed in terms of regulation 18

shall also satisfy the requirements and comply with any

applicable provisions of the Act, regulations or rules

issued thereunder, and with any other applicable law.

(1) The Notified PIF, by written

agreement with the Due Diligence Service Provider

appointed in terms of regulation 18, shall appoint a

money laundering reporting officer (MLRO) within the

meaning of regulation 15 of the Prevention of Money

Laundering and Funding of Terrorism Regulations, to

carry out the money laundering reporting function in

relation to the Notified PIF.

(2) The Notified PIF may delegate the money

laundering reporting function to the money laundering

reporting officer of the fund administrator of the

Notified PIF. In such cases, the fund administrator shall

be responsible for fulfilling the reporting obligations of

the Notified PIF

Provided that where the money laundering

function has been delegated in accordance with this

sub-regulation, the administrator of the Notified PIF

shall be required to confirm to the Due Diligence

Service Provider appointed in terms of regulation 18

and to the governing body of the PIF that the

recordkeeping, 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

Funding of Terrorism Regulations and the

Implementing Procedures issued thereunder.

(1) The Notified PIF shall submit a

Request for removal

List of Notified PIFs. request to the competent authority for the removal of

the Notified PIF from the List of Notified PIFs in the

following circumstances

(a) upon expiration of the duration of the

Notified PIF or its winding up;

(b) where the Notified PIF has appointed a

custodian, in any case where such custodian has

given notice of termination or is in liquidation or

subject to bankruptcy proceedings or has had its

authorisation to act as a custodian suspended or

cancelled, and an eligible replacement custodian

has not been appointed or adequate alternative

arrangements for the safekeeping of the Notified

PIF’s assets have not been established;

(c) where it becomes clear to the

governing body that adequate safekeeping

arrangements are no longer in place;

(d) in any case where the fund manager of

the Notified PIF has given notice of termination

or is in liquidation or subject to bankruptcy

proceedings or has had its authorisation to act as a

fund manager suspended or cancelled and an

eligible replacement fund manager has not been

appointed;

(e) in any case where any member of the

governing body of the Notified PIF or any

functionary or service provider, including the Due

Diligence Service Provider, appointed by the PIF

fails to comply on an ongoing basis with the

required high standards of fitness and properness,

and no replacement member of the governing

body or functionary or service provider has been

appointed, or arrangements are in place to be

appointed;

(f) in all other cases as may be specified

in the agreement between the Notified PIF and its

fund manager as grounds for requesting removal

of the Notified PIF from the List of Notified PIFs

in terms of this regulation;

(g) where the Notified PIF has a custodian

appointed, in all other cases as may be specified

in the custody agreement between the Notified

PIF and the custodian as grounds for requesting

removal of the Notified PIF from the List of

Notified PIFs in terms of this regulation; and

(h) in all other cases as may be laid down

in the Investment Services Rules.

(2) Upon removal from the List of Notified

PIFs, the PIF shall cease trading, other than for the

purpose of winding down the operations of the Notified

PIF or the sub-fund, as the case may be, and the

Notified PIF or the sub-fund shall then be liquidated or

otherwise terminated in accordance with the

requirements of Maltese legislation.

(1) Notified PIFs shall be exempt from

Memorandum of the

obtaining the approval of the competent authority in

terms of article 11(1)(a) of the Act.

(2) The exemption provided in sub-regulation

(1) shall also be applicable to any amendments to the

Offering Memorandum of a Notified PIF.

Where a custodian is appointed, the

Provisions of the Investment Services Act (Custodians

of Collective Investment Schemes) Regulations,

applicable to custodians of Professional Investor Funds,

shall be mutatis mutandis applicable to custodians of

Notified PIFs.

(1) For the better carrying out of the

provisions of this Part of these regulations, the

competent authority may from time to time issue and

publish Investment Services Rules outlining additional

requirements in respect of this Part of these regulations.

(2) Without prejudice to the generality of sub-

regulation (1), Investment Services Rules issued in

accordance with this regulation may inter alia provide

(i) additional requirements in relation to

the conditions for inclusion and retention of PIFs

on the List of Notified PIFs, including but not

limited to the conditions related to the notification

of specific categories of PIFs;

(ii) additional requirements in relation to

the contents and format of the request for

notification of a PIF;

(iii) additional requirements in relation to

the accompanying documentation and the

contents and formats thereof;

(iv) additional requirements in relation to

the Offering Memorandum and the contents and

format thereof;

(v) requirements in relation to the fitness

and properness standards expected by the

competent authority;

(vi) the criteria for eligibility for

appointment as a service provider in terms of

regulation 18;

(vii) the criteria for eligibility for

appointment as a fund manager of a Notified PIF;

(viii) additional criteria regarding investor

eligibility;

(ix) the ongoing obligations that shall be

complied with by the Due Diligence Service

Provider appointed in terms of regulation 18 in

relation to the Notified PIF; and

(x) the conditions applicable in relation to

the removal of the PIF from the List of Notified

PIFs.".

Part C: Administrative Penalties, Administrative

Measures and Appeals

(1) Without prejudice to any other power

assigned to the competent authority under the Act, these

regulations or any other law, where a person falling

within the scope of these regulations fails to comply

with any of the provisions of these regulations or any

rules issued thereunder which further implement these

regulations, the competent authority may, by notice in

writing impose on such person an administrative

penalty and other administrative measures in

accordance with article 16A of the Act.

(2) A right of appeal to the Financial Services

Tribunal shall lie from the decisions which the

competent authority shall take under these regulations

and the provisions of article 19 of the Act shall apply

mutatis mutandis.".

€0.54