INVESTMENT SERVICES ACT (PROSPECTUS OF COLLECTIVE INVESTMENT SCHEMES) REGULATIONS

SUBSIDIARY LEGISLATION 370.04

INVESTMENT SERVICES ACT

(PROSPECTUS OF COLLECTIVE INVESTMENT

SCHEMES) REGULATIONS

25th November, 2005

LEGAL NOTICE 392 of 2005, as amended by Legal Notices 75 of 2018

and 31 of 2025.

The title of these regulations is the Investment Services Act

(Prospectus of Collective Investment Schemes) Regulations.

(R EGULATION 2)

Non-material changes

1. Extensions to the initial offering period not exceeding a

period of three months provided that the fund has no

investors and provided that such extensions shall not

successively amount to a period of more than twelve months.

2. A cumulative increase in fees not exceeding 10% of

approved fees, provided that the Malta based scheme shall

grant investors the right to redeem their holdings within a

period of thirty days without incurring any penalties.

3. A change in the registered office of a service provider.

4. A change in the registered office of the scheme.

5. Amendments strictly reflecting changes in International

Financial Reporting Standards.

6. Changes made in satisfaction of any obligations arising in

terms of Exchange of Information (United States of

America) (FATCA) Order.

7. Appointment of parties not subject to any prior approval by

the MFSA, including the appointment of bankers, brokers,

other than prime brokers, of advisors to the manager and

legal advisors.

8. Correction of typographical errors in the Prospectus or

offering document.

INVESTMENT SERVICES ACT (PROSPECTUS OF

COLLECTIVE INVESTMENT SCHEMES)

In these regulations, unless the context otherwise requires

"Act" means the Investment Services Act;

"approval" means the positive act at the outcome of the scrutiny

of the completeness of the prospectus by the competent authority or

by the European regulatory authority including the consistency of

the information given and its comprehensibility, within the

meaning of the Directive;

"closed-ended scheme" means a scheme with fixed share capital;

"competent authority" means the Malta Financial Services

Authority appointed under article 2A of the Act;

"the Directive" means Directive 2003/71/EC of the European

Parliament and of the Council of 4 November, 2003 on the

prospectus to be published when securities are offered to the public

or admitted to trading and amending Directive 2001/34/EC as may

be amended from time to time and includes any implementing

measures that have been or may be issued thereunder;

"EEA State" means a State which is a contracting party to the

Agreement on the European Economic Area signed at Oporto on

the 2nd May, 1992 as amended by the Protocol signed at Brussels

on the 17th March, 1993 and as amended from time to time;

"European based scheme" means a European based closed-ended

scheme covered by the Directive and a collective investment

scheme within the meaning of article 2 of the Act established in a

Member State other than Malta or an EEA State or set up by

contract or otherwise under the laws of a country which is a

Member State or an EEA State and which is not a European UCITS

within the meaning of the Investment Services Act (Undertakings

f o r C o l l e c t i v e I n v e s t m e n t i n Tr a n s f e r a b l e S e c u r i t i e s a n d

Management Companies) Regulations;

"European based closed-ended scheme covered by the Directive"

means a collective investment scheme within the meaning of article

2 of the Act established in a Member State other than Malta or an

EEA State or set up by contract or otherwise under European law,

which is closed-ended and which is covered by the Directive;

"European regulatory authority" means the body or bodies

designated by a Member State other than Malta or an EEA State to

carry out the duties provided for in the Directive;

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

EEA State where the prospectus has been approved in terms of the

Directive;

"host Member State or EEA State" means one or more Member

States or EEA States where an offer to the public is made, in

respect of which Malta is the home Member State;

"Malta based scheme" means a collective investment scheme

within the meaning of article 2 of the Act, constituted or

incorporated under Maltese law;

"Malta based closed-ended scheme" means a Malta based scheme

which is closed-ended;

" M e m b e r St a t e " m e a n s a M e m b e r St a t e o f t h e E u r o p e a n

Communities;

"Non-European based schemes" means a collective investment

scheme within the meaning of article 2 of the Act established

outside a Member State or an EEA State or set up by contract or

otherwise under the laws of a country which is not a Member State

or an EEA State;

"non-material changes" means those changes falling within the

Schedule when made to a prospectus;

"offer to the public" has the same meaning assigned to the words

"offer of securities to the public" in article 2 of the Companies Act,

and reference therein to the words "securities" or "shares" shall be

read as references to "units";

"Rules" means Investment Services Rules and Conduct of Business

Rules issued by the competent authority in terms of the Act;

"summary" shall in a brief manner and in non-technical

language, convey the essential characteristics and risks associated

with the Malta based closed-ended scheme and the units on offer, in

the language in which the prospectus is originally drawn up and

shall contain a warning as specified in Article 5(2) of the Directive;

"unit" has the same meaning assigned to it by the Act.

PART I - MALTA BASED SCHEMES

(1) A Malta based scheme shall not offer any of its units to

the public unless it has issued a prospectus which complies with

these regulations and which is made available for inspection by the

public.

(2) The contents of a prospectus shall comply with the licence

conditions and, or such other requirements as the competent

authority may, from time to time, establish.

(3) No prospectus shall be published, nor shall any

amendments to a prospectus be made, by any Malta based scheme

unless such prospectus and any amendments thereto, have been

approved by the competent authority

Provided that Malta based schemes, which under

regulations made under the Act are exempted from the requirement

of a licence under article 4 of the Act, are prohibited from making

any offer of any of its units to the public except with the prior

approval of the competent authority which may impose such terms

and conditions as it may deem appropriate

Provided further that with effect from the 6th March,

2018 a Malta based scheme, other than a Malta based closed-

ended scheme falling within the scope of Article 1 of the

Directive, shall be exempt from obtaining the approval of the

competent authority with respect to any non-material changes

to its prospectus falling within the Schedule to these

regulations, made following the issue of the licence under

article 4 of the Act. Such exemption shall be automatically

operative, but its applicability shall be subject to

(i)

a notification containing all the

relevant changes made in writing to the competent

authority and to investors within one week from

the issue of the revised prospectus;

(ii)

a notification in writing submitted

to the competent authority confirming that all

investors have been duly informed as indicated in

sub-paragraph (i), within one week from the issue

of the revised prospectus; and

(iii) the provision to the competent authority of an updated copy of

the prospectus within one week from the issue of the revised

prospectus.".

(4) The approval of the prospectus of a Malta based closed-

ended scheme shall also meet the requirements of regulation 4.

(5) A prospectus shall be dated and signed by the persons who

are responsible for its issue.

(6) The prospectus shall be made available to investors free of

charge before they become committed to investing in the Malta

based scheme. The essential elements of the prospectus shall be

kept up to date.

(7) All advertising and publicity material comprising an offer

to the public to purchase or subscribe for units in the Malta based

scheme shall indicate that a prospectus is available and the place or

places where the prospectus and any documents updating it may be

obtained.

(8) Where the Malta based scheme is a company, a partnership

en commandite or a limited partnership or other commercial

partnership formed and registered under the laws of Malta, a signed

copy of the prospectus shall be lodged with the Registrar of

Companies prior to the issue of the form of application for the

subscription of units. Such copy shall be signed by at least two

directors or persons holding equivalent posts, or by one director

and the company secretary, or by at least two persons duly

authorised in writing by the Board of Directors for that purpose, in

which case the Board authority or a certified true copy thereof, shall

be lodged

Provided that this sub-regulation shall not apply where the

Malta based scheme is a special limited partnership fund established

under the Investment Services Act (Special Limited Partnership

Funds) Regulations.

(1) The documents submitted to the competent authority

for approval shall be complete and the competent authority shall

notify the Malta based closed-ended scheme that documents are

incomplete within ten working days of their submission.

(2) The competent authority shall notify a Malta based closed-

e nd e d s c h e m e o f i ts d e c i s i o n r e g a r di n g t he approval of the

prospectus within ten working days, where such approval is required

in terms of regulation 3(3).

(3) The time limit referred to in subregulation (2) shall be

extended to twenty working days if the offer to the public involves

units issued by a Malta based closed-ended scheme which does not

have any securities admitted to trading on a Recognised Investment

Exchange and which has not previously offered units to the public.

(4) If the competent authority fails to give a decision on the

prospectus within the time limits mentioned in subregulations (2)

and (3), this shall not be deemed to constitute approval of the

prospectus.

(5) Where the competent authority finds, on reasonable

grounds, that the documents submitted to it are incomplete or that

supplementary information is needed, the time limits referred to in

sub-regulations (2) and (3) shall apply only from the date on which

such information is provided by the Malta based closed-ended

scheme. The competent authority shall nonetheless as specified in

sub-regulation (1) notify the Malta based closed-ended scheme that

the documents are incomplete within ten working days of the

submission of the prospectus.

Any person responsible for the issue, circulation or

distribution of a prospectus or for the issue of a form of application

for units in a Malta based scheme shall ensure that these

regulations are complied with.

A prospectus including a statement purporting to be made

by an expert shall not be issued unless -

(a) the expert has given and has not, before the issue of

the prospectus, withdrawn his written consent to the

issue thereof; and

(b) a statement that he has given and has not withdrawn

his consent as aforesaid appears in the prospectus.

(1) The persons who are responsible for the issue of a

prospectus shall be jointly and severally liable for any damage

sustained by a person subscribing for units on the faith of that

prospectus, by reason of any untrue statement included therein.

(2)

An expert who has given the consent required by regulation

6 shall be liable in respect of an untrue statement made by him as

an expert.

(3) A person shall be civilly liable for statements made in the

summary, including any translation thereof, where such statements

are untrue when read together with the other parts of the

prospectus.

For the purposes of these regulations

(a) the term "expert" includes engineer, valuer, accountant

and any other person whose profession gives authority

to a statement made by him;

(b) a statement included in a prospectus shall be deemed

to be untrue if it is misleading, inaccurate or

inconsistent in the form and context in which it is

included; and

(c) a statement shall be deemed to be included in a

prospectus if it is contained therein or in any document

appearing on the face thereof or by reference

incorporated therein or issued therewith.

(1) Where a Malta based closed-ended scheme whose

prospectus and supplements thereto have been drawn in accordance

with the Directive wishes to offer units to the public in one or more

host Member States or EEA States, the competent authority shall, at

the request of the Malta based closed-ended scheme or the person

responsible for drawing up the prospectus of the said scheme and

within three working days following that request or, if the request

is submitted together with the draft prospectus, within one working

day after the approval of the prospectus provide the European

regulatory authority of the host Member State or EEA State with a

certificate of approval attesting that the prospectus and

supplements thereto have been drawn up in accordance with the

Directive and with a copy of the said prospectus and supplements

thereto. If applicable, this notification shall be accompanied by a

translation of the summary produced under the responsibility of the

Malta based closed-ended scheme or person responsible for

drawing up the prospectus. The same procedure shall be followed

for any supplement to the prospectus.

(2) Where certain information required to be disclosed in terms

of the Directive has been omitted the competent authority shall

outline the reasons for the omission in the certificate of approval

referred to in subregulation (1).

(3) When an offer to the public is made in one or more Member

States or EEA States excluding Malta, the prospectus shall be

drawn up either in a language accepted by the European regulatory

authorities of those Member States or EEA States or in a language

customary in the sphere of international finance, at the choice of

the Malta based closed-ended scheme

Provided that for the purpose of scrutiny by the competent

authority, the prospectus shall be drawn up in Maltese or English or

in a language customary in the sphere of international finance, at

the choice of the Malta based closed-ended scheme.

(4) Where an offer to the public is made in more than one

Member States or EEA States including Malta, the prospectus shall

be drawn up in English or Maltese and shall also be made available

either in a language accepted by the European regulatory

authorities of each host Member State or EEA State or in a

language customary in the sphere of international finance, at the

choice of the Malta based closed-ended scheme.

PART II - EUROPEAN AND NON-EUROPEAN BASED

SCHEMES

Regulation 3, other than sub-regulation (4) thereof, and

regulations 5, 6, 7 and 8, shall apply mutatis mutandis to a

European based scheme and to a non-European based scheme and

accordingly reference in these regulations to "Malta based scheme"

shall be deemed to include a reference to a "European based

scheme and to a non-European based scheme".

(1) Regulation 10 shall not apply to a European based

closed-ended scheme covered by the Directive whose prospectus

and supplements thereto have been drawn up in accordance with

the requirements of the Directive.

(2) The certificate of approval provided by the European

regulatory authority of the home Member State or EEA State in

terms of Article 18(1) of the Directive attesting that the prospectus

and supplements of a European based closed-ended scheme

covered by the Directive have been drawn in accordance with the

requirements of the said Directive shall be valid for the offer to the

public in Malta.

(3) The prospectus shall be drawn up either in English or in a

language customary in the sphere of international finance at the

choice of the European based closed-ended scheme covered by the

Directive.

(4) A summary of the prospectus shall be translated either in

English or in Maltese.

(5) Where the competent authority finds that irregularities have

been committed by the European based closed-ended scheme

covered by the Directive making an offer to the public in Malta, it

shall refer these findings to the European regulatory authority of

the home Member State or EEA State.

(6) If despite the measures taken by the European regulatory

authority of the home Member State or EEA State or because such

measures prove inadequate, the European based closed-ended

scheme covered by the Directive persists in breaching the relevant

legal or regulatory provisions, the competent authority, after

informing the European regulatory authority of the home Member

State or EEA State, shall take all appropriate measures in order to

protect investors. The European Commission shall be informed of

such measures at the earliest opportunity.

PART III - MISCELLANEOUS

Where the scheme qualifies as a professional investor fund

in terms of Rules issued for this purpose; by the competent authority,

any prospectus or other offering document issued by the scheme

shall comply with such requirements as the competent authority

may from time to time establish by the said Rules, and regulations 3

to 8 shall not apply thereto.

(1) For the purposes of implementing the relevant

provisions of the Directive, the "central competent administrative

authority" within the meaning of the Directive shall be the

competent authority.

(2) Without prejudice to the powers of the competent authority

under the Act and under any other law and to better implement the

provisions of the Directive, the competent authority shall have the

power to

(a) require a Malta based closed-ended scheme to include,

if necessary, supplementary information in the

prospectus for investor protection;

(b) require a Malta based closed-ended scheme and the

persons that control it or are controlled by it, to

provide information and documents;

(c) require auditors and managers of the Malta based

closed-ended scheme, as well as financial

intermediaries commissioned to carry out the offer to

the public to provide information;

(d) suspend a public offer for a maximum of ten

consecutive working days on any single occasion if it

has reasonable grounds for suspecting that the

provisions of the Directive have been infringed;

(e) prohibit or suspend advertisements for a maximum of

ten consecutive working days on any single occasion if

it has reasonable grounds for believing that the

provisions of the Directive have been infringed;

(f)

prohibit a public offer if it finds that the provisions of

the Directive have been infringed or if it has

reasonable grounds for suspecting that they would be

infringed;

(g) make public the fact that the Malta based closed-ended

scheme is failing to comply with its obligations.

Without prejudice to the powers of the competent authority

under the Act and under any other law and to better implement the

provisions of the Directive, the competent authority shall have the

power to cooperate with other European regulatory authorities

within the meaning of Article 22 of the Directive.

(1) Without prejudice to civil or criminal sanctions

imposed under any other law, the competent authority may impose

administrative penalties within the meaning of article 6 of the Act

where the competent authority is satisfied that a scheme’s conduct

amounts to a breach of any provision of the Act, regulations or rules

issued thereunder to implement the provisions of the Directive.

(2) The competent authority may disclose to the public every

measure or sanction that has been imposed for infringement of the

provisions adopted pursuant to the Directive unless

(a) the disclosure would seriously jeopardise the financial

markets; or

(b) cause disproportionate damage to the parties involved.

Any decision taken in terms of these regulations by the

competent authority in respect of any matter concerning the

prospectus or an offer to the public, shall be subject to a right of

appeal to the Financial Services Tribunal within the meaning of

article 19 of the Act.

(1) The objective of these regulations is partly to

implement the relevant provisions of the Directive and shall be

interpreted and applied accordingly.

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

provisions of the Directive, the latter shall prevail.