The Malta Financial Services Authority is about to launch a new investment framework which regulates the fund manager, rather than the fund itself.
The Maltese framework for Notified Alternative Investment Funds (NAIFs) will be launched more or less concurrently with Luxembourg’s Reserved Alternative Investment Fund (RAIF), announced a few months ago, which was hailed by analysts as being “pioneering” and a “revolution”.
MFSA chairman Joe Bannister is confident that the same will be said about the Maltese version, which will also benefit from passporting to other member states.
“We believe that innovation is one of the key pillars of the financial services strategy for Malta, and we have said this several times. This framework builds on the innovation of past legislation and will be followed by other launches over the coming months,” he said.
One of the key advantages of the new approach by regulators will be the speed with which new funds can come onto the market, since they do not have to go through the scrutiny of the regulator. The MFSA is aiming to list the funds on its website within just 10 days.
The NAIFs will only be available to qualified or professional investors. Any of the structures allowed under Maltese law can be used as a NAIF, and managers in the EU and the EEA will be able to ask the MFSA to include an AIF on the website list in Malta.
Third country managers will have to submit a request for the notification of the fund once the country where they are established has been granted passporting rights in accordance with the Alternative Investment Fund Managers Directive.
The framework can be used for new collective investment schemes but the MFSA has not yet said whether existing schemes will be able to switch to the new framework. Other details that will be keenly awaited will be what asset classes can be included in the framework as well as what diversification limits will be imposed.
The MFSA will in due course announce all the details about the framework and how managers can qualify, but for now the emphasis is on letting the sector in Malta and overseas know what is in store, rather than losing the first mover advantage.
The MFSA will be drawing up a specimen prospectus as well as other documentation to guide fund managers, which will clearly state that the funds are not regulated, emphasising the consumer protection measures that will underpin the new product.