The Malta Financial Services Authority (MFSA) is about to launch a new investment framework – the Notified Alternative Investment Funds framework - in tandem with Luxembourg's Reserved Alternative Investment Fund (RAIF), which was described by analysts as being "pioneering and revolutionary".
The new approach will reserve several benefits, prominent among which the fact that new funds will be able to come onto the market faster without the need to be scrutinised by the regulator. In addition, the Maltese NAIF will also benefit from pass-porting to other member states. The NAIF will only be made available to qualified or professional investors and any structures authorised by the Maltese law can be used as a NAIF.
Commenting, MFSA chairman Joe Bannister stated, "We believe that innovation is one of the key pillars of the financial services strategy for Malta, and we have said this several times. The framework builds on the innovation of past legislation and will be followed by other launches over the coming months." Professor Bannister is also confident that the Maltese version of Luxembourg's RAIF will be received as positively.
Fund managers based in the EU and the EEA will be able to request to the MFSA to include an Alternative Investment Fund (AIF) on the Maltese website list. Third country managers will need to send in a request in relation to the notification of the fund, that needs to be submitted after the country where they are established has been granted pass-porting rights in line with the AIFM Directive.
The new framework can be used for new Collective Investment Schemes (CIS), however it has not yet been revealed whether existing CIS will be able to adopt the new framework as well. Other details that still need to be specified include what asset classes can be included in the framework and what diversification limits will be imposed.
The MFSA will release such details later on and will also be drawing up a specimen prospectus and other relevant documentation to guide fund managers and elaborate which consumer protection measures will accompany the new product, as funds are not regulated.
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