Insights

Following the success with the Notified AIF regime, the Malta Financial Services Authority (“MFSA”) launched a proposed framework for Notified Professional Investor Funds (“Notified PIFs”) in Malta. Interested parties have until 31 January 2023 to submit comments on the main features of the proposed Notified PIF regime and the dedicated ‘Rules for Notified PIFs and related Due Diligence Service Providers’.

Notified PIFs will be subject to a notification process and will not be licensed by the MFSA. Promoters may therefore benefit from lower setup and other operational/regulatory costs, which fully licensed funds currently experience. Furthermore, the Notified PIF regime acknowledges time-to-market pressures experienced within the fund industry since the MFSA will include a Notified PIF in the List of Notified PIFs within 10 working days from the filing of a complete notification request.

Notified PIFs, as non-retail collective investment schemes, will be available to institutional/high net worth investors. The new product will be particularly attractive to UK, US and Swiss investment managers since Notified PIFs may be managed by:

• locally licensed de minimis AIFMs;
• EU/EEA de minimis AIFMs; and
• third-country AIFMs from reputable jurisdictions recognised by the MFSA.

While lending activities are excluded, Notified PIFs will be allowed to engage in any investment strategy. Another core feature of the proposed framework is that the due diligence exercise will not be undertaken by the MFSA, but rather to competent service providers such as fund administrators recognised by the MFSA, full-scope AIFMs and certain CSPs authorised under the Company Service Providers Act in Malta.

The new Notified PIF regime has been welcomed by various stakeholders and should be rolled out in Malta in the coming months.