MFSA Launches Framework for Notified PIFs

Following an extensive consultation period commencing in December 2022 the MFSA announced the launch of the Notified Professional Investor Fund (“Notified PIF”) regime. Building on the success story of the Notified Alternative Investment Fund (“NAIF”) regime, the Notified PIF seeks to marry the flexibility and lighter touch regulation of the PIF framework with the rapid time to market of the NAIF framework.

Rather than undergoing a full licence process with the MFSA, a Notified PIF will be included on a list of Notified PIFs maintained by the MFSA within 10 working days from the date of filing of a complete notification request. In order to ensure that the time to market benefits do not result in lower regulatory safeguards for investors, the Notified PIF regime introduced the role of the “due diligence service provider”, an entity entrusted with conducting due diligence with respect to the Notified PIF, both at notification stage and on an ongoing basis.

A Notified PIF is required to be a third party managed fund, and may be managed by a de minimis AIFM licensed in Malta or authorized in the EU/EEA, or a third country AIFM which is authorised in a jurisdiction with whom the MFSA has signed a bilateral cooperation agreement / MoU, provided that where such agreement is not in place, the MFSA may accept other forms of agreements / memoranda which it deems acceptable.

This highly anticipated fund framework is expected to generate interest from asset managers and promoters looking to establish a collective investment scheme in a jurisdiction offering a strong regulatory framework while also benefitting from greater flexibility and lower set-up and ongoing costs.