The Malta Financial Services Authority (“MFSA”) has introduced a new framework for Collective Investment Schemes (“CISs”) structured as Special Limited Partnership Funds (“SLPFs”). This move is part of the MFSA’s broader strategy to enhance Malta’s asset management industry, providing fund managers with more flexible structures while ensuring regulatory compliance.
The new framework allows for the creation of non-retail funds that target professional and qualified investors. These funds will operate as limited partnerships without a separate legal personality, providing greater flexibility in governance and fund operations.
Eligibility for SLPF Structure
The SLPF framework is available to non-retail CISs that are aimed at professional or qualifying investors. Specifically, it applies to funds licensed or notified under the following regulatory frameworks:
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Professional Investor Funds (“PIF”)
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Notified Professional Investor Funds (“NPIF”)
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Alternative Investment Funds (“AIF”)
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Notified Alternative Investment Funds (“NAIF”)
These structures allow asset managers to operate limited partnership-based funds with a streamlined regulatory process while maintaining high standards of investor protection.
Key Amendments to the Regulations
Several important updates have been made to the Investment Services Act (Special Limited Partnership Funds) Regulations, including:
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Limited Partnership Agreement (“LPA”): The LPA is the foundational document for SLPFs, and it must be approved by the MFSA before the fund is established. The Regulations also clarify the process for making changes to the LPA. Any changes to core elements of the agreement (as specified in the Regulations) require prior approval, while other amendments can be notified to the MFSA.
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Currency Requirements: The MFSA has removed the requirement for the LPA to specify the base currency of the units issued by the fund. Instead, the LPA must only state the accounting currency, simplifying the regulatory burden for fund managers.
Amendments to Fund Rulebooks
To integrate the SLPF structure into the broader regulatory framework, the MFSA has updated several key fund rulebooks, including those for PIFs, NPIFs, AIFs, and NAIFs. These amendments ensure consistency across all regulatory provisions, particularly for CISs structured as limited partnerships. The updates also address how these rules apply to SLPFs, ensuring a uniform approach to governance and regulatory compliance.
Beneficial Ownership Disclosure
SLPFs will be treated as an association of persons under the Civil Code, and as such, their Beneficial Owners (“BOs”) must be disclosed to the Malta Business Registry (“MBR”), similar to other associations. This is part of the MFSA’s commitment to maintaining transparency and regulatory oversight. Fund managers will need to follow MBR guidelines when submitting their BO information.
Naming and Registration of SLPFs
As part of the registration process, the proposed name of the SLPF must not be the same as or too similar to the name of an existing commercial partnership already registered with the MBR. The MFSA requires that fund managers verify the availability of their desired name through the MBR’s online system.
Approval Process for LPA and Fund Setup
The process for obtaining approval for the LPA and establishing the SLPF involves two key stages:
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For Licensed Funds: If the fund is applying for a PIF or AIF licence, the LPA and the LPA Checklist (Annex AX55) must be submitted along with the full application.
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For Notified Funds: If the fund is applying for Notified PIFs or Notified AIFs, the LPA and checklist must be submitted before the notification. The notification will not be considered complete until the MFSA has approved the LPA.
A Positive Step for Malta’s Asset Management Sector
The MFSA’s introduction of the SLPF framework is a positive development for Malta’s asset management industry. It enhances the regulatory environment for professional investors and provides greater flexibility in fund structuring. By incorporating the SLPF structure, the MFSA strengthens Malta’s position as a leading jurisdiction for asset management and investment funds.
For more information, stakeholders are encouraged to contact the MFSA or consult the updated regulations. Feel free to contact Zerafa Advocates for further insights into the regulatory landscape and asset management trends.
Further updates and developments on the MFSA’s strategic initiatives will be made public on the Authority’s website. Should there be any queries in relation to the above, kindly contact [email protected].
The full circular can be accessed here.
