On the 15th October 2019, the Malta Financial Services Authority (“MFSA”) issued a Circular on Self-Assessment on potential closet indexing practices adopted by Collective Investment Schemes targeting retail investors (the "Circular"). An in-depth explanation on the above-mentioned closet indexing and its related methodology can be found in the MFSA’s previously issued circular dated 11th July 2018.
By the present circular the MFSA intends to remind the following stakeholders to conduct a self-assessment according to the MFSA’s previously issued circular dated 11th July 2018:
Self-managed Undertakings for Collective Investment in Transferable Securities (“UCITS”) licensed in Malta;
Management Companies managing UCITS licensed in Malta;
Self-managed Retail Alternative Investment Funds (“Retail AIFs”) licensed in Malta; and
Maltese AIFMs managing Retail AIFs licensed Malta (these stakeholders are collectively referred to as the “Licence Holders”).
The MFSA further reminds that the frequency at which the self-assessment certificates are to be submitted to the MFSA, is as follows:
Annually for Licence Holders having a Net Asset Value ("NAV") between EUR 10,000,000 and EUR 100,000,000; and
Semi-annually for Licence Holders with NAV higher than EUR 100,000,000.
The MFSA also notes that the next self-assessment shall cover the entire period form the date of the submission of the last self-assessment certificate up until the submission date of the upcoming Annual Audited Financial Statements and supplementary regulatory reporting pack as follows:
For UCITS within four (4) months form the end of the reporting period; and
For Retail AIFs within (6) months form the end of the reporting period.
In addition, those Licence Holders which are subject to semi-annual reporting shall submit the self-assessment certificate within two months from the end of the reporting period.
The Licence Holders shall also store any information used for the analysis conducted for the purpose of the self-assessment for a period of two years. Furthermore, this circular also mentions that the European Securities and Markets Authority has updated requirements in relation to UCITS Schemes’ benchmark disclosure and past performance obligations.
The Licence Holders are required to fall in line with the above requirements not later than 30th November 2019.
Feel free to contact us if your require any further information on this Circular.