MFSA launches consultation on a new type of investment fund

The Malta Financial Services Authority (MFSA) has launched a consultation for a new type of fund that may be catered for the Maltese legislation.

The Notified Professional Investor Fund (NPIF) seeks to provide an additional fund structure which complements existing fund frameworks, entailing potentially lower associated setup and other operational and regulatory costs currently experienced in operating a fully licensed fund.

It also takes a more proportionate and risk-based approach to the onboarding process given the regulated status of the funds’ service providers and the qualified status of the target investors.

NPIFs will be non-retail schemes and only available to investors qualifying as Qualifying Investors.

NPIFs are riskier funds by nature in view of the less onerous regulatory requirements that will apply and will be subject to the minimum level of supervision for a collective investment scheme under Maltese law.

The NPIF will be required to provide the appropriate risk disclosures to any prospective investor accordingly

In previous feedback when the idea was first floated, stakeholders responded positively, highlighting that this may contribute towards Malta’s attractiveness as a fund jurisdiction and would address the needs of a specific segment of the market.

In its assessment leading to the proposed regime, the MFSA has also taken into consideration the inclusion of specific features derived from both the existing Notified Alternative Investment Fund (NAIF) and licensed Professional Investor Fund (PIF) regimes.

NAIFs and PIFs are increasingly popular types of scheme possible under the Maltese fund framework.

The new setup will attempt to build on their success by offering investors a new product more suited to their needs.

The consultation closes on 31st January.