The Malta Financial Services Authority (MFSA) is launching a new framework for Notified Professional Investor Funds (NPIFs).
The framework provides for “an additional fund structure in Malta that benefits from an appropriately streamlined onboarding process and complements other existing fund frameworks.”
The MFSA is launching this framework “following two separate public consultation exercises.”
The new framework is governed “by a set of proportionate and risk-based criteria – these funds must be serviced by specified regulated service providers, should fall within the established asset thresholds, and be offered only to eligible investors.”
A Notified Professional Investor Fund is “a special type of non-retail collective investment scheme which is notified to the Authority and solely available to professional and/or qualifying investors.”
NPIFs are subject to “a streamlined notification process and are governed by a regulatory framework which their service providers are also required to adhere to. NPIFs may only be set up as non-retail schemes available to Qualifying and/or Professional Investors and will be required to provide the appropriate risk disclosures to any prospective investor accordingly.”
The establishment of this framework is part of “a number of key regulatory and policy initiatives being undertaken by the Authority in relation to asset management.”
Commenting on its launch, Chief Officer Strategy, Policy and Innovation Michael Xuereb said:
“These initiatives are aimed at further improving the regulatory platform for professional investment funds by means of streamlined, pragmatic and risk-based policymaking. It is expected that the framework will lead to lower setup, operational and regulatory costs than those currently experienced in operating a fully licensed fund.”
The Malta Financial Services Authority (MFSA) recently concluded “a series of workshops targeted at insurance companies, intermediaries, and investment services to unfold the transformative potential of the EU Retail Investment Strategy Package.”
The EU Retail Investment Strategy Package, “adopted by the European Commission on 24 May 2023, aims to make the EU a safer place for citizens to invest in the long term, by enhancing the information provided to retail investors through disclosure rules, increasing cost transparency by standardising the presentation and terminology on costs, and ensuring that retail clients have a clear annual view of their portfolio’s performance.”
The EU Package aims to “address potential conflicts of interest, combat misleading marketing, and maintain high standards of professional qualifications for financial advisors. It is also intended to encourage financial literacy, reduce administrative burdens for professional investors, and enhance supervisory cooperation.”
Led by Head of Conduct Supervision Dr Sarah Pulis, the workshops covered a range of topics including disclosures, inducements, suitability assessment, value for money, marketing and communications practices, and more.
Dr Pulis commented on the initiative:
“The proposed Retail Investment Package will bring significant changes to the rules for many financial products and services offered to retail customers. While some proposals spark intense debate, the ultimate goal of bolstering consumer confidence in financial markets and encouraging retail investor participation remains the desirable outcome.”