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Malta, The future of Alternative Funds

With the coming into force of the new NAIF structure (Notified Alternative Investment Fund), Malta puts itself under the spotlight as a financial centre dynamic and responsive to the rising European trends.

Keeping pace with the evolution of European standards on the matter of common investment funds, examples being the Luxemburgish RAIFS and the Irish ICAV and QIAIF, the Malta Financial Services Authority (MFSA) has recently launched a new typology of AIF, the so-called NAIF, realizing a product that de facto will revolutionise the structuring process and the time-to-market, something that has always been a key point in the sponsors’ decision regarding the domiciliation.

Indeed, subject to direct regulation from the authority will be no more the fund itself, but only the Alternative Investment Fund Manager. The latter will assume direct responsibility for the due diligence process and for the prospectus compliance with the NAIF regulation.

In so doing, the MFSA will not need to exercise any approval or supervision of the fund, but only to insert the new NAIF into the list it maintains record of, upon receipt of the necessary documentation.

The process is thus considerably sped up, so much so that the regulating entity will just take ten working days to insert the fund in the NAIF list. To hit this target, the MFSA has worked on the standardisation of the structuring process of the fund.

The favourable time-to-market will make possible projects that otherwise would not be feasible because of strict timing constraints.

In the light of NAIF peculiarities, the MFSA has deemed appropriate not to include in the facilitation self-managed funds, loan funds and real-estate funds, while other categories of funds remain eligible.

Notably, NAIFs do not lose the benefit of being passported in other European countries, empowering Malta with the possibility to become a new financial centre and target domicile for alternative investment funds.

Tuesday, the 12th of July, a seminar on NAIF matter has taken place at the MFSA headquarter, occasion in which Roberto Colapinto, CEO of Abalone Asset Management, the first company ever structured a NAIF, has participated as speaker.

During the event, the intention of organising promotional events concerning NAIF in other European countries has been disclosed.