Funds & Investment Services: Management & Administration

Malta boasts a number of professionals capable of acting as fund managers, whose services comprise of investment and fund management, accounting services, consumer inquiries, valuation, distribution of income, unit issues and redemotions and contract settlements.

A fund manager need not necessarily be situated in the same Member State in which the fund is domiciled, as the Undertakings for Collective Investment in Transferable Securities Directive IV (UCITS IV) has introduced the notion of passporting of the management company.

Fund managers of local UCITS schemes should possess:

1. An investment services licence
2. Qualification as a European management company in terms of the Investment Services Act (UCITS Management Company Passport) Regulations

Fund managers of Non-UCITS schemes should possess:

1. An investment services licence
2. Authorisation to provide fund management services

Foreign-situated managers are subject to the Malta Financial Services Authority’s (MFSA’s) discretionary approval, on a case-by-case basis.

Fund maangers of PIFs should possess:

1. An investment services licence
2. Authorisation to provide fund management services

Foreign-situated managers need some additional administrative requirements, as they are considered on a case-by-case basis by the MFSA. An authorised EU/EEA fund manager must comply with any passporting regulations. If these obligations are complied with then the the fund manager may freely exercise the right to start a branch in Malta, without applying for new authorisation under the Maltese jurisdiction.

Fund administrators generally offer a variety of services, including net asset value calculation, reconciliation, valuation of the investment portfolio, payment of any outstanding bills and performance and compliance reports.

A fund administrator may be appointed in one of two ways: by the fund itself or by the fund manager. The fund manager may either be responsible for fund administration himself, or may choose to delegate to an external administrative body. It is important to note that pure administrators do not have the right to passport their services from one EU/EEA Member State to another, under the Undertakings for Collective Investment in Transferable Securities Directive IV (UCITS IV). If administrative services are carried out by the UCITS manager, then these may be transported in the usual manner of the management services.

According to Maltese law, fund administrators do not require a licence. They are only obliged to apply to the Malta Financial Services Authority (MFSA) for recognition. This application is subject to the below regulatory fees.

Application for recognition to provide Fund Administration Services – EUR 3,000

Annual Supervisory Cost – EUR 1,200

In order to request recognition, fund administrators are required to submit the following documents

1. Completed application and personal questionnaire form;
2. Business plan, including a description of the details of the services to be provided, and to whom they shall be provided;
3. Relevant deed of constitution of the administrative body, eg: Memorandum and Articles in the case of a company;
4. A copy of the most recent audited accounts of the applicant or in the case of a new entity, three year financial projections;
5. A chart outlining the internal operational structure with respect to its proposed fund administration business;
6. Disclosure of the ultimate beneficial owners.
7. Persons who are in possession of a licence from the MFSA are only required to submit a business plan and a chart outlining the operational structure.