A fund needs to
appoint an external manager and a custodian.
The MFSA requires that the Manager and Custodian are independent of each
other. In addition, the Manager would be expected to have a place of
business in Malta. Having said that, an overseas fund manager of
international repute and sufficient standing may be expected by the
authority for some of the licensing requirements. All this is assessed on a
case by case basis. The custodian of the Maltese fund must be
incorporated in and have an established place of business in Malta.
The appointment and/or the replacement of any party who
is to be a Custodian or Manager to the Scheme, the terms of that
appointment, and the contents of the agreement to which the appointment is
subject, shall be agreed in advance with the MFSA. The MFSA shall have the
right to require the replacement of all or any of these parties.
Managers are not allowed to delegate functions to the
extent that they become a brass-plate entity. Through adoption of the EU
passporting provisions, Malta allows EU/EEA licensed Managers to offer
services in Malta. The Manager should have sufficient financial resources at
its disposal to enable it to conduct its business effectively and to meet
The licensed Manager of a SICAV may also be one of its
directors or its sole director. As regards the limited partnership
structure, each of the general partners has to satisfy the competent
authority within the meaning of the ISA that he is a fit and proper person
to carry out such activities or functions.
The custodian of a collective investment scheme is
required to be incorporated and to have an established place of business in
Malta and be approved by the MFSA. It may in particular be a bank licensed
to perform this function under the laws of Malta. Alternative custodianship
arrangements, such as an overseas-based custodian, may be considered by the
MFSA provided they secure adequate protection of the schemes assets. The
MFSA recommends and would normally expect an external fund manager and
custodian or prime broker to be appointed by PIFs, although this is not
mandatory. A fund Administrator (if separate from the Manager) providing
services in or from Malta to licence holders and/or Schemes, does not
require a licence. However, it must still apply to the MFSA for appropriate
recognition. Under Maltese law it is possible for a UCITS scheme to be
self-managed. Such Scheme, which has not appointed a third party Manager,
has to have a minimum initial capital of EUR300,000 and has to comply with
financial resources, Conduct of Business requirements, and record-keeping
requirements as may be laid out by MFSA.
Favourable tax system for Investment Services Expatriates in Malta