AIFM passporting in Malta

The Maltese Investment Services (Marketing of Alternative Investment Funds) Regulations (the “Marketing of AIFs Regulations”) which transpose the AIFMD, as amended by the CBDF Directive, allow an EEA AIFM to engage in premarketing of an EEA AIF in Malta to Professional Investors. Premarketing in Malta arises when an EEA AIFM or a third party on its behalf (subject to certain conditions being met) provides information / communications on investment strategies or ideas to potential Professional Investors in Malta to test their interest in an EU AIF or compartment which is not yet established or which is established but not yet notified for marketing in accordance with the marketing passport procedures described below in Malta and which does not amount to an offer or placement to the potential investor to invest in the units or shares of that AIF or compartment. 

For information / communication on an EEA AIF to qualify as premarketing it cannot be presented to potential investors in a way which: (i) is sufficient to allow investors to commit to acquire units or shares of a particular EEA AIF; (ii) amounts to subscription forms or similar documents (whether in draft or final form); or (iii) amounts to constitutional documents, a prospectus or offering documents of a not-yet established AIF in final form. 

The EEA AIFM is not required to submit any prior notification to the Malta Financial Services Authority (the “MFSA”) before it engages in premarketing activity in Malta, provided that it fulfils certain conditions set out in the Marketing of AIFs Regulations, including the submission of an informal letter to its home State authority within two weeks of the date of commencement of premarketing in Malta specifying: (a) the member states in which and the periods during which premarketing is taking or has taken place; (b) a brief description of the premarketing; and (c) a list of AIFs and compartments of AIFs which are or were the subject of premarketing. The MFSA may request the home State authority of the EEA AIFM to provide further information on the premarketing that is taking or has taken place on its territory.  

Investors contacted as part of premarketing may only acquire units or shares in that EEA AIF through marketing permitted under a marketing passport described below. Any subscription by Professional Investors, within 18 months of the EEA AIFM commencement of premarketing activities, to units or shares of an EEA AIF referred to in the information provided in the context of premarketing or of an EEA AIF established as a result of the premarketing, shall also be considered to be the result of marketing and shall be subject to the marketing passport notification procedures described below. 

An EEA AIFM wishing to market an EEA AIF in Malta may do so only to Professional Investors and in accordance with the Marketing of AIFs Regulations. The EEA AIFM must first present a notification to its home State regulatory authority, in a language customary in the sphere of international finance, containing the information set out in Annex IV of the AIFMD. The home State authority of the EEA AIFM must transmit the full notification file to the MFSA within twenty working days of receipt of the complete notification file. The MFSA must also receive a statement to the effect that the EEA AIFM is authorised to manage the EEA AIF. Upon transmission of the notification file to the MFSA and upon receipt of a confirmation from the home State authority of such transmission, the EEA AIFM may begin marketing the EEA AIF in Malta. Certain additional requirements apply when marketing a European feeder fund.  

Marketing communications addressed to investors or potential investors for AIFs marketed under the abovementioned marketing passport must comply with the provisions of the Cross-Border Distribution of Funds Regulation (the “CBDF”) and the ESMA Guidelines on Marketing Communications dated 2 August 2021 which came into force on 2 February 2022. 

Currently, no EU passport exists for marketing of EEA AIFs to retail investors. The Marketing of AIFs Regulations set forth the conditions pursuant to which EEA AIFs can be marketed to retail investors in Malta, which include the requirement ofprior authorisation by the MFSA.

A Non-EEA AIFM may market a Non-EEA AIF or an EEA AIF which it manages in Malta to Professional Investors. The marketing of such AIFs is subject to the rules set out in the Investment Services Act (Alternative Investment Fund Manager) (Third Country) Regulations and is subject to the local private placement regime. Marketing to retail clients is subject to additional requirements including a formal application for authorisation, as well as a related application fee. 

A summary of the Maltese private placement regime can be found at the CMS Expert Guide to private placement of funds rules and law. 

In Malta, pre-marketing rules were not extended to EEA AIFMs and/or EEAAIFs. 

The Investment Services Act (Fees) Regulations set fixed fees in relation to marketing of units or shares of an EEA AIF by an EEA or Non-EEA AIFM. Marketing by an EEA AIFM or a non-EEA AIFM of an EEA AIF in Malta is subject to a notification fee of EUR 2,500 per AIF and an annual supervisory fee of EUR 3,000 per AIF. Where the EEA AIF has multiple sub-funds, a notification fee of EUR 450 per sub-fund and an annual supervisory fee of EUR 500 per sub-fund is applicable. When an EEA AIFM markets an EEA AIF in Malta, no annual supervisory fees are payable from the 16th sub-fund upwards.