Malta: Impact Of AIFMD On Maltese Funds And Their Service Providers

1. Background 

1.1. The deadline for implementation of Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers1 ("AIFMD"), by the EU Member States is 22 July 2013. However, there are various transitional provisions and special provisions on the transposition of certain rules in relation to third countries, which make the application of such rules dependent on a positive advice / opinion from ESMA, and a delegated act from the European Commission. For the relevant timeframes, see Annex I. 

1.2. The AIFMD will concern, essentially: 

  • Fund managers established in the EU managing and / or marketing Alternative Investment Funds ("AIFs"), and outside the EU, if they market and/or manage AIFs in the EU (subject to transitional arrangements);
  • Collective investment schemes other than UCITS, marketed in the EU or managed by an EU / EEA manager of alternative investment funds ("AIFM"), even though the AIFMD is said to apply to AIFMs. For a schematic overview, please refer to Annex II. The AIFMD will also affect the AIFM's / AIF's relationship with and the role of service providers such as custodians, prime brokers,fund administrators and external valuers (see sections 5 to 7 below).

1.3. Various implementing measures are yet to be issued. ESMA issued its first technical advice related to possible implementing measures to the European Commission in November 2011; such measures concern, for example: 

  • Article 3 exemptions ("light regime") - see point 2.3 below;
  • operating conditions for AIFMs2 (including, conflicts of interest, risk management, liquidity management, organisational requirement, valuation, delegation, etc.);
  • limits to leverage for AIFs3;
  • depositaries;
  • supervision and third countries.

The European Commission is expected to issue implementing ("Level 2") measures mid-2012. 

1.4. The UCITS IV Directive4 is currently under review (referred to as "UCITS V"), in order to ensure alignment with the AIFMD, particularly as regards depositaries and remuneration of managers. 

1.5. In December 2011, the European Commission published proposals for a Regulation on European Venture Capital Funds ("EVCFs") and a Regulation on European Social Entrepreneurship Funds ("EuSEFS"), which set out uniform rules and requirements for these types of funds and their managers. Once the requirements defined in the proposals are met, qualifying fund managers and managers of social investment funds will be able to market their funds across the EU using the label "European Venture Capital Funds" and "European Social Entrepreneurship Funds" respectively. The scope of application of the proposed Regulations is restricted to non-UCITS fund managers, established within the EU and registered with the competent authority in their home Member State in accordance with AIFMD, provided that the manager manages portfolios of EuSEFS or EVCFs whose assets under management ("AuM") in total do not exceed EUR 500 million.  

Passporting rights are granted to managers for the marketing of their funds under the designation "European Social Entrepreneurship Funds" or "European Venture Capital Funds", subject to registration of the manager with the competent authority of its home Member State. 

The proposed Regulations are intended to become applicable on 22 July 2013, which would coincide with the implementation deadline of the AIFMD. 

2. Scope of application of the AIFMD 

2.1. The AIFMD lays down the rules for authorisation, ongoing operation and transparency of AIFMs which manage and / or market AIFs in the EU.5 AIFMs will require authorisation under the AIFMD,6 and will enjoy passport rights for the management and/or marketing of AIFs throughout the EU. 

2.2. In the case of internally managed AIFs (under Maltese law, SICAVs may be organised as self-managed funds), the AIF is also considered to be the AIFM and should therefore comply with all requirements for AIFMs under the AIFMD and be authorised as such. 

The self-managed AIF would be subject to the rules on delegation, including the requirement that delegation concerning portfolio management or risk management, may be conferred only on undertakings which are authorised or registered for the purpose of asset management and subject to supervision or, where that condition cannot be met, only subject to prior approval by the competent authorities of the home Member State of the AIFM. Thus, it appears that if the self-managed AIF would delegate day-to-day management functions to a third party investment manager, the latter would not per se be required to be an AIFM authorised under AIFMD (subject to certain conditions). 

2.3. A "light regime" (the so-called "Article 3 exemption") will apply to: 

  • AIFMs which directly or indirectly manage portfolios of AIFs whose total AuM (including assets acquired through the use of leverage) do not exceed EUR 100 million; or
  • AIFMs which directly or indirectly manage portfolios of AIFs whose total AuM do not exceed EUR 500 million, when the portfolios of AIFs consist of AIFs that are unleveraged and have no redemption rights exercisable during 5 years following initial investment in each AIF.

Registration and reporting requirements apply, but no passport rights, unless the AIFM opts in7 (or if the manager can market its EVCFSs or EuSEFs to eligible investors within the EU under the proposed Regulations; see point 1.5 above). AIFMs that fall under the Article 3 exemption, will not be subject to any requirements imposed by the AIFMD other than the said registration and reporting requirements; this means, for instance, that the requirement to appoint a local depositary (see section 6 below) will not apply to the AIFs managed by such AIFMs. 

2.4. Excluded from the scope of application of AIFMD are: 

(i) holding companies; 

(ii) institutions for occupational retirement provision which are covered by Directive 2003/41/EC, including, where applicable, the authorised entities responsible for managing such institutions and acting on their behalf referred to in Article 2(1) of that Directive or the investment managers appointed pursuant to Article 19(1) of that Directive, in so far as they do not manage AIFs; 

(iii) supranational institutions, and similar international organisations, in the event that such institutions or organisations manage AIFs and in so far as those AIFs act in the public interest; 

(iv) national central banks; 

(v) national, regional and local governments and bodies or other institutions which manage funds supporting social security and pension systems; 

(vi) employee participation schemes or employee savings schemes; 

(vii) securitisation special purpose entities.8 

The AIFMD does not apply to AIFMs in so far as they manage one or more AIFs whose only investors are the AIFM or the parent undertakings or the subsidiaries of the AIFM or other subsidiaries of those parent undertakings, provided that none of those investors is itself an AIF.9 

In the preamble to the AIFMD it is also indicated that "[i]nvestment undertakings, such as family office vehicles which invest the private wealth of investors without raising external capital, should not be considered to be AIFs in accordance with this Directive."10

2.5. The AIFMD does not appear to capture or prohibit passive marketing/reverse solicitation. 

3. Maltese AIFs 

3.1. AIFs carrying on activities in or from Malta are currently regulated in Malta, and require (in principle) a collective investment scheme ("CIS") licence issued by the Malta Financial Services Authority ("MFSA"). For regulatory purposes, a distinction is currently made between: 

  • Retail CISs: CISs that are available to the general public, comprising UCITS and retail non-UCITS schemes;
  • Professional Investor Funds ("PIFs"): non-retail CISs that are available only to eligible investors; there are three categories: PIFs targeting Experienced Investors (Experienced Investor Funds); PIFs targeting Qualifying Investors (Qualifying Investor Funds); and PIFs targeting Extraordinary Investors (Extraordinary Investor Funds);
  • Private CISs: CISs which limit the total number of participants to fifteen persons and where the MFSA is satisfied that: (i) the participants are close friends or relatives of the promoters; (ii) that the scheme is essentially private in nature and purpose; and (iii) the scheme does not qualify as a PIF. Private CISs do not require a CIS licence but need to be recognised by the MFSA.

Thus, retail non-UCITS CISs, PIFs and Private CISs would be captured by the definition of an AIF in terms of the AIFMD. 

3.2. Maltese law and regulation governing the above mentioned funds (i.e. CISs other than UCITS), will need to be reviewed in the light of AIFMD, including in connection with the following key issues: 

  • The appointment of service providers and location of the depositary: the regulatory implications for a Maltese AIFM managing Maltese (and other) AIFs, are outlined in section 4 below.

For Maltese AIFs managed by an EU AIFM11 (established outside Malta), the implementation of the AIFMD regime will effectively mean that if the EU AIFM requires authorisation under AIFMD as implemented in its jurisdiction (and it obtains such authorisation), it will be able (and will have) to exercise its passport rights in order to manage the Maltese AIF, and will be entitled to market the Maltese AIF throughout the EU, following the prescribed notification procedure. 

If a Maltese AIF is managed by a non-EU AIFM (e.g. based in Switzerland), it appears that such AIFM would be able to continue to manage the Maltese AIF for the time being and market the Maltese AIF in the EU under the respective national private placement regimes for a transitional period. If and when the relevant provisions on third countries come into effect (which is not expected to happen before mid-2015 -see Annex I) and the non-EU AIFM falls within the scope of application of the AIFMD, then the non-EU AIFM would need to apply for authorisation under AIFMD at some point, possibly, between 2015 and 2018. If and when the non-EU AIFM is authorised under the AIFMD (as implemented in the non-EU AIFM's Member State of reference), it would need to ensure compliance with the AIFMD regime in respect of the Maltese AIF(s) it manages (including the requirement to appoint a depositary established in Malta - see section 6), and would be entitled to exercise its passport rights to manage and market AIFs in Malta and throughout the EU, subject to certain conditions (see Annex II). 

As far as the appointment of fund administrators, depositaries, and investment advisors are concerned, please refer to sections 5 to 7 below. 

  • For self-managed AIFs: authorisation and ongoing requirements for AIFMs would apply to the AIF (where relevant); self-managed AIFs will be required to have an initial capital of at least EUR 300,000, and will be subject to own funds or PII requirements12 (for self-managed PIFs the minimum capital requirement currently stands at EUR 125,000 / USD 125,000, which amount must be exceeded on an ongoing basis);
  • Marketing of Maltese AIFs in other EU/EEA States and of EU AIFs in Malta, will be possible in accordance with the passport procedure to be followed by the AIFM.
  • Marketing of Non-EU AIFs in Malta should remain possible under the currently applicable national regime (it being understood that overseas CISs that are actively marketed in Malta currently require a CIS licence), during a transitional period. If and when the relevant provisions on third countries come into effect, it should be possible for Non-EU AIFs to be marketed in Malta and other EU Member States following the exercise by the AIFM of its passport rights under AIFMD, subject to certain conditions (see Annex II).

4. Maltese Fund Managers 

4.1. Fund managers operating in or from Malta are currently regulated in Malta, and require (in principle) an investment services licence issued by the MFSA. UCITS management companies are subject to special rules derived from the UCITS IV Directive, whilst other fund management companies are subject to rules applicable to investment firms in general (based on MiFID), supplemented by certain specific requirements. Thus, AIFMs are already regulated in Malta, but the regulatory regime will need to be revised in view of AIFMD. The upside will be that AIFMs authorised in Malta will be able to exercise their passport rights throughout the EU under the AIFMD. 

4.2. Under the AIFMD regime, Maltese AIFMs will be required to apply for authorisation by the MFSA, and once granted in accordance with the requirements and conditions set out in the AIFMD, such authorisation will be valid for all EU member States.13 AIFMs performing activities before 22 July 2013 will need to take all necessary measures to comply with national law transposing the AIFMD, and submit an application for authorisation within one year of that date (i.e. by 22 July 2014). AIFMs, in so far as they manage AIFs of the closed-ended type before 22 July 2013 which do not make any additional investments after 22 July 2013, may however continue to manage such AIFs without authorisation under the AIFMD. Furthermore, AIFMs, in so far as they manage AIFs of the closed-ended type whose subscription period for investors has closed prior to the entry into force the AIFMD (i.e. 21 July 2011) and are constituted for a period of time which expires at the latest three years after 22 July 2013 (i.e. 22 July 2016), may also continue to manage such AIFs without the need to comply with the AIFMD except for Article 22 (regarding annual reports) and, where relevant, Articles 26 to 30 (setting out the obligations for AIFMs managing AIFs which acquire control of non-listed companies and issuers), or to submit an application for authorisation.14

4.3. External AIFMs must be authorised under the AIFMD, and may only engage in the following activities: 

(i) The activities referred to in Annex I to the AIFMD, namely: 

- Investment management functions, which an AIFM shall at least perform when managing an AIF: portfolio management and risk management; 

- Other functions that an AIFM may additionally perform in the course of collective management of an AIF: (a) administration; (b) marketing; (c) activities related to the assets of AIFs; 

(ii) additional management of UCITS, subject to authorisation under the UCITS Directive. 

By way of derogation, Member States may authorise external AIFMs to provide the following services: 

  • Individual portfolio management (including pension funds and occupational retirement schemes);
  • Non-core services comprising: investment advice; safekeeping and administration in relation to shares or units of collective investment undertakings; reception and transmission of orders in relation to financial instruments.15

Self-managed AIFs are treated as AIFMs, but may only engage in internal management activities as described in Annex I to the AIFMD (described in paragraph (i) above).16 

4.4. Although fund management is subject to robust regulation in Malta already, material changes to the current regime for non-UCITS fund managers in Malta are expected to relate to certain ongoing requirements, for instance, regarding the following: 

  • Remuneration policy and practices17 (currently, fund managers can rely on an exemption from the detailed rules and guidelines on RMICAAP applicable to investment firms);
  • Risk management in respect of AIFs (including liquidity management);18
  • Responsibility for procedures regarding valuation of assets and calculation and publication of NAV of AIFs, and the appointment of an external valuer;19
  • Delegation and sub-delegation of AIFM functions, in particular portfolio management or risk management;20
  • Disclosures to investors: the AIFM will be responsible to ensure that the AIF's offering documents are in line with the disclosure requirements of the AIFMD;21
  • Reporting to competent authorities (e.g. information on AIFs employing leverage on a substantial basis);22
  • Limits on leverage: to be self-imposed by AIFM for each AIF; and possibility for the competent authority of the home Member State to impose limits in order to ensure the stability and integrity of the financial system;23 and
  • Obligations for AIFMs managing AIFs which acquire control of non-listed companies and issuers: notification of acquisition of major holdings and control of non-listed companies; disclosure requirements in case of acquisition of control; specific provisions regarding the annual reports of AIFs exercising control of non-listed companies; and special requirements to prevent asset stripping for a period of twenty four months following acquisition of control.24

4.5. As of 22 July 2013, AIFMs established and authorised in Malta under AIFMD, should in principle be allowed to: 

(i) manage Maltese AIFs;25

(ii) manage EU AIFs (established outside Malta), directly on a cross-border basis or by establishing a branch, subject to notification to the MFSA;26 

(iii) manage non-EU AIFs which are not marketed within the EU, provided that appropriate cooperation arrangements are in place between the MFSA and the supervisory authority of the third country where the non-EU AIF is established;27

(iv) market units of any Maltese AIF and any EU AIF it manages to professional investors28 in Malta, subject to notification to the MFSA;29 

(v) market units of any Maltese AIF and any EU AIF it manages to professional investors in EU Member States (other than Malta), subject to notification to the MFSA (i.e. passporting); the Maltese AIFM would need to make arrangements for the marketing of AIFs and, where relevant, arrangements to prevent marketing to retail investors, in accordance with the laws of the Host Member State/s;30

(vi) during a transition period (expected to end in 2018 - see Annexes I and II), market units of non-EU AIFs it manages to professional investors in the EU, under the respective national private placement regimes (and subject to stricter rules which Member States may impose, where applicable), provided that: (i) appropriate cooperation arrangements are in place between the MFSA and the supervisory authority of the third country where the non-EU AIF is established and (ii) the said third country is not black-listed by the FATF.31 If and when the relevant provisions in relation to third countries become applicable (which is not expected to happen before mid-2015 - see Annex I), then a Maltese AIFM should also be allowed to market units of any non-EU AIF it manages to professional investors in the EU, subject to notification to the MFSA (in other words, to passport), provided that: (i) appropriate cooperation arrangements are in place between the MFSA and the supervisory authority of the third country where the non-EU AIF is established; (ii) the said third country is not black-listed by the FATF; and (iii) the said third country has entered into an exchange of information on tax agreement with Malta and any other Member States where the units are intended to be marketed. Under the passporting regime, the Maltese AIFM would need to make arrangements for the marketing of AIFs and, where relevant, arrangements to prevent marketing to retail investors, in accordance with the laws of the Host Member State/s.32 

4.6. A Member State may allow AIFMs to market units or shares of AIFs they manage to retail investors (i.e., an investor who is not a professional investor - see definition in footnote 29) in that Member State's territory, in accordance with AIFMD, irrespective of whether such AIFs are marketed on a domestic or cross-border basis or whether they are EU or non-EU AIFs. In such cases, Member States may impose requirements on the AIFM or the AIF which are stricter than the requirements applicable to the AIFs marketed to professional investors in their territory in accordance with the AIFMD (without discrimination against EU AIFs established in another Member State and marketed on a cross-border basis).33 

5. Fund Administrators 

5.1. Fund administrators operating in or from Malta require a recognition certificate issued by the MFSA. Currently, Maltese PIFs (and retail non-UCITS funds) may appoint a fund administrator directly, or the fund's investment manager may delegate the administration function to a third party fund administrator; if no fund administrator is appointed, the investment manager will be responsible for this function itself). In view of the AIFM's duties related to valuation of assets and calculation of NAV, it appears that, if and when the AIFM is authorised under AIFMD, the fund administrator would need to be appointed by the AIFM (or the self-managed AIF), in accordance with the relevant rules on delegation under AIFMD.  

5.2. The AIFMD contemplates the possibility for AIFMs to appoint an external valuer to perform the valuation function, subject to certain conditions; otherwise, such function remains with the AIFM, which would need to ensure however that the valuation task is functionally independent from the portfolio management, and that the remuneration policy and other measures ensure that conflicts of interest are mitigated and that undue influence upon the employees is prevented.34

It is understood that the fund administrator would not be considered to be an external valuer, if and to the extent that such administrator is responsible for the calculation of the AIF's net asset value, but not for the valuation of the AIF's assets.  

6. Custodians and Prime Brokers 

6.1. Currently, Maltese law and regulation require that Retail CISs and PIFs targeting Experienced Investors entrust the fund's assets to a custodian for safekeeping; the custodian is also responsible for monitoring the extent to which the investment manager abides by the investment and borrowing restrictions to which the fund is subject. PIFs targeting Qualifying or Extraordinary Investors would generally be expected to appoint a custodian or prime broker(s) for the safekeeping of the PIF's assets (in which case the custodian or prime broker is not required to assume a monitoring function in respect of the activities of the investment manager), but may adopt adequate alternative safekeeping arrangements instead, subject to the MFSA's approval.  

Whilst the custodian of Retail CISs must have an established place of business in Malta and be in possession of a Category 4 Investment Services Licence issued under the Investment Services Act (Chapter 370 of the Laws of Malta), PIFs may appoint a custodian / prime broker established abroad. The custodian (or prime broker) appointed by a PIF must be: 

(i) an entity providing the services of a custodian in terms of a Category 4 Investment Services Licence; or 

(ii) an entity constituted in a Member State or EEA State and operating from a Member State or EEA State other than Malta, providing the services of custodian to CISs; or 

(iii) an entity constituted outside Malta and operating from outside Malta providing the services of a custodian to CISs where the MFSA is satisfied that such entity is of sufficient standing and repute and having the business organisation, systems, experience and expertise deemed necessary for it to act as custodian. 

6.2. Under the AIFMD regime, for each AIF it manages, the AIFM will need to ensure that a single depositary is appointed.35 The functions of the "depositary" of an AIF will be primarily: to ensure that the AIF's cash flows are properly monitored, to hold the AIF's assets for safekeeping, and to perform "oversight duties" (and to carry out certain other tasks). The AIFMD will also regulate, amongst other matters:  

  • delegation by the depositary: only the safekeeping of assets may be delegated to a third party, subject to conditions; 
  • liability of the depositary and its delegates. 

 The AIFMD requires that the depositary be established in the following location: 

  • for EU AIFs, in the home Member State of the AIF; 
  • for non-EU AIFs, in the third country where the AIF is established or in the home Member State of the AIFM managing the AIF or in the Member State of reference of the AIFM managing the AIF.36

The competent authorities of the home Member State of an AIF or in case where the AIF is not regulated the competent authorities of the home Member State of an AIFM, may allow credit institutions referred to in paragraph (a) below, established in another Member State to be appointed as a depositary until 22 July 2017.37

Pursuant to AIFMD, the depositary must, in principle, be:38

(a) a credit institution having its registered office in the EU and authorised in accordance with Directive 2006/48/EC, or 

(b) an investment firm having its registered office in the EU, subject to capital adequacy requirements according to article 20(1) of Directive 2006/49/EC, including capital requirement for operational risks and authorised in accordance with MiFID, and which also authorized provide the ancillary service of safekeeping and administration of financial instruments for the account of clients in accordance with Section B(1) of Annex I to MiFID; such investment firms shall in any case have own funds not less than the amount of initial capital referred to in Article 9 of Directive 2006/49/EC; or 

(c) another category of institution which is subject to prudential regulation and ongoing supervision and which on 21 July 2011 falls within the categories of 

institution determined by Member States to be eligible to be a depositary under Article 23(3) of Directive 2009/65/EC.39

For non-EU AIFs, it may also be an entity of the same nature as those referred to in paragraphs (a) and (b), provided that it is subject to effective prudential regulation and supervision. 

Thus, under the AIFMD regime, a Maltese AIF, whose AIFM is authorized under AIFMD, would eventually be required to appoint a custodian who is established (including establishment through a subsidiary or branch) in Malta.  

6.3. Whilst the AIFMD aims to ensure that AIFs may continue to use prime brokers,40 it appears that under the AIFMD regime, prime brokers may be appointed as counterparty to the AIF, and also as sub-custodian, and possibly even as depositary. However, in order to avoid conflicts of interest between the depositary, the AIFM and/or the AIF and/or its investors, the AIFMD prescribes that a prime broker acting as counterparty to an AIF shall not act as depositary for that AIF, unless it has functionally and hierarchically separated the performance of its depositary functions from its tasks as prime broker and the potential conflicts of interest are properly identified, managed, monitored and disclosed to the investors of the AIF. Delegation of safekeeping functions by the depositary to such prime broker is allowed, as long as the relevant conditions for delegation by the depositary are met.41 

6.4. In view of the above, Maltese PIFs (if they will be subject to the AIFMD regime) that have appointed a foreign custodian and/or one or more prime brokers, will need to appoint a custodian established in Malta in due course (see also Annex II, for a schematic overview) and, generally, the custodian and prime brokerage relationships of Maltese AIFs will need to be revisited and related contracts will have to be revised or prepared in accordance with the rules of the AIFMD, as implemented at national level. 

7. Investment Advisor 

7.1. Currently, a Maltese CIS or its investment manager may appoint an investment advisor, it being understood that the discretionary management function remains with the investment manager (or the CIS, if self-managed). 

7.2. The AIFMD does not expressly refer to investment advisors, but it appears that under the AIFMD regime, the investment advisor will need to be appointed by the AIFM.  


1 Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010, OJ L 174 1.7.2011

2 The definition given in article 4(1)(b) AIFMD is: 'AIFMs' means legal persons whose regular business is managing one or more AIFs".

3 The definition given in article 4(1)(a) AIFMD is: 'AIFs' means collective investment undertakings, including investment compartments thereof, which: (i) raise capital from a number of investors, with a view to investing it in accordance with a defined investment policy for the benefit of those investors; and (ii) do not require authorisation pursuant to Article 5 of Directive 2009/65/EC".

4 Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS)

5 Article 1 AIFMD

6 Article 6(1) AIFMD

7 Article 3(2)-(4) AIFMD

8 Article 3(2) AIFMD

9 Article 3(1) AIFMD

10 Recital 7 of the preamble to AIFMD. ESMA has recently issued a Discussion Paper (ESMA/2012/117) dated 23 February 2012 inviting discussion on Key concepts of the Alternative Investment Fund Managers Directive and types of AIFM, which specifically includes the concept of "family offices'" as part of the subject-matter of the discussion.

11 The definition given in article 4(1)(b) AIFMD is: 'EU AIFM' means an AIFM which has its registered office in a Member State".

12 Article 9(1) and (7) AIFMD

13 Articles 7 and 8 AIFMD

14 Article 61(1), (2) and (4) AIFMD

15 Article 6(2) and (4) AIFMD

16 Article 6(3) AIFMD

17 Article 13 AIFMD

18 Article 15 AIFMD

19 Article 19 AIFMD

20 Article 20 AIFMD

21 Article 23 AIFMD

22 Article 24 AIFMD

23 Article 25 AIFMD

24 Articles 26-30 AIFMD

25 Article 6 AIFMD

26 Article 33 AIFMD

27 Article 34 AIFMD

28 The definition given in article 4(1)(b) AIFMD is: 'professional investor' means an investor which is considered to be a professional client or may, on request, be treated as a professional client within the meaning of Annex II to Directive 2004/39/EC [MiFID]".

29 Article 31 AIFMD

30 Article 32 AIFMD

31 Article 36 AIFMD

32 Article 35 AIFMD

33 Article 43 AIFMD

34 Article 19(3) AIFMD

35 Article 21(1) AIFMD

36 Article 21(5) AIFMD. It is understood that the local establishment of the depositary could well be in the form of a subsidiary or branch.

37 Article 61(5) AIFMD

38 Article 21(3) AIFMD

39 Article 23(3) of Directive 2009/65/EC (i.e., the UCITS IV Directive) states that: "Member States shall determine which of the categories of institutions referred to in paragraph 2 shall be eligible to be depositaries." Article 23(2) of Directive 2009/65/EC in turn states that: "A depositary shall be an institution which is subject to prudential regulation and ongoing supervision. It shall also furnish sufficient financial and professional guarantees to be able effectively to pursue its business as depositary and meet the commitments inherent in that function." In terms of the MFSA's Investment Services Rules for Investment Services Providers applicable to Malta based UCITS, the custodian must be a credit institution licensed under the laws of Malta, or such other body corporate, unincorporated body or association acceptable to the MFSA, providing the services of a custodian.

40 Vide recital (43) of the preamble to AIFMD. The definition of prime broker given in article 4(1)(af) AIFMD is: 'prime broker' means a credit institution, a regulated investment firm or another entity subject to prudential regulation and ongoing supervision, offering services to professional investors primarily to finance or execute transactions in financial instruments as counterparty and which may also provide other services such as clearing and settlement of trades, custodial services, securities lending, customised technology and operational support facilities".

41 Article 21(4) AIFMD

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Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.