The framework regulating Notified Professional Investor Funds (NPIFs), launched by the Malta Financial Services Authority (MFSA) on 18th December 2023, currently prohibits the self-management of NPIFs and thus requires the appointment of a third-party manager. Now, less than a year after the implementation of the NPIF regime, on 12th June 2024, the MFSA issued a consultation document seeking stakeholder feedback on the possible extension of the said regime to Self-Managed NPIFs.
The new proposed framework would aim to build upon the existing one, introducing provisions for Self-Managed NPIFs in a dedicated section of the Rulebook: Supplementary Rules for Self-Managed NPIFs. While Self-Managed NPIFs would adhere to the same requirements as those managed by a third-party manager, they would also be subject to new requirements, as follows:
- Capital: Aligning changes in capital requirements to be the same as those of a licensed Self-Managed PIF.
- Governance: Requiring the appointment of at least three Investment Committee members, including one Portfolio Manager.
- Due Diligence: Due Diligence Service Providers (DDSPs) would be required to conduct fitness and properness assessments on the Portfolio Manager and Investment Committee Members.
- Reporting: Internally managed NPIFs would be required to comply with Article 3(3) of the AIFM Directive by submitting Annex 1 – AIFM-Specific Information and Annex 2 – AIF-Specific Information of the PIF Rules to the MFSA in their entirety. This differs from the current NPIF framework, where only an abridged return is required.
- Terms of Reference: The NPIF would be required to have in place terms of reference regulating the procedures of the Investment Committee.
Next Steps
The MFSA invites comments on the inclusion of Self-Managed NPIFs and their proposed features by July 12, 2024. This feedback will assist in shaping the final NPIF framework.
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