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The Malta Financial Services Authority (the “MFSA”) has just launched a new regime of notification of funds applicable to Alternative Investment Funds AIFs which are promoted to professional investors and/or qualifying investors. AIFs falling within the scope of the notification process (the “Notified AIFs”) shall be managed by an Alternative Investment Fund Manager (the “AIFM”) authorized and regulated under Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers (the “AIFM Directive”).
Collective investment schemes which are currently authorized and licensed by the MFSA, in terms of article 4 of the Investment Services Act, Chapter 370 of the Laws of Malta (the “Act”), are not eligible to apply for the notification process in order to become Notified AIFs. Thus, only new structures can apply.  
Notified AIFs shall be included in the MFSA’s list of Notified AIFs within ten (10) business days from submission of the application with the MFSA provided all information and documents requested are duly provided. The same procedure used for Notified AIFs shall also apply in respect of additional sub-funds of the Notified AIF.

Structuring and Process of a Notified AIF

Through the new regime of Notified AIFs, more responsibility has been placed on the AIFM, whereby notification of AIFs shall be undertaken by the AIFM who shall be responsible for the respective Notified AIF and for the fulfilment of its ongoing obligations under the AIFM Directive and the relevant rules and regulations.
A Notified AIF can be either open-ended or closed-ended and may be established as an:

  • Investment Company with Variable Share Capital (SICAV);
  • Investment Company with Fixed Share Capital (INVCO);
  • Incorporated Cell Company;
  • Recognized Incorporated Cell Company;
  • Limited Partnership;
  • Unit Trust; or
  • Contractual Fund.

When structuring a Notified AIF, the Notified AIF shall at all times have one (1) or more directors independent from the AIFM and the depositary. Furthermore, the board of directors of the Notified AIF shall be composed of at least three (3) members one of whom must be resident in Malta.

Full Scope

Notified AIFs are to abide by the same requirements as AIFs which are licensed by the MFSA. The sole difference between a Notified AIF and a licensed AIF by the MFSA is that the MFSA will not carry out any due diligence process and thus such procedure will have to be undertaken by the AIFM.
Notified AIFs and AIFs which are licensed by the MFSA shall co-exist as two (2) products provided by the MFSA. It is then up to the promoters, through assistance by their regulatory advisors, to assess the best structure for their proposed set-up, subject to MFSA approval.
Notified AIFs have been established as an alternative to the authorized and licensed AIFs by the MFSA since the notification process can be considered as a faster process than the licensing process. It is to be noted that the MFSA shall, within ten (10) working days from the date of filing of a duly completed notification pack, proceed to include the AIF in the List of Notified AIFs.[1]
It is pertinent to point out that the inclusion of an AIF in the List of Notified AIFs will not imply that the AIF is authorized or licensed or in any way approved by the MFSA. Furthermore, the MFSA has a sole discretionary authority to reject a request for notification of an AIF, whereby such rejection shall be notified to the AIFM in writing. Moreover, the MFSA also has a discretionary authority to remove an AIF from the List of Notified AIFs at any time, and the burden of proving that the AIF should be retained on the List of Notified Alternative Investment Funds AIFs shall rest at all times on the AIFM.


The following collective investment schemes cannot undergo the process in order to become Notified AIFs:

  • Self-managed ;
  • AIFs which are not marketed and sold exclusively to professional and / or qualifying investors;
  • Loan funds which fall to be authorized under the Act and regulated by the Standard License Conditions Applicable to Collective Investment Schemes authorized to invest through loans;
  • AIFs that invest in instruments and assets other than financial instruments listed in Section C of Annex I of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (the “MiFiD”). This being said, private equity funds shall not be deemed to fall under this exclusion; or
  • AIFs whose main objective is investing in immovable property.

Application Process

A notification request together with the supporting documentation is to be submitted by the AIFM.  Third country Alternative Investment Funds AIFs will be able to submit a request for notification of an AIF once the country where they have been established has been granted passport rights under the AIFM Directive.
The notification form and ancillary documents[2] must be submitted to the MFSA within thirty (30) calendar days from the date of a resolution of the governing body[3] of the AIF approving the prospectus and prior to the effective date of the prospectus. The effective date of the prospectus shall be a date after the inclusion of the AIF in the List of Notified AIFs.

Notification of Sub-Funds

The procedure used for the notification of Notified AIFs shall also be used for the notification of additional sub-funds.

Marketing of Notified Alternative Investment Funds Alternative Investment Funds AIFs

Notified AIFs shall be marketed in the same way as AIFs which are licensed by the MFSA and thus, marketing shall be carried out either through passporting within the European Union (the “EU”) and European Economic Area (the “EEA”) or through the private placement regime for countries outside the EU.

Responsibility of the AIFM

The AIFM is bound to carry out the necessary due diligence exercise and to ensure that the governing body and the service providers of the Notified AIF are fit and proper and thus meet the criteria of integrity, competence and solvency, prior to submitting a request for inclusion of the AIF in the List of Notified Alternative Investment Funds AIFs.

The MFSA will not carry out any due diligence as is the case with respect to licensed Alternative Investment Funds AIFs, but will be relying on the checks and controls carried out by the AIFM in this regard.

The MFSA may carry out inspections and thus, the documentation related to the due diligence exercise carried out would need to be made available upon request by the MFSA. Any adverse findings by the MFSA in relation to any appointment may lead, inter alia, to the removal of the AIF from the List of Notified AIFs.

Due diligence records and documents are to be retained for a period of not less than ten (10) years and are to be updated by the AIFM annually. The AIFM must document any updates carried out.

Reporting obligations of the AIFM

The AIFM shall make the annual report of the Notified AIF available to the MFSA and where applicable, the European Regulatory Authority of the home EU member state or EEA state of the AIFM. The Notified AIF’s annual report shall be published and provided to investors of the Notified AIF, and submitted to the MFSA within six (6) months respectively of the end of the period concerned.

The AIFM shall submit to the MFSA any statistical returns in relation to the Notified AIF which may be required by the Central Bank of Malta to fulfil European and other relevant reporting obligations.

Way Forward

The Notified AIFs process will co-exist with the licensing process.

Thus, a client wishing to launch an AIF in Malta, may choose either to go for a full licensed AIF being licensed and fully authorized by the MFSA or else go for the Notified AIFs regime whereby the AIF will not be authorized and regulated by the MFSA but rather, responsibility is placed on the AIFM with respect to due diligence and fit and properness. The launch of the Notified AIFs product is aimed at reinforcing Malta’s role as a main domicile of choice within the EU for the establishment of funds and it is anticipated to generate a lot of interest from fund managers and promoters seeking to establish an efficient and time effective fund solution in a favorable and renowned jurisdiction as Malta.

Our Experience

lecocqassociate provides a full range of financial regulatory, corporate and commercial advice in relation to the structuring and incorporation of entities.

This newsletter is for information purposes only. It does not constitute professional advice or an opinion. Please contact us for any questions.


[1] Amended, changed or incomplete notifications will be rejected by the MFSA.

[2] MFSA templates of the prospectus, resolution of the governing body of the AIF, AIFM self-certification form, declaration form for the AIFM and the governing body of the AIF, and declaration form for the AIFM regarding due diligence undertaken on the AIF’s service providers and governing body.

[3] “governing body of the AIF” means the body with ultimate decision making authority for the AIF comprising the supervisory and managerial functions.

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