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Collective Investment Schemes

Hedge Funds – Professional Investor Schemes

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  • Passporting throughout EU
  • Low Regulatory, Entry and Management Costs
  • Flexible Management Requirements

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The table below sets out the key features of Collective Investment Funds – commonly known as Hedge Funds

Comparison of Professional Investor Funds (Hedge Funds)

Type of PIFExperienced Investor FundQualifying Investor FundExtraordinary Investor
Minimum Investment€10,000 / $10,000€75,000 / $75,000€750,000 / $750,000
Investment LimitsYesNoNo
Eligibility for InvestorsSatisfy definition ofexperienced investorSatisfy definition ofqualifying investorSatisfy definition ofextraordinary investor
Investment RestrictionsCertain rules apply to property fundsNone- except as specified inoffering documentationNone- except as specified inoffering documentation
Borrowing Limits100% NAV for borrowings used for investment purposes & leverage via derivatives. Assessed on VaR (value at risk) or Commitment Approach.Unrestricted borrowing on temporary basis for liquidity purposes.None- except as specified inoffering documentationNone- except as specified inoffering documentation
Time for MFSA Response7 business days7 business days7 business days
Offering MemorandumMinimum RequirementsMinimum RequirementsOptional
Financial Statements / ReportingAnnualTo be submitted withCustodian’s reportAnnualNo Custodian’s reportrequiredAnnualNo Custodian’s reportrequired
Compliance ReportSemi—AnnualSemi—AnnualSemi—Annual
Statistical ReturnsQuarterlyQuarterlyQuarterly
Investment ManagerOptional- depend on competence- self managed PIFs allowed- can act as administratorOptional- depend on competence- self managed PIFs allowed- can act as administratorOptional- depend on competence- self managed PIFs allowed- can act as administrator
Investment AdvisorOptionalOptionalOptional
AdministratorOptionalOptionalOptional
Compliance OfficerRequiredCan also act as MLRORequiredCan also act as MLRORequiredCan also act as MLRO
MLRO (Money Laundering Officer)Required if PIF marketing own unitsRequired if PIF marketing own unitsRequired if PIF marketing own units
Custodian /DepositoryRequired- assumes monitoring role- need not be in Malta- must be independent from fund managerOptional- to implement safe custody arrangements- must be independent from fund managerOptional- to implement safe custody arrangements- must be independent from fundmanager
Local RepresentativeYes if all officials & service providers outside of MaltaYes if all officials & service providers outside of MaltaYes if all officials & service providers outside of Malta
Independent Director from Manager or CustodianRequiredRequiredRequired
Self Managed FundsAllowedAllowedAllowed
AuditorRequiredRequiredRequired
ListingOptionalOptionalOptional
DeclarationInvestor to declare qualifies as Experienced InvestorInvestor to declare qualifies as Qualifying InvestorInvestor to declare qualifies as Extraordinary Investor
Taxation – FundNo Malta TaxNo Malta TaxNo Malta Tax
Taxation – InvestorsNo Capital Gainsfor Non ResidentsNo Withholding Taxon DistributionsNo Capital Gainsfor Non ResidentsNo Withholding Taxon DistributionsNo Capital Gainsfor Non ResidentsNo Withholding Taxon Distributions
Promoter RequirementNot RequiredNot RequiredNot Required
Pledge of UnitsAllowedAllowedAllowed
Side PocketsAllowedAllowedAllowed