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Updates – NAIF Regime

By August 27, 2021September 9th, 2021No Comments

On the 24th of June 2021, the Malta Financial Services Authority (MFSA) has published a separate set of rules applicable to Notified Alternative Investment Funds, improving its efficiency and making less restrictive its scope of application.

As a result of the new rules, the following key changes must be considered:

(i) Shorter processing timeframes – Changes to the prospectus must be acknowledged by the MFSA within five (5) working days from the notification of changes (previously ten days) as well as changes to the investment management function and/or valuation functions within 3 weeks (before two months)
(ii) Wider Scope of Application – Possibility to request the conversion of a licensed Collective Investment Scheme into a NAIF.
(iii) More Flexible Investment Policies and Restrictions – NAIFs are authorized to invest in any asset classes with the exception of loan origination which remains restricted, whilst loan acquisition is subject to certain requirements.

The NAIF continues being a fast-track solution for Managers looking for distribution of shares across Europe (once the required documentation has been submitted to the MFSA the Authority has 10 days to approve it and register it).

The NAIF Rule Book shall be applicable to current and prospective NAIFs as from the 24th of June 2021.

Finally, Alternative Investment Fund Managers of existing NAIFs are expected to undertake an impact assessment of the revised Rules against their current operations. Any potential issues arising as a result of the revised NAIF Rules which requires action by the scheme, needs to be addressed by no later than 31 December 2021.