MFSA launches rulebook for collective investment schemes investing through loans

Malta's flexibility as a domicile for funds has recently been enhanced through the introduction of a rulebook addressing the needs of collective investment schemes investing through loans. The introduction of the rulebook answers in the affirmative a question that has long pre-occupied financial services professionals in the jurisdiction i.e. can a fund issue loans? The Maltese legal environment for money lending companies remains imperfect, with the rules governing money lending under the financial institutions act being particularly unwieldy, but there can be no doubt that this is a step in the right direction for Malta.

The positive development does not however come without some caveats.  In particular the rulebook is very particular about the borrowers that may borrow from an MFSA authorised loan issuing fund i.e 'unlisted companies and SMEs'. Some other noteworthy features of the rulebook are the following:

• The fund must be of a closed-ended nature (although there are certain limited flexibilities)
• The fund can only be sold to professional investors as defined under MiFID, or investors who elect to be treated as professional investors and invest a minimum of EUR 100,000
• The fund must implement a credit risk strategy
• The fund must maintain a liquidity management policy
• The fund must adhere to a number of investment restrictions

You can read our full report on the rules here: http://www.ccmalta.com/publications/malta-loan-funds

Dr Charles Cassar

Chetcuti Cauchi Advocates

Malta establishes itself as a hub for E-money issuers

Over the past twelve months we have seen increased interest in e-money operators looking to domicile and operate their businesses in Malta. In response to this growth we have published E-money institutions: licensing and regulation in Malta on our website www.ccmalta.com. This publication provides what we hope will be a useful introduction to the topic, and covers the following:

• The definition of e-money under Maltese law

• The distinction between server based and card based e-money

• Distinctions between payment service providers and e-money issuers

• The activities that EMIs authorised in Malta are permitted to undertake

• Key regulatory requirements

• The licensing process

• Why e-money institutions have started to choose Malta as their domicile in Europe

The payments ecosystem as a whole has also registered encouraging growth. You can read about the growth in the related sector of payment services by clicking on the below link:

• Payment services in Malta

Malta also continues to attract interest from operators in the virtual currency sphere (non-fiat money such as Bitcoin and Linden dollar). Local authorities remain understandably cautious about the sector, but we believe that it is only a matter of time until these new technologies and systems achieve more widespread acceptance and legitimacy. You can read more about the topic here:

• Virtual currencies in Malta

If you are interested in any of these sectors, contact us on info@ccmalta.com

Dr Charles Cassar

Chetcuti Cauchi Advocates