Malta’s appeal as a fund jurisdiction is intrincially based on its geographical, political and legal attributes. The island’s colonial history resulted in an ad hoc corporate legal framework that compounds civil and common law practices, enabling the structuring of various investment products that satisfy the needs of fund promoters and fund investors alike. This is further aided by Malta’s geographical location in the centre of the Mediterranean Sea, well positioning it for cross border services and as an attractive global distribution hub with a close connection to the European, African and Middle Eastern distribution markets.
Malta’s fund market still remains attractive to a wide number of fund promoters from various jurisdictions, and plays a strategic role in opening markets for international fund distribution by providing different fund distribution products geared to the asset manager’s strategy. Malta’s strong regulatory framework under the supervision of the Malta Financial Services Authority (MFSA) has established a culture of strong investor protection whilst providing a range of regulated products that permit the effective implementation of the asset manager’s strategy and therefore aiding in maximising the cost-benefit return for investors.
Malta historically penetrated the fund market with the creation of a regulated professional investor fund (PIF) product and later, with the implementation of European fund regulation including the EU’s AIFMD, with the option of setting up an alternative investment fund product either as licensed (AIF) or notified (NAIF) entity. Malta was also a pioneer in regulating virtual assets with the establishment of a Virtual Financial Assets (VFA) regime (incl. a fund regime for investments in crypto assets) and is now implementing the EU’s Markets in Crypto-Assets (MiCA) with the experience gained from the application of its (VFA) regime framework.
Targeting alternatives
Besides Malta’s attractive offering for collective investment vehicles with traditional strategies, there are highly favourable new segments of growth for alternative investments in particular hedge funds, private equity, crypto, real estate and other specialist funds.
Indeed, alternative investment strategies are showing a strong growth trend across the asset management industry. 2022 was characterised by seesawing markets amid war in eastern Europe, rising inflation and interest rate hikes, and crypto scandals. Uncertainty is still looming in the first quarter of 2023 due to macroeconomic and geopolitical concerns and multiple bank collapses. This uncertainty seems to favour the trend towards alternative strategies with an aim to diversify the portfolio of investments held in order to dilute the risk posed by specific investment sectors.
Malta is also on board with the emerging trend of environmental and social governance (ESG), particularly with the growing interest in funds compliant with ESG objectives. Malta is well positioned to be a jurisdiction of choice for ESG funds.
Malta therefore offers a favourable environment and continues to play an important role in fund establishment, management, administration, custody and distribution of alternative investment funds. The offering includes a range of flexible regulatory, corporate and tax structures offered by seasoned and experienced fund professionals.
Malta’s role as an international financial centre goes back a couple of decades. Nonetheless its future as a services hub for fund managers looks more appealing than ever, particularly for start-up and emerging fund managers that seek a jurisdiction that not only follows a rigorous regulatory regime but can provide the individual attention and dedicated service offering that other more exclusive jurisdictions might lack.
Choosing a preferred partner
Partnering with an experienced international player in the investments sector ensures that the asset manager establishes, manages and distributes funds with the necessary safeguards and security.
Swissquote is a SIX exchange listed Swiss banking group headquartered in Gland, with offices in Malta, Luxembourg, Cyprus, UK, Dubai, Singapore and Hong Kong. Swissquote Malta offers securities brokerage services to institutional clients (incl. funds and asset managers) and fund depositary services to alternative investment funds in Malta and across the world. It provides global solutions for managers dealing in traditional securities (including UCITS) but also private equity, real estate, venture capital, private debt, fund of funds, crypto and other alternative investment strategies.
Swissquote offers its institutional clients a tailored service model with the integration of its proprietary financial technology tools into the operational business processes, thereby providing its clients with greater efficiency and flexibility. Swissquote also offers its clients excellent service quality provided by its experienced staff together with a strong corporate culture throughout the different offices. Swissquote aims to be the asset managers’ preferred global partner with a local perspective.
