FinanceMalta was set up in 2007 to holistically promote the various sectors of Malta's financial industry. FinanceMalta not only focuses on the fund management industry but also covers the insurance sector, trust and foundations sector and wealth management and as Kenneth Farrugia (pictured), Chairman of FinanceMalta confirms: "We are also exploring ways for FinanceMalta to support Islamic Finance and Capital Markets in Malta through various initiatives."
Malta has come a long way as a fund jurisdiction since it joined the EU in 2004. FinanceMalta has played an important role in this regard, and whilst more can always be done from a promotional standpoint, the organisation is not resting on its laurels.
"We will be hosting a funds conference in London on 5th November 2015, which will look at fund structuring opportunities in Malta, the new rules governing loan funds, as well as servicing operations such as Custody and Asset Management. The event will be held at the Corinthia Hotel in London," notes Farrugia.
Through June 2015, Malta had 146 licenced entities holding Category 1A (advisory), Category 3A and Category 4A licences. In terms of growth trends, one interesting observation is that the number of retirement schemes being established in Malta is on the rise. There are 35 such retirement schemes currently, compared to 11 in 2013. In addition, Malta is home to some 14 retirement scheme administrators, illustrating that the international pensions space is gaining traction.
With respect to the fund management operational infrastructure, Malta is today is home to 27 fund administrators and is well represented by the main international accounting firms as well as multiple first-class law firms.
"In terms of the number of funds, we've predominantly seen traction in PIFs," states Farrugia. "We've had 35 new PIFs licenced through June 2015. In addition, we've seen four AIFs licenced this year and, interestingly, eight UCITS schemes licenced in the first six months compared to 11 in total for 2014. So we're seeing good growth across a range of fund categories."
This is no doubt helped by the flexibility of Malta's fund structuring framework: fund promoters have the choice of complying with the PIF rulebook, the AIF rulebook under AIFMD, or the UCITS rulebook. Farrugia says that retaining the PIF regime, following the introduction of AIFMD two years ago, "was an important policy decision taken by the MFSA as some promoters want to remain de minimis and out of scope of the Directive.
"That said, we are seeing fund managers with AUM below EUR100 million still opting to be regulated under the AIFMD. Being regulated under the Directive infers a degree of quality and good governance within the fund structure, which institutional investors will likely favour."
Farrugia says he felt it was important for Malta to keep all options on the table for managers: "Why shut down the ability for small managers to remain out of the Directive? With the PIF regime, we are able to support fund managers who don't necessarily want to be fully registered under AIFMD from day one."
"Managers need clarity, and this depends on having access to the regulator to get unequivocal information on what is required when setting up a fund operation. Malta stands out highly in this regard with the accessibility of the MFSA being one of the pivotal and critical success factors to Malta's success, so far," concludes Farrugia.