Malta’s fund industry has long been known for its adaptability, innovation, and investor focused frameworks. A key development that is set to further enhance this reputation is the anticipated self managed version of the Notified Professional Investor Fund (NPIF).
This forthcoming structure is a game-changer for promoters, fund managers, family offices and other set ups looking for an efficient, streamlined, and cost effective solution for funds below EUR100Million threshold. It provides a simpler route to market while maintaining robust investor protection and adhering to regulatory requirements.
?Why the Self-Managed NPIF?
The NPIF framework already offers speed to market and operational flexibility. The self managed variant will elevate this by:
- Eliminating the need for a fund manager appointment: Allowing set ups to leverage their internal expertise while retaining full control over investment strategies.
- Cost efficiency: Reducing ongoing operational costs associated with appointing an external fund manager.
- Agility: Streamlining the governance structure, making it easier to respond to market opportunities quickly.
?How to Go About Setting Up a Self Managed NPIF
Establishing a NPIF is a straightforward process. Here’s an outline of the steps involved:
- Define Your Investment Strategy Clearly outline the objectives, target investments, and risk profile of the fund.
- Prepare the Governance Framework Appoint a Board of Directors: The board must include at least one local director, who will also be responsible for compliance matters to ensure the fund meets Maltese regulatory requirements. Establish an Investment Committee: This committee will oversee investment decisions and risk management. At least one member of the Investment Committee is expected to be required to be based in Malta, further strengthening the fund’s local governance.
- Choose Service Providers These include: Fund Administrator: Engage a trusted administrator, to handle operational and reporting requirements. Legal Advisor: If required, appoint a legal advisor to assist with drafting documentation and ongoing guidance in relation to local regulations. Due Diligence Service Provider: This can either be a recognised fund administrator or a CSP of your choice. Conduct an initial due diligence exercise to assess the proposed fund setup, including the individuals involved, the fund’s objectives, and compliance with applicable set up expectations. The chosen service provider will also arrange for ongoing due diligence and an annual confirmation to be submitted to the regulator. Auditor: Appoint an auditor to oversee financial reporting requirements.
- Draft Key Documentation Develop the Offering Memorandum and Supplement detailing the fund’s structure and operations. Compile the Constitutional Documents, including the fund’s Memorandum and Articles of Association.
- Complete Due Diligence and Compliance Ensure all necessary due diligence is conducted as per MFSA’s requirements
- Submit the Notification to the MFSA Compile the notification pack, including governance, compliance, and operational details. Submit the notification to the MFSA for approval.
- Launch Your Fund Once notified by the MFSA, you can begin operations and onboard investors.
At Fexserv Fund Services, we are ready to guide fund promoters and clients through every step of the Self managed NPIF setup process once this will become available. We will ensure that
- Your governance structures, including the appointment of local directors and Investment Committee members, meet all regulatory requirements.
- Compliance and operational frameworks are robust and aligned with the expectations of the MFSA.
- Your service providers work seamlessly to support your fund’s success.
This is an important milestone for Malta’s funds industry, and we are eager to see how this framework will empower promoters to maximise their strategies. If you’re exploring this opportunity or need advice on how to prepare, our team is here to help. For more information or to discuss how the self managed NPIF can help to meet your objectives, reach out to us on [email protected]
