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Collective Investment Schemes

Hedge Funds – Professional Investor Schemes

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  • Passporting throughout EU
  • Low Regulatory, Entry and Management Costs
  • Flexible Management Requirements

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The table below sets out the key features of Collective Investment Funds – commonly known as Hedge Funds

Comparison of Professional Investor Funds (Hedge Funds)

Type of PIF Experienced Investor Fund Qualifying Investor Fund Extraordinary Investor
Minimum Investment €10,000 / $10,000 €75,000 / $75,000 €750,000 / $750,000
Investment Limits Yes No No
Eligibility for Investors Satisfy definition ofexperienced investor Satisfy definition ofqualifying investor Satisfy definition ofextraordinary investor
Investment Restrictions Certain rules apply to property funds None- except as specified inoffering documentation None- except as specified inoffering documentation
Borrowing Limits 100% NAV for borrowings used for investment purposes & leverage via derivatives. Assessed on VaR (value at risk) or Commitment Approach.Unrestricted borrowing on temporary basis for liquidity purposes. None- except as specified inoffering documentation None- except as specified inoffering documentation
Time for MFSA Response 7 business days 7 business days 7 business days
Offering Memorandum Minimum Requirements Minimum Requirements Optional
Financial Statements / Reporting AnnualTo be submitted withCustodian’s report AnnualNo Custodian’s reportrequired AnnualNo Custodian’s reportrequired
Compliance Report Semi—Annual Semi—Annual Semi—Annual
Statistical Returns Quarterly Quarterly Quarterly
Investment Manager Optional- depend on competence- self managed PIFs allowed- can act as administrator Optional- depend on competence- self managed PIFs allowed- can act as administrator Optional- depend on competence- self managed PIFs allowed- can act as administrator
Investment Advisor Optional Optional Optional
Administrator Optional Optional Optional
Compliance Officer RequiredCan also act as MLRO RequiredCan also act as MLRO RequiredCan also act as MLRO
MLRO (Money Laundering Officer) Required if PIF marketing own units Required if PIF marketing own units Required if PIF marketing own units
Custodian /Depository Required- assumes monitoring role- need not be in Malta- must be independent from fund manager Optional- to implement safe custody arrangements- must be independent from fund manager Optional- to implement safe custody arrangements- must be independent from fundmanager
Local Representative Yes if all officials & service providers outside of Malta Yes if all officials & service providers outside of Malta Yes if all officials & service providers outside of Malta
Independent Director from Manager or Custodian Required Required Required
Self Managed Funds Allowed Allowed Allowed
Auditor Required Required Required
Listing Optional Optional Optional
Declaration Investor to declare qualifies as Experienced Investor Investor to declare qualifies as Qualifying Investor Investor to declare qualifies as Extraordinary Investor
Taxation – Fund No Malta Tax No Malta Tax No Malta Tax
Taxation – Investors No Capital Gainsfor Non ResidentsNo Withholding Taxon Distributions No Capital Gainsfor Non ResidentsNo Withholding Taxon Distributions No Capital Gainsfor Non ResidentsNo Withholding Taxon Distributions
Promoter Requirement Not Required Not Required Not Required
Pledge of Units Allowed Allowed Allowed
Side Pockets Allowed Allowed Allowed