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) |
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| 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 |