Malta, together with Luxembourg, is one of the first two jurisdictions in Europe to adopt the new framework and the move is likely to expand its share of the alternative investment funds (AIF) market, marking yet another step in the country’s move to becoming a leading financial centre, Jeremy Leach says.
Under the NAIF framework, product providers are directly regulated rather than their products, so new funds can be launched without the need for pre-authorisation by the regulator. The Malta Financial Services Authority (MFSA) will maintain an updated list of NAIFs in good standing on its website while the AIF manager assumes full responsibility for the NAIF.
Speaking ahead of the annual Finance Malta Conference on 25/26 May, Jeremy Leach commented: “Asset managers often complain that regulation is strangling them. European regulators are notoriously slow in getting authorization and it is the biggest frustration most financial groups have. Time to market is critical when you have competition and the delay with getting authorization through various authorities is commercially compromising.
“This move by Malta is a game changer. It sends out the message that the MFSA is amenable to speeding up the time taken to launch products and it will enhance its share of the European fund market. This new framework is easier, quicker and cheaper without any compromise to the regulatory framework.”
Jeremy Leach says Malta has a number of advantages that are supporting its emergence as one of the world’s most important financial jurisdictions. These include its membership of the European Union and the Commonwealth, its tax framework, both domestically and internationally with 65 tax treaties with other countries and the legislation it has put in place around securitsations means it is the only EU jurisdiction outside of Luxembourg that has the legislation in place to offer these flexible tools.
While some other EU financial centres might attempt to get into the securitisations market, it is far easier for smaller jurisdictions to establish the necessary laws and there are very few principalities that have the same passporting rights as Malta and Luxembourg, Jeremy Leach says.
Managing Partners Group intends to offer securitisations and alternative fund management services to the pan-European market and Malta’s Securitisation Act has been a key factor in its decision to locate there, as well as its other attributes.