Maltese Funds - EuVECA/EuSEF alignment
On the 30th of May 2025, the Malta Financial Services Authority (“MFSA”) issued a circular announcing several key amendments to its Investment Services Rulebooks and associated documents to align with the regulatory requirements of the European Venture Capital Funds (“EuVECA”) and European Social Entrepreneurship Funds (“EuSEF”) frameworks.
The EuVECA are investment funds which provide financing to start-ups and early-stage companies and this for the benefit of promoting growth and innovation within the European Union. The EuSEF on the other hand are investment funds which provide financing to businesses whose primary goal is to achieve a social impact, whilst also making a financial return. The attraction of this fund is that it combines financial return with businesses’ social mission.
These amendments shall apply to multiple fund structures and aim to clarify the eligibility of such structures to operate under the EuVECA and/or EuSEF designations and to disapply certain national requirements for better alignment with EU Regulations.
The key amendments affect the following:
- Alternative Investment Funds (“AIF”);
- Professional Investor Funds (“PIF”);
- Notified AIFs (“NAIF”);
- Notified PIFs (“NPIF”);
- NPIF Supplementary Rules;
- NPIF Notification Form and Guidance Note on the NPIF Framework
These amendments primarily have the following two objectives:
- Eligibility Clarification - The rulebooks have been updated to explicitly allow the above-mentioned fund structures to be established and marketed as EuVECA or EuSEF funds under EU Regulations; and
- Disapplication of Certain Requirements: The amendments also reflect recent changes to the Financial Institutions Act (FIA), which now exclude: (i) Notified AIFs or PIFs set up as EuVECA/EuSEF from requiring a licence under the FIA; and (ii) NAIFs involved in loan acquisition or receivables financing.
Fund-Specific Amendments:
- Part A AIFs & PIFs: It is now clarified that the Loan Fund Rules do not apply when the AIF or PIF is designated as a EuVECA or EuSEF.
- Part A NAIFs: Now authorise NAIFs to be set up under the EuVECA/EuSEF regimes and now allow such funds to engage in loan origination, which is typically restricted.
- Part A NPIFs: Amendments now disapply restrictions on lending activities and cross-border marketing under the European passport for NPIFs operating as EuVECA/EuSEF.
- NPIF Supplementary Rules: Confirm that self-managed NPIFs must observe the Assets Under Management (“AUM”) thresholds set by Alternative Investment Fund Management Directive (“AIFMD”). Amendments also introduce a new section allowing NPIFs to align with EuVECA/EuSEF requirements, particularly in terms of portfolio composition and eligible instruments.
- NPIF Notification Form & Guidance Note to the Framework: Updated to reflect the ability to designate NPIFs as EuVECA/EuSEF funds and to provide clearer guidance on the interaction between the frameworks. These changes represent a significant step in supporting Malta’s alignment with EU-level venture capital and social entrepreneurship investment frameworks. They provide fund managers with increased flexibility to structure funds under the EuVECA or EuSEF designations while benefiting from reduced local licensing obligations.
For more information or assistance, please contact us at info@gtg.com.mt
Author: Dr Neil Gauci
Further Reading on Capital Markets and EU Regulatory Alignment
The recent MFSA updates represent a broader trend of harmonising Maltese financial services with EU-level frameworks. As Malta continues to strengthen its capital markets infrastructure, it is crucial for fund managers, legal advisors, and investors to stay informed on evolving regulations and strategic opportunities.
For deeper insights, explore the following articles:
These pieces offer practical commentary and legal analysis on key developments shaping Malta’s position as a growing financial services hub within the EU.
For any additional information or assistance, please contact our team at info@gtg.com.mt