What is a Collective Investment Scheme and what forms can it take?
The term “Collective Investment Scheme” (CIS) is defined in the Investment Services Act (Chapter 370) as “any scheme or arrangement which has as its object or as one of its objects the collective investment of capital acquired by means of an offer of units for subscription, sale or exchange and which has the following characteristics:
the scheme or arrangement operates according to the principle of risk spreading; and either
the contributions of the participants and the profits or income out of which payments are to be made to them are pooled; or
at the request of the holders, units are or are to be re-purchased or redeemed out of the assets of the scheme or arrangement, continuously or in blocks at short intervals; or
units are, or have been, or will be issued continuously or in blocks at short intervals”.
Benefits of Collective Investment Schemes
Diversification of risk through pooling of funds
Economies of scale, allowing individual investors to make investments which they otherwise would not be able to do
Malta offers a flexible and versatile legal framework led by a rigorous yet practical regulator
UCITS and AIFs can be passported to other EU Member States
Tax benefits through a CIS-specific Maltese tax regime
Maltese Fund Structures
A fund can be setup as either of the following forms:
an investment company with variable share capital (SICAV)
an investment company with fixed share capital (INVCO)
a limited partnership or partnership en commandite
a unit trust
a common contractual fund
Malta offers a practical and competitive framework regulating various types of CIS, primarily:
Maltese UCITS Scheme
Maltese Non-UCITS Scheme
Overseas based Non-UCITS Schemes; and
European UCITS Schemes
Professional Investor Funds (PIFs)
Alternative Investment Funds (AIFs)
Notified Alternative Investment Funds (NAIFs)
The MFSA is the authority responsible for issuing licences under the Investment Services Act.
When considering a fund licence application, the MFSA will consider:
The protection of investors and Malta’s reputation
The track record of all the parties involved (including directors, founder shareholders and promoters of the scheme); and
The ongoing adherence to the fit and proper test (integrity, competence and solvency).