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A one-stop shop solution to launching Malta funds

Circle Partners (Circle) is an independent fund administrator with offices across the EU, the Americas and Hong Kong. Circle has the ability to set up sub-funds on its Luxembourg SICAV and guide start-up managers through the whole process of bringing a new fund to market in all major fund jurisdictions. 

By extension, Circle has a large network of local counterparties based in Malta and as Peter Jakubicka (pictured), Business Development Manager at Circle explains: "We can offer a `one-stop shop' solution from the set-up phase through to launch including brokers, custodians, auditors; basically all of the functions that are required for the proper functioning of a fund in Malta. This makes the whole process of licensing a lot faster."

The first step for any fund promoter is choosing the most suitable legal structure for the fund, which in turn will be determined by the type of investors and the nature of the investment strategy. 

"Then proper preparation of all the fund documents is required for the licensing process in order to get the application through in good order. To do this requires having an in-depth knowledge of the MFSA's requirements, which Circle Partners and our local counterparties have. 

"The third stage is the submission of the application and follow-up communication with the MFSA. The last stage involves us opening the brokerage account for the fund and disseminating the fund's offering documents to all relevant parties," explains Jakubicka. 

Jakubicka confirms that Circle is presently in the process of setting up a Maltese FX fund for a client but cannot reveal details at this stage. He confirms, however, that in the initial stages of discussions with the client, the Circle team explained the full range of structuring possibilities and fund management options on the island. Indeed, one of the benefits of Malta is the choice of fund structuring options. It is home to three different fund regimes – the UCITS regime, the AIFMD regime for Alternative Investment Funds (and now Notified AIFs), and the Professional Investor Fund (PIF) regime. 

"PIFs are divided into three sub categories, based on whether they are promoted to experienced investors, qualifying investors or extraordinary investors. The client chose to promote to qualifying investors, meaning a minimum investment of EUR75,000," says Jakubicka. "In terms of the fund's management, the most suitable and cost effective solution is for the Fund to be self-managed, as opposed to appointing an external AIFM."

Jakubicka says that the time for getting a Malta fund to market takes three to six months, on average, from the date of submission of the application.

"The MFSA will look for multiple recommendation letters. The whole KYC exercise on all directors, promoters and other related parties is a must. Certain functions such as, for example: a money laundering reporting officer, compliance officer and administrator need to be appointed locally in Malta or in a jurisdiction recognised by the MFSA.

"In the early weeks, whilst all the offering and constitutional documents are being prepared we make sure all the due diligence documents are duly collected to make sure the application process with the MFSA goes as smoothly as possible.

"A good service provider will guide you through the licensing process, which can be a complicated exercise," concludes Jakubicka

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