The Malta Solution ahead of the curve An international domicile for Funds and Fund Managers Malta s leading fund services provider Geneva, 31 st May 2017
Agenda 1. A snapshot 2. Malta s Financial Services Industry 3. Redomiciliation of offshore funds 4. The Swiss in Malta 5. Brexit 6. Malta: the success factors 7. Bank of Valletta Group profile
A Snapshot
A snapshot: economic highlights Malta s EU mission: GDP growth: (Deficit)/Surplus: 2004 joined the EU 2008 joined the uro 2015: + 6.3% over previous year 2016: + 5.0% over previous year 2017: to exceed Eurozone average (Fitch forecast) 2015: (1.6%) of GDP 2016: 1.0% of GDP Unemployment: 4.8% Rating (2016): Moody s: A3 Stable outlook Fitch: A Positive outlook S & P: A - Stable outlook Inflation: 2015: 1.4% 2016: 1.0% approx. Population: 420,000 Economic Sectors: A diversified economy Source: NSO Malta (National Statistics Office) European Commission's Winter 2016 Economic Forecast
Malta s Economic Vision A Diversified Economy A unique interrelated blend of seven industries upon which Malta can focus future business attraction, retention, and entrepreneurial development efforts upon: 1. Tourism 2. Advanced Manufacturing 3. Life Sciences and Health Services 4. ICT related services 5. Transportation and Logistics 6. International Educational Services 7.Financial Services
Malta s Financial Services Industry
Malta: economic vision FINANCIAL SERVICES FINANCIAL SERVICES: 4 CORE SEGMENTS 1. Credit and Financial Institutions 2. Insurance companies 3. Trusts and Foundations 4. Funds and Fund Management operations
Malta: economic vision A diversified economy Milestones in Financial Services and Fund Sector 1988: Offshore domicile 1990: Application to join EU 1994: From offshore to onshore 2000: Professional Investor Fund regime 2002: Continuation of Companies Regulations 2004: Malta joins EU / Introduction of UCITS regime 2008: Malta adopts the Euro 2014: AIFMD transposed in Malta s legislation 2017: Financial Services sector: strong economic enabler (Contribution to GDP increases from 3% to 12% - workforce of 10,000)
Malta s Fund Industry A Comprehensive Regulatory Framework for Investment Funds Legal Forms 1. SICAV open ended investment companies having a variable share capital 2. Contractual Funds 3. InvCo closed ended investment companies having fixed share capital 4. Limited Partnership 5. Unit Trust Funds
Malta s Fund Industry A Comprehensive Regulatory Framework for Investment Funds FUND TYPOLOGIES 1. Professional Investor Funds (PIFs) 2. UCITS Funds 3. Alternative Investment Funds (AIFs) 4. Notified Alternative Investment Funds (NAIFs) 5. Loan Funds 6. EU initiative fund set ups: EU Veca Funds ELTIFs 7. Incorporated Cell Companies (RICCs) (Hosting platform for all fund typologies listed above)
Funds, Fund Management and Fund Servicing Over 652 investment funds NAVs of Malta based funds: 12 billion approx. Aggregate AUM of funds managed by Malta based asset management companies: 109 billion approx. 27 Fund Administrators 8 Depositaries / Custodians 157 Asset Managers Source: Malta Financial Services Authority
MALTA: RECENT DEVELOPMENTS IN THE FUNDS SECTOR Growth in funds investing in real assets; Passporting of UCITS and AIFs into various EU domiciles; Cross-border mergers of UCITS funds (merging into Malta based UCITS funds); Conversions of PIF structures to AIFs; Listing of UCITS funds on the Milan Stock Exchange; Growing presence on the island of Fund Administrators and Fund Managers; Rent-a-cell business models on fund platforms; Man Co platforms (for fronting of AIFMD and UCITS business) Brexit related; Redomiciliation of investment funds from offshore domiciles to Malta (plus asset swap solutions; master-feeder structures).
Redomiciliation Of Offshore Funds To Malta
Redomiciliation of Investment Funds Legislation - Companies Act, Continuation of Companies Regulations 2002 Regulation allows for inward and outward continuation of Companies Tried and tested legislation with redomiciliation of companies from over 18 countries Redomiciliations have been effected for holding company structures, property entities and others dealing financial securities (including Collective Investment Schemes) Typical domiciles wherefrom investment funds redomiciled to Malta: BVI, Bahamas, Channel Islands, Cayman, Liechtenstein Redomiciled funds to Malta granted licences from MFSA as Professional Investor Funds, AIFs or UCITS funds
Redomiciliation of Investment Funds REDOMICILIATION OF OFFSHORE FUNDS IN 10 EASY STEPS 1. Application for Fund licence to be filed with the MFSA; 2. Draft constitution and offering documentation and other application documents; 3. Full due diligence on the existing and new set up, including with offshore regulator; 4. Notification of intent to the Registry of Companies in Malta; 5. MFSA vets documentation and reverts with comments to promoters; 6. Proposed redomiciled structure needs to be in line with requirements of the Investment Services Rules for PIFs, AIFs or UCITS directive as the case may be; 7. MFSA issues In Principle Approval following satisfactory conclusion of due diligence; 8. IPA details pre-licensing conditions that promoters are to address; 9. Liaison MFSA / ROC with respect to resolution of all issues and conditions; 10. Fund licensed and redomiciled to Malta on the same date.
The Swiss in Malta
The Swiss presence in Malta The Experience of BOV Fund Services: 1. Swiss operators: first movers following the introduction of the PIF regime; 2. Approximately 20% of the funds administered by BOV Fund Services having Swiss connection; 3. Three typologies of fund promoters: FINMA regulated entities, members of SROs, Self Managed funds; 4. Lugano / Zurich / Geneva: easy access to the EU market; 5. SROs: due diligence and competency assessment considerations; 6. Swiss banks in Malta: Reyl Bank; Banca Zarattini; Swiss Quote.
Brexit Malta s positioning
The Brexit effect Hard, Soft or.the Goldilocks way? Pre- triggering of Article 50 characterised by increased enquiries from London-based operators; Prevailingly wait-and-see attitude; Evidently Malta well positioned as a gateway to UK operators for EU market; Main impact, interest, feedback so far: - redomiciliation of funds from offshore domiciles - setting up of Master-Feeder structures - engagement of 3 rd party Man Co platform (soft approach) - setting up of a Man Co platform in Malta (hard approach) - setting up of a Man Co platform in Malta, hosted by local AIFM or UCITS Manager (the not too soft, and not too hard option )
Malta: The Success Factors
The Success Factors Single Regulator: pro-business approach Cost competitiveness Time to market considerations Robust yet flexible regulatory framework catering for all investor types and investment strategies Alliance between authorities and industry players Highly skilled workforce Cosmopolitan lifestyle
Bank of Valletta Group: Business Profile
Bank of Valletta plc Highlight statistics Total Assets (30/09/2016): 10.7 billion Pretax profits: 146 million Return on Equity: 20.9% Market capitalization: 881 million Shares in issue: 390 million Tier 1 Ratio: 12.8% Fitch Rating: BBB+ Market share: 45% AWARDS Global Finance Best Bank in Malta MCA ebusiness Award: Best Multi Channel Strategy Best Trade Finance Bank in Malta
BOV Fund Services a member of the BOV Group Highlight statistics Assets Under Administration: 3.5 billion No of Funds under Administration: 125 funds Shareholder registry: 68.000 shareholder accounts NAVs issued: In excess of 8,500 per annum Market Share: In excess of 30%
Fund Administration Services Valletta Fund Services - Service Proposition Suite of Fund Services Fund Accounting and Valuation Shareholder Registry Preparation of Financial Statements Company Secretarial Regulatory Reporting: FATCA CRS Annex IV reporting Administrative Services to AIFMs and UCITS managers MLRO and AML reporting services Fact sheet production Preparation of the KIID Compliance reporting On-going obligations in relation to listing on the MSE Administration services to Malta-based as well as offshore funds
Concluding Remarks Malta s Value Proposition 1. a comprehensive legal and regulatory framework for UCITS and alternative funds 2. presence of a meticulous yet accessible regulator 3. cost competitive jurisdiction 4. efficient licensing process 5. strong operational infrastructure Bank of Valletta Group Your Fund Servicing Partner in Malta
Thank You Further Information Corporate Website: www.bovfundservices.com Joseph Camilleri Executive Head Business Development & Corporate Services Email: joseph.camilleri@bov.com Direct line: +356 2275 2275 Mobile: +356 7908 4242
BOV Fund Services Limited TG Complex Suite 2, Level 3 Triq il-birrerija L-Imriehel BKR 3000 Malta Website : www.bovfundservices.com Valletta Fund Services Limited is recognised to provide fund administration services and licensed to provide Company services by the Malta Financial Services Authority The contents of this document are intended to provide general information only and cannot substitute legal, tax or any other relevant advice.