Mindful of the fact that certain businesses are finding it increasingly difficult to gain access to capital through traditional lending sources, on the 10th of November 2020, the Malta Financial Services Authority (‘MFSA’) restructured the Loan Funds Regime by publishing a revised version of the Loan Funds Rules, the aim of which is to achieve a better balance between the need for a comprehensive regulatory framework and making the regime more practical and accessible to the fund industry. The revised Rules are applicable from the 10th November 2020 onwards.

WHAT CHANGED?

The list below highlights the most salient changes which were made to the Loan Fund rules:

COLLECTIVE INVESTMENT SCHEMES ALREADY LICENSED IN TERMS OF THE LOAN FUND RULES

The previous version of the Loan Funds Rules shall remain applicable to current collective investment schemes which have been established in terms of the Loan Funds Rules and have been licensed up to the 10th November 2020. However, licensed funds may choose to amend any of their current applicable requirements in terms of the revised Rules. Before doing so, the said funds must duly notify investors and seek regulatory approval.

While the previous Rules remain applicable, existing licensed loan funds are nonetheless expected to assess how the revised framework might impact the fund. Any potential issues arising as a result of the revised Loan Fund Rules requiring action by the licensed scheme, need to be addressed by no later than 1st November 2021.

If an existing Loan Fund has been granted any derogations by the MFSA in terms of the previous Rules, the licence holder is expected to undertake an assessment of the applicability or otherwise of such derogation.

For further information about how GVZH Advocates can assist you in terms of the MFSA revised Loan Fund Rules, kindly contact us on [email protected].