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ARTICLE · 12 MAY 2015

Redefining Collective Investment Schemes

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The Investment Services Act (CAP. 370 of the laws of Malta) defines collective investment schemes as arrangements which, inter alia, "operate according to the principle of risk spreading".

MaltaFinance and Banking
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The  Investment Services Act (CAP. 370 of the laws of Malta) defines  collective investment schemes as arrangements which, inter alia, "operate according to the principle of risk spreading". By virtue of this definition, the requirement of risk spreading had been imposed on all licensed collective investment schemes alike and this irrespective of the type of  collective investment schemes licence.

However, following a consultation process by the MFSA on the proposed implementation of the  Alternative Investment Fund Managers Directive, collective investment schemes licenced as Professional Investor Funds (PIFs) and Alternative Investment Funds ("AIFs") targeting Qualifying and Extraordinary Investors became exempt from risk spreading requirement. Furthermore AIFs which target professional investors are also exempt from the said risk spreading requirement. Nonetheless, risk spreading continues to be mandatory for  UCITS, Non-UCITS Retail Schemes and, due to their

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