MFSA publishes Revised Loan Funds Rules Framework

MFSA

The Malta Financial Services Authority has published an updated version of the Standard Licence conditions applicable to Collective Investment Schemes authorised to invest through loans on Tuesday.

The MFSA explained that the revision was carried out for it to achieve a better balance between the need for a sound regulatory framework and to make such regime more pragmatic and accessible to the fund industry. This was done taking into consideration market developments and the current economic scenario which has been severely impacted by the outbreak of coronavirus leading to certain businesses finding it increasingly difficult to gain access to capital through traditional lending sources.

In a statement, the MFSA explained that it took note of the relevant EU regulatory developments and, notably, the focus being placed on the area of non-bank financing by the European Commission, within the wider context of the Capital Markets Union. It also took into consideration the feedback by the industry on the framework.

MFSA’s Chief Officer Supervision and Chief Executive Officer Ad Interim Dr Christopher P. Buttigieg commented that “This marks the attainment of one of the first key milestones forming part of the overarching MFSA Asset Management strategy related initiatives. This strategy is aimed at strengthening Malta’s position as an asset management jurisdiction, also demonstrating the Authority’s commitment to contributing towards the sustained development of this sector”.

Clare Farrugia, Head of Strategy, Policy, and Innovation, noted that, “In effecting these amendments, the Authority has carefully re-evaluated its regulatory approach to this market, whilst acknowledging the critical role also played by existing regulation, like the one regulating the alternative investment management sector. The Authority believes that the updated framework should provide the industry with a more pragmatic, but nonetheless, robust regime”.