Introduction to Notified Professional Investor Funds (NPIFs): 

Collective Investment Schemes are regulated by the Investment Services act (Chapter 370 of the Laws of Malta), regulations made under the said Act and Malta Financial Services Authority ('MFSA') Investment Services Rules. A Professional Investor Fund ('PIF') however is a special class of a non-retail collective investment scheme but Notified Professional Investor Funds ('NPIFs') is a sub-category of PIFs which are exempt from licensing under the Act, subject to inclusion in the List of NPIFs maintained by the MFSA in terms of S.L. 370.34 - The Investment Service Act (Notified CISs) Regulations.

Key Features of NPIFs:

Exemption from Licensing

NPIFs are exempt from the full licensing process under the Investment Services Act, provided they meet certain proportional and risk-based criteria. Insted, they undergo a high-level notification procedure. 

Exclusive Investor Eligibility

NPIFs are exclusively restricted to eligible investors, including qualifying investors and professional investors. 

Flexible Fund Structures

NPIFs are exclusively restricted to elible investors, including qualifying investors and professional investors. 

Marketing Restrictions

NPIFs may only be marketed to qualifying investors and professional investors, ensuring alignment with the intended investor base. 

Understanding NPIFs: 

In recognition of the specific features of NPIFs, the MFSA expressly caters for a high-level notification procedure applicable to NPIFs rather than the full licensing process that would otherwise apply to CISs. The notification procedure may be availed of if a set of proportional and risk-based criteria is satisfied. NPIFs are still required to be serviced by designated regulated service providers, adhere to specified asset thresholds, and more importantly, they would need to be exclusively restricted to eligible investors only.


In summary, a PIF may be eligible for MFSA notification if the following conditions are satisfied:

  1. It is promoted to Qualifying Investors and / or Professional investors only,
  2. It is managed by a Fund Manager,
  3. At least one of the members of its governing body is resident in Malta,
  4. At least one of the members of its governing body is independent from the Manger, Custodian (where appointed), Fund Administrator, Due Diligence Service Provider, and Founder shareholders of the NPIF,
  5. It appoints a Due Diligence Service Provider,
  6. It appoints a fund administrator in terms,
  7. Adequate safekeeping arrangements are in place.

Establishment of a NPIF:

Under the Notified PIF Framework, a NPIF may be established as: 

  1. An investment company with variable share capital (SICAV),
  2. An investment company with fixed share capital (INVCO),
  3. An incorporated cell company,
  4. An incorporated cell of a Recognised Incorporated Cell Company,
  5. A limited partnership under the Companies Act,
  6. A unit trust under the Trust and Trustees Act; or
  7. A contractual fund under the Investment Services Act (Contractual Funds) Regulations. 

Marketing of a NPIF

NPIFS may only be marketed to: 

1.  Qualifying Investors, being investors that fulfil the following criteria:

  • Invest a minimum of €100,000 or its currency equivalent in the NPIF, which investment may not be reduced below this minimum amount at any time by way of a partial redemption.
  • Declare in writing to the fund manager and the NPIF that they are aware of an accept the risks associated with the proposed investment, and
  • Satisfy at least one of the following:
    • A body corporate which has net assets in excess of €750,000 or which is part of a group which has net assets in excess of €750,000 or, in each case, the currency equivalent thereof;
    • An unincorporated body of persons or association which has net assets in excess of €750,000 or the currency equivalent;
    • A trust where the net value of the trust's assets is in excess of €750,000 or the currency equivalent;
    • An individual whose net worth or joint net worth with that of the person's spouse, exceeds €750,000 or the currency equivalent; or
    • A senior employee or director of a service provider to the NPIF.

2.  Professional Investors, being investors who are considered to be a Professional Client or may, on request, be treated as a Professional Client within the meaning of Annex II to the Markets in Financial Instruments Directive ('MiFID II'). 

Notification Process of the PIF

The PIF or its representative may make a written request for notification to the MFSA, the inclusion of a PIF, or one or more sub-funds of a PIF, in the List of Notified PIFs. Before submitting a written notification request, the PIF's governing body must endorse a resolution certifying that the Offering Memorandum of the NPIF meets the minimum criteria set by the MFSA. A copy of the Offering Memorandum must be maintained at the address of the Notified PIF, as specified in the Offering Memorandum, and should be accessible to the MFSA upon request. 

Management of a NPIF

A notified PIF shall be managed by:

  1. A de minimis Alternative Investment Fund Manager ('AIFM') in possession of an Investment Services License issued in Malta;
  2. A de minimis AIFM which is duly authorised in an EU or EEA State;
  3. A third country AIFM which is authorised in a jurisdiction with whom the MFSA has signed a bilateral cooperation agreement or memorandum of understanding on securities, and which the Authority deems to be subject to regulation in an equal or comparable level to that which it would have been subject to in Malta. Where however there is no such bilateral cooperation agreement or memorandum of understanding on securities in place, the MFSA may accept other forms of agreements / memoranda of understanding which it deems acceptable.

Due Diligence Service Provider

Another integral aspect of the NPIF framework involves assigning the responsibility for due diligence on the NPIF to an 'approved' third-party service provider who has undergone the 'fit and proper' test. This due diligence occurs both during the notification stage and as an ongoing process. The designated third-party service provider can be either (i) a recognised fund administrator or (ii) an entity licensed under the Company Service Providers Act (Chapter 529 of the Laws of Malta) to function as a Corporate Company Service Provider. 

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Partner | Head of tax, regulatory and compliance | International Liaison Director
Wayne Pisani
Wayne Pisani
Partner | Head of tax, regulatory and compliance | International Liaison Director
Wayne Pisani