Malta: Guidance note on shariah compliant funds issued
A guidance note for shariah compliant funds has been issued by the Malta Financial Services Authority.
The note explains how the legal and regulatory framework established under the Investment Services Act would apply to shariah-compliant funds established under Maltese law.
The MFSA stated that Malta’s principles-based regulatory regime lays emphasis on the disclosure of all information that the investor needed to know before taking the investment decision and on the transparency of investment management process itself.
This allowed a high degree of freedom on the choice of investment strategies and asset allocation policies adopted by investment funds, subject to conditions that varied according to the level of experience and investment expertise of the target investor.
On this basis, the note establishes that, whether set up as professional investor funds, undertakings for collective investment in transferable securities (Ucits) or non-Ucits retail funds, shariah funds may be regulated in the same manner as non-shariah funds.
The level of disclosure and the applicable conditions would be the same as those that were applicable to the respective category of retail or professional funds.
The guidance note requires that funds presenting themselves as shariah compliant were required to disclose all the relevant details in this respect in the fund prospectus or offering document as well as in their financial statements as part of their ongoing obligations.
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Source: Times of Malta (English)
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