divider

STRUCTURAL OPTIONS

separator

A SICAV (as well as other legal fund structures, such as the LP and the contractual fund) may be set up as:

  • a single-class (single fund) structure; or
  • amulti-class (single fund) structure, where in terms of its constitutive document, its share capital (or capital) is, or is capable of being, divided into different classes of shares (or units) not constituting any distinct sub-fund); or
  • a multi-fund (umbrella) structure, where in terms of its constitutive document, its share capital (or capital) is, or is capable of being divided into different classes of shares (or units) where one class or a group of classes of shares (or units) constitute a distinct sub-fund of the company; provided that the initial share capital may or may not be organized in one or more sub-funds.

A multi-fund structure may in its constitutive document elect to have the assets and liabilities of each sub-fund comprised in that structure treated for all intents and purposes of law as aseparate patrimony distinct and statutorily ring-fenced from the assets and liabilities of each other sub-fund of such structure. Each of the sub-funds would not have separate legal personality (and there is only one legal entity at the top, i.e. the SICAV or other relevant structure) but would nonetheless enjoy statutory ring-fencing as if it were a separate legal person, a status which is respected even at the point of dissolution and winding up of the sub-fund (or of the SICAV or other relevant structure in general).

To further enhance certainty of ring-fencing, Maltese law now provides also for the creation of incorporated cell structures as follows:

  • a SICAV may be formed or constituted as an incorporated cell company (“ICC”) in terms of the Companies Act (SICAV Incorporated Cell Company) Regulations (Legal Notice 559 of 2010), which may establish one or more incorporated cells (which would also be CISs) in the form of a limited liability company with separate legal personality (the incorporated cell may be a SICAV or INVCO);
  • an incorporated cell of a recognised incorporated cell company (“RICC”) in terms of the Companies Act (recognised Incorporated Cell Companies) Regulations (Legal Notice 119 of 2012), which cell may take the form of a SICAV or INVCO.

Apart from endowing each cell with separate legal personality (thus creating more certainty of ring-fencing being recognised by courts in and outside Malta), the incorporated cell structure also allows for a smooth transformation of a cell into a self-standing fund, with the possibility of keeping its corporate existence and track record, and the incorporated cell structure is therefore ideal for structuring incubatory cells where the different funds would plug into it only for the start-up period until they reach volumes of assets which enable them to detach themselves from the platform and grow by themselves.

Maltese law and MFSA regulation are also open to other structural flexibility needs, including the possibility to create:

  • open or closed ended funds, or hybrid funds (e.g. open ended funds with gates or lock-in periods);
  • side pockets;
  • Shariah-compliant (Islamic) funds.