Seeking an Asset Management License

Fund management companies post AIFMD

01 Sep 2012 Seeking an Asset Management License

In order to get a regulatory license, an asset management company must guarantee a fit and proper organisation. Most recognised jurisdictions have set similar standards, including (i) a level of independence between shareholders and board members; (ii) a level of ‘chinese wall’ between operations, risk management and compliance; (iii) dual control and four eyes principles; (iv) good monitoring of conflict of interests. The Malta Financial Service Authority (‘MFSA’) controls the issuing of licenses and supervising asset managers and advisors operating in or from Malta.

While the 1994 Investment Service Act sets core legal conditions required to get a license, the MFSA has also implemented specific requirements which are not necessarily available in writing, summarised below:
Shareholders: An asset management company cannot be established as a single member company and thus must have at least two founding shareholders at all times.
Directors: The MFSA stresses the principle of ‘Dual Control’ and the ‘Four Eyes Principle’, thus requiring a minimum of two directors. In order to establish and maintain jurisdiction in Malta, at least one of the directors must be a Maltese resident.

 

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