UCITS schemes are schemes that are harmonized under the UCITS Directive of the European Union. These are schemes that predominantly invest in transferable securities such as:
(a) shares in companies and other securities equivalent to shares in companies;
(b) bonds and other forms of debt securities; or
(c) any other negotiable securities which carry the right to acquire any such transferable securities by subscription or exchange.
A UCITS qualifies as such if the fund has:
(a) as sole object the collective investment in transferable securities and/or in other liquid financial assets, of capital raised from the public and which operate on the principle of risk-spreading; and
(b) units which, at the request of holders, may be repurchased or redeemed, directly or indirectly, out of those undertakings’ assets.
UCITS can take various legal forms, among which there are:
· mutual funds or other equivalent contractual schemes
· investment companies with variable share capital
· limited partnerships with variable share capital
· or unit trusts.
A UCITS that is managed by a third party manager can be set up with a capital of EUR 125,000, if it takes the form of a company. In the case of a self managed scheme taking the form of a company, the initial paid up share capital should not be less than EUR 300,000, while the NAV of the Scheme is expected to exceed this amount on an on-going basis.
As relates to the fund officers of a UCITS, the custodian and the administrators (if any) need to be based in Malta. The scheme is free not to appoint an administrator, but in such case, the manager needs to carry out the functions of the administrator as well. If an administrator is appointed, it should preferably be based in Malta unless there are exceptional reasons. The scheme is also obliged by law to appoint an auditor and a compliance officer and a Money Laundering Reporting officer.
Once a Maltese UCITS scheme is licensed in Malta, it can freely offer its services in Malta as well as in any EEA state provided that it follows certain notification procedures in pursuance of its passport rights.
