www.mfsa.com.

mt Inside this issue: MFSA Strategic Plan 2011-2014 UCITS IV: Implementation opens up new opportunities for Maltese UCITS LatAm Fund Manager - Roundtable: Focus On Ucits IV Consultation Job Exposure in Financial Services Programme: 2011 Licences MFSA Notices Circulars Foreign Warnings Forthcoming Events

MFSA Newsletter - July 2011

MFSA Strategic Plan 2011-2014

The Malta Financial Services Authority has published its Strategic Plan for the period 2011-2014. In his forward to the publication, Professor Joe Bannister states that when the Authority was set up in 2002, responsibility for supervision of all financial services providers and consumer protection were brought together in one organisation resulting in a consistent approach to regulation linked to the legitimate aspirations of consumers. Initially the plan reviews the implementation of the first Strategic Plan 2007 2009, which included the networking with regulatory organisations and their agencies, creating risk based regulatory practices and upgrading technology to enhance operational effectiveness and sustaining and improving organisational excellence through human resource training. The second chapter of the Plan reviews the role this sector plays in the Maltese economy. Financial sector firms, particularly credit institutions, have over the last couple of years been subjected to extreme stress. These institutions faced a crisis resulting from low interest rates and an expansion of financial and investment opportunities that arose from aggressive credit expansion, growing complexity in mortgage securitization, and loosening in underwriting standards combined with expanded linkages among national financial centers to spur a broad expansion in credit and economic growth. This rapid rate of growth pushed up the values of equities, commodities and real estate. Over time, the combination of higher commodity prices and rising housing costs affected consumers budgets. The crisis brought to the fore the limits of national supervisory authorities to deal with troubled banks particularly those with cross border operations. As a result, supervisory authorities raised the capital adequacy levels of financial institutions and created colleges of supervisors for cross border institutions.

These policy requirements are aimed at strengthening the resources of branches and subsidiaries. The Plan also sets the vision for the Authority and the financial services sector it supervises. The Authority has set a number of objectives and goals that it intends to implement during the period of the plan. Maltas development as an international financial centre is reflected in the range of financial services available. Malta continues to be positively ranked for its performance in the financial sector. The World Economic Forums Global Competitiveness Index 2010 2011 ranked Malta 11th out of 139 countries for its financial market development. Against a background of crisis worldwide, the preparation of the Plan was a rather lengthy exercise due to rapidly changing situations. The whole of 2010 was spent implementing and reviewing new regulatory structures within the MFSA. The MFSA has a very good history of implementation of its programs. The implementation of the Strategic Plan 2011 2014 has to be as timely as the previous Strategic Plan 2007-2009. The Strategic Plan 2011 2014 takes the MFSA to a higher level of activity with the important parameters being training, legislative reviews and the expansion of contacts with regulatory authorities worldwide. A copy of the MFSA Strategic Plan is available at the MFSA Website.

UCITS IV: Implementation opens up new opportunities for Maltese UCITS

The implementation of the UCITS IV Directive on July 1, 2011 fits in with Maltas established open architecture framework and opens up new possibilities in the management and structuring of funds under the UCITS brand. There are already strong indications that UCITS management passport and the introduction of cross-border master feeder structures will further boost Maltas growth as a fund domicile and fund servicing centre as they continue to build on the global strength of the UCITS product. With more funds seeking EU onshore locations, fund promoters who have hitherto focussed on the private placement market are becoming increasingly

MFSA Newsletter - July 2011

interested in the distribution opportunities presented by UCITS. Meanwhile, Malta has also been witnessing a surge in the level of local service provision. The number of domiciled funds that are managed in Malta increased from 22% to 44%, while the number of Maltese funds administered locally increased from 47% to 78%. The UCITS Directive contains the regulatory framework for retail funds at the European level, and lays the basis for a single market in these funds. The regulatory framework for UCITS has been considered largely successful in delivering an effectively functioning market for funds in the EU, including ensuring the effectiveness of this market for retail investors. UCITS are central to many European households arrangements for long term savings. They give small investors easy access to professionally managed and diversified baskets of financial instruments at affordable costs. UCITS have however developed into global brand sought after not only by retail investors in Europe but by institutions and investors worldwide who consider them to be a robust, reliable and well-regulated product. Their real strength in fact lies in their potential as a vehicle for large scale distribution not just within the EU where they provide direct access to the retail investor but wider afield on the back of the brand value that they have managed to garner over the years. Through the management passport and the new master -feeder introduced by UCITS IV, UCITS funds will become more of a pan-European product leveraging on services and distribution channels that may be sourced across the EU rather than just those available in the Member State of domicile. The Key Investor Information document and new cross-border merger regime, moreover, introduce greater transparency and more flexibility in the structuring of these types of fund, and are aimed at making the product more investor-friendly, less costly and therefore more popular among investors. The MFSA and the Maltese funds industry have been preparing for the implementation of UCITS IV (Directive 2009/65/EC) long before the amendments to Maltese UCITS legislation came into force on July 1 of this year. This has involved extensive consultations, training and exploratory workshops leading up to the transposition of the Directive into national law as follows:

amendments to the Investment Services Rules for

Investment Services Providers. These amendments will continue to drive the Maltese fund sector forward following a 100% increase in the number of funds licensed in the first six months of this year and a surge in new fund services operations. Maltese UCITS: Key changes effective 1 July 2011: (i) Management Company Passport Under the previous UCITS III framework, a UCITS, a management company and its depositary had to be located in the same Member State. All activities related to collective portfolio management and administration of UCITS were subject to the law of one Member State and accountable to a single enforcement authority. The introduction of the management company passport under UCITS IV allows a UCITS to be managed by a management company authorised and supervised in a Member State other than its home Member State. (ii) Fund Mergers The directive provides for a regime for both cross-border and domestic mergers of UCITS. It also introduces a basic principle that all UCITS are entitled to merge regardless of their structure (i.e. all types of funds, contractual, corporate and trust funds can be merged with each other). Three different forms of mergers are provided for:

Merger by way of absorption; Merger by formation; and A scheme of amalgamation or arrangement.

Fund mergers are possible even if the investment strategies of the merging funds differ. The requirements for authorisation of a merger of UCITS and the information that has to be made available to investors will be harmonised. Only the approval of the home state regulator of the merging UCITS is required, although such decision shall be communicated to the regulatory authority of the receiving UCITS. The rules require the depository bank or an independent auditor to validate the valuation criteria, cash payment and the conversion ratio of the merger. As a consequence of the current financial crisis, fund volumes have significantly decreased because of both redemptions and a devaluation of assets. Many funds have fallen below the crucial amount that is required to manage the fund effectively. Therefore it is expected that the industry will make frequent use of the new opportunities of UCITS mergers. (iii) Master-Feeder Structures UCITS IV introduces master-feeder structures allowing a UCITS (feeder) to be (fully) invested in another UCITS (master). This allows UCITS to have increased economies

amendments to the Investment Services Act; the issue of the following Legal Notices: L.N. 243 of 2011 - Investment Services Act (UCITS
Management Company Passport) Regulations, 2011; L.N. 242 of 2011 - Investment Services Act (UCITS Mergers) Regulations, 2011; and L.N. 241 of 2011 - Investment Services Act (Marketing of UCITS) Regulations, 2011; amendments to the Investment Services Rules for Retail Collective Investment Schemes; and

MFSA Newsletter - July 2011

of scale and lower operational costs and makes the framework more attractive for creating funds for institutional investors. This structure fosters the efficient pooling of assets. The structure allows a feeder UCITS to invest at least 85 per cent of the Net Asset Value into a master UCITS. Up to 15 per cent of the NAV can be invested in ancillary liquid assets and derivatives for hedging purposes. The feeder UCITS delegates the portfolio management to the master UCITS and must therefore monitor the master UCITS. The feeder and master UCITS may be in the same or in different member states and may or may not have the same depositories and auditors; however, agreements between the management companies and the depositaries and auditors must be in place to ensure information sharing. (iv) Key Investor Information The simplified prospectus has now been replaced by a key investor information document (KIID), subject to a one-year transitional period. This standardized information for investors is to be written in readily understandable form and which would contain fair and clear information which is not misleading. It shall provide information on the essential elements with respect of the UCITS concerned and clearly specify where and how to obtain additional information on the proposed investment. These essential elements shall be understandable by the investor without any reference to other documents. KII shall include a short description of the investment objectives, a past performance presentation, information on costs and associated charges, and a risk-reward profile. Additional information is required for specific cases such as umbrella funds, UCITS with more than one share class, UCITS fund of funds, master-feeder structures and UCITS with a capital guarantee. The document should be written in a concise manner using non-technical language. (v) Notification Procedure If a UCITS proposes to market its units in a Member State other than its home Member State, it shall first submit a notification letter to the competent authorities of its home Member State. The competent authorities of the UCITS home Member State shall transmit the complete documentation to the competent authorities of the Member State in which the UCITS proposes to market its rules (so called regulator-to-regulator notification procedure). Upon the (electronic) transmission of the documentation, the competent authorities of the UCITS home Member State shall immediately notify the UCITS that the transmission has taken place. The UCITS may access the market of the UCITS host Member State as of the date of this notification. The Directive encourages the exchange of information between supervisors, harmonises the powers of supervisors and allows for the possibility of on-the-spot verifications and investigation, consultation mechanisms and mutualaid mechanisms for the imposition of penalties, in particular.

LatAm Fund Manager - Roundtable: Focus On Ucits IV

LatAm Fund Manager Magazine recently held a roundtable discussion which included MFSA Chairman Professor Joe Bannister. Taking also part were Robert Van Kerkhoff head of product management, Asset & Fund Service Spain, BNP Paribas Securities Services, John Bohan managing director and group operations manager at Apex Fund Services, and David Claus who is head of offshore, BMY Mellon Asset Servicing. The following article covering the event was first published in the LatAm Fund Manager magazine for August 2011. As the hedge fund sector adapts to the arrival of Ucits IV, four industry experts share their thoughts on how regulation is playing a bigger part in fund management. LatAm FM (LFM): Investors are increasingly interested in regulated funds. What options are available to a fund manager in Latin America when considering a European regulated product? Joe V Bannister (JVB): The options are basically two. Undertakings for Collective Investment in Transferable Securities (Ucits) funds authorised in Malta come with a European passport and may be marketed to the general public across the European Union. Although they may also be offered by private placement, the regulation that comes with Ucits is highly protective of the ordinary consumer. On the other hand, funds that are intended to be sold on a private placement basis only may opt to apply for a Professional Investor Fund (PIF) licence. PIFs are an alternative regime regulated under Maltese law, under a more flexible legal framework that is particularly suited for alternative investment strategies. Robert Van Kerkhoff (RVK): Obviously, the Ucits is a highly appreciated and well-known brand in the European fund market. What initially started as a way to standardise and harmonise the distribution among the state members in Europe has nowadays grown out to a truly global investment fund product. Ucits have become an increasingly popular investment in countries outside the EU. John Bohan (JB): The Ucits product is deemed to be one of the most regulated products available, but whether the structure will fit the strategy is a key consideration for any investment manager. Whilst the central bank does not impose any minimum capital requirements on the investment manager, there is a minimum capital requirement of 635,000 required for the promoter of the fund. With Ucits IV now in place since 1 July it is also imperative to give full consideration to the implications of the management company passport, and the many options available for master feeder structures as well as the Key Investor Information document, simplification of regulatory communication and approval processes and how all of

MFSA Newsletter - July 2011

these new rules impact on the decision making process for an investment manager. David Claus (DC): Ucits funds are the gold standard in Europe today. The Ucits regulations were originally designed for European retail investors, some 25 years ago, and have not only proven a great success in terms of asset gathering, but also in terms of reliability. Fast forward to today, and the Ucits brand has become extremely well regarded across the world. Its a case of, if it is Ucits, you can trust it. It is also worth noting that the non-Ucits industry in Europe will be re-shaped next year when the Alternative Investment Fund Managers (AIFM) Directive kicks in. This will create another strong European brand, catering for asset classes/investment policies that are not available under Ucits. LFM: How has the growth of regulated funds been? Which areas offer the greatest opportunities? JVB: In recent years Malta has registered steady growth both in the Ucits and in the PIF sector. Both types of funds offer particular opportunities. Funds pursuing full alternative investment strategies find the PIF framework ideally suited for this purpose, since the level of regulation that is applied is inversely proportionate to the level of sophistication of the end investor. On the other hand, Ucits have become a global brand which, in a restricted kind of way, can also accommodate certain alternative investment strategies. Their real strength, however, lies in their potential for large-scale distribution. RVK: Although Brazil and Mexico in size dominate the region, especially in smaller countries such as Chile, Peru and Colombia, there is an increasing appetite for crossborder Ucits fund distribution. Furthermore, local regulators especially in Chile and Colombia, are increasing their flexibility towards overseas investment in the pension market. For example, 70% of Chilean pension assets are currently allowed to be invested overseas. This will be increased in the third quarter this year to 80%. The latter in combination with the increasing flows to these emerging markets, clearly offer great opportunities to the sector. JB: In 2010, sales of alternative Ucits funds increased by 70% on the previous year up to September, gaining 25bn, according to a survey by Strategic Insight. Most of those sales were represented by hedge fund-type strategies. Of that, 6bn was from newly launched alternative Ucits products more than unregulated hedge fund launches. The distribution opportunities can be very attractive for a manager assuming steady track record and if the strategy is in vogue. By way of example, there are opportunities in life settlement funds where there are tax treaties in place between Ireland and the US that allow an efficient life settlement strategy to be employed. There has also been huge growth in Exchange Traded Funds and, through a Ucits vehicle it can tap into the distribution potential. DC: Latin America and Asia have become significant sources of net inflows for the European Ucits industry and we foresee this to continue. Asian and Latin American funds have historically been hampered in their crossborder aspirations by the regional complications and the absence of a common framework for funds across multiple jurisdictions on both geographies. As a result, through Ucits, Europes cross-border fund centres, particularly Ireland and Luxembourg, are playing a big role in reducing the cost and complexity of cross-border funds in both Latin America and Asia. LFM: Which type of investor tends to favour regulated products? JVB: Regulated products are favoured by all types of investors, be they retail, institutional or professional. Investors feel more confident in putting their money where they are assured of the existence of certain standards of transparency, governance and some degree of regulatory oversight. Beyond that, it is always important for the promoter to seek a level of regulation that is proportionate to the profile of the fund as regulation does not have to be unduly burdensome on the business. RVK: Basically, the institutional investors and private banking in Latin America are dominating the markets. Additionally it is also interesting to see that also small boutiques in Latin America show their interest mainly in the Luxembourg domicile to launch their Ucits fund in order to capture flows outside their local market. JB: A Ucits fund that partakes in daily trading would attract a retail investor with a low appetite for risk. It is a highly regulated product, meaning they can take assurance that the local regulator is regulating the investment manager and the constraints which the funds must operate (Counterparty exposure/ Var analysis). Ucits IV employs a key investment information document (KIID), which is a simplified prospectus for investors to get transparency into the key elements of the fund. Of course, the Ucits product is very attractive to institutional investors, pension monies, trusts and family money. Ucits represent a low risk, highly regulated product that meets their investment criteria. DC: Global investors are increasingly investing time and resources in the due diligence process when selecting a manager, looking into non-investment aspects of the managers including corporate governance, transparency and risk management. Whereas today, Latin America is largely a pension funds market for Ucits, we hope retail investors in Latin America will be able to invest in Ucits going forward. LFM: What distribution and marketing advantages does having a regulated fund offer managers within Latin America? JVB: As already indicated, Ucits funds offer managers much wider possibilities when it comes to distribution and marketing. Originally developed to harmonise Europes fund structures and promote fund distribution inside the European Union, Ucits have today become a gold standard recognised by many other countries worldwide. This is particularly true of Latin America, where Ucits are considered the foreign investment oppor-

MFSA Newsletter - July 2011

tunity of choice for local pension funds in a growing number of South American countries. Chile and Peru have both permitted foreign funds to be authorised to certain institutional investors, while opportunities for distributing European based funds on a private placement or institutional basis also exist in other Latin American countries. Apart from all this, the popularity of Ucits in other parts of the world, such as Asia, also makes them the ideal vehicle to channel wealth into investment opportunities in emerging economies, such as those of Brazil and neighbouring countries. RVK: The Ucits brand name is growing strongly in acceptance across many jurisdictions globally. Mainly the confidence of the local regulator in the Ucits brand is the most important driver for their success. In some countries, regulators only ask a simple notification procedure for the registration of these funds in their local market. Besides the only requirement under Ucits IV, the Key Investor Information Document is very similar to a document that is required in Chilean market. JB: The key advantage is that they have instant access to Europe. Ucits IV is bringing in a number of key changes; enhanced communication between regulators, increased response times which allows a Latin American investment manager to attain regulatory status in order to quickly tap into different EU markets. They can launch their fund in Ireland and distribute that fund in any EU state. The local regulator has a minimum period of 10 business days to authorise distribution; which means that within a couple of months, products can be distributed freely across Europe. DC: As mentioned earlier, Ucits funds are the gold standard in Europe and highly respected worldwide. The marketing advantage is therefore fully linked to the strength of the Ucits brand which scores highly on investor protection, risk diversification and governance. More specifically, while Ucits IV only kicks in on 1 July, and a number of countries in Europe are still translating these provisions in their local legal framework, Ucits V is already in preparation. Investor protection under Ucits V will be further strengthened by increasing the obligations for depositaries and trustees. In a nutshell this will give investors in Ucits products a level of certainty in terms of asset detention that would go beyond what retail and institutional investors would face if they were holding the underlying assets themselves. LFM: What issues should a fund manager be aware of when considering regulated funds? JVB: There are a number of regulatory, administrative and tax issues that should be carefully considered by the promoters of a fund seeking a regulated domicile. These conditions can be unduly onerous and time-consuming in some European domiciles relative to others. This is why the choice of domicile has to be carefully weighed to ensure that the fund may be brought to market in the least possible time and at the lowest possible cost. Other important issues to consider include the availability of the right infrastructure, an environment that is conducive to cross-border business and good distribution networks. However, the fact that some service providers have started to position themselves as intermediaries between distributors on one hand and promoters and management companies on the other, is making it even easier to distribute funds on a global scale from practically any European domicile. RVK: When a fund manager considers regulated funds like Ucits, he must be aware that in a non-EU jurisdiction the passporting regime is not available. A Ucits must therefore be registered under the local regime and comply with all local registration and compliance requirements. Consequently, the local regulator has the possibility to impose additional restrictions on a funds ability to manage various kinds of assets. In Chile, for example, the regulator is using a kind of benchmark in the pension market to ensure that all six pension funds keep the same track. In case of being below this benchmark, the legislator is allowed to interfere. Consequently, this benchmark is an important variable to keep in mind when investing in assets. JB: There has to be an appropriate fit for strategy, size, and market. Cost is a factor. It is certainly more expensive to launch and maintain a regulated product. Besides the legal aspects and regulatory applications, there is the ongoing maintenance of the fund. You must have a local custodian and you must have a local administrator, local directors and custodian fees. Most importantly, the regulator will require detailed infrastructure which carries a proper risk analysis of the strategy itself. The sophistication involved in managing a regulator product is far greater than that of an onshore product. DC: There are indeed constraints in terms of fund structures, asset classes, concentration limits etc that they need to comply with. That is the trade-off. LFM: Which domiciles are available to a fund manager when considering regulated funds and what advantages does each domicile offer? JVB: Malta has established a reputation as one of the leading fund domiciles in Europe. The quality of service and all round cost-effectiveness of setting up a fund in Malta have been critical to its success and have turned it into the European domicile of choice for fund managers relocating onshore. As a regulator the MFSA considers it its duty to ensure that managers and fund promoters are fully aware of the regulatory implications and that they understand the various licensing frameworks available to them depending on their business model. RVK: Currently Luxembourg as a domicile has a favourite position above the other domiciles mainly due to the stability and regulatory regime. Again Luxembourg as in 1988 when they were the first European Member to adapt its legislation, now again they are the first country in transposing Ucits IV in their legislation. Certain Latin American legislators impose investment restrictions, like for example in Chile where they oblige the pension funds to invest in AAA overseas assets. The recent crisis in this sense has positively affected Luxembourg in the selection of domiciled assets by Latin American fund managers. Ucits being a successful brand, most of the target funds are Luxembourg funds, then

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Irish funds, and to a lesser extent French funds, UK funds and German funds who do have a strong domestic market and asset management expertise. JB: To a degree, it is a level playing field for each domicile within the EU. Ireland has key tax treaties with the US, which are advantageous for life settlement funds. There is also a Tax Dabonnement payable on funds in Luxembourg which is not payable on Irish funds. Despite being marginal it can have an impact for certain strategies such as money market funds. Ireland enjoys close links and synergies with US and 40% of the worlds hedge funds are administered in Ireland. We are a proven jurisdiction from a service provider perspective. Ireland has a highly educated workforce, one that is in abundance and that has over 20 years experience in dealing with every type of hedge fund and alternative investment strategy. DC: From my vantage point, there are two key domiciles a fund manager should largely focus on and they are Luxembourg and Ireland. Over 90% of the cross-border funds industry is in the hands of these two domiciles about 75% with Luxembourg and about 15% with Ireland. They also represent over 40% of the Ucits industry largely a testimony to their success in the global arena since both domiciles have relatively limited local markets. While both domiciles operate their Ucits business under very similar frameworks, as one would expect, there have been a few differences historically in the type of business they attract. LFM: How is the role of a service provider different where regulated funds are concerned in comparison to traditional offshore vehicles? JVB: Regulated fund frameworks such as Maltas ensure that the fund service providers are pre-screened and that they are fit and proper to carry out the relevant activities. A rigorous due diligence process also ensures that proper controls are in place and that the service provider is capable of satisfying its on-going obligations vis- vis the fund in terms of the existing regulatory framework. RVK: When working with Ucits the role of the service provider is even more important in terms of quality of the service to be delivered, operational effectiveness and cost efficiency. In this field, we do feel that there is room for a larger number of competitors and the provision of a wider range of services, which will inevitably improve and reinforce the current trend towards cross-border distribution. JB: There are generally more demands from a timing and reporting perspective whether through reporting through to the investment manager themselves or through to the regulator. Given the level of regulation there is also a demand across clients for risk management reporting. Investment in front end systems can represent significant outlays and investment managers can avail of these services such as Apex Fund Services middle office and operational risk reporting solutions. DC: Service providers, like our company, provide consistent core services across all types of products. So the basics are absolutely the same. Regulations will impact the role though there will be a direct impact when regulations prescribe the way services need to be rendered to the client and their funds; and an indirect impact when regulations trigger new needs from clients, like the KIID under Ucits IV. The main issue affecting both managers and service providers across Europe continues to be simply keeping up with the volume of new laws and regulations.

Consultation
On 26th July 2011 the MFSA issued a consultation document on the proposed amendments to Listing Rule 4.55 and the introduction of other Listing Rules regarding Advertisements. The Listing Authority has noted that there have been instances where Applicants/Issuers applying or intending to apply for admissibility to listing embark on an aggressive marketing campaign. The Listing Authority is of the opinion that such advertising material would create a hype with respect to a particular Applicant/Issuer which could be misleading to the investing public and where, upon the opening of subscriptions, any potential investors would not be able to objectively evaluate the potential investment in the Applicant/Issuer and its Securities. In view of the above, the Listing Authority is proposing to replace the existing Listing Rule 4.55 and introduce other Listing Rules to address this situation. The proposed Listing Rules regarding Advertisements are being attached herewith as Appendix 1. The proposed Listing Rules will prohibit advertisements during the period starting from an Applicant/Issuer intends to apply for Admissibility to Listing or has submitted its application to the date it receives the Listing Authoritys approval of its Admissibility to Listing. During such period direct and indirect advertisement related to the Applicant/ Issuer and its securities are not allowed. The proposed Listing Rules also makes it clear that hidden and other indirect forms of advertising which do not comply with the Rules are prohibited. Accordingly advertising such as interviews in the media by the Applicant/Issuers top management, inserts in newspaper about the business of the Applicant/Issuer etc would be prohibited. In the case of any doubt as to what constitutes an advertisement in terms of the proposed Listing Rules, it is the Applicant/Issuers responsibility to consult the Listing Authority prior to any proposed publication. The proposed Listing Rules (Listing Rule 4.55, 4.55A, 4.55B, 4.55C and 4.55D) are being issued for consultation. The Listing Authority invites comments by not later than the 8th August, 2011 on the proposed Listing Rules. Interested parties are to send their comments in writing addressed to the Chairman Listing Committee (e-mail: listcomm@mfsa.com.mt). A full copy of the consultation document is available on the MFSA Website.

MFSA Newsletter - July 2011 Job Exposure in Financial Services Programme: 2011
The MFSA together with the Student Services Department within the Directorate for Educational Services, the Secretariat for Catholic Education, and the Independent Schools Association have worked upon and concluded a job exposure programme during which one hundred twenty two secondary school students at form four within state, church and independent schools had the opportunity to experience different work environments within the financial services sector. This initiative was undertaken to continue to promote a number of careers in finance. As in 2009 and 2010, the programme complemented the exposure that was already being provided to the same category of students within the scope of periodic familiarisation visits to the MFSA during the respective scholastic years. The recent launching by the MFSA of a careers in financial services website during the current year added more value to the experience. Indeed, following the launch of this website and its subsequent use, students taking part in the programme had a further opportunity to enrich their exposure. The programme involved two separate groups of students and was held during the week starting 4th July and the following one starting on 11th July 2011. The Job Exposure in Financial Services Programme for 2011 was held for the second year running following the launch of a pilot programme in 2009 that had involved sixty students and twelve employers. The 2011 programme was also characterised by the first time participation of students from all the five main independent secondary schools. On the 19th July 2011, Students were awarded a certificate of achievement issued jointly by the MFSAs Education Consultative Council and the Educational Agencies that coordinated the programme together with the MFSA on completion of the programme during an awarding ceremony that took place on 19th July 2011. The ceremony was attended by the Hon Minister of Finance Economy and Investment, Tonio Fenech, officials from the MFSA and from the three educational agencies, participating students and their parents together with representatives from the financial sector organisations and firms that were involved in the programme. These were: AON Insurance Management Limited, APS Bank, Atlas Insurance, BANIF Bank, Bank of Valletta plc, Bee Insurance Management Limited, Camilleri Preziosi Advocates, Deloitte, Elmo Insurance Limited, FinanceMalta, First United Insurance Brokers Limited, Garanti Bank Malta Branch, Gasan Mamo Insurance Limited, Global Capital plc, HSBC Global Asset Management Limited, HSBC Life Assurance (Malta) Limited, IFS Malta, Island Insurance Brokers Limited, Izola Bank Limited, Jatco Insurance Brokers Limited, KPMG, Laferla Insurance Agency Limited, Malta Institute of Accountants, Malta Stock Exchange, Marsh Management Services Malta Limited, Middlesea Insurance plc, MITC, MSV Life plc, Price Waterhouse Coopers, PSA Insurance, RSM Malta, Sparkasse Bank Malta plc, Victoria Insurance Agency Limited.

Licences June 2011

Minister Tonio Fenech addressing the audience

New Licences issued

Collective Investment Schemes Professional Investor Funds targeting Qualifying Investors Collective Investment Scheme licence issued to Orange Capital Funds SICAV plc in respect of one sub-fund. Collective Investment Scheme licence issued to Tertius SICAV plc in respect of one sub-fund. Collective Investment Scheme licence issued to Capital Investments SICAV plc in respect of one sub-fund. Collective Investment Scheme licences issued to Taliti Funds SICAV plc in respect of two sub-funds. Collective Investment Scheme licence issued to Merdion Funds SICAV plc in respect of one sub-fund. Collective Investment Scheme licence issued to NBCG Fund SICAV plc in respect of one sub-fund. Collective Investment Scheme licences issued to Innocap Fund SICAV plc in respect of two sub-funds. Professional Investor Funds targeting Extraordinary Investors

In recognition of the value of this initiative, thirty four organisations involved in different areas within the local financial sector participated in the programme together with the MFSA. The salient features of the project were as follows: 1. The students currently at Form 4 level, from Government, independent and church secondary actively observed a variety jobs both of a technical and administrative nature that are typical the sector . 2. The students were requested to log down their observations and exchange views both with their mentors and with the school career counsellors who were monitoring them during the programme. 3. Students were also exposed to the soft skill element related to the various jobs and were assigned small related research projects as homework. 4. Placements did not carry any remuneration and were subject to all the rules and policies (including those related to health and safety and personal welfare) that were applied by the participating organisations.

Collective Investment Scheme licence issued to Tertius

SICAV plc in respect of one sub-fund.

MFSA Newsletter - July 2011

Collective Investment Scheme licence issued to Futura
Funds SICAV plc in respect of one sub-fund. UCITS Collective Investment Scheme licence issued to AVC Funds SICAV plc in respect of one sub-fund. Collective Investment Scheme licences issued to Temple Global Fund SICAV plc in respect of two sub-funds. Investment Services Category 2 licence issued to Exante Limited. Category 2 licence issued to Futura Investment Management Limited. Category 2 licence issued to Calamatta Cuschieri Investment Management Limited. Recognised Fund Administrators Certificate issued to Alter Domus Services (Malta) Limited. Insurance Insurance Companies Licence issued to Oney Insurance (PCC) Limited to carry on business of insurance in five classes of the general business. Licence issued to Oney Life (PCC) Limited to carry on business of insurance in one class of the long term business. Protected Cells Absolut Cell has been approved as a cell of Abbey International Insurance PCC Limited. Enrolment of Insurance Agents Citadel Health Insurance Agency Limited has been granted enrolment in the Agents List. Enrolment of Insurance Manager HSBC Insurance Management Services (Europe) Limited has been granted enrolment in the Managers List. 13/07/2011 - Surrender of Category 2 Investment Services Licence - First International Merchant Bank p.l.c. (FIMBank plc) 15/07/2011 - MFSA Notice - EIOPA consultation process on a Draft Response to Call for Advice on the scope of Directive 2003/41/EC 25/07/2011 - MFSA Notice - EIOPA is currently developing harmonized Solvency II Quantitative Reporting Templates Licence - La Valette FTSE 100 Index Capital Guaranteed Fund

Circulars - July 2011

Securities and Markets Supervision - AIFMD 26/07/2011 - Circular to the financial services industry regarding the Alternative Investment Fund Managers Directive (AIFMD). Trust and Fiduciaries 27/07/2011 - Circular addressed to companies authorised to act as trustees in terms of article 43 of the Trusts and Trustees Act.

Foreign Warnings
Foreign warnings received by MFSA can be viewed on the Authoritys Website www.mfsa.com.mt, under Announcements/Foreign warnings received.

Forthcoming Events
October 2 -5 - FERMA Risk Management Forum 2011 Stockholm - Sweden November 2 - Risk Frontiers - Solvency II and the management of cross border risks - The final countdown - Frankfurt December 6 7 - European Funds Regulation and Supervision Conference - Malta Malta International Training Centre - Forthcoming Training Courses

Licences Surrendered
Investment Services Surrender of Category 2 licence issued to Stoneworks Asset Management (Malta) Limited.

Advanced Applied Insurance Studies Diploma: October 2011 July 2012 Certificate in Insurance (Cert CII) Courses October 2011 Diploma and Advanced Diploma in Insurance (Dip CII & ACII) courses October 2011

MFSA Notices - July 2011

01/07/2011 - Transposition of the UCITS IV Directive (Directive 2009/65/EC) 08/07/2011 - Surrender of Collective Investment Scheme

More information on MITC training courses is available on the MITC Website

Issued by the Communications Unit, Malta Financial Services Authority, e-mail: communications@mfsa.com.mt

Notabile Road Attard BKR 3000 Phone: +356 21 44 11 55; Fax: +356 21 44 11 89 www.mfsa.com.mt registry.mfsa.com.mt mymoneybox.mfsa.com.mt www.careersinfinance.mfsa.com.mt