These regulations are aimed at aligning the Tenth Schedule of the Maltese Companies Act with the SICAV Regulations (L.N. 241 of 2006 as amended). This alignment was considered necessary so as to bring en commandite, or Limited Partnership structures on a level playing field with SICAVs.

In 2008, a number of amendments were carried out to the SICAV regulations. These amendments had included a distinction between multi class and multi-fund companies, introduced segregation of assets for multi-fund companies and exempted SICAVs from certain provisions in the Companies Act.

Segregation of assets and liabilities

With the amended Tenth Schedule, Limited Partnerships will benefit from more structural and operational flexibility under the Companies Act, which is the principal legislation that regulates these types of structures. It will also be possible for Limited Partnerships to be formed either as a multi-class partnership or as a multi-fund partnership. The multi-fund partnership may moreover elect for the segregation of assets and liabilities between separate funds.

Other changes

The following are the other main changes brought in by the new amendments to the Tenth Schedule:

• Article 73 of the Companies Act, which provides flexibility in the type of consideration for the acquisition of shares, is now applicable to Limited Partnerships, with certain modifications that make it particularly attractive for Limited Partnerships that are licensed as Professional Investor Funds by the MFSA;
• Article 120 of the Companies Act, which requires notification of all transfers and transmissions of shares to the Registrar of Companies, no longer applies to Limited Partnerships and notifications shall instead be made to the partnership itself; the same applies to the notification of pledges of shares in a Limited Partnership which - together with the formalities for constituting a pledge - are now regulated by the Tenth Schedule, para. 3(13), instead of by Article 122 of the Companies Act;
• Article 186 of the Companies Act, which regulates the currency denomination of the share capital as well as changes in currency denomination, no longer apply to Limited Partnerships in virtue of the new para. 3(10) of the Tenth Schedule;
• Also as a result of para. 3(10) of the Tenth Schedule, a Limited Partnership constituted as a multi-fund or multi-class partnership is no longer required to present its annual accounts in the same currency as that of its share capital, as was previously the case under Artilce 187(1) of the Companies Act;
• Other proposed amendments refer to the power of the competent authority to issue Investment Services Rules and to the issue of shares at a discount.

Limited Partnerships with capital not divided into shares

These new possibilities build on another important amendment to Article 66A of the Companies Act that was introduced by Act XIX.2010.29. This made it possible for Limited Partnerships to be set up with capital that is not divided into shares. The change in the law followed on an interpretation of the term ‘Unit’ recently given by the MFSA which considered that an interest that does not amount to a share in a fund may still qualify as a ‘unit’ in terms of the Investment Services Act.

MFSA Ref 03-2011