S.L. 370.20 Art. 5Activity of collective portfolio management on a cross-border basis by Maltese management companies.

(1) A Maltese management company which pursues the activity of collective portfolio management on a cross-border basis by establishing a branch or under the freedom to provide services shall comply with the provisions of the Act, any applicable regulations made thereunder and the Investment Services Rules and the requirements prescribed thereunder shall not be any stricter than those applicable to Maltese management companies conducting their activities only within the territory of Malta.

(2) The competent authority shall be responsible for supervising the compliance of a Maltese management company with the regulatory requirements referred to in sub-regulation (1).

(3) In addition to the requirements of sub-regulation (1), a Maltese management company which pursues the activity of collective portfolio management of a European UCITS on a cross-border basis by establishing a branch in another Member State or EEA State or in accordance with the freedom to provide services shall also comply with the applicable provisions in force in the UCITS home Member State or EEA State implementing the provisions of the UCITS Directive on the constitution and functioning of UCITS, and in particular it shall comply with the requirements applicable to:

(a) the setting up and authorisation of the UCITS;

(b) the issuance and redemption of units and shares;

(c) investment policies and limits, including calculation of total exposure and leverage;

(d) restrictions on borrowing, lending and uncovered sales;

(e) the valuation of assets and the accounting of the UCITS;

(f) the calculation of the issue price and, or redemption price and rules regarding errors in the calculation of the net asset value and related investor compensation;

(g) the distribution or reinvestment of the income;

(h) the disclosure and reporting requirements of the UCITS, including the prospectus, the key investor information and periodic reports;

(i) the arrangements made for marketing;

(j) the relationship with unit-holders;

(k) the merging and restructuring of UCITS;

(l) the winding up and liquidation of the UCITS;

(m) where applicable, the content of the unit-holder register;

(n) the licencing and supervision fees regarding the UCITS; and

(o) the exercise of unit-holders’ voting rights and other unit-holders’ rights in relation to paragraphs (a) to (m).

(4) A Maltese management company shall comply with the obligations set out in the prospectus and in the instruments of incorporation of the European UCITS which it manages and such documents shall be consistent with the requirements of the applicable law as referred to in sub-regulations (1) and (3).

(5) A Maltese management company shall adopt and implement all arrangements and organisational decisions necessary to ensure compliance with the applicable provisions relating to the constitution and functioning of the European UCITS. The Maltese management company shall also be responsible for compliance with the obligations set out in the prospectus and in the instruments of incorporation of the European UCITS.

(6) The competent authority shall supervise the adequacy of the arrangements and organisation of a Maltese management company in order to ensure that such Maltese management company is in a position to comply with the obligations and rules applicable to the constitution and functioning of all the European UCITS it manages.