Companies Act Amendment Regulations - Investment Companies with Variable Share Capital
News    ·   08-07-2013
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AUTHOR: Louis de Gabriele

Article 84(6) of the Companies Act provides that shares of an investment company with variable share capital which have been purchased by the company itself shall be cancelled and the amount of the company’s issued share capital shall be reduced by the amount of the consideration paid by the company for the purchase of the shares.

By virtue of LN 165 of 2013, a multi-fund company opting for the segregation of assets and liabilities may now, on behalf of any of its sub-funds and whether by subscription or transfer, acquire for consideration any shares of any of its other sub-funds and the provisions of article 84(6) of the Companies Act shall not apply. This will be allowed in specific circumstances as shall be prescribed by the competent authority in the Investment Services Rules and subject to specific and appropriate disclosure in the constitutional documents and the offering memorandum or prospectus of the relevant Scheme.

This amendment to regulation 7 of the principal regulations goes on to provide that multi-fund companies performing activities as aforesaid, shall take all necessary measures to comply with the requirements prescribed therein within 6 months from the date of publication the coming into force thereof. The MFSA may issue Investment Services Rules for the better carrying out of this new sub-regulation.

Additionally, a new regulation has been introduced relating to the issue of shares which may be subject to full payment by a date as determined by the prospectus or any other offering document issued by the SICAV (settlement date). This new regulation provides that an issue of shares by a SICAV for a cash consideration which is subject to full payment by a settlement date shall be deemed to be a lawful issue of fully paid up shares, provided that the following conditions are satisfied:

1.     the SICAV is authorised to issue shares in such manner by its M&A;

2.     the settlement date and terms of payment are clearly disclosed in the prospectus and any other offering document issued by the SICAV; and

3.     the person acquiring the shares undertakes in writing to pay the full subscription price by not later than the settlement date. 

For more information please refer to the full amendment by clicking here.

 

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