                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        1
CHAPTER 450
SPECIAL FUNDS (REGULATION) ACT
To make provision regulating retirement funds.
() *
ACT XVII of 2002, as amended by Act IX of 2003.
ARRANGEMENT OF ACT
*Not yet in force.
  Articles
Part I Preliminary  1 - 2 
Part II  Registration and Operational Requirements 3 - 49
Registration 3 - 13
Officers 14 - 30
Funding Requirements of Occupational Schemes 31 - 36
Permitted Investment, Borrowing, Expenses, and
Distributions
37 - 41
Advertising and Disclosure 42 - 45
Rights arising from Scheme 46 - 49
Part III  General Provisions 50 - 64
SCHEDULES  
First Schedule
Second Schedule
  2        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
PART I
PRELIMINARY
Short title and 
commencement.
1. (1) The short title of this Act is the Special Funds
(Regulation) Act.
(2) Parts I, II and III of this Act shall come into force on such
date as the Minister responsible for Finance may by notice in the
Gazette establish and different dates may be so established for
different provisions and different purposes thereof.
Interpretation. 2. (1) In this Part and in Parts II and III of this Act and in the
Schedules thereto unless the context otherwise requires -
''advertisement'' means any form of advertising, whether verbal,
in written or by electronic means and, without prejudice to the
generality of the foregoing, includes advertising in a publication,
the display of notices, signs, labels or show cards, by means of
letters, circulars, prospectuses, catalogues, price lists or other
documents, by the exhibition of pictures or photographic or
cinematographic films, by way of sound, television or other
broadcast, by the distribution of recordings or in any other manner,
and references to the issue of an advertisement shall be construed
accordingly;
''affiliate'' with respect to a person (hereinafter ''the relevant
person'') means:
( a ) any person who owns directly or indirectly 25% or
more of the total combined voting power or 25% or
more of the total value of the stock or ownership
interests of the relevant person (hereinafter referred to
as ''an owner'');
( b ) any person where the relevant person directly or
indirectly owns 25% or more of the total combined
voting power or 25% or more of the total value of
stock or ownership interest of such person (hereinafter
referred to as ''the sub-person'');
( c ) any two or more persons where an owner directly or
indirectly, in the case of each such person owns 25%
or more of the total combined voting power or 25% or
more of the total value of the stock or ownership
interest of such person (each of such two or more
persons, hereinafter referred to as ''a sister-person'');
( d ) any person where a director, or officer of a relevant
person, an owner, a sub-person or a sister-person owns
25% or more of the total combined voting power or
25% or more of the value of the stock or ownership
interests of such person;
( e ) any person that in the opinion of the Authority -
(i) is under the  de facto  or effective control of a
relevant person; or 
(ii) exercises  de facto  or effective control of the
relevant person;
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        3
''ancillary cash'' means cash used in connection with a registered
scheme to pay expenses, to pay retirement benefits, and to fulfil
similar requirements of the scheme;
''asset manager'' means a person who provides discretionary or
non-discretionary investment services to a retirement fund or
scheme;
Cap. 330.
''Authority'' means the Malta Financial Services Authority
established by article 3 of the Malta Financial Services Authority
Act; 
''beneficiary'' means an individual who is to receive current or
future payments under the applicable scheme or overseas
retirement plan; and, where relevant, the estate of such individual;
''Commissioner'' means the Commissioner of Inland Revenue;
''contributor'' shall mean - 
( a ) the individual, in the case of a retirement scheme to
which contributions are made solely or partly by the
individual for the benefit of that same individual; and
( b ) the employer, in the case of a scheme to which
contributions are made solely or partly by an employer
for the benefit of employees; and for the purpose of
this Act, a partnership shall be treated as the employer
of each of its partners, and a company shall be treated
as the employer of each of its officers and directors;
and ''employee'' and ''employment'' shall be construed
accordingly;
''defined benefit scheme'' means a scheme other than a defined
contribution retirement scheme which has as its primary purpose
that of providing for the payment of fixed or determinable
retirement benefits;
''defined contribution retirement scheme'' means a scheme which
has as its primary purpose that of providing for the payment of
retirement benefits, which are established by reference to the
contributions paid into such scheme, the accumulation of profits,
gains and other income, after the deduction of expenses and losses
in relation thereto;
''directive'' means a directive issued by the Authority in
accordance with article 51(3);
Cap. 123.
Cap. 372.
''Income Tax Acts'' means collectively the Income Tax Act and
the Income Tax Management Act;
''investment service'' means any service falling within the Second
Schedule, when provided in relation to an instrument;
Cap. 370.
Investment Services Act;
''Malta's international commitments'' shall have the same
meaning as assigned to it in the Investment Services Act;
''Minister'' means the Minister responsible for finance;
''overseas retirement plan'' means a  bona fide  scheme or
  4        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
arrangement, organized under the laws of a country outside of
Malta, which govern the rights and responsibilities of the parties
thereto, and under which payments are made to beneficiaries for the
principal purpose of providing retirement benefits;
''occupational scheme'' means a scheme to which contributions
are made solely or partly by an employer for the benefit of
employees;
''permanent invalidity'' means a medically-determined disability
of a permanent nature, which as certified by a medical doctor
approved by the retirement scheme administrator, has rendered the
employee incapable of meeting the requirements of the
employment he had been performing at the onset of such disability;
''prescribed'' means prescribed by regulations or directives made
under this Act;
''registration'' in relation to a scheme or retirement fund or to a
retirement fund administrator, retirement scheme administrator or
asset manager, or to a matter connected therewith or ancillary
thereto, means a registration under this Act, and ''register'' and
''registered'' shall be construed accordingly;
''retirement benefit'' means pension or other benefits that are
payable to a beneficiary after retirement, permanent invalidity or
death;
''retirement fund'' means a company established for the principal
purpose of holding and investing the contributions made to one or
more schemes or to one or more overseas retirement plans and shall
be construed in accordance with article 4(2);
''retirement fund administrator'' shall be construed in accordance
with article 17;
''retirement scheme administrator'' shall be construed in
accordance with article 17;
''scheme'' means a scheme or arrangement established by contract
which governs the rights and responsibilities of the retirement
scheme administrator and contributor thereto, and under which
payments are made to beneficiaries for the principal purpose of
providing retirement benefits. a scheme or arrangement shall not
constitute a scheme under this Act if it provides for:
( a ) the payment of retirement benefits to five or fewer
beneficiaries; or 
Cap. 403.
( b ) solely the payment of proceeds from the surrender or
maturity of a long term contract of insurance effected
by an insurance company authorised under the
Insurance Business Act; or
( c ) the commencement of payment of retirement benefits
to a beneficiary on a date that is earlier than that on
which such beneficiary has attained the age of fifty, or
later than that on which the beneficiary attains the age
of seventy, except in those cases where the scheme or
arrangement provides that:
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        5
(i) the payment is made by reason of the permanent
invalidity or death of a beneficiary; or
(ii) the payment is made by means of a cash lump
sum to the beneficiary without the necessity of
the beneficiary’s consent in such amount as the
Authority may prescribe in the event that the
beneficiary is no longer employed by the
contributor of the scheme or arrangement:
Provided that a scheme or arrangement described
in paragraphs ( a ) or ( b )  may by written notice to the
Authority elect to be considered a scheme for purposes
of this Act;
''scheme document'' means the written contract evidencing a
registered scheme;
''tax'' means the tax imposed by the Income Tax Acts;
''technical funding requirement'' has the meaning given by article
31.
(2) In Parts I, II and III of this Act and in the Schedules  and in
any regulations or directives made thereunder, if there is any
conflict between the English and the Maltese texts, the English text
shall prevail.
PART II
REGISTRATION AND OPERATIONAL REQUIREMENTS
Prohibition against 
unregistered 
schemes ans 
unregistered 
retirement funds.
3. (1) No person shall provide or hold himself as providing a
scheme situated in Malta unless such scheme is a registered scheme
which complies with the requirements of articles 4(1) and 5.
(2) No person shall accept money or other consideration from
a contributor with respect to a scheme situated in Malta unless such
scheme is a registered scheme which complies with the
requirements of articles 4(1) and 5.
(3) No person shall maintain or hold himself out as
maintaining a retirement fund situated in Malta unless such fund is
a registered fund which complies with the requirements of articles
4(2) and 6.
(4) The Authority may by directives under this article declare
such schemes or other arrangements as may be referred to in the
directives not to be a scheme for the purposes of this Act, or
declare that such funds as may be referred to in the directives not to
be a retirement fund for the purposes of this Act.
(5) The Authority may by notice in writing to any person
determine that:
( a ) an activity falls within the meaning of articles 17, 18,
19 or 24 when provided in relation to a retirement fund
or a scheme; or
( b ) a service falls within the Second Schedule to this Act;
or
( c ) for the purposes of this Act, a scheme or other
  6        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
arrangement is a scheme situated in Malta, or a fund is
a retirement fund situated in Malta,
and subject to any appeal under article 54, with respect to such
person, the determination by the Authority, unless otherwise
overruled by the Tribunal referred to in that article shall be
conclusive for all purposes of this Act.
Requirement to 
register schemes 
and retirement 
funds.
Amended by:
IX. 2003.120.
4. (1) A scheme shall not be registered under the provisions
of this Act unless the scheme document contains written terms and
provisions which shall state:
( a ) that the principal purpose of the scheme is to provide
retirement benefits;
( b ) that all contributions to the scheme shall be invested
exclusively in one or more retirement funds, except for
ancillary cash;
( c ) that the scheme is designed and operated for the
exclusive benefit of the beneficiaries specified in such
scheme;
( d ) the specific means to be used to identify all current,
and future contributors of the scheme together with
their respective obligations;
( e ) the specific means to be used to identify all current
and future beneficiaries of the scheme together with
the specific means to be used to determine the amount
of their respective retirement benefits, and the timing
of payment of such retirement benefits;
( f ) the name, address and the telephone number and e-
mail address, if available, of the initial retirement
scheme administrator appointed to carry out the
administrative requirements of the scheme;
( g ) the rules or other criteria governing the valuation of
assets and liabilities attributable to the scheme and the
timing of such valuations;
( h ) the rules governing admissible costs and expenses
payable out of the scheme;
( i ) the method of appointment, removal, and replacement
of the retirement scheme administrator and, where
appropriate, the asset manager, auditor, or actuary of
the scheme;
( j ) the rules governing the surrender, termination or,
where appropriate, forfeiture of a retirement benefit;
( k ) the applicable rules in the event of an inability or
failure by a contributor to fulfil its obligations;
( l ) the rules governing amendments to the scheme
document;
( m ) the circumstances leading to the winding up of the
scheme, other than such circumstances established by
law; and
( n ) that, unless otherwise prescribed under this Act there
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        7
exists no statutory provision for compensation in the
case where a scheme or retirement fund is unable to
satisfy the liabilities attributed to it, and the
registration of the scheme or retirement fund is not an
endorsement by the Authority of the scheme’s or the
retirement fund’s financial performance.
(2) A retirement fund shall not be registered under this Act
unless it satisfies the following requirements:
Cap. 386.
( a ) the retirement fund is registered as an investment
company with fixed share capital or an investment
company with variable share capital under the
Companies Act;
( b ) the memorandum of association of the retirement fund
states that its objectives are limited to - 
(i) the receipt of contributions made by one or more
schemes, and, or by one or more overseas
retirement plans, and the investment of such
contributions and all return on such
contributions in instruments or immovable
property with the aim of maximising return on
such contributions;
(ii) the payment of retirement benefits to the
beneficiaries of the schemes or the overseas
retirement plans which have invested in such
retirement fund; and 
(iii) the carrying on of all matters or functions
connected or ancillary to the objectives
mentioned in subparagraphs (i) and (ii); and 
( c ) the name of the retirement fund is one which, in the
opinion of the Authority, is not misleading; and 
( d ) the company’s head office is, and is operated, in Malta.
(3) The assets of the retirement fund shall not be for the
benefit of any investor in the retirement fund, but shall be used for
the exclusive purpose of providing retirement benefits to the
beneficiaries of the schemes or the overseas retirement plans which
have invested in such retirement fund, and of defraying the
expenses as are allowable under this Act, of such scheme, or the
bona fide  expenses of the overseas retirement plan, as applicable.
Cap. 386.
(4) Unless otherwise provided in this Act, the provisions of the
Companies Act shall apply to a Retirement Fund.
Cap. 370.
(5) A scheme or retirement fund registered under this Act shall
not be subject to any licensing requirements under the Investment
Services Act.
Application for 
registration of a 
scheme.
5. An application for registration of a scheme shall be made
in the form and manner required by the Authority and shall - 
( a ) contain or be accompanied by a copy of the scheme
document containing statements listed in article 4(1);
( b ) be accompanied by such fee or fees as may be
  8        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
prescribed;
( c ) specify the nature of the scheme;
( d ) contain or be accompanied with such other
information and particulars, as the Authority may
require or as may be prescribed; and
( e ) contain the address in Malta for service on the
applicant of any notice or other documents required or
authorized to be served on him by or under this Act or
any other law.
Application for 
registration of a 
retirement fund.
6. An application for registration of a retirement fund shall be
made in the form and manner required by the Authority and shall - 
( a ) contain or be accompanied by a copy of the
memorandum and articles of association of the
retirement fund which satisfy the requirements of
article 4(2);
( b ) specify the name and address and the telephone
number and e-mail addresses if available of the
retirement fund, the directors and retirement fund
administrator of such retirement fund;
( c ) be accompanied by such fee or fees as may be
prescribed;
( d ) contain or be accompanied with such other
information and particulars, as the Authority may
require or as may be prescribed;
( e ) contain the address in Malta for service on the
applicant of any notice or other document required or
authorised to be served on it by or under this Act or
any other law; and
( f ) contain a general description of the investment
objectives, the risk and return characteristics of the
retirement fund, as well as information relating to the
type and diversification of assets anticipated within
the investment portfolio of the retirement fund.
Power of Authority 
to refuse 
registration of a 
scheme.
7. (1) The Authority may register or refuse to register a
scheme for which an application is made under this Act.
(2) The Authority shall not register a scheme unless it is
satisfied that - 
( a ) the retirement scheme administrator is fit and proper to
provide the scheme concerned;
( b ) the retirement scheme administrator will comply with
and observe the provisions of this Act and any
regulations or directives prescribed thereunder; and 
( c ) the proposed Scheme will comply with the provisions
of this Act and any regulations or directives prescribed
thereunder.
(3) In registering a scheme, the Authority may subject it to
such conditions as it may deem appropriate, and having registered
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        9
it, the Authority may, from time to time, vary or revoke any
condition so imposed or impose new conditions.
(4) When considering whether to register any scheme under
this Act, the Authority shall in particular have regard for - 
( a ) the protection of investors and the general public;
( b ) the protection of the reputation of Malta taking into
account Malta’s international commitments;
( c ) the promotion of competition and choice; and
( d ) the reputation and suitability of the retirement scheme
administrator and any other parties connected with the
scheme.
(5) ( a ) Where close links exists between an applicant and any
other person the Authority shall:
(i) only register a scheme if it considers that such
close links do not prevent it from exercising
effectively its supervisory functions; and
(ii) refuse to register a scheme if it considers that the
laws, regulations or administrative provisions of
any country outside Malta governing one or
more persons with whom the applicant has close
links, or their enforcement, prevent the effective
exercise of its supervisory functions.
( b ) The Authority may from time to time, by means of
directives under this Act define the circumstances in
which ''close links'' are to be regarded as existing
between any two or more persons.
(6) Where a scheme or the retirement scheme administrator,
asset manager or other person responsible for the scheme
contravenes or falls to comply with any of the conditions imposed
on the scheme under this article, the Authority may by notice in
writing and, without recourse to a court hearing impose on the
scheme, retirement scheme administrator, asset manager to other
person, as the case may be, an administrative penalty which may
not exceed forty thousand liri.
Power of Authority 
to refuse 
registration of a 
retirement fund.
8. (1) The Authority may register or refuse to register a
retirement fund for which an application is made under this Act.
(2) The Authority shall not register a retirement fund unless it
is satisfied that - 
( a ) the promoters, the directors and the retirement fund
administrator are fit and proper persons to offer the
retirement fund concerned;
( b ) the directors and the retirement fund administrator will
comply with and observe the provisions of this Act and
any regulations or directives prescribed thereunder;
and
( c ) the proposed retirement fund will comply with the
provisions of this Act and any regulations or directives
made thereunder.
  10        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
(3) In registering a retirement fund, the Authority may subject
it to such conditions as it may deem appropriate, and having
registered it, the Authority may, from time to time, vary or revoke
any condition so imposed or impose new conditions.
(4) When considering whether to register any retirement fund
under this Act, the Authority shall in particular have regard for - 
( a ) the protection of investors and the general public;
( b ) the protection of the reputation of Malta taking into
account Malta’s international commitments;
( c ) the promotion of competition and choice; and
( d ) the reputation and suitability of any promoter, director,
retirement fund administrator and any other party
connected with the retirement fund.
(5) ( a ) Where close links exist between an applicant and any
other person the Authority shall:
(i) only register a retirement fund if it considers
that such close links do not prevent it from
exercising effectively its supervisory functions;
and
(ii) refuse to register a retirement fund if it considers
that the laws, regulations or administrative
provisions of any country outside Malta
governing one or more persons with whom the
applicant has close links, or their enforcement,
prevent the effective exercise of its supervisory
functions.
( b ) The Authority may from time to time, by means of
directives under this Act, define the circumstances in
which ''close links'' are to be regarded as existing
between any two or more persons.
(6) Where a retirement fund, or the retirement fund
administrative, its manager, secretary, director or other person
responsible for the retirement fund contravenes or fails to comply
with any of the conditions imposed on the retirement fund under
this article, the Authority may by notice in writing and without
recourse to a court hearing impose on the retirement fund, its
manager, secretary, director or other person, as the case may be, an
administrative penalty which may not exceed forty thousand liri.
Payment of 
periodic fees.
9. Every scheme and retirement fund shall pay to the
Authority such periodic and application fees, and within such time,
as may from time to time be prescribed.
Changes in 
information.
10. A retirement scheme administrator or a retirement fund
administrator, or any other person having responsibility for the day
to day administration or management of a scheme or fund, shall
provide the Authority with particulars of any changes in the
information provided under this Act as soon as such person or its
delegate becomes aware of such changes.
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        11
Power of Authority 
to cancel or 
suspend 
registration of a 
scheme.
11. Without prejudice to any other provision of this Act and of
any regulations or directives made thereunder, the Authority may
cancel or suspend the registration of a scheme if:
( a ) it considers that a retirement scheme administrator is
not a fit and proper person to carry out the functions
required of it in connection with the scheme; or 
( b ) it considers that the scheme to which the registration
refers does not comply with the provisions of this Act
or of any regulations and, or, directives made
thereunder, or that there has been a contravention of
any such provisions, or of an obligation or condition to
which the scheme or its registration are subject by or
under this Act; or
( c )  information has been furnished to the Authority by or
on behalf of or in relation to the scheme which is false,
inaccurate or misleading.
Power of Authority 
to cancel or 
suspend 
registration of a 
retirement fund.
12. Without prejudice to any other provision of this Act and of
any regulations or directives made thereunder, the Authority may
cancel or suspend the registration of a retirement fund if:
( a ) it considers that a director or retirement fund
administrator is not a fit and proper person to carry out
the functions required of it in connection with the
retirement fund; or
( b ) it considers that the retirement fund to which the
registration refers does not comply with the provisions
of this Act or of any regulations and, or, directives
made thereunder, or that there has been a
contravention of any such provisions, or of an
obligation or condition to which the retirement fund or
its registration are subject by or under this Act; or
( c ) information has been furnished to the Authority by or
on behalf of or in relation to the retirement fund which
is false, inaccurate or misleading.
Notification of 
proposed refusal, 
variation, 
cancellation or 
suspension of a 
registration.
13. (1) Where the Authority proposes - 
( a ) to vary any condition to which a registration is subject
or to impose a condition thereon; or
( b ) to refuse an application for registration or to cancel or
to suspend a registration,
it shall give the retirement scheme administrator or retirement fund
administrator notice in writing of its intention to do so, such notice
setting out the reasons for its proposed action.
(2) Every notice given under subarticle (1) shall state that the
recipient of the notice may, within such reasonable period after the
service thereof as may be stated in the notice (being a period of not
less than forty-eight hours and not longer than thirty days), make
representations in writing to the Authority giving reasons why the
proposed decision should not be taken, and the Authority shall
consider any representation so made before arriving at a final
decision.
  12        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
(3) The Authority shall as soon as practicable notify its final
decision in writing to any of the persons to whom notice is to be
given under subarticle (1).
Retirement fund 
directors.
14. (1) Every company, which is formed as a retirement fund,
shall have at least three directors.
(2) Subject to the provisions of this Act and to the applicable
scheme, it shall be the responsibility of the board of directors either
directly or through an asset manager to invest all money and other
assets received by the retirement fund in accordance with its
memorandum of association.
Appointment of 
retirement fund 
administrator.
15. (1) Every retirement fund shall have a retirement fund
administrator to carry out such duties assigned to such
administrators under this Act or any other law.
(2) It shall be the duty of the directors of the retirement fund to
appoint a retirement fund administrator, and such directors shall
have the power to remove the retirement fund administrator at their
discretion.
(3) Where the post of retirement fund administrator becomes
vacant, the directors of the retirement fund shall, within fourteen
days from the date of vacancy, appoint another person to fill the
post.
(4) Where the directors fail to fill such vacancy within the
fourteen days provided above, the Authority may, on an application
made by any one of the directors or by a contributor or beneficiary,
appoint a person to fill such vacancy itself.
(5) During any period where there is no retirement fund
administrator, and during any period of incapacity of the retirement
fund administrator, any officer of the retirement fund authorized
generally or specifically in that behalf by the directors shall carry
out the functions of the retirement fund administrator.
Appointment of 
retirement scheme 
administrator.
16. (1) Every scheme shall have a retirement scheme
administrator to carry out such duties assigned to such
administrator under this Act or any other law.
(2) It shall be the duty of the contributors of the scheme to
appoint a Retirement Scheme Administrator, and such contributors
shall have the power to remove the retirement scheme administrator
at their discretion.
(3) Where the post of retirement scheme administrator
becomes vacant, the contributors of the scheme shall, within
fourteen days from the date of vacancy, appoint another person to
fill the post.
(4) Where the contributors fail to fill such vacancy within the
fourteen days provided above, then the Authority may, on an
application made by any one of the contributors or beneficiaries,
appoint a person to fill such vacancy itself.
(5) During any period where there is no retirement scheme
administrator, and during any period of incapacity of the retirement
scheme administrator any officer of the scheme authorized
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        13
generally or specifically in that behalf by the contributors shall
carry out the functions of the retirement scheme administrator.
Registration of 
retirement fund 
administrators abd 
retirement scheme 
administrators.
17. (1) No person shall provide a retirement fund or a scheme
with the administrative services described in articles 18 and 19,
unless such person is registered under this Act to act as a retirement
fund administrator or a retirement scheme administrator as the case
may be.
(2) No person shall be registered as a retirement fund
administrator or retirement scheme administrator under this Act
unless -
( a ) such person is a company operating in Malta which -
(i) has its head office in Malta, or
(ii) in the case of a company whose head office is
outside Malta, is established in a country which
in the opinion of the Authority is subject to an
adequate level of regulatory supervision;
Cap. 370.
( b ) in the case only of a retirement fund administrator
such person is in possession of an appropriate licence
under the Investment Services Act or as may otherwise
be prescribed.
(3) The application for registration of a retirement fund
administrator or of a retirement scheme administrator shall be made
in the form and manner as may be prescribed, and shall - 
( a ) specify the name, and address, and telephone number
and e-mail address, if available, of the retirement fund
administrator or retirement scheme administrator, as
the case may be;
( b ) be accompanied by such fees as may be prescribed;
( c ) contain or be accompanied by such other information
and particulars as the Authority may require or as may
be prescribed;
( d ) contain the address in Malta for service on the
applicant of any notice or other document required or
authorized to be served on it by or under this Act or
any other law; and
( e ) specify the nature of the applicant’s business and
relevant experience.
Cap. 370.
(4) The Authority may provide for the automatic registration
of retirement fund administrators or retirement scheme
administrators that already are in possession of a valid investment
services licence within the meaning of the Investment Services Act,
or that are already registered under such other law as the Authority
may specify.
(5) The registration of a retirement fund administrator or of
retirement scheme administrator, may be made subject to such
conditions as the Authority may deem appropriate, and after
registration the Authority may, from time to time, vary or revoke
any condition so imposed or impose new conditions.
  14        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
(6) Where a retirement fund administrator or retirement
scheme administrator contravenes or fails to comply with any of
the conditions imposed under this article, the Authority may
without recourse to a court hearing impose an administrative
penalty which may not exceed forty thousand liri.
Duties of the 
retirement fund 
administrator.
18. (1) The retirement fund administrator shall perform all
duties in connection with the ordinary or day-to-day operations of
the retirement fund, including but not limited to the following:
( a ) receiving the assets of eligible investors, and
maintaining or arranging custody of such assets;
( b ) ensuring that the retirement fund receives all payments
due to it in the proper amounts and in a timely manner;
( c ) ensuring that all income and proceeds received by the
retirement fund are applied in accordance with the
retirement fund’s memorandum and articles of
association;
( d ) ensuring that all disbursements are effected in
accordance with the memorandum and articles of
association;
( e ) maintaining accurate records regarding the net asset
value of the retirement fund in accordance with this
Act, the memorandum and articles of association;
( f ) maintaining accurate records regarding the retirement
fund’s investors;
( g ) complying with all the retirement fund’s statutory and
other requirements including those affecting the
disclosure of information, admissible financial
transactions and the preparation of any financial audit;
( h ) complying with any requirements of the Income Tax
Acts in order to qualify for tax-exemption or tax-
approval;
( i ) ensuring that all instructions and decisions affecting
the retirement fund conform with the law and the
memorandum and articles of association; and 
( j ) providing or arranging for all necessary accounting or
other services.
(2) A retirement fund administrator shall act in the best
interests of the retirement fund and may not use the assets of the
retirement fund for its own or other purposes.
(3) It shall be the duty of the retirement fund administrator
who has in any way, whether directly or indirectly an interest in any
transaction or proposed transaction affecting the retirement fund, to
immediately declare the nature of its interest to the retirement
fund’s board of directors.
Duties of the 
retirement scheme 
administrator.
19. (1) The retirement scheme administrator shall perform all
duties in connection with the ordinary or day-to-day operations of
the scheme, including but not limited to the following:
( a ) investing all contributions in the retirement fund in
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        15
accordance with the terms of the scheme document;
( b ) ensuring that the scheme receives all payments due to
it by any contributor or retirement fund in the proper
amounts and in a timely manner;
( c ) ensuring that all income and proceeds received by the
scheme are applied in accordance with the terms of the
scheme document;
( d ) ensuring that all disbursements are effected in
accordance with the scheme document;
( e ) maintaining accurate records regarding the net asset
value of the scheme in accordance with this Act and
the scheme document;
( f ) ensuring that, with respect to a defined benefit
retirement scheme, the scheme satisfies the technical
funding requirement at each prescribed interval;
( g ) ensuring that, with respect to a defined contribution
retirement scheme, any assets of the scheme in excess
of the current liabilities, or that, with respect to a
defined benefit retirement scheme, the liabilities that
represent future payment obligations to beneficiaries,
shall not be distributed to a party other than to a
beneficiary of the scheme, except in such manner as
may be prescribed;
( h ) ensuring that the interests in the shares of a retirement
fund or funds held for the benefit of an individual who
is to receive payments under such scheme, shall, upon
the retirement, permanent invalidity, or death of such
individual, be redeemed or otherwise liquidated by the
scheme from such retirement fund, and the value of
such redemption shall be made available to the
beneficiary or as provided for in the scheme document;
( i ) maintaining accurate records regarding the scheme’s
contributors and beneficiaries;
( j ) complying with all the scheme’s statutory and other
requirements, including those affecting the disclosure
of information, admissible financial transactions and
the preparation of any financial audit;
( k ) complying with any requirements of the Income Tax
Acts to qualify for tax-exemption or tax-approval;
( l ) seeking to ensure that all instructions and decisions
affecting the scheme are in conformity with the law
and the scheme document; and
( m ) arranging for all necessary accounting, actuarial or
other services.
(2) A retirement scheme administrator shall act in the best
interests of the scheme and may not use the assets of the scheme for
its own or other purposes.
(3) It shall be the duty of the retirement scheme administrator
  16        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
who has in any way, whether directly or indirectly, an interest in
any transaction or proposed transaction affecting the scheme, to
immediately declare the nature of its interest to the contributors of
the scheme, or their appointed representative.
Remuneration of 
the retirement fund 
administrator or 
retirement scheme 
administrator.
20. (1) The remuneration that is payable to the retirement
fund administrator or retirement scheme administrator shall be set
out in a written contract between such person and the retirement
fund or scheme, as applicable, and shall be approved by the board
of directors of the retirement fund or a majority by value of
contributions on the relevant date within the scheme, of the
contributor of the scheme, as the case may be, and be disclosed in
the retirement fund or scheme’s annual report.
(2) For the purpose of this article ''remuneration'' includes
sums paid in respect of expenses.
(3) The provisions of this article shall apply in relation to
benefits in kind as well as to payments in cash, and in relation to
any benefit in kind, references to its amount are to be taken as
references to its estimated money value. The nature of any such
benefit shall also be disclosed.
Removal of the 
retirement fund 
administrator or 
retirement scheme 
administrator.
21. (1) Subject to any requirements as may be prescribed, the
board of directors of a retirement fund may at any time replace the
retirement fund administrator with a new retirement fund
administrator.
(2) Subject to any requirements as may be prescribed, a
majority by value of contributions to date within the scheme of the
contributor of the Scheme may at any time replace the retirement
scheme administrator with a new retirement scheme administrator
in accordance with the relevant scheme document.
(3) It shall be the duty of the administrator being replaced to
cooperate fully with the new retirement fund administrator or
retirement scheme administrator, to ensure a proper, orderly and
complete transfer of duties, and to take all reasonable and practical
measures to preserve and safeguard the interests of the retirement
fund and the beneficiaries.
Liability of the 
retirement fund 
administrator or 
retirement scheme 
administrator.
22. In the discharge of their responsibilities, and without
prejudice to the liability for damages under any other law, the
retirement fund administrator and retirement scheme administrator
shall be liable for any loss or damage suffered as a result of fraud,
wilful default or negligence on their part.
Regulation of the 
retirement fund 
administrator or 
retirement scheme 
administrator.
23. (1) The Authority shall have the power to audit and
investigate a retirement fund administrator or retirement scheme
administrator or any other party providing services to a retirement
fund.
(2) The Authority may at any time cancel or suspend the
registration of the retirement fund administrator or retirement
scheme administrator if - 
( a ) the Authority considers that such person is not fit and
proper to carry out the function required of it in
connection with the retirement fund or scheme; as the
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        17
case may be; or
( b ) information has been furnished to the Authority by or
on behalf of the administrator which is false,
inaccurate or misleading.
(3) The Authority shall, in the exercise of its powers under
subarticle (2), have regard to all relevant matters and shall act in
the best interests of the beneficiaries.
Registration of 
asset managers.
24. (1) No person shall provide or hold itself as providing
discretionary or non-discretionary investment management services
constituting investment services to any retirement fund or scheme
unless such person is a registered asset manager in accordance with
this Act.
(2) A person shall not be registered as an asset manager under
the provisions of this Act unless it is a company - 
Cap. 370.
( a ) operating in Malta and in possession of an appropriate
licence under the Investment Services Act or as may
be prescribed, or
( b ) in the case of a company operating outside Malta,
which is established in a country where in the opinion
of the Authority the company will be subject to an
adequate level of regulatory supervision.
(3) The application for registration of an asset manager shall
be made in the form and manner required by the Authority and
shall-
( a ) specify the name, and address and the telephone
number and e-mail address, if available of the asset
manager;
( b ) be accompanied by such fees as may be prescribed;
( c ) contain or be accompanied by such other information
and particulars as the Authority may require or may be
prescribed; and
( d ) specify the nature of the applicant’s business and
relevant experience.
Cap. 370.
(4) The Authority may provide for the automatic registration
of asset managers that already are in possession of a valid
investment services licence under the Investment Services Act, or
that are already registered under such other law as the Authority
may specify.
(5) An asset manager, may be registered by the Authority
subject to such conditions as the Authority may deem appropriate,
and after registration the Authority may, from time to time, vary or
revoke any condition so imposed or impose new conditions.
(6) Where an asset manager contravenes or fails to comply
with any of the conditions imposed under this article, the Authority
may without recourse to a court hearing impose an administrative
penalty which may not exceed forty thousand liri.
Remuneration of 
asset manager.
25. (1) The remuneration that is payable to a retirement fund
  18        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
asset manager shall be set out in a written contract between the
retirement fund and the asset manager, be approved by the board of
directors, and be disclosed in the retirement fund’s annual report.
(2) The remuneration that is payable to a scheme asset
manager shall be set out in a written contract between the
retirement scheme administrator on behalf of a scheme and the
asset manager, and be disclosed in the scheme’s annual report.
(3) For the purpose of this article ''remuneration'' includes
sums paid in respect of expenses.
(4) The provisions of this article shall apply in relation to
benefits in kind as well as to payments in cash, and in relation to
any benefit in kind, references to its amount are to be taken as
references to its estimated money value. The nature of any such
benefit shall also be disclosed.
Removal of asset 
manager.
26. (1) Subject to any requirements as may be prescribed, and
to any terms and provisions as are established in the scheme
document, the board of directors of a retirement fund or the
majority by value of contributions to date within the scheme of the
contributors of a retirement scheme may replace the asset manager
with a new asset manager at any time.
(2) It shall be the duty of the asset manager being replaced to
cooperate fully with the new asset manager, or where no new asset
manager is appointed, with the administrator, to ensure a proper,
orderly and complete hand over of duties, and to take all reasonable
and practical measures to preserve and safeguard the interests of
the retirement fund or scheme, its shareholders, contributors, and
beneficiaries.
Duties of asset 
manager.
27. (1) An asset manager shall be responsible for all
investment services which it has agreed to provide to the retirement
fund or the scheme appointing it.
(2) An asset manager shall act in the best interests of the
retirement fund or scheme appointing it and may not use the assets
of the retirement fund or the scheme, as the case may be, for its
own or other purposes.
(3) It shall be the duty of the asset manager who has in any
way, whether directly or indirectly, an interest in any transaction or
proposed transaction affecting the retirement fund or the scheme,
as the case may be, to immediately declare the nature of its interest
to the board of directors of the retirement fund or the scheme’s
contributors.
Liability of asset 
manager.
28. In the discharge of its responsibilities, and without
prejudice to any liability for damages under any other law, the asset
manager shall be liable for any loss or damage arising out of fraud,
wilful default or negligence on the part of the asset manager.
Auditors and 
actuaries.
29. (1) Every auditor or actuary of a retirement fund or
scheme shall have the duty to report immediately to the Authority
any fact or decision of which it becomes aware in its capacity as
auditor or as actuary of such retirement fund or scheme which - 
( a ) is likely to lead to a serious qualification of, or refusal
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        19
to issue, the auditor’s or actuary’s report on such
retirement fund or scheme; or 
( b ) constitutes or is likely to constitute a material breach
of the legal or regulatory requirements applicable to a
retirement fund or scheme in or under this Act; or
( c ) seriously impairs the retirement fund’s or scheme’s
ability to meet the current or future liabilities
attributable to it; or 
( d ) relates to any other matter which may be prescribed.
(2) An auditor or an actuary of a scheme or a retirement fund
shall report to the Authority any facts or decisions as specified in
subarticle (1) of any person having close links with such scheme or
retirement fund within the meaning in articles 7 and 8, of which he
becomes aware in his capacity as auditor or actuary of the scheme
or retirement fund or of the person having such close links.
(3) The matters which may be prescribed for the purpose of
subarticle (1)( d ) may include matters related to persons or entities
other than a retirement fund or scheme, including but not limited to
the administrator of a retirement fund or a scheme, or to an asset
manager.
(4) Every defined benefit retirement scheme, which is an
occupational scheme, other than one falling within a class or
description as may be prescribed, shall appoint an auditor and an
actuary.
Cap. 386.
the Authority may by directive - 
( a ) prescribe the class of persons who may act as auditors
or actuaries on behalf of a retirement fund or scheme;
or
( b ) provide that the persons who may so act shall be - 
(i) persons with professional qualifications or
experience as may be prescribed; or
(ii) such other class or classes of persons as are
approved by the Authority.
Cap. 386.
the Authority may by directive make provision relating to - 
( a ) the appointment, resignation and removal of auditors
and actuaries of retirement funds or schemes;
( b ) the duty of an administrator of a retirement fund or of
a scheme to disclose information and to make
documents available to the auditors or actuaries of a
retirement fund or of a scheme.
Duty to report.
administrator or retirement scheme administrator, or the asset
manager, auditor or actuary of any scheme or retirement fund
knows, believes or otherwise suspects that - 
( a ) any duty relevant to the administration of the scheme
  20        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
or retirement fund imposed by any law on any person
acting in connection with the scheme or retirement
fund has not been or is not being complied with, and 
( b ) the failure to comply is likely to be of material
significance in the exercise by the Authority of any of
its functions,
he must immediately give a written report of the matter to the
Authority.
(2) A retirement fund director, retirement fund administrator
or retirement scheme administrator, or the asset manager auditor or
actuary of a retirement scheme or retirement fund shall not be
regarded as having contravened his duties merely because he may
have given any information or opinion contained in a written report
under this article or under article 52.
Cap. 9.
Cap. 12.
Cap. 377.
(3) Saving the provisions of article 642(1) of the Criminal
Code and of article 588(1) of the Code of Organization and Civil
Procedure, no duty, including any duty under the Professional
Secrecy Act, to which any person is subject shall be regarded as
contravened merely because of any information or opinion
contained in a report made by such person under this article or
under article 52.
(4) Any person who fails to comply with subarticle (1) shall be
guilty of an offence.
(5) If it appears to the Authority that a retirement fund
director, retirement fund administrator or retirement scheme
administrator, or the asset manager, auditor or actuary of a scheme
or retirement fund has failed to comply with subarticle (1), the
Authority may by notice in writing, together with reasons for its
decision, disqualify him from being the director, retirement fund
administrator or retirement scheme administrator, or the asset
manager, auditor or actuary of the scheme or retirement fund
specified in the notice.
(6) A notice under subarticle (5) may specify the scheme or
retirement fund to which the failure relates, schemes or retirement
funds falling within any class or description of schemes or
retirement funds or all schemes or retirement funds.
(7) The Authority may, on the application of any person
disqualified under this article who satisfies the Authority that he
will comply with those subarticles, by notice in writing revoke the
disqualification; such a revocation shall not be retrospective.
(8) A retirement fund director, retirement fund administrator
or retirement scheme administrator, or an asset manager, auditor or
actuary of a scheme or retirement fund who is disqualified under
this article shall, while he is so disqualified, cease to be the
retirement fund director, retirement fund administrator or
retirement scheme administrator, or the asset manager, auditor or
actuary of the scheme or the retirement fund specified in the notice
disqualification.
(9) A person who, while he is disqualified under this article,
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        21
purports to act as retirement fund director, retirement fund
administrator or retirement scheme administrator, or as the asset
manager, auditor or actuary of a scheme or retirement fund
specified in the notice of disqualification shall be guilty of an
offence.
Technical funding 
requirement.
31. (1) Every defined benefit retirement scheme which is an
occupational scheme, other than one falling within such class or
description as may be prescribed shall be subject to a requirement
(referred to in this Act as the ''technical funding requirement'') that
the value of the assets of the scheme shall not be - 
( a ) less than such amount; nor
( b ) more than such amount,
as may be prescribed.
(2) The retirement scheme administrator shall obtain within
such period as may be prescribed an actuarial valuation from the
scheme’s actuary and afterwards obtain such a valuation at such
intervals as may be prescribed.
(3) The retirement scheme administrator shall on such
occasions or dates as may be prescribed or within such periods or
intervals as may be prescribed obtain a certificate prepared by the
scheme’s actuary - 
(i) stating whether or not in his opinion the
contributions payable towards the scheme are
adequate for the purpose of securing that the
technical funding requirement will continue to
be met throughout the prescribed period or, if it
appears to him that it is not met, whether or not
in his opinion it will be met by the end of that
period, and
(ii) indicating any relevant changes that have
occurred since the last actuarial valuation was
prepared.
(4) The retirement scheme administrator shall obtain an
actuarial valuation within the period stated in subarticle (2) in the
event that:
(i) the actuary states in the certificate referred to in
subarticle (3) that in his opinion the
contributions payable towards the retirement
scheme are not adequate for the purpose of
securing that the technical funding requirement
will continue to be met throughout the
prescribed period or, if it appears to him that it is
not then met, or that in his opinion it will not be
met by the end of that period; or
(ii) in such circumstances as may be prescribed.
(5) Notwithstanding the provisions of subarticle (4) the
retirement scheme administrator shall not be required to obtain an
actuarial valuation if - 
  22        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
( a ) in the opinion of the scheme actuary, the value of the
scheme assets is not less than the amount prescribed
for the purpose of subarticle (1)( a ); and 
( b ) since the date on which the actuary signed the
certificate referred to in that subarticle, the schedule of
payments for the scheme has been revised in
accordance with article 33(3).
(6) If the retirement scheme administrator obtains a valuation
under subarticle (4), he shall do so - 
( a ) in the case of a valuation required by subparagraph (i)
thereof, within the period of six months reckoned from
the date of the actuarial certificate, and
( b ) in any other case, within such period as may be
prescribed.
(7) A valuation or certificate shall be prepared in such manner,
give such information and contain such statements as may be
prescribed.
Schedule of 
payments of 
occupational 
schemes.
32. The retirement scheme administrator of every occupational
scheme, other than one falling within such class or description as
may be prescribed shall prepare, maintain and from time to time
revise a schedule (hereinafter and in article 31 referred to as a
schedule of payments), showing - 
( a ) the rates of contributions payable towards the scheme
by or on behalf of the employer and, where applicable,
by any other contributors of the scheme;
( b ) the dates on or before which such contributions are to
be paid; and
( c ) such other matter as may be prescribed.
Schedule of 
payments for 
occupational 
defined benefit 
retirement 
schemes.
33. (1) This article applies to every defined benefit retirement
scheme, which is an occupational scheme, other than one falling
within such class or description as may be prescribed.
(2) The schedule of payments shall be prepared before the end
of such period as may be prescribed reckoned from the date of the
first actuarial valuation for the scheme, and shall thereafter be
revised before the end of such period as may be prescribed
reckoned from the date of the signing of each subsequent actuarial
valuation.
(3) Where from time to time, such revisions are agreed by the
retirement scheme administrator and the employer, and where
applicable, any other contributor to the scheme, and any such
revision in the rates of contributions is certified by the actuary of
the scheme as meeting the requirements of this Act, or as may be
prescribed or in the circumstances referred to in subarticle (4)( b )
hereof, the schedule of payments may be revised.
(4) The matters contained in the schedule of payments as
revised shall be:
( a ) matters previously agreed between the retirement
scheme administrator and the employer, and where
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        23
applicable, any other contributor to the scheme, or
( b ) where no such agreement has been reached:
(i) the rates of contributions determined by the
retirement scheme administrator and the actuary
of the scheme and certified by the actuary of the
scheme, being such rates as in their opinion are
adequate for the purpose of securing that the
technical funding requirement will continue to
be met throughout the prescribed period or
where it appears to them that they are not then
met, such as are adequate for them to be met by
the end of that period; and
(ii) any other matters determined by the retirement
scheme administrator and the actuary of the
scheme.
(5) An agreement for the purposes of subarticle (4)( a ) shall be
made during such period as may be prescribed beginning with the
signing of the last preceding actuarial valuation for the scheme.
(6) The actuary shall not certify the schedule of payments - 
(i) where it appears to him that the technical
funding requirement is met, unless he is of the
opinion that the rates are adequate for the
purpose of securing that the requirement will
continue to be met throughout the prescribed
period, and 
(ii) in any other case unless he is of the opinion that
the rates are adequate for the purpose of
securing that the requirement will be met by the
end of that period.
(7) The Authority may extend, or further extend the period
referred to in subarticle (2), and where it refuses to extend, or
further extend such period it shall give written notice of the refusal
together with a statement of reasons for the decisions.
Payment of 
contributions.
34. (1) Except in such circumstances, as may be prescribed
the retirement scheme administrator and actuary of every
occupational scheme, other than one falling within such class or
description as may be prescribed, shall, where any amounts payable
by or on behalf of the contributor(s) of the scheme in accordance
with the schedule of payments have not been paid on or before the
due date, give notice of that fact, within such period as may be
prescribed to the Authority and to the beneficiaries.
(2) ( a ) Where the retirement scheme administrator desires to
sue for the recovery of a debt due from a contributor in
respect of any contribution, he may make a declaration
on oath before the registrar of the courts, a judge or a
magistrate wherein he is to state the nature of the debt
and the name of the debtor and confirm that it is due.
( b ) The declaration referred to in paragraph ( a ) shall be
served upon the contributor by means of a judicial act
  24        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
and it shall have the same effect as a final judgement
of the competent court unless the contributor shall,
within a period of twenty days from service upon him
of the said declaration oppose the claim by filing an
application demanding that the court declare the claim
unfounded.
( c ) The application filed in terms of paragraph ( b ) shall be
served upon the retirement scheme administrator who
shall be entitled to file a reply within the period of
twenty days. The court shall appoint the application
for hearing on a date after the lapse of that period.
( d ) In the case of an urgent nature the court may, upon an
application of the retirement scheme administrator or
the contributor, shorten any time limits provided for in
this subarticle by means of a decree served on the
other parts.
( e ) Any executive title obtained according to the previous
paragraphs of this subarticle in the absence of any
opposition on the part of the contributor shall be
rescinded if upon a request by writ of summons to be
filed by the contributor within twenty days from the
first service upon him of an executive warrant based
on the said title or of any other judicial act wherein
reference is made to the said title the court is satisfied
that the contributor was unaware of the service of the
declaration referred to in paragraph ( a ) during the
period during which he could oppose the same and that
the claim contained in the said declaration is
unfounded on the merits.
( f ) No opposition other than that specifically provided in
paragraph ( e ) shall stay the issue or execution of any
executive act obtained thereunder or the paying out of
the proceeds of any warrant or sale by auction carried
out in pursuance thereof.
(3) In the case of an occupational scheme, other than one
falling within such class or description as may be prescribed, any
amounts payable by the contributor in accordance with the payment
schedule shall be paid on or before the due date. Any contributor
who fails to effect such payment on or before the due date shall be
guilty of an offence.
(4) Where in the case of a defined benefit retirement scheme,
which is an occupational scheme other than one falling within such
class or description as may be prescribed, it appears to the
retirement scheme administrator or the scheme actuary, at the end
of such period as may be prescribed that the technical funding
requirement is not met, such retirement scheme administrator or
such scheme actuary, as the case may be, shall give written notice
to the Authority of that fact together with such information as may
be prescribed relating to the failure to meet that requirement.
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        25
Underprovision in 
an occupational 
benefit retirement 
scheme.
35. (1) This article applies to every defined benefit retirement
scheme, which is an occupational scheme, other than one falling
within such class or description as may be prescribed.
(2) Where an actuarial valuation shows that, on the effective
date of the valuation, the value of the scheme assets is less than the
amount prescribed for the purposes of article 31(1)( a ) (the
difference shown in the valuation hereinafter referred to as ''the
shortfall''), the employer, shall - 
(i) by making an appropriate payment to the
retirement scheme administrator, or 
(ii) by such other method as may be prescribed,
secure an increase in the value of the scheme assets which, taken
with any contributions paid, is not less than the shortfall.
(3) The required increase in that value must be secured - 
( a ) before the end of such period as may be prescribed
reckoned from the date of the valuation, or 
( b ) if the actuarial valuation was obtained by reason of a
statement in a certificate as is referred to in article
31(3), before the end of a prescribed period reckoned
from the date of the certificate.
(4) Except in such circumstances as may be prescribed, if the
employer referred to in subarticle (2) fails to secure the required
increase in value before the end of the period applicable under
subarticle (3), the retirement scheme administrator shall within the
period of thirty days reckoned from the end of that period, give
written notice of that fact to the Authority and to the beneficiaries
of the scheme.
(5) Except in such circumstances as may be prescribed if the
employer referred to in subarticle (2) fails to secure the required
increase in value before the end of the period applicable under
subarticle (3), then so much of the shortfall as, at any subsequent
time, has not been met by an increase in value made under
subarticle (2) or otherwise by contributions made before the end of
that period, shall be recoverable by the retirement scheme
administrator and the provisions of article 34(2) shall  mutatis
mutandis  apply with regard to any such debt.
(6) The Authority may extend, or further extend the period
referred to in subarticle (3), and where it refuses to extend or
further extend the period it shall give written notice of the refusal
together with a statement of reasons for its decision.
Overprovision in 
an occupational 
benefit retirement 
scheme.
36. (1) This article applies to every defined benefit retirement
scheme, which is an occupational scheme, other than one falling
within such class or description as may be prescribed.
(2) Where an actuarial valuation shows that, on the effective
date of the valuation, the value of the scheme assets is more than
the amount prescribed for the purposes of article 31(1)( b ) (the
difference shown in the valuation hereinafter referred to as ''the
excess''), the Authority may issue a directive to the employer and
the retirement scheme administrator, to take such steps by such
  26        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
method as may be approved by the Authority to secure an
appropriate reduction in the value of the scheme assets.
(3) The required reduction in that value must be secured before
the end of such period as may specified in the directive.
(4) If the employer and retirement scheme administrator fail to
secure the required reduction in value before the end of the period
applicable under subarticle (3), the retirement scheme
administrator shall within the period of thirty days reckoned from
the end of that period, give written notice of that fact to the
Authority and to the beneficiaries of the scheme.
(5) The Authority may extend, or further extend the period
referred to in subarticle (3), and where it refuses to extend, or
further extend the period it shall give written notice of the refusal
together with a statement of reasons for the decision.
Scheme to invest in 
retirement fund.
37. A scheme may only invest in one or more retirement funds
which satisfy the requirements of this Act.
Permitted 
investments of 
retirement fund 
and borrowing 
powers.
38. (1) A retirement fund shall comply with such
requirements as may be prescribed with regards to the investment,
management and valuation of its assets and the extent to which a
retirement fund may borrow money.
(2) A retirement fund shall comply with directives made by the
Authority for the purpose of ensuring that:
( a ) no part, or not more than a specified proportion, of the
Scheme's resources shall be invested in instruments or
immovable property of such class or description as
may be specified in the directive;
( b ) the whole or specified proportion of instruments or
immovable property of any specified class or
description forming part of the scheme’s resources
shall be realized before the end of such period as
maybe specified in the directive;
( c ) the allocation of the scheme’s assets among various
investments shall be diversified in such manner as may
be prescribed; and
( d ) the retirement fund shall derive in each fiscal year at
least ninety per cent of its gross income from
dividends, rent or interest payments with respect to
Instruments or immovable property, or from gains
from the sale or other disposition of such instruments
or immovable property, or from other income derived
with respect to its business of investing in such
Instruments or immovable property.
(3) Without prejudice to the generality of subarticle (1), a
retirement fund shall comply with such restrictions as may be
prescribed under this Act, with respect to the proportion of its
resources that may at any time be invested in, or in any description
of, contributor-related investments, as defined in subarticle (4).
(4) For purposes of this article - 
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        27
( a ) ''contributor-related investments'' means - 
(i) saving any exemption under article 50(1), any
instrument issued by the contributor or an
affiliate of the contributor;
(ii) immovable property which is occupied or used
by, or held under any title whatsoever by the
contributor or an affiliate of the contributor;
(iii) loans to the contributor or to an affiliate of the
contributor;
( b ) any sums due and payable by a person to a retirement
fund and remaining unpaid shall to the extent that they
are so unpaid be regarded for the purposes of this
article as a loan made to that person by the retirement
fund.
Payment of 
retirement fund 
expenses and 
scheme expenses.
39. Retirement funds and schemes shall comply with such
requirements as may be prescribed with regard to the use of the
scheme’s money or other assets - 
( a ) to defray administrative expenses;
( b ) to pay any commission; or
( c ) in any other way which does not result in the provision
of retirement benefits for or in respect of beneficiaries.
Distributions by a 
defined benefit 
retirement scheme.
40. (1) Subject to the following provisions, and to any
regulations or directives as made for the purpose of this article, a
defined benefit retirement scheme shall make a distribution to
beneficiaries in the amounts and at the times specified in the
applicable scheme document.
(2) To the extent as may be consistent with the applicable
scheme, a defined benefit retirement scheme may also satisfy its
liability to a beneficiary under such scheme if - 
Cap. 403.
( a ) it takes out an annuity contract or a policy of insurance
or a number of such contracts or policies, with an
insurance company carrying on long-term insurance
business and authorized for this purpose in accordance
with the Insurance Business Act (or, in the case of a
beneficiary resident outside Malta, with a  bona fide
insurance company carrying on long-term insurance
business outside Malta); and
( b ) it transfers the benefit of such a policy or policies or
such a contract or contracts to such beneficiary:
Provided that a policy of insurance or annuity contract
shall only be appropriate for the purposes of this article if - 
( a ) it may not be assigned or surrendered except on
conditions which satisfy such requirements as may be
prescribed;
( b ) the amount secured by the policy may not be
commuted except on conditions which satisfy the
requirements of such scheme; and
( c ) it satisfies such other requirements as may be
  28        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
prescribed by any regulations or directives for the
purpose of this article.
Compliance with 
tax requirements.
41. A retirement fund or scheme shall comply with any
requirements as are established from time to time by the
Commissioner.
Advertisement of 
schemes.
42. (1) The Authority may make directives relating to the
form and content of advertisements and such other promotional
activity as may be prescribed in connection with schemes or funds.
(2) All advertisements relating to a scheme or retirement fund
shall, unless otherwise prescribed, contain a statement that there
exists no statutory provision for compensation in the case where a
scheme or retirement fund is unable to satisfy the liabilities
attributable to it, and that the registration of the scheme or
retirement fund is not an endorsement by the Authority of the
scheme’s or retirement fund’s financial performance.
Disclosure of 
retirement scheme 
particulars.
43. (1) A retirement fund shall, not later than three months
after the closing of its financial year, or at any other time as may be
prescribed, send a copy of the documents listed in subarticle (2) to
each of the following persons -
( a ) each overseas retirement plan investing in such
retirement fund;
( b ) each retirement scheme administrator of a scheme
investing in such retirement fund;
( c )  the Authority and the Commissioner; and
( d ) any other person as the Authority may prescribe.
(2) In relation to any retirement fund, the documents to which
subarticle (1) applies are - 
( a ) its audited accounts;
( b ) its annual report, in accordance with the requirements
in the First Schedule; and
( c )  a directors’ report providing such information as is
sufficient to enable the persons mentioned in
subarticle (1) to make an informed judgement on the
development management, operation and financial
performance of the retirement fund.
(3) In all other respects, the annual account and directors’
report of a retirement fund shall be prepared in accordance with the
provisions applicable to companies generally to the extent that they
are not inconsistent with the provisions of the preceding subarticles
of this article and the First Schedule.
(4) The Authority may by directive specify additional
requirements with respect to keeping the persons mentioned in
subarticle (1), or any of them, informed of any changes with respect
to, or additions to the terms and provisions - 
( a ) of the retirement fund’s administration and finances;
( b ) of the rights and obligations that arise or may arise in
respect of the retirement fund; and
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        29
( c ) of any other matters that appear to the Authority to be
relevant to retirement funds in general or to retirement
funds of a description to which the retirement fund in
question belongs.
(5) The directive may distinguish between - 
( a ) cases in which information is to be given as of course;
and
( b ) cases in which information need only be given on
request or in such circumstances as may be prescribed.
(6) The Authority may by directive make provision as to the
form and content of any such document as is mentioned in this
article.
Disclosure of 
retirement fund 
information.
44. (1) The Authority may make directives requiring the
retirement scheme administrator to submit to the Authority and to
publish or make available to beneficiaries a document containing
information about the scheme and complying with such
requirements as may be prescribed.
(2) Directives may further require the retirement scheme
administrator to submit and publish or make available revised or
further scheme particulars if -
( a ) there is significant change affecting any matter
contained in such particulars previously published or
made available as may be prescribed; or
( b ) a significant new matter as may be prescribed arises.
Annual accounts of 
occupational 
schemes.
45. (1) The retirement scheme administrator of an
occupational scheme, other than one falling within such class or
description as may be prescribed, shall produce a copy of the
annual accounts of the scheme to the Authority not later than three
months after the closing of its financial year, or at any other time as
may be prescribed.
(2) Such statements, reports, certificates and information as
may be required by regulations made under this Act, or required by
any other enactment to be annexed or attached to the annual
accounts for any purpose shall be produced to the Authority at the
same time as the annual accounts are submitted.
(3) The Authority may exempt in writing a scheme specified in
the exemption from any provision contained in regulations made
under this Act relating to accounts.
(4) In this article, annual accounts means the scheme accounts
as prescribed under this Act.
Scheme document 
as binding 
agreement.
46. (1) A scheme as written out in its scheme document shall,
when duly disclosed to a beneficiary, be binding on the beneficiary,
unless such beneficiary notifies the retirement scheme
administrator of his written opposition thereto within a period of
two months from the receipt by him of the scheme document.
(2) A beneficiary who is not himself also a contributor shall
cease to be a beneficiary under a scheme if he opposes a scheme
document which does not reduce the benefits due to him under the
  30        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
scheme.
Unenforceability 
of unregistered 
schemes.
47. (1) A scheme which is not registered in accordance with
this Act shall be unenforceable against any contributor who is also
a beneficiary; and such contributor shall be entitled to recover any
money paid, or other property transferred by him under the scheme,
or where such property cannot be so recovered, such contributor
shall be entitled to have it replaced by its value at the time of the
agreement, together with compensation for any loss sustained by
him in consequence of such payment or transfer or the non-
recovery of the property transferred and any profits that may have
accrued as a result of that money or other property having been
transferred by him.
(2) The provision of subarticle (1) shall not affect any liability
which any person may incur apart from this article.
Transferability of 
rights and 
obligations.
48. Regulations or directives may prescribe the circumstances
in which and the conditions subject to which - 
( a ) a beneficiary may transfer his accrued rights from one
scheme to another; and
( b ) a scheme may transfer the liabilities attributable to it
to another scheme; and
( c ) a scheme may provide for the payment of a retirement
benefit in the form of a lump sum instead of an
annuity; and
( d ) a contributor may transfer, dispose of or charge his
interest in a scheme.
Assignment or 
attachment of 
retirement fund 
assets.
49. (1) The creditors of a contributor may not enforce their
rights over the contributor's interest in the scheme; nor may such
creditors attach or subject such interest to any precautionary or
executive warrant:
Cap. 16.
Provided that nothing in this subarticle shall be deemed to
deprive any creditor of such contributor of any rights granted to a
creditor under article 1144 of the Civil Code.
(2) Except as may be prescribed under this Act, every
agreement that is made by a contributor to transfer, dispose of or
charge his interest in the scheme shall be void.
PART III
GENERAL PROVISIONS
Minister’s powers.
Amended by:
IX. 2003.121.
50. (1) The Minister, acting on the advice of the Authority,
may make regulations to give effect to the provisions of this Act,
and without prejudice to the generality of the foregoing may, by
such regulations, in particular, do any of the following;
( a ) extend or restrict the definition of ''contributor'',
''beneficiary'', ''defined benefit retirement scheme'',
''defined contribution retirement scheme'',
''instrument'', ''investment service'', ''occupational
scheme'', ''overseas retirement plan'', ''retirement
benefit'', ''retirement fund'' or ''scheme'', contained in
article 2 to such class of persons, schemes,
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        31
instruments, services, plans or benefits as the Minister
deems fit; and amend the Schedules to this Act;
( b ) regulate retirement funds and retirement schemes, as
well as the services provided and activities carried on
in conjunction therewith or in relation thereto;
establish the qualifications and other eligibility criteria
necessary to act as Retirement Fund Custodian,
provide for the payment of such fees and other charges
as may be prescribed, provide for the powers of the
Authority in their regard including the imposition of
administrative penalties and other measures as well as
appeals thereform to the Financial Services Tribunal,
and provide for the issue of Directives establishing
other requirements regarding their conduct and
activities; and provide for any matter he may deem
expedient and may in particular grant rights to the
public in respect of such funds and schemes and
regulate the exercise thereof;
( c ) establish or make arrangements for the compensation
of beneficiaries in cases where a retirement fund or
retirement scheme is unable to satisfy claims in respect
of any liability incurred by it in connection with a
retirement scheme;
( d ) regulate the format, content or amendment of a scheme
document;
( e ) prescribe the circumstances in which auditors or
actuaries shall be obliged to communicate information
to the Authority in accordance with article 29 and may
in particular increase the circumstances wherein
auditors or actuaries shall be obliged to report to the
Authority and prescribe the circumstances or classes
thereof wherein they shall be exempted from the
provisions of the said article 29; and prescribe rules
governing the disclosure by auditors or actuaries of
information, and establish supervisory and disciplinary
procedures for auditors or actuaries in respect of their
duties;
( f ) exempt any person, scheme, retirement fund, or
advertisement from any one or more of the provisions
of this Act and on such conditions as may be
prescribed;
( g ) regulate the provision by any one retirement fund of
separate investment portfolios, regulate the investment
in any one retirement fund of separate schemes,
providing for any matter he may deem expedient,
including the regulation of the contents of the
memorandum and articles of association of such
retirement funds, and for the segregation of the assets
of any one scheme from that of another, the regulation
of the manner and the form whereby such retirement
fund may create and issue shares, and the provision of
any matter consequential, incidental to or connected
  32        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
therewith;
( h ) require the keeping and maintenance of records with
respect to the transactions and financial position of an
overseas retirement plan, a scheme or a retirement
fund, and for the keeping of records in Malta and for
the inspection of such records;
( i ) require the preparation and presentation of periodical
or other reports by an overseas retirement plan, a
scheme or a retirement fund, to the Authority and to
any other person as the said Minister may prescribe;
( j ) require an overseas retirement plan, a scheme or a
retirement fund - 
(i) to obtain at prescribed times or on the happening
of prescribed events such information and
documents as may be prescribed;
(ii) to furnish that information and copies of those
documents to the Authority and, or, such persons
as may be prescribed in the form, manner and at
the time prescribed;
( k ) restrict or otherwise regulate the manner in which a
defined benefit retirement scheme deals with surplus
funds;
( l ) provide for the content, format and audit of the annual
accounts of an overseas retirement plan, a scheme or a
retirement fund;
( m ) regulate the payment (including the time thereof),
nature and amount of benefits which may or may not
be paid to beneficiaries;
( n ) regulate the manner by which the amount or value of
the assets or liabilities of a scheme shall be
determined, calculated and, or, verified, and determine
the assets and liabilities that are to be taken into
account for such purpose;
( o ) prescribe anything that is to be or which may be
prescribed; and 
( p ) provide for any matter incidental to or connected
thereto.
(2) Any regulations made under this article may also contain
provision for enabling a beneficiary, contributor, and generally any
person who has entered, or offered to enter, into a scheme, to
rescind the agreement or withdraw the offer within such period and
in such manner as may be prescribed, and in particular, but without
prejudice to the generality of the foregoing, may make provision - 
( a ) requiring the service of notice with respect to the
rights exercisable under such regulations;
( b ) for the restitution of property and the making or
recovery of payments where those rights are exercised;
or 
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        33
( c ) for such other matters as are incidental to or connected
with any of the above.
(3) Any regulations made under this article, may be made
subject to such exemptions or conditions as may be specified
therein, may make different provision for different cases,
circumstances or purposes and may give to the Authority such
powers of adaptation of the regulations as may be therein specified.
(4) Regulations made under this article may provide that any
contravention or failure of compliance therewith shall constitute an
offence and that any person guilty of such an offence shall be liable
on conviction to such penalty as may be prescribed being a penalty
not exceeding a fine ( multa ) of forty thousand liri or imprisonment
for a term not exceeding one year, or both such fine and
imprisonment.
Powers of the 
Authority.
51. (1) The administration of this Act shall be vested in the
Authority. The Authority shall perform such other functions as the
Minister may consider appropriate in relation to the operation of
this Act.
(2) The Authority shall have the power to carry out the
functions assigned to it by or under this Act and to ensure that the
provision of retirement schemes and retirement funds complies
with this Act and with any regulations made thereunder, with any
directive made by the Authority in virtue of this Act, and with the
conditions specified in any registration of a scheme.
(3) The Authority may make, amend or revoke directives as
may be required for carrying into effect any of the provisions of
this Act and of any regulations made thereunder. Such directives,
amendment and revocations may relate to a particular class of
persons or situations or to persons and situations generally.
(4) All directives and any amendment or revocation thereof
shall be officially communicated to the persons concerned and be
open to public inspection in all the offices of the Authority at all
times during the normal working hours of the Authority.
Cap. 370.
(5) The Authority shall enjoy the powers assigned to the
competent authority in terms of articles 15 and 16 of the Investment
Services Act  mutatis mutandis .
(6) The Authority may exercise the following powers at the
request of or for the purposes of assisting an overseas regulatory
authority:
( a ) the power to impose, revoke or vary conditions on the
registration of a scheme or a retirement fund made
pursuant to the provisions of articles 7(3) and 8(3);
( b ) the power to cancel or suspend a registration under
articles 11 and 12;
( c ) the powers of inquiry under article 52;
( d ) the power to appoint inspectors under article 53;
( e ) the powers of intervention under subarticle (5) of this
article;
  34        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
( f ) the powers of entry under subarticle (5) of this article;
( g ) the power to communicate to the overseas regulatory
authority information which is in the possession of the
Authority, whether or not as a result of the exercise of
any of the above powers.
(7) The Authority shall exercise powers by virtue of this
article:
( a ) where the assistance is requested by the overseas
regulatory authority for the purpose of the exercise of
one or more of its regulatory functions; or
( b ) where so required within the terms of Malta’s
international commitments; or
( c ) where so required within the terms of undertakings
assumed in bilateral or multilateral agreements for the
exchange of information and other forms of
collaboration with overseas regulatory authorities
including a request arising under a memorandum of
understanding concluded with the Authority.
Power of Authority 
to obtain 
information.
52. (1) The Authority may, by notice in writing, require - 
(i) any contributor, retirement scheme
administrator, retirement fund administrator or
asset manager who is or was providing, or who
appears to be or to have been providing, a
retirement scheme, overseas retirement plan or a
retirement fund, or who appears to be or have
been carrying on activities in connection with a
retirement scheme, overseas retirement plan or a
retirement fund; or 
(ii) any contributor, retirement scheme
administrator, retirement fund administrator, or
asset manager who has issued, or appears to
have issued an advertisement falling within the
provisions of article 42; or
(iii) any other contributor, retirement scheme
administrator, retirement fund administrator, or
asset manager who appears to be in possession
of relevant information,
to do all or any of the following:
( a ) to furnish to the Authority, at such time and place and
in such form as it may specify, such information and
documentation as it may require with respect to any
such retirement scheme or advertisement;
( b ) to furnish to the Authority any information or
documentation authenticated in such manner as it may
specify; or
( c ) to attend before the Authority, or before a person
appointed by it, at such time and place as it may
specify, to answer questions and provide information
and documentation with respect to any such service,
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        35
scheme or advertisement.
(2) The Authority may take and retain copies of any
documents furnished or provided under this article.
(3) Where the Authority has appointed a person under
subarticle (1)( c ), such person shall, for the purposes of carrying out
his functions under his appointment, have all the powers conferred
on the Authority by this article and a requirement made by him
shall be deemed to be and have the same force and effect as a
requirement by the Authority.
Appointment of 
inspectors.
53. (1) The Authority may, whenever it deems it necessary or
expedient, appoint an inspector or inspectors to investigate and
report on the affairs of any person, scheme, overseas retirement
plan or retirement fund referred to in article 52(1)(i) to (iii).
(2) An inspector appointed under subarticle (1) - 
( a ) may also, if he thinks it necessary or expedient for the
purposes of that investigation, investigate the affairs of
any person, scheme, overseas retirement plan or
retirement fund mentioned in subarticle (1);
( b ) shall have and may exercise all the powers conferred
on the Authority by article 51, and any requirement
made by him shall be deemed to be and have the same
force and effect as a requirement by the Authority; and
( c ) may, and if so directed by the Authority shall, make
interim reports and on the conclusion of his
investigation shall make a final report to the Authority.
(3) The Authority shall have power to order that all expenses
of, and incidental to, an investigation pursuant to this article be
paid by the person, scheme or retirement fund concerned.
Appeals.
Cap. 330.
54. (1) Subject to the provisions of this article, an appeal shall
lie to the Tribunal established in article 21 of the Malta Financial
Services Authority Act with respect to:
( a ) any determination in accordance with article 3(5);
( b ) any refusal, variation, cancellation or suspension of a
registration under article 7, 8, 11 or 12;
( c ) any decision under article 13(3), and any directive
given under article 51(6)( e );
( d ) any decision to make a public statement, under the
provisions of article 59, as to a person’s misconduct;
or 
( e ) any administrative penalty in respect of infringements
as may be prescribed under article 7, 8, 17 and 24.
(2) An appeal under this article shall lie only on any of the
following grounds:
( a ) that the Authority has wrongly applied any of the
provisions of this Act; or
( b ) that the decision or Directive of the Authority
constitutes an abuse of discretion and is manifestly
  36        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
unfair, but the discretion of the Authority may not, so
long as it has been exercised properly, be queried by
the Tribunal.
(3) An appeal made under this article shall not suspend the
operation of any decision or directive from which the appeal is
made:
Provided that a decision to cancel a registration shall not
become operative until the expiration of the period within which an
appeal lies under this article and, if an appeal is made within such
period, the decision shall become operative on the date of the
decision of the Tribunal dismissing the appeal or the date on which
the appeal is abandoned:
Provided further that a decision to issue a statement as to a
person's misconduct shall not be published until expiration of the
period within which an appeal lies under this article and, if an
appeal is made within such period, the statement shall not be
published before the date of the decision of the Tribunal dismissing
the appeal or the date on which the appeal is abandoned.
Cap. 330. (4) The provisions of article 21 of the Malta Financial Services
Authority Act shall, except in so far as any of them is incompatible
with the provisions of this article, apply to appeals made to the
Tribunal under this Act.
Powers of the 
Court.
55. (1) If, on an application by the Authority made to the Civil
Court, First Hall, the court is satisfied - 
( a ) that there is reasonable likelihood that a person will
contravene any of the provisions of this Act or any
regulations or directives made thereunder, or will
contravene or fail to comply with any condition,
obligation, requirement, regulation, directive, or order
made or given under any of the provisions of this Act;
or
( b ) that a person has contravened any such provision or
has contravened or failed to comply with any such
condition, obligation, requirement, regulation,
directive, or order and that steps could be taken to
remedy the contravention or failure,
the court may give such orders as it may deem appropriate to
restrain the contravention or, as the case may be, to require the
person referred to in paragraph ( a ) or ( b ), or any other person who
appears to the court to have been knowingly concerned in the
contravention, to take such steps as the court may direct.
(2) If, on an application made under subarticle (1), the court is
satisfied that a person has entered into any transaction in
contravention of any of the provisions of this Act, the court may
order that person and any other person who appears to the court to
have been knowingly concerned in the contravention to take such
steps as the court may direct for restoring the parties to the position
in which they were before the transaction was entered into.
(3) If, on application made under subarticle (1), the court is
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        37
further satisfied that - 
( a ) profits have accrued to any person as a result of the
contravention; or 
( b ) a shareholder, contributor or a beneficiary has suffered
loss or been otherwise adversely affected as a result of
that contravention,
the court may order the person responsible for the contravention to
pay into court such sum as appears to it to be just having regard to
the extent of the profit, loss or adverse effect as aforesaid, and
order such sum to be paid out as the court may direct to the persons
who have entered into transactions as a result of which profits have
accrued or losses or adverse effects have been suffered as
aforesaid.
(4) For the purposes of this article the court may order the
production by any person of such accounts and the provision of
such information, and authenticated in such manner, as the court
may deem appropriate.
(5) The provisions of this article shall be without prejudice to
any right of any aggrieved person to bring proceedings directly in
respect of any right such person may otherwise have independently
of the Authority.
Cap. 12.
Organization and Civil Procedure may make rules
concerning proceedings before the Civil Court, First
Hall, under this article.
( b ) The Minister responsible for justice may by
regulations under this paragraph establish the fees
payable in the registry of the Court relative to the
filing of judicial acts in connection with proceedings
under this article:
Provided that until such fees are so established, the
fees contained in Schedule A to the Code of
Organization and Civil Procedure shall apply.
Offences.
any of the provisions of this Act, or contravenes or fails to comply
with any condition, obligation, requirement, regulation, directive or
order made or given under any of the provisions of this Act, shall
be guilty of an offence.
(2) Any person who for the purposes of, or pursuant to, any of
the provisions of this Act or of any regulations made thereunder, or
any condition, obligation, requirement or order made or given as
aforesaid, furnishes information or makes a statement which he
knows to be inaccurate, false or misleading in any material respect,
or recklessly furnishes information or makes a statement which is
inaccurate, false or misleading in any material respect, shall be
guilty of an offence.
(3) Any person who is knowingly a party to the carrying on of
any retirement fund or scheme with an intent to defraud, shall be
guilty of an offence.
  38        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
(4) Any person who by any statement, promise or forecast
which he knows to be misleading, false or deceptive, or by any
dishonest concealment of material facts, or by the reckless making
(whether dishonest or otherwise) of any statement, promise or
forecast which is misleading, false or deceptive, induces or
attempts to induce another person to enter into or offer to enter into
a retirement fund or scheme, shall be guilty of an offence.
(5) Any person who with intent to avoid detection of the
commission of an offence under this Act removes, destroys,
conceals or fraudulently alters any book, document or other paper,
shall be guilty of an offence.
(6) Any person who intentionally obstructs a person exercising
rights conferred by this Act shall be guilty of an offence.
Penalties. 57. A person guilty of an offence under the provisions of
article 56 shall unless another penalty is prescribed be liable on
conviction to a fine ( multa ) not exceeding two hundred thousand
liri or to a term of imprisonment not exceeding four years, or to
both such fine and imprisonment.
Criminal 
proceedings.
58. (1) No proceedings for an offence under this Act shall be
commenced without the consent of the Attorney General.
(2) The provisions of this Act shall not affect any criminal
liability that may be incurred by any person under any other law.
Public statement as 
to misconduct.
59. (1) If it appears to the Authority that a person who is or
was providing or who appears to be or to have been providing, a
retirement scheme has contravened any of the provisions of this
Act or of any regulations made thereunder or has contravened or
failed to comply with any condition, obligation, requirement,
directive or order made or given under any of the provisions of this
Act, the Authority may publish a statement to that effect.
(2) Before publishing a statement under subarticle (1), the
Authority shall give the person concerned written notice of the
proposed statement and of the reasons for which it is proposed to
publish the statement.
(3) Where the reasons stated in the notice relate specifically to
matters which - 
( a ) refer to a person identified in the notice other than the
person who is the subject of the notice; and
( b ) are in the opinion of the Authority prejudicial to that
person in any office or employment,
the Authority shall, unless it considers it impracticable to do so,
serve a copy of the notice also on that other person.
(4) A notice served on a person pursuant to the provisions of
this article shall give particulars of the person’s right of appeal
under article 54 and of the provisions of subsection (5).
(5) Subject to the provisions of article 54(4), upon the
expiration of one month from the date of service of the notice under
subarticle (2), or a copy of the notice under subarticle (3) of this
article, whichever was the later, the Authority may publish the
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        39
proposed statement and, after publication, shall send a copy to that
person and to any person on whom a copy of the notice was served
under subarticle (3) of this article.
Confidentiality.
obtained by any person for the purposes of, or pursuant to, any of
the provisions of this Act, or of any regulations or directives
promulgated thereunder, or in the discharge of any functions under
any of the said provisions, shall be treated as confidential and
protected by the duty of professional secrecy, and shall not be
disclosed to any person other than to a person who may lawfully
obtain that information for the purposes of, or pursuant to, the
provisions of this Act, except in the case of the consent of the
person from whom it obtained the information, provided the
information relates solely to that person.
(2) The provisions of subarticle (1) shall not preclude the
disclosure of information - 
( a ) with a view to the institution of, or otherwise for the
purposes of, criminal proceedings or of any
proceedings by the Authority before any court under
this Act;
( b ) with a view to enabling or assisting the Authority in
the performance or discharge of any of its functions
under this Act;
( c ) which has been made available to the public by virtue
of being disclosed in any circumstances in which, or
for any purpose for which, disclosure is not precluded
by this article;
( d ) in a summary or collection of information formed in
such a way as not to enable the identity of any person
to whom the information relates to be ascertained;
( e ) to an auditor or actuary where such disclosure would
assist the auditor or actuary in the exercise of its
functions under article 29;
Cap. 345.
( f ) to the Central Bank of Malta or to the listing authority
under the Financial Markets Act, where such
information is required by the Bank or the listing
authority in the exercise of their respective functions
in terms of law;
( g ) in response to a request from, or for the purpose of
assisting an overseas regulatory authority pursuant to
article 51;
( h ) to such other local or overseas regulatory, judicial or
enforcement authorities where such disclosure is
required or requested for the pursuance of serious
regulatory concerns or the detection, prevention or
prosecution of criminal offences;
( i ) in civil or commercial proceedings in relation to the
bankruptcy or compulsory winding up of a scheme or
retirement fund provided such information does not
  40        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
concern third parties involved in attempts to rescue
such a scheme or retirement fund, and to such overseas
bodies responsible for the liquidation of bankruptcy of
a person holding a licence or an equivalent
authorisation from an overseas regulatory authority or
for other similar procedures.
Exclusion of 
liability.
61. The Authority and any officer or employee of the
Authority, and any other person appointed to perform a function
under this Act, or under any regulation and, or, directive
promulgated thereunder, or under an order made or given under any
of the provisions of this Act, shall not be liable in damages for
anything done or omitted to be done in the discharge or purported
discharge of any functions under this Act, or any regulation and, or
directive thereunder, unless the act or omission is shown to have
been done or omitted to be done in bad faith.
Notices. 62. A notice or other document to be given or served under this
Act, or any regulations or directives made thereunder, shall be
deemed to have been duly given or served on a person if - 
( a ) it has been delivered to it; or
( b ) it has been left at the address furnished by it to the
Authority, or to its last known address; or
( c )  it has been sent to it by post, e-mail or by telefax at
any of the aforesaid addresses; or
( d ) in the case of a body of persons, whether corporate or
unincorporated, or of a scheme or a retirement fund, if
it has been given or served in any of the manners
aforesaid to or on a scheme or retirement fund
administrator, secretary, clerk, manager, trustee or
their equivalent, or to any contributor or to any
director or member of the governing body or an
appointed representative.
Application of 
Exchange Control 
Act.
Cap. 233.
63. The Exchange Control Act shall not apply to transactions
carried out by a scheme or retirement fund with persons or entities
not resident in Malta for the purposes of the said Act.
Minister’s power 
to make 
transitional 
arrangements.
64. The Minister, acting on the advice of the Authority, may by
regulations, make transitional provisions in respect of such persons
who, on the effective date of this Act, were providing a scheme or a
retirement fund, or in respect of companies which in accordance
with this Act are to be converted into retirement funds, and,
without prejudice to the generality of the foregoing, may, by such
regulations, in particular - 
( a ) prescribe a period within which such persons shall
apply for a registration under this Act; and
( b ) allow such person to continue carrying on the
activities of a scheme or a retirement fund including
the issue or creation of units, to the extent of the
activities then carried on until such time as the scheme
or retirement fund is registered or the registration is
refused or until the expiry of the deadline provided in
such regulations, which is the shorter period, and on
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        41
condition that such person has applied for a
registration in accordance with the provisions of this
Act within the period referred to in paragraph ( a ).
  42        CAP. 450. ħ               SPECIAL FUNDS (REGULATION)
FIRST SCHEDULE
(Article 43(3))
Information to be included in the annual report of a registered retirement fund
Statement of assets and liabilities:
Assets:
- Immovable property
- Transferable securities;
- Debt Instruments;
- Other securities;
- Bank balances;
- Other assets; and
- Total assets.
Liabilities:
- Borrowings;
- Other amounts payable; and
- Total liabilities.
Net asset value
Number of shares issued
Net asset value per share
Portfolio Description:
- Transferable securities listed on an official stock exchange;
- Transferable securities transacted on another organized market;
- Other transferable securities;
- Debt Instruments; and
A statement of the principal developments which have occurred in the
composition of the portfolio during the reference period.
Statement of changes in the assets and liabilities of the retirement fund during
the reference period, including the following:
Income:
- Income from investments;
- Other income; and
- Total income.
Charges:
- Management/investment advisor charges;
- Depository’s charges;
- Taxes;
- Other charges; and
- Total charges.
                     SPECIAL FUNDS (REGULATION)            ġ CAP. 450.        43
Net investment income:
- Appreciation or depreciation of investments;
- Changes in the ''capital'' account; and
- Any other changes affecting the assets and commitments of the retirement
fund.
A comparative table covering the last three financial years (where applicable)
and including, for each financial year, at the end of the financial year:
- The total net asset value; and
- The net asset value per share.
Details, by category of transaction carried out by the pension fund, on financial
derivatives (e.g., options, futures, swaps), of the resulting amount of commitments at
the year end date.
A summary of the compliance by the fund with its provisions and with the law.
A summary of the compliance by the fund with its memorandum of association
and with the law.
Specific Rules for Multiple Compartment Retirement Funds.
The financial reports of multiple compartment pension funds shall contain
separate information on each of the compartments, as well as consolidated
information on all of those compartments.
SECOND SCHEDULE
(Article 2)
1. Buying, selling, subscribing for or underwriting instruments.
2. Giving or offering to a retirement fund or a scheme:
- advice on the merits of their purchasing, selling, subscribing for or
underwriting an instrument, or exercising any right conferred by an
Instrument to acquire, dispose of, underwrite or convert an instrument; or
- advice in relation to a collective investment scheme or arrangement
involving an instrument
3. Managing Investments.
