S.L. 370.24 Art. 10Changes in marketing strategy of third country AIFM within two years of its initial authorisation by the competent authority.

(1) The determination of Malta as a Member State of reference shall not be affected by the further business development of the third country AIFM in any Member State or EEA State.

(2) Where, however, the third country AIFM changes its marketing strategy within two years of its initial authorisation, and that change would have affected the choice of Malta as a Member State of reference if the modified marketing strategy had been the initial marketing strategy, the said AIFM shall notify the competent authority of the change before implementing it and it shall indicate its Member State of reference in accordance with the criteria prescribed in regulation 9(6) to (11) and based on the new strategy. The said AIFM shall justify its assessment by disclosing its new marketing strategy to the competent authority. At the same time, the said AIFM shall provide information on its legal representative, including its name and the place where it is established: Provided that the legal representative shall be established in the new Member State of reference.

(3) The competent authority shall assess whether the determination of the third country AIFM in accordance with sub-regulations (1) and (2) is correct and shall notify ESMA thereof. In its notification to ESMA, the competent authority shall provide the third country AIFM’s justification of its assessment regarding the Member State of reference and information on the said AIFM’s new marketing strategy: Provided that ESMA shall issue advice on the assessment made by the competent authority.

(4) Within one month of receipt of the notification referred to in sub-regulation (3), the competent authority shall receive ESMA’s advice on the assessment carried out: Provided that ESMA shall issue a negative advice only where it considers that the criteria prescribed in regulation 9(6) to

(11) have not been complied with.

(5) After receipt of ESMA’s advice in accordance with sub-regulation (4), the competent authority shall inform the third country AIFM, its original legal representative and ESMA of its decision.

(6) Where the competent authority agrees with the assessment made by the third country AIFM, it shall also inform the European regulatory authority of the new Member State of reference of the change. The competent authority shall also, without undue delay, transfer a copy of the licensing and the supervision file relating to the said AIFM to the European regulatory authority of the new Member State of reference. From the date of transmission of the licensing and supervision file, the European regulatory authority of the new Member State of reference shall be responsible for the licensing and supervision of the said AIFM.

(7) Where the final assessment of the competent authority is contrary to ESMA’s advice as referred to in sub-regulation (4):

(a) the competent authority shall inform ESMA thereof, stating reasons. ESMA shall publish the fact that the competent authority does not comply, or does not intend to comply with its advice: Provided that ESMA may also decide, on a case-by-case basis, to publish the reasons for non-compliance provided by the competent authority and it shall proceed to notify the competent authority in advance of such publication;

(b) where the third country AIFM markets units or shares of the AIFs managed by it in Member States or EEA States other than Malta, the competent authority shall inform the European regulatory authorities of those other Member States or EEA States thereof, stating reasons. Where applicable, the competent authority shall also inform the European regulatory authority of the home Member State or EEA State of the AIFs managed by the said AIFM thereof, stating reasons.

(8) Where it appears from the actual course of the business development of the third county AIFM in the Member State or EEA State within two years after its licensing, that the marketing strategy as presented by the AIFM at the time of its licensing was not followed, that the AIFM made false statements in relation thereto or that the AIFM has failed to comply with the conditions prescribed in sub-regulations (1) to (7) when changing its marketing strategy, the competent authority shall request that the third country AIFM indicates the Member State of reference based on its actual marketing strategy. The procedure prescribed in sub-regulations (1) to (7) shall apply mutatis mutandis.

(9) If the third country AIFM fails to comply with the request made by the competent authority, it shall withdraw the AIFM’s licence.

(10) Where the AIFM changes its marketing strategy after the period of two years as referred to in sub-regulations (1) to (7), and intends to change its Member State of reference on the basis of its new marketing strategy, it may submit a request to change its Member State of reference to the competent authority. The procedure prescribed in sub-regulations (1) to (7) shall apply mutatis mutandis.

(11) Where a European regulatory authority of a Member State or EEA State disagrees with the assessment made on the determination of the Member State of reference under sub-regulations (1) to (7) hereof under sub-regulations (8) to (10), the European regulatory authority concerned may refer the matter to ESMA which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010.

(12) Any disputes arising between the competent authority as the third county AIFM’s Member State of reference, and the said AIFM, shall be settled in accordance with the law of Malta and shall be subject to the jurisdiction of the Courts of Malta.

(13) Any disputes between the AIFM or the AIF and investors in any Member State or EEA State of the relevant AIF shall be settled in accordance with the law of and subject to the jurisdiction of the Member State or EEA State involved.

(14) Where a European regulatory authority rejects a request to exchange information in accordance with the regulatory technical standards developed by ESMA, the competent authority may refer the matter to ESMA which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010. THIRD COUNTRY AIFMs HAVING MALTA AS MEMBER STATE OF REFERENCE AND MARKETING EUROPEAN AIFs IN MALTA OR IN ANY MEMBER STATE OTHER THAN MALTA