KEY MALTA LEGAL INSIGHTS

KEY MALTA LEGAL INSIGHTS

Matthew Mizzi

2

The Malta ILS framework

- Securitisation Act;- Reinsurance Special Purpose Vehicles Regulations;- Securitisation Cell Companies Regulations;- Securitisation Transactions (Deductions) Rules;- Reinsurance Directive (until 12/31/2015); and- Solvency II Regime (from 1/1/2016).

3

Malta structures

4

• Orphaning arrangement may consist of foundation or trust;

• Company; trust or partnership.• No MFSA authorisation

requirement, unless issuing securities to the public on a continuous basis;

• No reinsurance or reinsurance-like contract (no indemnity trigger);

• Statutorily bankruptcy remote;• Investor subordination clauses

and non-petition clauses expressly recognised in terms of Securitisation Act and Civil Code.

• Criteria set out in Transaction Documents apply.

Securitisation vehicle

MT Issuer Co. Ltd.

MT Foundation

Collateral

5

• Orphaning arrangement may consist of foundation or trust;

• Private or public limited liability company;

• Authorised by the MFSA;• Managed or self-managed;• Assumes risk by means of

reinsurance or reinsurance-like risk transfer agreement;

• Satisfies mandatory criteria for RSPVs in RSPV Regulations;

• Securitisation Act applies.

• Solvency II investment and diversification criteria apply.

Reinsurance special purpose vehicle

MT RSPVCo.

MT Foundation

MT Insurance Manager(optional)

Collateral

6

Securitisation Cell Company

SCC Core

Cell 1

Investors

MT Foundation

Collateral

• Established with as little as €1,200;• Board of directors responsible

for entire entity, including cells.• No transactions through core.• No prior authorisation, unless

vehicle established as a public securitisation vehicle.

• No minimum capital requirements to establish cell;• No need for issue of shares to

establish cell;• No contamination between cell

and core and other cells – separate patrimony concept;• Cell can enter into single or

multiple transactions, but no multiple originators;• Contractual tranching within cell

possible and recognised under Securitisation Act;• Notification to RoC on

establishment of cell.

Counterparty

Cell 2

Counterparty

Investors

Collateral

7

RSPV SCC

SCC Core

Cell 1

Investors

MT Foundation

Collateral

• Core authorised by MFSA• Directors and controllers subject

to MFSA approval;• Solvency II governance

arrangements apply;• Responsible for supervisory

reporting;•Managed by insurance manager

or self-managed;

•MFSA approval to be obtained prior to establishing cell;• Fully-funded principle applies at

cell level;• Prohibition to transact with

unrelated undertakings, but multiple transactions through same cell with related undertakings allowed – to change after 1 Jan, 2016?•Multi-currency transactions

possible.

• Ownership structure subject to MFSA authorisation

Cell 2

MT Insurance Manager(optional)

CedantCedant

Investors

Collateral

8

Important Notice: This presentation is for informational purposes only and does not contain or convey legal advice. The information contained in these slides should not be used or relied upon in regard to any particular facts or circumstances without first obtaining specific legal advice.

In this presentation ‘GANADO Advocates’ refers to the law firm Ganado & Associates, Advocates, an association established under the laws of Malta. A full list of members is available upon request at the principal office of the firm at 171, Old Bakery Street, Valletta VLT1455, Malta.

Thank you.Thank you.Find us at ganadoadvocates.com

20/04/23