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Passporting (MiFID, UCITS and AIFMD)

Investment Services

Passporting (MiFID, UCITS and AIFMD)

Within the EU, the financial sector operates under a framework of directives outlined in the EU’s Financial Services Action Plan, including the Markets in Financial Instruments Directive. These directives establish uniform rules across the EU, resulting in consistent regulatory standards across member states. A key outcome of this harmonization is the concept of ‘passporting,’ enabling financial entities established in one EU jurisdiction to offer services in other European jurisdictions without facing additional regulatory hurdles. Passporting rights extend to investment advisors, credit institutions, insurance principals and intermediaries, stock brokers, and certain types of FOREX businesses. This mechanism promotes efficiency and cost-effectiveness by facilitating cross-border service provision or the establishment of branches in target territories.


The Markets in Financial Instruments Directive (MiFID) replaced the Investment Services Directive in November 2007, aiming to regulate investment services, trading platforms, and financial markets in Europe, fostering transparency and cross-border trade. MiFID-compliant firms in Malta benefit from EU-wide “freedom of services.” The Directive harmonized regulations for investment firms, trading platforms, and enforcement mechanisms. Implementation in Malta required amendments to existing laws and issuance of new legal notices and regulations.


The Directive on Undertakings for Collective Investment in Transferable Securities (UCITS) sets rules for UCITS funds’ establishment and operation in the EU, enhancing investor protection and market competitiveness. UCITS IV further streamlined regulations to facilitate cross-border activities, introducing passporting rights for management companies and enhancing investor information.

A common tool used by UCITS to widen the activities which they are allowed to undertake is passporting.

Passporting of UCITS funds is about the offer of units within a Collective Investment Scheme for subscription throughout the EU and also EEA states. This right is not universal to all fund typologies.  In effect, in the case of Malta-based UCITS funds, such rights are a given.  

The UCITS V Directive caters for a written notification of the intention to market the units of a Malta UCITS fund in another EU member state (or an EEA State) to the MFSA, the financial regulator in Malta. Such a written communication needs to take place prior to any commencement of marketing of the units.


The Alternative Investment Fund Managers Directive (AIFMD) aims to regulate alternative investment fund managers (AIFMs) in the EU, ensuring appropriate authorization, risk management, investor protection, and market development. Implementation in Malta required transposition into local laws and regulations, including procedures for AIFMs’ cross-border activities and establishment of branches.

Key Persons

Luca Zahra Brincat

Corporate Lawyer

Ryan Barwari

Corporate Lawyer

Audrey Sapiano

Chief Commercial Officer

Angelo Vella


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