ICC Malta: Fund of Cells

Source: Dr. Marilyn Mifsud LL.D¸ GMM Buisness Solutions

While segregated portfolio companies have been home to multi-strategy umbrella funds for years1¸ incorporated cell companies (ICC) have emerged as victorious successors since their inception when they were aptly tagged the ‘hybrid spin-offs2’ of their segregated portfolio company predecessors. Locally¸ legislation was introduced to regulate the ICC in 2010¸ only two years after the same emerged in financial strong-holds like the Cayman Islands3.

Returning to the predecessor¸ it is interesting to observe that over-seas the segregated portfolio company was initially introduced for insurance purposes and was later extended to umbrella funds¸ which in turn were later and of recent adopted by the ICC model4. Thus¸ a contrario sensu it would logically seem that ICC’s primary inclination would be towards insurance and by extension made applicable also to funds. To this end it has been held that ‘whilst the ICC may have been born from a lack of imagination¸ its actual develop­ment and potential advantages are far more interesting and innovative than that of the SPC5’.

In tandem with the above¸ in Malta the creation of an incorporated cell company was established primarily as an alternative risk transfer vehicle for the insurance industry¸ and of recent is being pursued in view of the ‘fund option’¸ particularly where a fund sponsor is seeking to launch a number of regulated fund products.

By way of follow-up to the ICC legislation introduced locally in 2010¸ the 17th April 2102 saw the advent of the Recognized Incorporated Cell Company Regulations (S.L 386.15 of the laws of Malta). This legislation has set the stage for an attractive launching pad alternative for multi-strategy collective investment schemes. The RICC would serve as the fertile centre from where off-shoot IC’s may stem¸ legally distinct from one another yet identifiable through their RICC blueprint which is evident in a shared regist