What You Need to Know

In May 2025,the Gibraltar Financial Services Commission (GFSC) introduced an important regulatory change that affects certain private funds. Under a newly added section of the Alternative Investment Fund Managers (AIFM) Regulations, Section 18B states that all self-managed small AIFMs are now required to appoint a local fund administrator.

This update portrays a shift in the way private funds are expected to operate and is part of the jurisdiction’s ongoing efforts to enhance oversight and align with practices internationally. At Abacus Financial Services, we are here to support fund managers and investors in navigating these regulatory developments smoothly and confidently.

Who is affected by the change?

The updated regulation applies specifically to funds classed as self-managed small AIFMs, in other words, funds that manage themselves rather than appointing an external manager.

To fall within this definition, a fund must:

-       Be internally managed by its own governing body

-       Have assets under management within the thresholds set out in Regulation 8(1) of the AIFM Regulations

-       Have no more than 50 participants (regardless of location); and

-       Not classified as an Experienced Investor Fund (EIF).

In effect, this will impact self-managed private funds and, if such a fund meets all of these criteria, it is now required to appoint a local fund administrator based in Gibraltar unless certain exemptions can be applied and approved by the regulator. This marks a clear change from previous practice, where small private funds could operate entirely self-managed and without third-party administration.

Why has this change been introduced?

The GFSC made this change to ensure that even smaller, privately run funds are meeting strong governance and compliance standards.

These types of funds are often private and limited in size, but they can still involve complex investments and hold responsibilities to their investors. Requiring them to use a local, regulated fund administrator adds a layer of independent oversight that helps protect investors, improve the standard of compliance and ensures key tasks and functions are being handled correctly, such as record-keeping, valuations and reporting. This change also helps Gibraltar keep pace with international expectations around how investment funds should be run. It shows the jurisdiction’s commitment to maintaining high standards while remaining attractive to private fund managers.

Why is the change being made through the AIFM Regulations?

Rather than changing the wider Financial Services Act 2019, which outlines the general rules and definitions for regulated activities, including those pertaining to collective investment schemes, the GFSC chose to make this update using the more specific AIFM Regulations.

This decision allows the regulator to focus the new requirement on a particular type of fund (self-managed small AIFMs) without changing the rules for all funds. It’s a practical way of tightening oversight only where needed, while still keeping the overall legal framework stable and flexible.

What are the implications for fund managers?

For managers of affected funds, this change means it is now a regulatory requirement to appoint a licensed, Gibraltar-based fund administrator. The appointment must be in place to remain compliant with the revised AIFM Regulations.

While this introduces an additional operational step, it also presents an opportunity to improve processes and ensure compliance risks are well managed. A professional fund administrator can take responsibility for tasks such as:

-       Valuing fund assets fairly and independently.

-       Keeping accurate records and preparing reports for investors.

-       Making sure regulatory filings are submitted on time.

-       Overseeing compliance processes such as anti-money laundering (AML) and Know-your-client (KYC) checks.

For many fund managers, particularly those who are investment-focused, bringing in an administrator offers extra operational support and peace of mind.

Are there any other changes impacting private funds?

Yes, in the same amending legislation, within Section 18C, the GFSC now also expect self-managed small AIFMs to enter into and maintain appropriate arrangements for safe custody of the fund’s assets. Practically,this may require a private fund to establish a relationship with a banking or credit institution, which otherwise may not have been required previously (an example of such a scenario could be a crypto fund that would otherwise operate fully via digital assets). Exemptions may be available upon application to, and with approval by, the GFSC, if the circumstances are such that it is appropriate to do so.

How Abacus Financial Services can support you

At Abacus, we offer trusted, regulated fund administration services via our licensed entity, Abacus Fund Administration Limited, that are designed with both regulated Experienced Investor Funds and private self-managed funds in mind.

With decades of hands-on experience in Gibraltar’s financial sector, we understand the changing regulatory landscape and the day-to-day challenges fund managers face. We don’t just handle the admin, we work alongside you to provide clarity and practical support.

Whether you’re already running a self-managed fund or setting one up, our team is here to help you stay compliant and focused, without losing the flexibility that makes private funds so appealing.

Next steps

This update reflects Gibraltar’s commitment to transparent financial services. Whilst a transitional period may apply, private funds should now assess whether their structure falls under the definition of a self-managed small AIFM and, if so,begin the process of appointing a local administrator as soon as possible.

Abacus is hereto assist with that transition. Whether you need administration or simply guidance on meeting the new requirements, our expert team is ready to help.

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