The MFSA has published an updated Corporate Governance Manual
for Directors of Investment Companies and Collective Investment
Schemes. This revised Manual is updated with the requirements of
the Alternative Investment Fund Managers Directive
(2011/61/EU).
The objective of this Manual is to increase awareness amongst
Directors who are vital for the proper operation of investment
companies and funds. The Manual also provides general guidance on
the implementation of good governance in financial services.
The global financial crisis of 2007-09 caused severe troubles in the funds industry. These manifested themselves mainly through unprecedented losses in asset value, but also through unexpected and prolonged limitations on shareholder liquidity, operational chaos, extremely compressed and extended time horizons, legal and regulatory paralysis, slow or poor communication from managers, and overall shareholder confusion and even panic.
Many participants in the fund industry, politicians, regulators, investors and journalists believe that directors of investment funds generally failed to react properly in the context of such a crisis. Whether or not such a perception is merited, it is crucial that going forward directors of investment funds are cognizant of their role, duties and obligations. A number of jurisdictions have overhauled their corporate governance frameworks or are considering doing so. The Malta Financial Services Authority considers the role of directors to be vital to the proper operation of an investment fund and has accordingly issued a Corporate Governance Manual for Investment Funds, a copy of which is available from the MFSA website.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
