The purpose behind this revamping exercise was to ensure that the Corporate Governance Manual for Directors of Collective Investment Schemes is aligned with the general Corporate Governance Code – which was issued in August 2022 and which established a comprehensive, principle based and cross sectoral framework applicable to all financial sectors operators.
This Manual introduces additional principles and best practices which are specific to the funds sector, promote strong and effective governance, seeking to enhance compliance culture and ensure the continued stability.
The Directors of the Scheme are expected to adhere to this Manual in a manner that is proportionate to the nature, size and complexity of the Scheme’s business. The Directors are ultimately responsible for the governance of the Scheme.
Some of the duties of the directors are as follows:
Directors shall act in an ethical manner taking into consideration the best interests of investors and the integrity and reputation of Malta’s financial system, with the tone being set from the top.
Directors shall act honestly, fairly, effectively, and professionally, and shall comply with all relevant applicable legislative and regulatory frameworks.
Directors are inter alia also expected to:
- conduct their business with integrity, due skill, care, and diligence;
- identify, mitigate and manage any conflicts of interests;
- organise and control their affairs effectively, inter alia establishing an adequate risk management framework; iv. ensure that high standards of corporate governance are applied at all times;
- ensure that the Scheme which they direct maintains adequate financial resources;
- disclose to the MFSA any information which the Authority would reasonably expect to be made aware of; and disclose to the Board any information which the Scheme would reasonably expect to be made aware of;
- make reference to and, as applicable, ensure compliance with the relevant Maltese laws, regulations and rules issued thereunder as well as any Guidance Notes which may be issued by the MFSA or other relevant authority, agency, or body to assist the said entities in complying with their legal and regulatory obligations;
- cooperate in an open and honest manner with the MFSA and any other relevant regulatory authority; and
- take due account and, as applicable, comply with any relevant EU legislation as well as any Guidance Notes/Statements/Industry Best Practices which may be issued by European and international standard-setting bodies.
About the Author
This article has been authored by Dr Francesca Anastasi, Legal, Risk & Compliance Advisor. Contact us here or on https://www.csbgroup.com/contact-us/ for more information.
