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On the 30th of October 2023, the MFSA issued a circular about the Corporate Governance Manual it issued in relation to directors of Collective Investment Schemes (CIS). This Manual is an updated version from the one issued by the authority on the 22nd August 2022 and is based on a set of core principles which shall act as a foundation for good governance practices which the MFSA have recommended to directors, for them to apply to the best of their abilities, and in proportion to the fund’s nature and size.

The Manual outlines numerous best practices for directors to apply, building on from the previous Manual issued by the authority. Focus is directed towards the obligations of the director when it comes towards managing risks and conflicts of interests whilst maintaining effective and strong governance measures, that is fostered around a compliance culture. Additionally, the Manual lists several practices which the board of directors must undertake in its board meetings, with particular detail on the various reports which must be scrutinised by the directors on a best-effort basis. This is said to ensure that the CIS is kept up to date with its ongoing governance obligations. These reports are given due consideration by the Manual including those specifically relevant to CIS such as the investment manager’s report.

Moreover, the Manual sheds light on certain Environment Social Governance (ESG) recommended practices which directors of such schemes should apply. The importance here is for the outlined ESG considerations to be applied within the fund’s long term financial strategies while certifying that all relevant stakeholders are kept up to date with clear and accurate ESG related disclosures. Furthermore, guidelines relating to compliance with internal controls and Anti Money-Laundering (AML) risks are also given weight, so as to ensure that that a holistic approach is applied by directors when undertaking their duties for their benefit and that of the CIS.

Lastly, whilst the guidance set out in this Manual is not intended to be exhaustive, CISs should utilize it in order to advance their corporate governance practices that fit their size and investment profile.

This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact