The Malta Financial Services Authority considers corporate governance to be one of its key priorities, from both a strategic and supervisory perspective. Ensuring good corporate governance complements, supports and is conducive to the Authority’s objectives of preserving financial stability and ensuring the integrity of the markets as well as the protection of consumers of financial services.
The MFSA seeks to ensure that entities falling within its remit keep good corporate governance at the forefront of their agenda, with a view to fostering responsible and efficient management, for the long-term continuity and success of firms and the creation of sustainable value for all stakeholders. Apart from being a vital indicator of a solid compliance culture, the Authority has also identified corporate governance as a driver for the achievement of regulatory outcomes.
The main legislative source for Corporate Governance under Maltese Law is the Companies Act. It sets out the types of commercial partnerships available and the applicable requirements for such entities. Specifically with respect to companies, it establishes the accountabilities of the Board of Directors, the rights of shareholders as well as transparency obligations. Further to the sector-specific regulatory frameworks, the Companies Act is then complemented by the following additional documents in relation to the financial services sector as a whole:
MFSA Corporate Governance Code
The Code provides a set of principles, complemented by supporting provisions, which are to be applied on a ‘best effort basis. This Corporate Governance Code is applicable across sectors, to all unlisted entities authorised by the MFSA.
The Corporate Governance Manual for Directors of Investment Companies and Collective Investment Schemes
This manual seeks to provide general guidance to directors of Investment Companies and Collective Investment Schemes on how to implement good corporate governance practice for an investment fund, including some thoughts on typical issues that affect fund directors. The guidance set out in the Corporate Governance Manual is not exhaustive and directors are encouraged to develop their own best corporate governance practices to fit the specific investment company or fund.
The Corporate Governance Guidelines for Public Interest Companies
These guidelines, applicable to public interest companies, seek to: [i] promote best practice in corporate governance in Malta; [ii] make it easier for directors and managers to fulfil their duties and assist them in advancing the growth and development of the companies they are entrusted with directing; [iii] ensure public confidence in enterprises and business activities in general; and [iv] strengthen trust between investors, directors and managers.
The Code of Principles of Good Corporate Governance
Corporate Governance requirements are also included within the Capital Markets Rules, specifically Appendix 5.1, which provides a Code of Principles of Good Corporate Governance. This Code targets companies whose equity securities are admitted to listing on a Regulated Market but are not applicable to Collective Investment Schemes.