The Investment Committee

Anton John Mifsud | 02 Feb 2012

The Investment Committee


Regulatory Authority

The Malta Financial Services Authority (MFSA) is responsible for the licensing, regulation and supervision of all investment services providers and collective investment schemes operating in or from Malta.

The MFSA was established on the 1 October 2002 by the Malta Financial Services Authority Act (“MFSA Act”) as an autonomous public authority. It succeeds the Malta Financial Services Centre (MFSC) which was established in 1994. The Authority aims to provide a seamless regulatory function for financial services. It also houses the Registry of Companies.

The Investment Committee

Appointment and Departure

Maltese collective investment schemes may, in general, and subject to approval by the MFSA, be set up as self-managed schemes. Naturally, in such case the management of the Scheme will need to be undertaken by the Board of Directors of the same Scheme, and thus the MFSA will need to be satisfied of the competence of the persons involved in such operations.

In the case that a Scheme opts for the self-managed option that is available under the law, the various Standard License Conditions applicable to the various types of schemes, prescribe that the Board of Directors of the Scheme should establish an in-house Investment Committee. The Committee needs to be made up of at least three voting members, however, there is a certain level of flexibility as well, in that its composition may include Board members.
The persons who are proposed for appointment to the Investment Committee need to be approved by the MFSA. In this regard, apart from the usual due diligence, the MFSA will need to ensure that such persons are competent on investment management in relation to the underlying assets of the Scheme. In the absence of any recognised qualifications and/or relevant direct experience in the provision of such management in relation to the underlying assets, a person can only participate in the Investment Committee as a non-voting member.

The Scheme needs to obtain the written consent of the MFSA before the replacement of any member of the Investment Committee and is obliged to notify the MFSA in writing of the departure of a member of the same Investment Committee within 14 days of the departure. Moreover, the Scheme is obliged to request the Investment Committee member to confirm that his/her departure has no regulatory implications or otherwise provide any relevant details as appropriate. A copy of such request has to be provided to MFSA.

Given the fact that the MFSA is in general a flexible regulator, it may in the case of exceptional circumstances warranting such a decision, decide the waive the requirement of establishing an Investment Committee.
Terms of Reference
A document setting up the terms of reference of the Investment Committee will normally need to be drawn up and be submitted to the MFSA. Any changes to the Terms of Reference of the Investment Committee are also subject to the prior approval of the MFSA. The role of the Investment Committee is normally that of:

  • monitoring and reviewing the investment policy of the Scheme;
  • establishing and reviewing guidelines for investments by the Scheme;
  • issuing rules for stock selection;
  • setting up the portfolio structure and asset allocation; and
  • making recommendations to the Board of Directors of the Scheme.

Being self-managed, the management of the Scheme will need to be carried out by and under the responsibility of the Board of Directors of the same Scheme. Having said this, the Investment Committee may delegate the day-to-day investment management of the assets of the Scheme to at least two officials of the Scheme who will effect day-to-day transactions within the investment guidelines set by the Investment Committee and in accordance with the investment objectives, policy and restrictions described in the Scheme’s Prospectus.

The Scheme needs to maintain adequate arrangements, in agreement with and subject to the approval of the MFSA, in order to ensure adequate monitoring of the activities of the Investment Committee. Moreover, the Scheme is obliged to ensure that on a continuing basis there are sufficient resources available to the Investment Committee in order to make it possible for the latter to effectively conduct its business.

Meetings of the Investment Committee

The frequency of the meetings to be held by the Investment Committee really and truly depends on the nature of the Scheme’s investment policy. Having said this, the law lays down the requirement that there have to be held at least four of such meetings per year. The majority of Investment Committee meetings are to be physically held in Malta. In this regard, the law maintains a degree of flexibility, in that Investment Committee meetings are deemed to be physically held in Malta if the minimum number of members that form a quorum necessary for a meeting are physically present in Malta. This means that one can feasibly have a situation whereby a portion of the Investment Committee members are participating through a teleconference from outside Malta during a Committee meeting.

The minutes of the Investment Committee meetings are to be available in Malta for review during MFSA’s compliance visits.

Investment Service Providers

As opposed to the management of the assets of a Scheme, the rules issued by the MFSA do not strictly speaking require the setting up of an Investment Committee. Having said this, the MFSA does in certain cases impose this requirement on entities which apply for the grant of a Category 2 portfolio management license under the Investment Services Act. In this case, the above considerations would apply to the Portfolio Manager in an analogous manner according to circumstances.


  • Investment services rules for retail collective investment schemes  - Part B – Standard license conditions – Part B1: Malta based Retail Non-UCITS Collective Investment Schemes
  • Investment services rules for professional investor funds - PART B – Standard license conditions - Appendix I: Supplementary Licence Conditions.
  • Investment services rules for retail collective investment schemes - Part B – Standard license conditions – Part B: Standard license conditions - Appendix VIII: Supplementary Licence Conditions Applicable to Self-Managed Schemes.

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Key Contacts

Dr Jean-Philippe Chetcuti

Global Managing Partner & Founder

+356 22056411

Dr Maria Chetcuti Cauchi

Senior Partner & Founder, Global Property Investment

+356 22056875

Mr Colin B German

Chief Executive Officer

+356 22056442

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