Corporate Governance – Mutual Funds and Private Funds

CIMA publishe its Statement of Guidance on Corporate Governance for Mutual Funds and Private Funds.
The purpose of this statement is to provide guidance to the operators of regulated mutual funds or private funds on the minimum expectations for the sound and prudent governance of the regulated fund. The document sets out the key corporate governance principles pertaining to the operators of a regulated fund and is not intended to be a prescriptive or exhaustive guide to the Authority’s expectations with regard to governance.
The document covers various aspects of corporate governance, including the oversight function of the operators, conflicts of interest, operators meetings, duties of operators, documentation, relations with the authority, and risk management. The operators are responsible for ensuring that a full, accurate, and clear written record is kept of the operators‘ meetings and/or determinations. The records of the operators‘ meetings and/or determinations should include the agenda items and circulated documents, a list of attendees present at the meeting, the matters considered and decisions made, the information requested from and provided by service providers and advisors, and a declaration of conflicts of interest.
The operators of a regulated fund should have a written conflicts of interest policy commensurate with the size, complexity, structure, nature of business, and risk profile of the operations of the business of the regulated fund. The operators must exercise independent judgment, always acting in the best interests of the regulated fund and taking into consideration the interests of its investors as a whole. The operators must make relevant inquiries where issues are raised on matters fully within the scope of the operators‘ responsibility and be satisfied that an appropriate and timely course of action is being taken.
The operators should communicate adequate information to the regulated fund’s investors, including any material changes to the fund. The operators must always act honestly and in good faith and oversee and supervise each regulated fund for which it functions and all matters falling within the scope of its related responsibilities. The operators are responsible for approving the appointment and removal of the regulated fund’s service providers and the terms of the contracts with each of its service providers.