Financial Regulator Sets Its Sights On Investment Fund Directors

Author:Mr Stephen Carty
Profession:Eversheds O'Donnell Sweeney

New corporate governance code for the funds industry to be formulated Fund directors' code of governance to be developed by funds industry representative body with direction and guidance from the Financial Regulator. Clearer details emerge as to elements the Financial Regulator will require the code to cover. As part of a range of regulatory initiatives, the Financial Regulator has recently proposed the introduction of a corporate governance code for Irish funds. This will cover corporate governance practices of boards of investment funds and fund management companies as well as fund service providers such as administrators and custodians. This follows similar corporate governance initiatives in the area of banking and insurance. Recognising the importance of industry consultation in this process, the Financial Regulator has invited the Irish funds industry representative body (the Irish Funds Industry Association - "IFIA") to prepare the code. Speaking at the IFIA Global Funds Conference at the new Aviva Stadium on 9 June 2010*, Matthew Elderfield, Head of the Financial Regulator, took the opportunity to give the IFIA some direction on elements that the Financial Regulator consider the code should address. These items will be of particular interest to many observers keen to gauge what form the code may take. Below is a summary of the items mentioned by Mr. Elderfield that the Financial Regulator expects to be considered by the IFIA when formulating the code:

the possibility of imposing a restriction on the number of non-executive directorships to be held by any one director, taking into account the nature, scale nd complexity of the funds concerned and whether the director is a full time director and/or other commitments of the director; consideration of a process to address...

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