The Malta Financial Services Authority (MFSA) has issued a thematic review assessing the extent to which Management Companies (UCITS Management Companies and AIFMs) comply with AIFMD and UCITS requirements, as transposed into Malta’s Investment Services Rules, on liquidity risk management. The review also assessed adherence to internal processes covering, inter alia, investment-limit monitoring, the day-to-day portfolio management process, and investment decision-making.

Many managers are already aligned with the spirit of the rules. In particular, well-documented liquidity risk frameworks tailored to each fund’s liquidity profile, regularly calibrated liquidity stress tests, and clear escalation playbooks were evident across stronger setups. Where pre- and post-trade compliance is embedded into daily workflows, portfolio decisions are naturally filtered through investment-limit monitoring before orders are placed, reducing breach risk.

Firms that integrate Risk and Portfolio Management – through standing Investment Committees, minuted challenge, and MI dashboards that track liquidity buckets, dealing patterns, and investor concentration –tend to demonstrate more consistent outcomes. Likewise, transparent decision logs (capturing thesis, data inputs, and approvals) make the Investment Management process auditable and resilient to staff turnover.

On the operational side, outsourcing oversight that is risk-based and evidenced (KPI/KRI packs, periodic due-diligence refreshes), plus ongoing staff training tied to AIFMD/UCITS changes, helps keep policies “live” rather than static. Managers that have invested in these disciplines are well placed for supervisory scrutiny and to protect investors through varying liquidity conditions.

Overall, while growth has been measured rather than spectacular, the results underline how proactive decisions – rather than short-term fixes – are helping companies remain competitive. Investors may take comfort in the fact that, even in a tough economic climate, good governance and careful planning are producing tangible outcomes.