When was the last time you updated your UK stewardship code disclosures?
19 September 2017
All UK-authorised Investment Managers are required under the FCA's Conduct of Business Rules (COBS 2.2) to produce a statement of commitment to the UK Stewardship Code, or where they do not commit to the Code, their alternative investment strategy. The Code consists of principles and guidance and sets out a number of areas of best practice to which the Financial Reporting Council (FRC) believes institutional investors should aim towards.
In 2016, the FRC notified several asset managers that they should significantly improve their disclosures or face being removed from the list of signatories. Consequently, in August 2017, the FRC updated its list of signatories and has now ranked asset managers into two tiers according to the quality of the reporting based on the seven principles of the Code.
Where do you rank?
Over the last 18 months, the FRC has reported that several asset managers have revised their disclosures to be more transparent - this has resulted in an improved status for many in the tiered ranking. The FRC will continue to review disclosure statements and reclassify signatories if reporting standards begin to diminish.
The overall message is that organisations need to continually review their disclosures to ensure they are meeting best practice.
Asset managers should have their policies annually reviewed and independently verified.
The FRC are likely to be revising the Code in 2018 and BDO are actively committed to helping clients implement robust stewardship policies and better articulate their practices to obtain a tier 1 status.
If you would like to discuss how you can enhance your Stewardship policies or practices, or have any questions, please do get in touch.