FRC Launches Review of UK Stewardship Code 2020
- Posted by kalyani
- On May 27, 2024
- 0 Comments
The Financial Reporting Council (FRC) has announced the initiation of a comprehensive review of the UK Stewardship Code 2020 to optimise its effectiveness in promoting stewardship outcomes across asset managers, asset owners, and other signatories.
Key Details of the Review:
- Purpose: The FRC aims to enhance the UK’s investment stewardship framework by evaluating the current impact and relevance of the UK Stewardship Code 2020. This review seeks to align the Code with evolving market dynamics while minimising reporting burdens.
- Stakeholder Engagement: The review process will involve targeted outreach to issuers, asset managers, asset owners, and service providers to solicit feedback on the Code’s application and impact on investor-issuer engagement and reporting obligations.
- Public Consultation: Following the outreach phase, a public consultation is scheduled to commence after the 2024 AGM voting season. This consultation will gather broader input to inform the revision of the Code.
- Expected Timeline: The revised UK Stewardship Code is anticipated to be published in early 2025, reflecting insights garnered from stakeholders and public consultations.
Focus Areas of the Review:
- Long-Term Value Creation: Assessing how the Code supports sustainable value creation through effective investor-issuer engagement.
- Reporting Burdens: Evaluating the impact of the Code on reporting requirements for both issuers and signatories, aiming to streamline processes.
- Unintended Consequences: Investigating any unintended outcomes, such as short-termism in issuer targets and outlooks, attributed to the Code’s principles.
Stakeholder Impact:
The review acknowledges the broader regulatory context, engaging with regulators like the Financial Conduct Authority (FCA), the Department for Work and Pensions (DWP), and The Pensions Regulator (TPR) to ensure alignment and effectiveness.
Signatory Profile:
Currently, the Code boasts 273 signatories representing £43.3 trillion of assets under management, including a diverse range of 188 asset managers, 66 asset owners and 19 service providers.
Operational Continuity:
During the review process, existing signatories will continue to operate under the current Code requirements, with renewal applications expected as part of ongoing commitments.
The FRC’s commitment to refining the UK Stewardship Code underscores its dedication to fostering transparent, accountable, and sustainable investment practices.
This news alert provides insights into the FRC’s review of the UK Stewardship Code 2020, outlining key objectives, stakeholder engagement, and expected outcomes. Stakeholders are encouraged to participate in the consultation process to shape the future direction of investment stewardship in the UK.
0 Comments