Authorised ESG & Sustainable Investment Funds – Multi-firm review
2-3pm GMT, 5 December 2023
On 5 December 2023, FBC members heard from the FCA’s Christopher Davis, Head of Asset Management & Funds Market Interventions, and Senior Associate, Fiona Law, to discuss the findings of their multi-firm review of authorised fund managers (AFMs) and ESG & sustainable investment funds.
Hosted by FBC senior adviser, Brandon Horwitz, the discussion and member Q&A covered the good practices and areas for improvement uncovered in the review including:
- how the Guiding Principles introduced in 2021 fit with the final Sustainability Disclosure Requirements (SDR) announced in 2023
- lack of specific ESG or sustainability objectives in many funds, with firms often including ESG and sustainability policies in investment strategies instead
- the need for better disclosure practices to provide investors with clear and relevant information for informed decision-making
- methodologies for measuring impact
- key governance takeaways including the responsibilities of Fund Board Directors
The recording of the full session is now available on demand in the Member Portal here.
Following a discussion with the FCA a couple of days after the publication of the review, FBC has also produced a Memo outlining the key messages for fund board directors to help FBC corporate members identify their key responsibilities highlighted in the review.
Contributors
Fiona is a Senior Associate within the Asset Management and Funds Market Interventions Department at the FCA, having been a member of the department for five years. Fiona supervises small asset management and alternatives firms on a day-to-day basis and has developed more specific experience in relation to principal and appointed representative business models. Fiona first joined the FCA in 2016 as a supervisor in the Retail Investments Department. Fiona recently led the FCA’s multi-firm review into the implementation of the ESG Guiding Principles by authorised fund managers. The review considered whether firms are complying with existing requirements relating to the design, delivery and disclosure of ESG and sustainable funds. Fiona holds the CISI Investment Management Certificate and is currently studying for the CBI Green and Sustainable Finance Certificate. Prior to joining the FCA, Fiona was an adjudicator at the Financial Ombudsman Service specialising in general investment and interest rate hedging cases. This followed earlier roles in the legal sector in commercial litigation and professional regulation.
Chris is Head of the Asset Management & Funds Market Interventions Department at the FCA, having been in role since October 2022. The department is part of the FCA’s buy-side directorate, which sits within the Supervision, Policy & Competition Division at the FCA.
The department develops and applies supervision strategies that ensure the FCA plays a role in preventing and reducing harm to consumers and financial markets as well as promoting competition. It is responsible for the supervision of circa 2700 asset management firms, ranging from small, independent asset managers up to sophisticated financial services groups with a large impact on the retail, institutional and wholesale markets. It also has responsibility for the authorisation and supervision of circa 30k investment funds. Chris led the development and the delivery of the strategy for the asset management portfolio, including the publication of our strategy in February 2023. He is also responsible for the delivery of the strategy for the alternatives, custody and fund services portfolios.
Chris led the buy-side response to the gilt market volatility in September and October 2022, working closely with regulators and stakeholders in the UK and across Europe to ensure increased resilience in the Liability Driven Investment sector. He also directly inputs into the policy development of long-term resilience standards for LDI. Chris also sits on various on working groups within the FCA and currently co-chairs the Wholesale Data Working Group which aims to advance the understanding and use of wholesale for the benefit of supervisors and policy makers.
Before his current role, Chris led the supervision of bank owned asset managers and custody banks at the FCA and was accountable for leading a portfolio of custody and fund services business models and developing the first publicly articulated FCA regulatory strategy for custody & fund services sector. Prior to joining the FCA in 2018, he advised investment firms as a member of KPMG’s consulting practice, delivering significant Board and ExCo sponsored projects in consulting. He also worked with the FCA on numerous occasions as part of Skilled Person’s teams to review the business and conduct of wholesale firms. He has also gained direct experience within the industry having worked for leading global asset managers several times on secondment in various roles.
Brandon is Fund Boards Council’s Senior Adviser, involved with developing FBC’s Assessment of Value analysis and assurance model for its members and leading FBC’s new proposition – offering bespoke training and coaching for boards and executives.
He is also the principal of NomBon Consulting and an experienced actuary and independent director, providing consulting to insurers, asset managers, banks and wealth managers on investment and pension proposition design, delivery, governance and distribution strategy.
