In an overhaul of the UK asset management regulation to better meet consumer needs and take account of improving technologies, the Financial Conduct Authority (FCA) is seeking views on Updating and improving the UK regime for asset management (DP 23/2). The discussion paper includes proposals for a single retail fund regime to replace the separate rules underpinning Ucits and alternative investment funds, reported on in Ignites Europe here. Feedback by 22 May 2023.
For the inside track on the FCA letters and the opportunity to ask burning questions, FBC corporate members are invited to join our digital meeting with Camille Blackburn, the FCA’s new Director of Wholesale Buy-side on 2 March 2023. Following an initial ‘fireside chat’ with Philip Warland, Chair of FBC’s Advisory Council, the floor will be open for questions to all meeting participants. FBC corporate members can register here.
The FCA is also seeking views on governance, incentives and competence in response to its Finance for positive sustainable change (DP 23/1) discussion paper. Nice to see our FBC research on the role of fund boards in overseeing sustainable investment funds providing some food for thought in section 3.54 (Governance of products and services)! Feedback on this one is by 10 May 2023.
For those of you concentrating on Consumer Duty implementation, FCA policy expert Sean Cafferky explains expectations in its ‘Inside FCA Podcast: What does the Consumer Duty consumer support outcome mean?’. If you’re not up to speed on the difference between ‘appropriate friction’ and ‘sludge’ make sure you have a listen! The podcast is here and if you prefer to read, the transcript is here.
The Securities and Exchange Commission (SEC) has released its exam priorities indicating its intention to look closely at how directors perform relative to new rules shortly after their implementation. Get the lowdown in Board IQ here.
Responsible Investment / ESG
According to Ignites Europe, here, regulators in Ireland and Luxembourg have been challenging depositaries on whether they have done enough to check if claims made by asset managers under the Sustainable Finance Disclosure Regulation (SFDR) match the asset allocation of funds.
Vanguard chief executive, Tim Buckley, provides insight on the asset management’s decision to resign from the Net Zero Asset Managers initiative, in the FT here.
ClientEarth is holding the Board of Directors at Shell personally responsible for ‘failing to manage the material and foreseeable risks posed to the company by climate change’. The non-profit organisation in environmental law, and a Shell shareholder, is being backed by a pension fund and asset managers in its legal claim. Read the FT article here and the press release from ClientEarth here.
Calls for “greater honesty” over the degree to which ‘sustainable’ investment products can realistically effect change and generate impact are expounded in new report, ‘Embracing Complexity: the state of ESG heading into 2023’, from UK boutique Hosking Partners. Ignites Europe reports here.
The FCA is cracking down on part-time executives taking up senior roles, with scrutiny of ‘significant-influence functions’ — roles that include chief executives, executive directors, compliance officers, and money-laundering officers. For more on the impacts this is having, read the FN London article here.
In the latest on the Woodford saga, the FCA has said that it’s in “advanced confidential discussions” with Link Group and Link Fund Solutions to determine whether the FCA’s enforcement action can be resolved by agreement. Reported on in Investment Week here.
Insight Investment’s decision to apply a fair value adjustment to gilt prices on 27 September 2022 saw fund governance make the front page of the Financial Times here. The fund board’s decision came after the Bank of England announced its targeted bond-buying rescue scheme at 11am on September 28, which instantly pushed gilt prices higher.
Tackling an essential characteristic for any boardroom, author of ‘Boards’ Patrick Dunne talks about effective challenge, in his recent Linkedin article ‘Character, Craft and Culture – The key to Constructive Challenge’, here.
Designed to dispel common misconceptions about Corporate Governance and Stewardship, the Financial Reporting Council (FRC) has published a mythbusting guide, here.
Emily Shepperd, the FCA’s chief operating officer and executive director of authorisations, speaks to FT Adviser here. She discusses her views on key topics including greenwashing, Consumer Duty and diversity and inclusion – including how not to do it, based on her own personal (negative) experiences.
Boutique asset management think tank, Independent Investment Management Initiative (IIMI) has named Somerset Capital’s head of client services, Sebastian Stewart, as chair, as well as appointing several new members and setting out its core aims. More details in Portfolio Adviser here.
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