Regulation
Data drive
The Financial Conduct Authority (FCA) has appointed six directors as part of its strategy to become a more data driven regulator, Money Marketing reports here. The hires, which will join between now and October 2022, include three FCA: Roma Pearson, Anthony Monaghan and Simon Walls; and three external hires Camille Blackburn (from Legal & General Investment Management), Matthew Long (from the National Economic Crime Command within the National Crime Agency) and Karen Baxter who has spent 30-years in policing.
Review wrapped up
Fundsmith has completed an independent review of its business activities following being served with a section 166 notice, which allows the FCA to trigger an independent view of a firm’s activities that are a cause for concern or require further analysis and includes governance, controls or risk management assessments, in Q1 2022. Recommendations have been given and the FCA is not requiring it to take further action. Portfolio Adviser reports here.
ESG
Regulatory rigour
The Financial Conduct Authority (FCA) timeline for the consultation on the UK sustainable disclosure regime (SDR) will now be Autumn, to allow time to ‘take account of other international policy initiatives’. More details in the Ignites Europe report here.
And in its ESG integration in UK capital markets feedback statement, here, the FCA outlines the “clear rationale” for it to provide regulatory oversight of “certain ESG data and rating providers”. The regulator noted there was broad agreement across the industry regarding the potential harms caused by the growing role of ESG data and rating providers, including a potential lack of transparency, poor governance controls, potential conflicts of interest, insufficient engagement with companies and the high cost of data requests. Reported on in Investment Week here.
SFDR under the microscope
The European Sustainable Investment Forum (Eurosif) has called for a new product category under the EU’s Sustainable Finance Disclosure Regulation for vehicles that focus on sustainability risks and opportunities. Ignites Europe here.
Full report here.
Climate collaboration
Schroders and its impact investment unit BlueOrchard has been chosen by Luxembourg’s Ministry of Finance for a new climate action partnership. Schroders will serve as the management company for the finance ministry. Investment Officer here.
Luxembourg news
Lux listing
ALFI, the association of the Luxembourg fund industry, has reported that, although its overall market share contracted slightly, Luxembourg last year held on to its number one spot among Europe’s top 10 investment hubs for both Ucits and Alternative Investment Funds, with a market share of 26.8 percent, compared to 27 percent that was reported for the previous year. Investment Officer here.
We hosted our FBC inaugural Luxembourg event yesterday, 6 July 2022, bringing together FBC members and invited guests for an afternoon of insights at the offices of FBC corporate member Franklin Templeton.
We welcomed Marco Zwick, director of CSSF, for a fireside chat with Philip Warland. This was followed by a panel discussion, hosted by Sheenagh Gordon-Hart, a portfolio iNED and partner in The Directors’ Office, with panellists: Craig Blair, CEO, Franklin Templeton Luxembourg, Corinne Lamesch, Country Head, Luxembourg at Fidelity International and chair of ALFI, and Emmanuel Gutton, Director of Tax and Legal, ALFI. To round off the day, FBC’s Brandon Horwitz summarised some of the key themes from FBC’s new cross-jurisdictional research into the roles and responsibilities of fund board directors on ESG.
All FBC members will be able to watch the event on-demand shortly in your FBC Member Portal.
Boardroom Insights
Investor expectations
EY’s European Financial Services Boardroom Monitor reveals that the boardrooms of European asset and wealth managers are falling short of investor expectations in terms of their experience in sustainability and financial technology. For example, the report says that 51 per cent of investors in financial companies believe boardroom experience in sustainability has a “significant impact” in terms of making a company an attractive investment, with 22 per cent indicating that it has a “highly significant” impact. However, only 11 per cent of wealth and asset manager boards have individuals with sustainability backgrounds. Such firms “significantly lag banks”, where the figure rises to 34 per cent, EY writes. Ignites Europe here. Full report is here.
Governance Views
PwC’s 2021 Mutual Fund Directors Governance survey asked almost 120 board members about a variety of topics, including their views on self-assessments and diversity, as well as their thoughts on working virtually. Board IQ here. Full report is here.
Industry news
Disclosure distortion
Funds of funds are being made to look a lot more expensive than they are due to “ridiculous” charge disclosure rules, says a senior fund executive. Ben Conway, head of fund management at Hawksmoor Investment Management, says the rules, which require funds of funds to include underlying fund charges in a single charge figure, need revamping. Ignites Europe here.
Interdependent independence
DWS woes put spotlight on its independence in the Financial Times here. Asset manager is listed but allows German corporate structure allows parent Deutsche Bank to call the shots.
People and Progress
London expansion
Los Angeles-headquartered fund house, Capital Group will double its London office space as part of plans to relocate its local operations. Ignites Europe here. Guy Henriques, president, Europe and Asia client group at Capital, says doubling his firm’s office space “underlines the importance of the UK” for its growth strategy.
Boardroom shake up
AssetCo‘s planned purchase of Edinburgh-based boutique SVM Asset Management is leading to an overhaul of the latter’s board, which oversees both the business and its funds. Three senior AssetCo executives, including chairman Martin Gilbert, will join SVM’s board, while Colin McLean, managing director of SVM, will become a director of AssetCo’s Scottish business. Investment Week here.
Returning home Down Under
Andrew Formica, the chief executive officer of Jupiter Fund Management Plc, announced his departure from the asset manager. He will be succeeded by Matthew Beesley, the company’s chief investment officer, who will take up the role of CEO with effect from 1st October 2022. Bloomberg here and a viewpoint in Ignites Europe here.
Christmas comes early to FBC
Fund Boards Council is very pleased to announce that Peter Christmas has joined our ranks as senior adviser. With his strong commercial background and deep industry expertise in asset servicing, Peter will add an important dimension to the work that FBC does with its key constituency of funds board directors in the UK and across Europe. Reported on in Ignites Europe here and our announcement here
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