Regulation
Relationship rigour
Ignites Europe here, explores, amongst other things, how the Financial Conduct Authority (FCA) discussion paper Updating and improving the UK regime for asset management (DP 23/2) could impact the relationships between portfolio managers and independent/host authorised fund managers – seemingly, as a result of the Woodford debacle.
Regulatory restraints
In a comment in the Luxembourg Times, the Commission de Surveillance du Secteur Financier (CSSF) expressed that the EU’s Sustainable Finance Disclosure Regulation (SDR) discussions should be within the framework at European level and “cannot be commented on in isolation by national authorities”. This followed the Autorité des Marchés Financier’s proposed introduction of minimum standards for funds categorised as sustainable under SFDR. Ignites Europe reports here.
Cross-border comparison
Also worth a read is the Financial Times (FT) article, here, on US vs EU regulation – and how the US has arguably become more outcomes based vs. EU’s focus on things like price (rather than value/outcomes) and being lobbied to soften things like Basel III banking regulations.
Responsible Investment / ESG
Labelling levy
On ESG labelling, the FCA told UK MP’s recently that it has not worked out the potential cost investors may incur to leave green funds that would no longer qualify for the label under its new ESG regime. FN London reports here.
Top Priority
The IA’s recently published Shareholder Priorities report provides insight on the standout topics at last years’ annual general meetings (ESG of course!) and executive pay. Read the report here and the Portfolio Adviser take here.
Growing greener
A study from Fitz Partners, based on over 4,000 products covering $500bn in assets, revealed the growth in ESG-labelled funds in Europe and a narrowing price gap between ESG and non-ESG products. Reported on in Investment Week here.
Market News
Dis-closed
The FT reports, here, that, in a recent closed-door dinner, City of London minister Andrew Griffith raised concerns about the FCA’s consumer duty leading to a compensation culture of investors taking legal action against the asset management industry.
Going up?
After 10 months of the 12 in 2022 seeing net retail outflows, could investor sentiment be seeing signs of life? The IA here reports on the £1.4 billion UK investors put into funds in January 2023, following December’s outflow of £281 million.
Ireland acceleration
Amundi has received regulatory approval to launch a selection of US equity ETFs in Ireland, mirroring its Luxembourg-domiciled range, alongside launching two Climate Transition Benchmark (CTB) ETFs. ETF Stream reports here.
Takeover target
According to Sky News, here, Apex Group is preparing a takeover offer for UK asset management consultancy MJ Hudson. The offer was expected to be on the table last week.
Opting out
Portfolio Adviser here, reports on the potential demise of another investment trust, Aquila Energy Efficiency Trust (AEET), after 55% of shareholders failed to back a continuation vote. The trust’s board now has six months in which to “explore all options” and decide whether AEET will be reconstructed, reorganised or placed into liquidation.
CEO insights
Schroders‘ chief executive officer, Peter Harrison’s, interview in Ignites Europe here reveals his thoughts on how the “next generation” of asset managers will develop new ways in which investment services reach clients.
Governance
Overboarding
Take a listen to this recent podcast from the FT on ‘Overboarding – the perils of sitting on too many boards’, here. Host Isabel Berwick hears from the FT’s management editor Anjli Raval and corporate governance expert Patricia Lenkov in the US, and the FT’s careers expert Jonathan Black.
Longer Read
Climate considerations
If you’re considering climate risk tools, it’s worth taking a look at the United Nations Environment Programme Finance Initiative (UNEP FI)’s Climate Risk Landscape Report. It highlights the latest developments in the rapidly evolving climate tool marketplace, featuring over 35 tools for physical and transition risk as well as climate alignment. The report explores major trends in methodology, regulation, financial sector use cases, and data that are shaping tool development. It also includes a roadmap to help firms make an informed selection of a tool based on their needs.
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