FCA and FRC focus on encouraging effective stewardship

The FCA is working with the the FRC to set out proposals and a discussion paper encouraging asset managers and others managing investments to take a closer interest in the operation of the businesses in which they invest.

The FCA consultation is on measures implementing the second Shareholders Rights Directive which mainly affects FCA regulated life insurers, asset owners and managers, and companies with shares admitted to trading on a regulated market, and which comes into force in June 2019.  The FRC has also published proposals for a revised UK Stewardship Code.

The discussion paper, which is published jointly with the FRC, calls for input on:

  • what constitutes effective stewardship
  • the challenges in delivering an effective regulatory framework for stewardship in the UK
  • how to strike the right balance between regulatory rules and voluntary codes of best practice.

Responses to the FCA consultation paper are invited by 27 March 2019, and to the discussion paper by 30 April 2019.