DP19/01 response form

We are asking for comments on this interim report by 30 April 2019.

Please use this online form or alternatively write to: Mark Manning, Primary Markets Policy, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN

Email: [email protected]

We make all responses to formal consultation available for public inspection unless the respondent requests otherwise. We will not regard a standard confidentiality statement in an email message as a request for non-disclosure.

Despite this, we may be asked to disclose a confidential response under the Freedom of Information Act 2000. We may consult you if we receive such a request. Any decision we make not to disclose the response is reviewable by the Information Commissioner and the Information Rights Tribunal.

Once you complete this form, we will email you a copy of your submission to acknowledge receipt of your response.

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Q1: Do you agree with the definition of stewardship set out here? If not, what alternative definition would you suggest?

Q2: Are there any particular areas which you consider that investors’ effective stewardship should focus on to help improve outcomes for the benefit of beneficiaries, the economy and society (eg ESG outcomes, innovative R&D, sustainability in operations, executive pay)?

Q3: To what extent do the proposed key attributes capture what constitutes effective stewardship? Which attributes do you consider to be most important? Are there other attributes that we should consider? If so, please describe.

Q4: What do you think is the appropriate institutional, geographical and asset class scope of stewardship? How can challenges associated with issues such as the coordination of stewardship activities across asset classes, or the exercise of effective stewardship across borders, be overcome?

Q5 title

Q5: We welcome examples of how firms with different objectives and investment strategies approach stewardship. In particular, we welcome input on how stewardship practices differ across active and index-tracker funds, in the following areas:

i: How firms prioritise and conduct stewardship engagements

ii: What investments firms have made in stewardship resources

iii: How stewardship activity is integrated with investment decisions

Q6: To what extent do you agree with the key barriers to achieving effective stewardship identified in this DP? What do you believe are the most significant challenges in achieving effective stewardship? We would particularly welcome views on the investment required to embed effective stewardship in investment decision making.

Q7: To what extent do you consider that the proposed balance between regulatory rules and the Stewardship Code will raise stewardship standards and encourage a market for effective stewardship?

Q8: To what extent are there are issues with proxy advisers that are not adequately addressed by SRD II and proposed revisions to the Stewardship Code?

Q9 title

Q9: We welcome feedback on other specific aspects of the regulatory framework described above. In particular, we are interested in views on:

i: Whether and to what extent the FCA’s proposed rules for asset owners should be extended to SIPP operators?

ii: The case for regulatory rules to expand the reach of stewardship beyond listed equity

iii: Whether there is a role for UK regulators in encouraging overseas investors to engage in stewardship for their asset holdings in the UK

iv: The extent to which additional rules might be necessary either to improve stewardship quality or prevent behaviours that might not be conducive to effective stewardship

v: For differences between active and index-tracker strategies in the practice of stewardship, whether there are particular regulatory actions we should consider to address any perceived harms

vi: Whether the FCA’s proposed rules to implement certain provisions of SRD II should apply on a mandatory, rather than ‘comply or explain’, basis

Q10: We welcome feedback on whether, to support effective stewardship, we should consider amendments to other aspects of the regulatory framework that affect how investors and issuers interact (such as the LRs, PRs and DTRs)?

First published: 30/01/2019 Last updated: 30/01/2019