Institutional disclosure working group

The institutional disclosure working group made its recommendations to the FCA in June 2018.

Recommendations

The Institutional Disclosure Working Group (IDWG) has now made its recommendations to the FCA. 

The IDWG has made recommendations to the FCA on: 

  • templates for data collection and disclosure
  • what arrangements need to be in place to ensure the templates are maintained
  • how to encourage providers to offer information using the templates
  • how to encourage more users to request information in this format from their providers

Read a summary of the report

The full report, including the templates, will be released in full once a new body or group is convened in autumn 2018 to curate and update the framework as needed in future.

The FCA responded to the recommendations in July 2018. 

For queries please contact: [email protected]

Background and launch

The IDWG was set up to support consistent and standardised disclosure of costs and charges to institutional investors.

In the asset management market study final report the FCA proposed a package of remedies to make competition work better in this market, and protect those least able to actively engage with their asset manager. The FCA considered that this will increase efficiency, lead to the UK asset management industry being a more attractive place for investors and so improve the relative competitiveness of the UK market.

The overall package of remedies is designed to bring together a consistent and coherent framework of interventions. The remedies package seeks to enable those investors who are able, to exert greater competitive pressure on asset managers. It will increase the transparency of costs so that those seeking information can get it, including through more consistent and standardised disclosure of costs and charges to institutional investors.

In June 2017 the FCA appointed Dr Chris Sier to chair the IDWG. Dr Sier is Professor of Practice at Newcastle University Business School and is an expert in pension scheme costs and charges who has worked closely with the Local Government Pension Scheme (LGPS) in developing their template for institutional disclosure. Dr Sier is also the government’s FinTech envoy for the north of England. 

The co-deputy Chairs of the working group were Jeff Houston and Gregg McClymont.

The working group members and observers were:

  • Stewart Bevan
  • Jason Bullmore 
  • Richard Butcher
  • Dr Iain Clacher
  • Ralph Frank
  • Teresa Fritz
  • Joanne Getty
  • Tim Giles
  • David Hutchins
  • Piers Lowson
  • Gurpreet Manku
  • Thomas Mercier  
  • James Mowat
  • Mark Rowe
  • Mark Sherwin
  • Sarah Smart
  • Dr Ali Toutounchi
  • Joe Dabrowski
  • Financial Conduct Authority
  • Department for Work and Pensions
  • Organisation for Economic Co-Operation and Development
  • Trades Union Congress
  • CFA Institute

Read the IDWG's terms of reference (PDF) and supplement to the terms of reference (PDF)

Meeting discussion summaries

December 2017 summary of progress

The IDWG reported progress against the Terms of Reference (PDF).

The IDWG proposed a design for a disclosure framework that builds a high level summary for investors from a set of more detailed templates containing granular data on costs and returns.

IDWG – February 2018 engagement event

The IDWG hosted a successful stakeholder event on 8 February 2018. This provided an opportunity to discuss the progress of the IDWG work so far and gather feedback from stakeholders.

The event was introduced by Mary Starks – Chief Economist and Director of Competition at the FCA, who thanked stakeholders for the significant contributions and progress made in this space to date, including by those involved in this initiative. She also set the scene in terms of the context in which the IDWG is working, including regulatory initiatives in this space.

This was followed by a technical session presented by members of the IDWG. The Group explained that they are making progress towards improving clarity of charges for investors through the development of a framework with three levels of user, account and reference templates. The members explained the rationale for their design choices, as well as the principles that underpin the framework. The Group recognised that there are some elements of the templates which are more advanced than others, and that further work is ongoing. The IDWG reiterated their plan to present this to the FCA as soon as possible so that it can be adopted by the market and investors can benefit from the increased transparency it will provide. A technical question and answer session followed this section of the event.

The event was closed by representatives from the user, producer and regulator looking to the future and how the work of the IDWG can be embedded. Jeff Houston (LGA – Head of Pensions) spoke about the need for this template to be demanded by the suppliers and the users, and also noted that it is important to consider how best to articulate costs to trustees so that they can better understand the value of the services they receive. Chris Cummings (IA – Chief Executive) included his view that the work of the IDWG presents an opportunity for industry to work together with regulators and investors to improve transparency. Robin Finer (FCA – Head of Wholesale & Investments Competition Department) expressed his pleasure at the progress made by the IDWG and how the FCA was looking forward to seeing final recommendations on the template in the near future.

The event was attended by more than 80 stakeholders representing industry and investors as well as other interested parties. For further information please contact: [email protected]