This consultation proposes regulatory measures to implement the provisions of the amended Shareholder Rights Directive (SRD II) for FCA-regulated life insurers and asset managers, as well as for issuers of shares in respect of related party transactions. The Directive comes into effect in June 2019 and, assuming a transition period for EU Withdrawal is agreed, will need to be transposed in the UK. SRD II aims to promote effective stewardship and long-term investment decision-making.
It is one of two papers published today that propose new measures on how to encourage effective stewardship in the interest of consumers. The other is a joint Discussion Paper (DP19/1) by the FCA and the Financial Reporting Council (FRC) on the importance of effective stewardship.
In developing these papers, the FCA has worked closely with the Department for Business, Energy and Industrial Strategy, Her Majesty’s Treasury, the Department for Work and Pensions and the FRC. In a separate Consultation Paper published today, the FRC sets out proposed revisions to its Stewardship Code. With these revisions, the FRC aims to consolidate and to maintain the UK’s strong reputation on stewardship internationally.
This consultation will be of interest mainly to asset owners (such as life insurers and pension funds), asset managers, and companies with shares admitted to trading on a regulated market, who may be directly affected by our proposals. Retail investors, consumers. trade bodies and organisations with a focus on stewardship may also have an interest, but they are not directly included in the scope of these proposals.
This consultation has now closed. We will consider the responses, and any other relevant developments before finalising our rules.