UK: FCA Policy Statement - Improving shareholder engagement and increasing transparency around stewardship

The Financial Conduct Authority has published PS19/13 Improving shareholder engagement and increasing transparency around stewardship: see here (pdf). The statement contains final rules and feedback following the FCA's earlier consultation (about which: see here, pdf). The new rules come into force on 10 June and will implement, in part, EU Directive 2017/828 (aka SRD II or the Second Shareholder Rights Directive). They will require, amongst other things, life insurers and asset managers to disclose information concerning their engagement policies and investment strategies (or to explain publicly why these disclosures are not being made).

The FCA states (at para. 2.20) that it cannot see a reason why these new SRDII disclosures should not be contained in the same document as the disclosures required by firms under the revised Stewardship Code but firms will need to consider whether their Stewardship Code disclosures are sufficient to meet the FCA rules. The regulator also states (at para. 1.42) that for an initial period, and because the rules are coming into force quickly after their publication, firms can comply by explaining that they are developing an engagement policy (or considering whether or not to have one).