The Financial Reporting Council (FRC) has unveiled what it calls significant revisions to the UK Stewardship Code application process.
Following extensive engagement with stakeholders the FRC said it was making five immediate changes, aimed at providing clarity on areas that are challenging to address, reduce the volume of reporting, and provide scope in how signatories are undertaking stewardship.
These changes are:
- Remove the requirement to annually disclose all ‘Context’ reporting expectations, except for new reports or material changes.
- Remove the requirement to annually disclose against ’Activity‘ and ’Outcome‘ reporting expectations for some Principles.
- Explicitly allow use of content from previous reporting and cross-referencing of such reports.
- Set clear expectations of what is considered an ‘outcome’ for stewardship purposes.
- Emphasise the ability to exercise reporting against Principles 10, collaborative engagement, and 11 escalation ‘where necessary’.
The FRC is also launching a formal consultation on the Code later this year.
The FRC’s CEO Richard Moriarty said: “The UK Stewardship Code is an important driver of the UK investment stewardship eco-system, safeguarding the interests of all savers and pension holders by promoting the transparency and accountability of investors stewardship activities and decisions, as well as being adopted by global investors.
“However, it is right that we continue to challenge ourselves to ensure that the Code is operating in a way that is proportionate and minimises reporting burdens on signatories and supports the growth and effectiveness of the UK capital markets.”
- The FRC has 289 signatories to the UK Stewardship Code, representing a substantial £50.3 trillion in assets under management.
