UK Stewardship Code
Update on proposed revision to the UK Stewardship Code
The FRC published a consultation on the draft 2019 UK Stewardship Code on 30 January 2019. It closed on 29 March 2019 and we received more than 100 responses.
The FRC has analysed all the responses to the consultation and our engagement with stakeholders during the consultation period. Responses demonstrated strong support for key changes proposed including, consideration of ESG issues, extension to asset classes beyond listed equity, setting expectations of different entities in the investment community and reporting on activities and outcomes.
To ensure the Code will drive distinctive and high-quality stewardship reporting, we are undertaking targeted outreach to test changes to our proposals on activities and outcomes reporting before publishing the revised Code in October.
The 2012 UK Stewardship Code
The UK Stewardship Code (PDF) aims to enhance the quality of engagement between investors and companies to help improve long-term risk-adjusted returns to shareholders. On this page, you can read the code and learn about its origins and see the tiering of current signatories. The Code was last updated in September 2012.
Who should comply with the code?
The responsibility for monitoring company performance does not rest with fund managers alone. Pension fund trustees and other asset-owners can do so either directly or indirectly through the mandates given to fund managers. Their actions can have a significant impact on the quality and quantity of engagement with UK companies.
The FRC therefore encourages all institutional investors to report if and how they have complied with the Code:
- Publishing a statement on their website of the extent to which they have complied with the Code,
- Notifying the FRC when they have done so and whenever the statement is updated.
- Providing a name in the statement of the individual who can be contacted for further information and by those interested in collective engagement.
The Code also allows service providers to disclose how they carry out the wishes of their clients with respect to each principle of the Code that is relevant to their activities.
Since December 2010 all UK-authorised Asset Managers are required under the FCA's Conduct of Business Rules to produce a statement of commitment to the UK Stewardship Code or explain why it is not appropriate to their business model. Further information can be found here. Please note that institutions that manage several types of fund need only make one statement.
Why should we publish a stewardship code compliance statement?
Disclosures made in relation to the Code are useful for:
- Companies who want to understand the approach and expectations of their major shareholders.
- Those issuing mandates to asset managers, helping them to make a better informed choice,
- Asset managers who want to understand the expectations of currents and potential clients.
How can I let the FRC know we have complied with the code?
There is no fee payable to become a signatory to the Code. Where an organisation does not have a public website, the FRC can host a copy of their statement in pdf form on our website free of charge. If you wish to discuss this, please contact us at email@example.com.
Organisations wishing formally to notify the FRC that they have published a statement should email firstname.lastname@example.org.