FCA’s Vote Reporting Group launches consultation on asset managers’ voting activity

The Vote Reporting Group established by the Financial Conduct Authority (FCA) has recently unveiled a consultation designed to introduce a new vote reporting template. This new initiative, for UK asset managers, aims to elucidate their voting activity to their clients. The primary objective here is to create a voluntary, standardised and comprehensive system that facilitates an increased level of transparency between asset managers and their clients.

In 2022, the FCA assembled this working group to devise a uniform vote disclosure protocol for UK asset managers, a decision that stemmed from the recommendations made by the Taskforce on Pension Scheme Voting Implementation (TPSVI). Rather than the FCA, these proposals come directly from the working group and aim to equip asset owners with pertinent and comparable data to aid in their decision-making process.

What are the Vote Reporting Group’s aims?

The Vote Reporting Group’s mission is threefold. Firstly, they aim to formulate recommendations on minimum vote reporting requirements for asset managers. Secondly, they are set on determining the ownership of the vote disclosure template. Lastly, they aim to devise effective strategies for the storage and dissemination of vote reporting data.

The proposed template can be divided into three distinct categories: standard fields, vote category fields, and vote rationale fields. Each of these fields provides different pieces of information, from basic data to the reasons behind each vote, creating a comprehensive picture of voting activity.

Alignment with broader regulation

The group proposed that this template could play a crucial role in bolstering wider regulatory developments. This includes the government’s ambitious plans for the whole-of-economy Sustainability Disclosure Requirements (SDR), the efforts of the Transition Plan Taskforce (TPT), and providing insights for an upcoming review of the UK’s overarching legal and regulatory framework concerning investment stewardship.

The potential benefits of this standardised report can be enormous. It would not only enhance the transparency between asset managers and clients, but could also inform and shape the direction of wider regulatory frameworks. It can aid in developing a more sustainable economy and contribute significantly towards responsible investing.

For asset managers

The group is seeking views on these proposals until the consultation closes on 21 September 2023. This is a valuable opportunity for stakeholders to share their thoughts and concerns, ensuring the proposed template best meets the needs of all parties involved. The results of this consultation will shape the future of vote reporting for asset managers in the UK, making it an initiative of critical importance to the sector.

Just as the FCA’s Vote Reporting Group aims to increase transparency and informed decision-making among asset managers and their clients, SI Engage’s service thrives on providing clarity, understanding and actionable information about sustainable and impact investing to its users and the shareholders across their portfolio companies. Contact us to find out more!

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