On 30 May 2019, the FCA published Policy Statement 19/13 (“PS19/13”) in relation to the Shareholders Directive II (“SRD II”).
As per PS19/13, SRD II requires asset owners and asset managers to make disclosures about their long term investment strategies, their arrangements with each other and their engagement with the companies they invest in.
From 10 June 2019, the FCA will require asset managers and asset owners to make disclosures about their engagement policies and investment strategies, with asset managers having to provide information to asset owners, including how their investment strategies contribute to the medium to long term performance of the assets. The requirements will be set out in a new COBS 2.2B.
The FCA has stated that due to the new rules coming into force so soon after the publication of the final policy statement, firms can, for an initial period, comply with the new rules by explaining what they are doing to develop an engagement policy. This may include, for example, simply explaining that is the firm is developing an engagement policy or considering whether to have one.
As with the Stewardship Code, the rules on firms’ shareholder engagement policies under SRD II will apply on a comply or explain basis.