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<p /> <p /> <p /> <p>The Government supports the principles set out in the Financial
Reporting Council (FRC) UK Stewardship Code including schemes becoming active stewards
of their investments and reporting on that stewardship. The Code sets out a number
of areas of good practice to which the FRC believes institutional investors should
aspire, and operates on a 'comply or explain' basis. It includes guidance for pension
schemes and other asset owners on steps they can take to protect and enhance the value
that accrues to the ultimate beneficiary. The FCA requires UK authorised asset managers
to report on whether or not they apply the Code.</p><p> </p><p>The UK stewardship
code is voluntary, however we would encourage workplace pensions schemes to comply
with the principles set out in the code. In addition we are developing governance
standards of workplace defined contribution schemes, and have asked the Law Commission
to investigate how fiduciary duties currently apply in the investment chain. The Pensions
Regulator's defined contribution Code of Practice also sets out the legal requirements
and standards they expect trustees of defined contribution schemes to attain. This
includes a section on investment which also references the FRC Stewardship code. These
initiatives are part of our on-going work to ensure schemes are governed and administered
to deliver in members' interests.</p>
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