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<p>Asset managers act as agents of investors in their funds. They are required to
manage their funds in the best interests of all of their fund investors and to appropriately
avoid, manage and disclose conflicts of interests that could, and do arise between
different investor groups. This is a requirement of Markets in Financial Instruments
Directive II (MiFID II).</p><p> </p><p>Asset managers should have policies, procedures
and governance in place to effectively manage any conflicts arising from their stewardship
obligations.</p><p> </p><p>The FCA has recently published a Policy Statement (PS 19/13)
‘Proposals to promote shareholder engagement: Feedback to CP 19/7 and final rules.’
This sets out final rules to implement requirements of the Revised Shareholder Rights
Directive (SRD II). SRD II introduced new requirements to improve shareholder engagement
and increase transparency around stewardship. The rules came into effect on 10 June
2019 requiring asset managers to disclose and make publicly available their policies
on how they engage with the companies they invest in. They also require asset managers
to provide certain information to institutional investors, including occupational
pension schemes. The new rules are designed to foster stewardship, and better stewardship
should lead to better decision making in relation to mergers and acquisitions.</p>
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