Britain reviews investor code of practice with competitiveness lens
By Huw Jones
LONDON (Reuters) — Britain's code of good practice for asset managers will undergo a root-and-branch review to aid economic growth and international competitiveness, its compiler said on Tuesday, in a move that could see pay of top executives bumped up.
The code sets out how asset managers should engage with companies over how they are run to improve long-term returns to investors. It is based on «comply or explain», meaning asset managers must disclose when they don't apply any of its principles.
There are currently 273 signatories to the code, many based abroad, and representing 43.3 trillion pounds ($54.90 trillion) of assets under management,
Since the Financial Reporting Council (FRC) wrote the latest version in 2019, it has been given a remit by government to aid growth and competitiveness.
Britain is seeking ways to boost London's attraction a global financial sector through listing and other reforms as Wall Street attracts European company listings and the UK financial sector is largely locked out of the EU since Brexit.
«It’s clear that now is an opportune moment for a fundamental review process to ensure that the principles of the Code are still driving the right stewardship outcomes for investors while not unduly contributing to reporting burdens,» the FRC said in a statement.
The review will focus on whether the code has led to unintended consequences, such as «short-termism» in targets.
After meeting with industry participants, the FRC will make concrete proposals in the summer for public consultation, with the revised code published in early 2025.
The Capital Markets Industry Taskforce (CMIT), an industry group chaired by London Stock Exchange CEO Julia Hoggett, said in November the code must
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