PS19/13: Improving shareholder engagement and increasing transparency around stewardship

Open consultation: CP19/7
30/01/2019
Consultation closes
27/03/2019
Policy Statement: PS19/13
31/05/2019
31/05/2019

We have introduced new requirements to improve shareholder engagement and increase transparency around stewardship. The requirements come into effect on 10 June 2019.  
Asset managers and life insurers will need to disclose and make publicly available, their policies on how they engage with each other and the companies they invest in, and how their strategies create long-term value. Issuers will also need to make new disclosures regarding their related party transactions (RPTs).

Read PS19/13 (PDF)

These rules, which we consulted on in January, implement the provisions of the amended Shareholder Rights Directive (SRD II). Our finalised rules reflect the feedback to our CP19/7: Consultation on proposals to improve shareholder engagement.

In relation to asset managers and life insurers, the Policy Statement provides additional clarifications to aid firms in interpreting the policy intent of the new rules.

The main changes we have made in our final rules compared to the proposals in CP19/7 relate to the rules on RPTs. While there was support for our broad approach, we received divergent feedback on some of our proposals. Our changes carefully balance the interests of issuers and investors. We have reduced the materiality threshold at which issuers will be required to disclose their RPTs and have them approved, to give investors greater transparency and protections. On the other hand, we have also made changes to reduce the cost to issuers in meeting the new requirements, and in particular non-EEA issuers.

We have coordinated our work on SRD II with the Department for Business, Energy and Industrial Strategy, Her Majesty’s Treasury and the Department for Work and Pensions, who have also implemented parts of the Directive.

In January, we also published a related Discussion Paper on stewardship (DP19/1) jointly with the Financial Reporting Council. This has now closed. We are currently considering the responses.

Who this applies to

Asset owners (such as life insurers and pension funds), asset managers, and companies with shares admitted to trading on a regulated market, who may be directly affected by our proposals. Retail investors, consumers. Trade bodies and organisations with a focus on stewardship may also have an interest.

Next steps

Our new rules come into force on 10th June, which is the deadline to implement the Directive. 

Page updates

12/04/2019: Information added Updated to note the closed consultation