The Financial Reporting Council (FRC) has initiated a consultation on updates to the UK Stewardship Code, with a focus on supporting economic growth and investment.
The aim is to deliver increased transparency for millions of UK investors, savers and pensioners, the regulator said.
The consultation also seeks to streamline reporting requirements and reduce burdens for signatories.
The UK Stewardship Code operates within a regulatory framework alongside the Financial Conduct Authority’s (FCA) oversight, the Pensions Regulator’s protection of member interests, and the Department for Work and Pensions’ pension scheme regulations.
The consultation, open until 19 February 2025, follows engagement with more than 1,500 stakeholders during 2024 and reflects four years of analysis of reporting against the 2020 Code.
Earlier this year, a review of the Corporate Governance Code was released.
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By GlobalDataFor the first time, the Code is said to introduce separate dedicated principles for different service providers including proxy advisers and investment consultants.
This aims to promote insightful reporting on how they support stewardship activity throughout the investment chain.
Additionally, targeted guidance will help signatories include relevant information in their reporting.
Key proposals in the consultation include a revised definition of stewardship, emphasising the creation of long-term sustainable value for clients and beneficiaries.
The reporting process will be streamlined by separating policy and activity disclosures, reducing burdens on signatories.
Targeted principles for different types of signatories and service providers including proxy advisers will also be introduced.
FRC CEO Richard Moriarty said: “The UK Stewardship Code plays a vital role in promoting long-term value for millions of people who trust their hard-earned savings and pensions to the investment community in order to provide for their future.
“This consultation marks an important evolution of the Code, ensuring it maintains high standards of stewardship in a manner that continues to support UK growth and is more proportionate. In doing so, we aim to help enhance the attractiveness of the UK as a leading global destination for capital and its management.”
The consultation builds on interim measures announced in July 2024, which reduced annual reporting requirements and provided greater clarity on stewardship outcomes.
The FRC noted that it will host engagement events during the consultation period to gather further feedback, with the updated Code expected to be published in 2025, with implementation in 2026.
