0:00
one of the city's key financial
0:02
Regulators the financial reporting
0:04
council is planning a big change it
0:06
wants to remove references to the
0:08
environment and Society from a code that
0:11
sets standard for City investors why
0:14
well it's part of an effort to simplify
0:16
red tape in the city and support the
0:18
government's growth agenda but what is
0:20
this code and what do these changes
0:21
actually mean was called the stewardship
0:24
code it's all about setting standards
0:25
and governing behaviors of investors
0:28
that back British companies to code has
0:30
273 signatures representing around 45
0:34
trillion pounds of assets while it's
0:36
designed to prevent unethical
0:37
decisionmaking by fund managers critics
0:39
argue that in its current form it's
0:41
piling regulatory burdens on UK
0:43
investors and creating frictions between
0:46
companies and the fund managers that
0:48
back them now the F FRC has announced a
0:50
set of plan changes to the code open for
0:52
public consultation until February the
0:54
changes involve redefining what
0:56
stewardship means and removing a clause
0:59
that focused on creating sustainable
1:01
benefits for the economy the environment
1:04
and Society among the other changes are
1:06
plans to streamline reporting
1:08
requirements and reduce burdens to
1:10
ensure a clearer focus on the outcomes
1:12
of stewardship rather than the process
1:14
the removed of the terms marks an
1:15
attempt to lighten the regulatory load
1:17
on listed companies and their investors
1:19
amid fears that excessive rules are
1:21
stifling the competitiveness of the city
1:24
however crucially the F frc's Chief
1:26
Richard moratti has told CM this shift
1:29
does doesn't mean abandoning
1:31
responsibility towards the environment
1:33
in an interview with us he explained
1:35
that this is a deliberate shift allowing
1:37
investors to Define their view of
1:39
sustainable value creation and report on
1:41
it rather than infantilizing them with a
1:43
definition to stick to the FC's plan
1:46
also includes new principles for
1:48
different types of signatures and for
1:50
the first time a specific principle for
1:53
proxy advisors now proxies have stirred
1:55
up some debate in the city for urging
1:57
investors to vote again policies like
1:59
big executive pay packages a stance that
2:02
some say makes it hard for British firms
2:04
to attract top talent but morti has told
2:07
CM that soothing the relationship
2:09
between the two was not the regulator's
2:11
aim it comes as the latest attempt by
2:13
morati to shift the F FRC onto a growth
2:16
footing after he already dramatically
2:18
pruned plans to strengthen the
2:20
governance code for boardrooms last year
2:22
while his predecessor had planned to
2:24
introduce areas like new environment
2:26
reporting requirements for firms morati
2:28
scrapped many of those plan measures
2:30
after taking over last October the
2:32
changes had already been a point of
2:34
friction with the previous government
2:36
and ministers had shelved legislation
2:38
that would have tightened reporting
2:39
practices in the city but in The King's
2:42
Speech in July the new government
2:43
revived plans to strengthen audit
2:46
practices and introduce a new audit
2:48
reporting and governance Authority so
2:50
what do you think should Regulators be
2:52
placing less onus on companies to
2:54
benefit society and benefit the
2:56
environment and should reporting
2:57
practices be simplified across the City
3:00
let us know what you think in the
3:01
comments below and don't forget to
3:03
subscribe for more news from city a.
