Call for regulatory guidance on Stewardship Code for UK funds

There’s been a call in Parliament for the UK’s pensions regulator to provide guidance to pension funds on how they should implement the Stewardship Code.
Labour MP Jon Cruddas has called on pensions minister Steve Webb to take the matter up with the regulator.
Webb said he would raise the issue with the new chairman of the regulator Michael O’Higgins – but warned the body is independent of the government and that there’s a “lot on their plate”.
Cruddas argued it was disappointing that the regulator has not yet produced any official guidance on the Stewardship Code, which was launched in July. “The role of pension funds has often been left to the National Association of Pension Funds, which is an industry body – a less-than-ideal situation,” he said in a debate last night.
Cruddas said it was clear the stewardship code would not be a panacea in terms of accountability and transparency. Cruddas, who recently hosted FairPensions’ annual lecture in the House of Commons, pointed to confusion about where responsibility lies for disclosure about voting records.

“There is a real danger that such buck passing will result in nobody disclosing and that the pension savers at the bottom of the chain remaining in the dark abouthow their money is being managed,” Cruddas said.
Webb acknowledged “scope for greater clarity” on the matter. Cruddas also called for asset managers to be forced to disclose how they vote at company meetings; this comes under the remit of another government department, Business, Innovation and Skills, and Cruddas hoped it would form part of its review of economic short-termism.
He called for clarity on pension funds’ obligations, to make it clear they should disclose information about their voting practices not just their voting policy.
Webb said there was no appetite for additional regulation but said he was open to suggestions that have little or no “regulatory burden” or which identify regulations that could be repealed.
Webb said the new NEST Corporation, the personal accounts system to be launched next year, is currently thinking about how will provide an ethical or socially responsible investment fund. He said there was evidence that there is “very strong support” for this.
In other business in the House yesterday, MPs voted to support the government’s approach to the European Commission’s Green Paper on corporate governance in financial institutions and remuneration policies. They voted by 281 to 195 to suppport a “strong, principles-based framework” for governance in banks. Debate transcript