An amendment to a bill that is currently in the House of Lords could make standardised vote reporting by asset managers mandatory if accepted. The Association of Member-Nominated Trustees and fintech firm Tumelo have voiced their support for the change.  

An amendment to the digital markets, competition and consumers bill has been tabled by independent peer Baroness Patience Wheatcroft. The bill originated in the House of Commons.  

The amendment, which is also backed by fintech firm Tumelo, would require the Financial Conduct Authority to make rules for investment managers and insurers to give occupational pension schemes, personal pension providers and the Local Government Pension Scheme standardised information on all votes relating to their investments within 30 days of receiving the request.  

The AMNT said that existing FCA rules only require annual reporting, with reporting standardised, and is at firm level rather than fund level – “so a pension fund cannot distinguish between a few hundred votes cast on their behalf and many thousands of votes on other companies in which they are not invested”. 

It is also on a ‘comply or explain' basis, allowing managers and insurers to opt out of the process altogether, the association noted.   

AMNT co-chair Janice Turner said: “This amendment would be very helpful to pension schemes. Most pension schemes employ several fund managers, and the response to requests for information varies greatly from manager to manager.” 

She noted that most managers of pooled funds still refusing to allow pension schemes to direct a voting policy for how their shareholder votes should be cast. 

Last summer, the FCA proposed standardised vote reporting but on a voluntary basis. It has not yet responded to the consultation. 

Tumelo chief executive Georgia Stewart said the amendment would reinforce the ongoing work of the FCA’s vote reporting working group.  

“Mandatory, public vote reporting will help to craft a transparent fund management industry; facilitate quality conversations between fund managers and their clients; and enable good decision-making by pension funds who manage money on behalf of long-term savers,” she argued.  

Baroness Wheatcroft, a former editor-in-chief of the Wall Street Journal Europe, said: “Government has regularly said that stewardship – including voting – is essential to good corporate governance and good investor outcomes, as well as wider policy goals such as net zero. To put this principle into action, we need transparent, consistent, comprehensive fund-level voting information for pension providers, so they can hold their managers to account. My amendment will enable trustees and others to make better decisions on behalf of consumers and make the UK a better place to invest.”  

In 2021, the government-convened Taskforce on Pension Scheme Voting Implementation set out 24 recommendations on how to increase and improve shareholder voting for occupational pension schemes. A subsequent government-convened group, the Occupational Pensions Stewardship Council, said in a 2022 report that pension schemes should be better able to influence companies through shareholder voting. 
 

     

         

Would you support mandatory standardised reporting?