UK Financial Reporting Council’s Stewardship Code Disclosure Statement

FCA COBS Rule 2.2.3R requires FCA authorised firms to disclose the nature of their commitment to the UK Financial Reporting Council’s Stewardship Code (the “Stewardship Code”), which was first published by the Financial Reporting Council (“FRC”) in July 2010, and then revised in September 2012.

The Stewardship Code sets out the principles of effective stewardship by investors. It sets out good practice and is to be applied by firms on a “comply or explain” basis. The FRC recognises that not all parts of the Stewardship Code will be relevant to all signatories and that smaller institutions may judge some of the principles and guidance to be disproportionate. The seven principles of the Stewardship Code, so as to protect and enhance the value that accrues to the ultimate beneficiary, are that institutional investors should:

• Publicly disclose their policy on how they will discharge their stewardship responsibilities;
• Have a robust policy on managing conflicts of interest in relation to stewardship which should be publicly disclosed;
• Monitor their investee companies;
• Establish clear guidelines on when and how they will escalate their stewardship activities;
• Be willing to act collectively with other investors where appropriate;
• Have a clear policy on voting and disclosure of voting activity; and
• Report periodically on their stewardship and voting activities.

NPGCUK acts as investment manager to certain private investment funds and managed accounts. Its investment strategy primarily involves credit and credit-related investments and only infrequently involves voting interests in listed companies and interaction with the management of companies listed in the UK. Therefore, while the Firm generally supports the principles of the Stewardship Code, it does not consider it appropriate to conform to the Stewardship Code at this time.