Companies Act 2014

F425 [ Investment strategy of institutional investors and arrangements with asset managers

1110I

1110I. (1) A relevant institutional investor shall publicly disclose how the main elements of its equity investment strategy are consistent with the profile and duration of its liabilities, in particular its long-term liabilities, and such disclosure shall include how those elements contribute to the medium to long-term performance of its assets.

(2) Where an asset manager invests on behalf of a relevant institutional investor, whether on a discretionary client-by-client basis or through a collective investment undertaking, the relevant institutional investor shall publicly disclose the following information regarding its arrangement with the asset manager:

( a ) how that arrangement incentivises the asset manager to align its investment strategy and decisions with the profile and duration of the liabilities of the relevant institutional investor, in particular long-term liabilities;

( b ) how that arrangement incentivises the asset manager to

(i) make investment decisions based on assessments about the medium to long-term financial and non-financial performance of the investee company, and

(ii) engage with investee companies in order to improve their performance in the medium to long term;

( c ) how the method and time horizon of the evaluation of the asset manager s performance and the remuneration for asset management services

(i) are in line with the profile and duration of the liabilities of the relevant institutional investor, in particular the long-term liabilities, and

(ii) take absolute long-term performance into account;

( d ) how the relevant institutional investor monitors portfolio turnover costs incurred by the asset manager and how it defines and monitors a targeted portfolio turnover or turnover range;

( e ) the duration of the arrangement with the asset manager.

(3) Where the public disclosure under subsection (2) does not contain all of the elements specified in paragraphs (a) to (e) of that subsection, the relevant institutional investor shall publicly disclose a clear and reasoned explanation as to why such elements are not included.

(4) A requirement in this section to publicly disclose any matter shall be read as a requirement to

( a ) make the matter available free of charge on the website of the person that is subject to the requirement, and

( b ) update the matter on an annual basis, unless there is no material change to the matter since it was last updated.

(5) An institutional investor that is regulated by Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (recast) 11 may include the information referred to in subsections (1) and (2) in its report on solvency and financial condition under Chapter 3 of Part 4 of the European Union (Insurance and Reinsurance) Regulations 2015 ( S.I. No. 485 of 2015 ). ]

Annotations

Amendments:

F425

Inserted (30.03.2020) by European Union (Shareholders’ Rights) Regulations 2020 (S.I. No. 81 of 2020), reg. 7, in effect as per reg. 1(3).