Political
concerns
continued
to
grow
throughout
2023
about
the
weakness
of
UK
growth.
In
financial
markets,
these
concerns
manifested
around
the
declining
attractiveness
of
the
London
Stock
Exchange
as
a
listing
venue
of
choice
for
public
companies.
Worries
have
been
exacerbated
by
a
mix
of
firms
choosing
to
sell
to
private
equity,
choosing
to
list
in
other
countries
due
to
perceived
valuation
and
growth,
or
even
to
relocate
their
listing
from
London
to
other
exchanges
such
as
New
York.
The
challenge
is
in
how
to
solve
it
without
diluting
too
heavily
the
governance
standards
that
the
UK
has
prided
itself
on.
An
open
consultation
from
the
FCA
proposes
a
simplified
listing
regime
with
a
single
listing
category
aimed
at
helping
boost
UK
growth
and
competitiveness,
by
making
the
London
exchange
more
attractive
to
a
wider
range
of
companies.
As
with
many
other
areas
of
regulation,
transparency
and
disclosure
are
key
tools
to
balance
the
risks
of
a
new
regime.
These
ensure
people
have
enough
information
to
make
informed
investment
decisions
and
the
ability
to
engage
with
and
influence
companies’
behaviour.
The
UK
Corporate
Governance
Code,
or
CGC,
is
a
key
part
of
UK
listing
rules
and
the
Financial
Reporting
Council
is
expected
to
publish
an
updated
version
of
the
code
imminently,
following
its
own
consultation
last
process
last
year.
The
FRC
recently
said
it
is
keen
to
explore
ways
of
ensuring
reporting
requirements
and
guidance
are
proportionate
–
a
word
used
by
the
FCA
in
its
recent
review
–
and
maintain
effective
corporate
governance
and
stewardship
to
promote
growth
and
competitiveness.
Following
its
work
on
the
UK
CGC,
the
FRC
intends
to
engage
with
stakeholders
on
a
review
of
the
UK
Stewardship
Code,
as
envisaged
in
the
white
paper
‘Restoring
Trust
in
Audit
and
Corporate
Governance’,
including
understanding
how
it
works
in
practice
and
what
changes
may
be
required.
Corporate
Governance
is
a
(Consumer)
Duty
Governance,
and
particularly
product
governance,
is
at
the
heart
of
the
FCA’s
2023’s
flagship
piece
of
regulation,
the
Consumer
Duty.
To
recap,
the
Duty,
effective
since
July
31
2023,
seeks
to
put
good
outcomes
for
consumers
at
the
heart
of
financial
service
providers’
businesses.
Specifically,
four
outcomes
are
sought:
helpful
and
accessible
customer
support,
timely
and
clear
understandable
information about
the
subset
of
a
firms’
products
and
services
that
are
designed
for
the
target
market,
which
should
be
offered
at
fair
value.
The
regulator
wants
the
Duty
to
shift
culture
and
behaviour
within
firms
to
consistently
focus
on
customer
outcomes.
A
board
level
‘Consumer
Duty
Champion’
is
meant
to
drive
focus
on
embedding
the
principles
throughout
a
firm.
This
can
span
everything
from
staff
training
through
gathering
the
right
data
and
setting
key
performance
indicators.
At
least
annually,
a
report
of
the
firms’
compliance
with
the
Duty
must
be
reviewed
and
approved
by
the
board.
This
is
all
in
addition
to
longstanding
fitness
and
propriety
assessments
that
individuals
must
pass
(and
continue
to
meet
the
conditions)
to
hold
senior-level
roles
in
financial
services
firms.
Sustainable
Investment
Labels,
Governance
at
the
Core
A
perennial
focus
of
regulators
over
recent
years
is
that
of
environmental,
social
and
governance
investment.
The
newest
development
in
ESG
will
see
new
UK
sustainability
disclosures
together
with
four
new
investment
labels
–
Sustainability
Impact,
Sustainability
Focus,
Sustainability
Improvers,
and
Sustainability
Mixed
Goals
–
available
to
products
from
the
end
of
July.
Here,
governance
is
a
core
requirement,
underlying
firms’
ambitions
to
elect
a
label
for
any
of
their
products.
They
must
ensure
there
are
resources,
governance
and
organisational
arrangements
in
place
to
achieve
the
product’s
sustainability
objective;
there
is
adequate
knowledge
and
understanding
of
the
assets;
and
there
is
a
high
standard
of
due
diligence
in
the
selection
of
any
data
or
other
information
used
to
inform
investment
decisions.
These
criteria
are
on
top
of
requirements
to
have
sufficient
knowledge,
skills
and
experience,
commit
sufficient
time
and
act
with
honesty,
integrity
and
independence.
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