Brunel sign the UK asset owner letter on FCA Consultation Paper – Primary Markets Effectiveness Review

Hannah Prosser
Communications Consultant
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Today, we have signed, with a number of other pensions schemes, a letter to the FCA calling for calling for a broad and evidence-based policy discussion following the FCA’s consultation on listing reforms.

The group wants to ensure that the UK’s historically high corporate governance standards and robust investors protections are maintained to support healthy capital markets in the future.

Brunel is supporting this letter as we believe that the current proposals FCA listings risk undoing the stewardship progress. Faith Ward, Chief Responsible investing Officer said:

As a company that invests for the long term, we believe that these reforms would make UK-listed companies less attractive to the kinds of well-informed, long-term investments that we seek on behalf of our clients. We do not believe the proposed reforms to the UK listings regime will lead to the healthy capital markets we all want.

The full letter reads:

UK asset owner letter | FCA Consultation Paper 23/10 – Primary Markets Effectiveness Review: Feedback to DP22/2 and proposed equity listing rule reforms

As UK pension schemes stewarding ca. £250bn assets under management on behalf of over 20 million members, we recognise that access to home-grown, high-performing companies – like many of those we already invest in – is positive for our members. We welcome the current conversation on creating vibrant UK capital markets, including how we attract not only high-quality, innovative firms but also high-quality, thoughtful investors.

We do not think the FCA’s proposed reforms to the UK listings regime will lead to the healthy capital markets we all want. We believe that they would in fact exacerbate the current issues by making UK-listed companies less attractive to the kinds of well-informed, long-term investors that our portfolio companies – including several that are looking to list in the next few years – tell us and our managers they are looking for.

The current proposals would roll back fundamental investor protections, such as the right to a shareholder vote on both significant and related party transactions, as well as the equal voting rights that serve as  the foundation of a fair and democratic capitalist system. Diluting these important shareholder rights mean that investors would find it more challenging to act as effective stewards of their assets. It would also diminish the UK’s reputation and attractiveness as the world’s ‘quality’ market, and its role as a beacon for high corporate governance standards and robust investor protections.

Many of us have previously welcomed FCA and other UK policy efforts to support investors in undertaking robust stewardship in members’ best interests. We agreed with policymakers that thoughtful stewardship on material factors is a fundamental ingredient in supporting companies that are well-placed to perform over the long term. Yet these latest policy discussions risk undoing much of the progress achieved, fundamentally reducing shareholder protections in a way that would ultimately leave scheme members exposed to more significant risks and higher costs.

The discussions many of us have had with portfolio companies, IPO advisers and our managers indicate that innovative companies are primarily looking for fair valuations, a stable policy, economic and political environment, and a deep, liquid pool of thoughtful and long-term domestic and international capital. We believe that policymakers should instead seek to implement measures in these fundamental areas that will attract both the companies and the investors that are important for healthy capital markets.

We are responsible for the retirement outcomes of millions of British citizens who work and live in the UK. We naturally want to see the UK continue to thrive as a global financial centre. However, we do not think that the changes proposed will solve the fundamental issues affecting our equity markets. Rather, we think that they will amplify the current challenges as well as leading to worse outcomes for our members. We also do not believe that policymakers have provided the necessary evidence to support yet further changes to the UK listings regime (taking place only 18 months after the previous changes were implemented).

We look forward to a broad and evidence-based policy discussion that includes, and listens to, voices from across the entire capital markets ecosystem. This discussion should include serious consideration of the asset owner perspective, given our role at the top of the investment chain and close alignment of interests with those of our members.

Yours sincerely,


Brunel Pensions Partnership

The Church of England Pensions Board

HSBC Bank (UK) Pension Scheme

Merseyside Pension Fund


People’s Partnership

TPT Retirement Solutions

Universities Superannuation Scheme (USS)


Photo by Artur Tumasjan on Unsplash

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