Key facts
- The Financial Conduct Authority is consulting on new rules.
- The proposed rules aim to curb shareholder influence on UK investment trust boards.
- The rules would restrict the voting power of substantial shareholders appointed as investment managers.
- The consultation follows criticism of the FCA's handling of activist campaigns.
The Financial Conduct Authority (FCA) has initiated a consultation on new regulations designed to curtail the influence of substantial shareholders on the boards of UK investment trusts. These proposed rules specifically target the voting power of shareholders who are also appointed as investment managers for these trusts. The FCA's move comes in the wake of criticism concerning its past handling of activist investor campaigns. The consultation seeks to gather feedback on measures that would restrict the ability of these influential shareholders to sway board decisions. The underlying concern is to mitigate potential conflicts of interest and prevent undue influence by parties who may have vested interests beyond those of the broader shareholder base. This initiative reflects a broader effort to enhance corporate governance within the investment trust sector and ensure that boards operate in the best interests of all stakeholders.