Policyholders risk of both being unable to understand the issues and being misrepresented.
The Financial Conduct Authority (FCA) has proposed changes to its approach on Part VII insurance business transfers. This is set out in GC 21/3. The consultation can be found here.
Arbitrary manipulation of discount rates can ‘create’ reported capital, misleading prospective investors, creditors or policyholders.
Creation comes from use of discount rates in excess of the risk-free rate.
The use of discount rates that are in excess of risk-free rates is a pervasive issue that affects all firms with medium to long term debt, often with a material impact on the accounts.
This approach is rejected by all financial economists and has been raised as a serious concern by many stakeholders.
It is crucial that the interests and concerns of policyholders are represented to the Regulator. UKSA’s own expert has not had any useful response from the Financial Conduct Authority (FCA).
We are sending our comments to the Expert.
We have written to the FCA’s Chairman asking for a single point of contact between UKSA or another nominated policyholder representative.
The FCA must address corporate culture to focus on sound consumer outcomes.
The FCA must deal with the conflict between the objectives of firms and the needs of customers.
The legal concept of ‘Duty of Care’ already exists. Why introduce an FCA construct with no widely accepted meaning?
LIAS or LIARS? Our view is that the proposals should be killed at birth.
The LTAF is designed to enable authorised funds to be set up to invest efficiently in long‑term, illiquid assets.
We believe the name ‘Long Term Asset Fund’ is an awful misnomer:
We think that the problem the FCA wants to solve is unclear.
Multiple corporate failures such as Carillion & Patisserie Valerie show that something has gone wrong with auditing and with the way companies are run. As mentioned on our page “Are you happy with the quality of corporate reporting? Have your say” the Government is trying to fix this.
Companies get into trouble for all sorts of reasons. Shareholders have a duty of care to ensure the best possible outcome for all stakeholders.
When the shareholders, many of them retail shareholders, work with a company to find a win/win option, they should be able to rely on the Regulator to be consistent. In this case, the FCA has been erratic.
The Governor of the Bank of England replies to a Joint UKSA and ShareSoc letter about the Archegos fallout. The broad structure is defined. It is down to individuals to make sure it works – the weak spot.
Practical action or political stunt?
Follow this link to find out whether we think that the proposals will put Britain at the forefront of mandatory climate reporting or whether this looks more like a political stunt.
In March BEIS published a consultation paper on 'requiring mandatory climate-related financial disclosures by publicly quoted companies, large private companies and Limited Liability Partnerships (LLPs)'
What has Archegos’ blight on Credit Suisse and five other non-UK banks got to do with UK shareholders? If the same activity along with the same lack of transparency exists in the UK, UK banks could be greatly exposed without their shareholders and customers being any the wiser.
UKSA and ShareSoc have written to Bank of England Governor, Andrew Bailey, seeking assurance that the lack of transparency is being addressed in the UK surrounding large share trades by private offices and hedge funds executed through their prime brokers in derivative form.
Renewing your UKSA membership is quick and easy, ensuring uninterrupted access to all the advantages of membership.
