MFA Letter to the FCA on Climate Disclosures by Asset Managers
On September 10, 2021, MFA submitted comments in response to the UK Financial Conduct Authority’s (FCA) proposal to introduce TCFD-aligned disclosure requirements for asset managers, life insurers, and FCA-regulated pension providers. In the letter, MFA emphasizes:
- Importance of Disclosure Regime Consistency Among the U.S. and UK markets – MFA strongly encourages the FCA to work closely with U.S. regulators to ensure the interoperability of the UK’s disclosure regime with the rules that the SEC and CFTC are expected to develop.
- Diversity of Investment Strategies – MFA urges the FCA to consider the broad array of investment strategies utilized by asset managers and to avoid imposing a one-size-fits-all disclosure regime that may not be workable for strategies that invest in assets outside of listed equities.
- Needs of Professional vs Retail Investors – MFA urges the FCA to ensure that there is no expectation of a one-size-fits-all approach to disclosure across retail and professional investment products as investment managers should have the flexibility to provide more or less granular data depending on the nature of their target investor base.
- Sequencing of Disclosure Requirements – MFA urges the FCA to ensure that its proposed disclosure framework for asset managers is underpinned by an effective and comprehensive issuer disclosure framework, which should take precedence over asset management-focused disclosure in terms of timing.
- FCA Should Focus on UK-Based Managers – MFA supports the FCA’s decision not to extend the proposed disclosure regime to third country managers marketing funds through the UK national private placement regime.