New standard for asset managers

The Financial Services Council’s (FSC) Principles of Internal Governance and Asset Stewardship Standard for asset managers, which commenced in January, will aim to strengthen the foundations of public trust in the industry.

The standard would become mandatory for close to 50 FSC asset manager members from 1 July.

The new norm would be also expected to:

• Encourage higher standards of internal governance and stewardship practices
• Provide better information for clients and other stakeholders
• Raise the quality and standing of Australia’s financial services internationally

Apart from addressing the asset stewardship and conflicts of interest, the FSC code would require asset managers to explain policies and practices regarding their investment and organisational approach, internal governance and asset stewardship.

Additionally, the asset managers would be expected to share their explanations publicly.

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AllianceBernstein (AB), which produced together with FSC a white paper to mark the industry’s adoption of the new regime, chief executive Jen Driscoll said: “The standard reflects how keenly Australian fund managers understand the importance of ethics and governance in rebuilding and maintaining trust, and how seriously they take the challenge.”

According to FSC chief executive, Sally Loane the new regime set the highest bar in the world for Australian asset managers in terms of their reporting organisational processes and meeting governance responsibilities.