The Value for Money Framework

1. Who we are & why we are responding

The Society represents Members working for publicly listed companies and investor relations focused service providers, to assist them in the development of effective two-way communication with the markets. It has approaching 800 Members, drawn mainly from the UK, including the majority of the UK FTSE 100, many of the FTSE 250 constituents and some from AIM-listed companies, as well as those listed overseas.

The Society’s mission is to promote best practice in investor relations; to support the professional development of its Members; to represent their views to regulatory bodies, the investment community and Government; and to act as a forum for issuers and the investment community. 

Our response has therefore been primarily constructed through the lens of a corporate issuer, and as such reflects the views of those very much at the ‘coal face’ of investor engagement and corporate reporting.

2. Overview

We support the overall objective of the Value for Money framework and welcome efforts to improve transparency and comparability across DC schemes. I am writing to reiterate our comments on the classification and transparency of investment exposures used in VfM assessments, see our previous response here. We acknowledge that your feedback from CP24/16 states that ‘among those who commented, the majority did not support breaking out ‘Quoted, not listed assets’ into a separate category’ but it is not clear how many respondents answered this question and, moreover, CP24/16: Value for Money Framework stated that ‘its direct use for asset allocation would be limited’, and did not consider or mention some of the wider benefits of separately listed quoted/unlisted equities that we set out below.

3. Importance of clear and meaningful investment‑exposure metrics

We welcome the FCA/TPR objective of improving comparability, consistency and decision‑usefulness in VfM assessments. The consultation proposes revised metrics and a centralised database to support transparent comparisons. However, the usefulness of these metrics depends heavily on the clarity and accuracy of underlying asset‑class classifications. If categories obscure material differences in risk, liquidity and market structure, VfM comparisons may misrepresent how schemes are actually allocating capital.

4. Classification of AIM and Aquis Growth Market equities

In our attached 2024 response to CP24/16 (Q13), the Society highlighted concerns that the draft framework treated AIM and Aquis Growth Market equities as “unlisted equity”, grouping them together with private equity and other illiquid holdings.

We reiterate that this remains:

·         Unhelpful for UK capital‑markets transparency, as it obscures the scale of DC investment in UK public growth markets—an area of wider policy focus in relation to investment flows, competitiveness and the Mansion House agenda.

·         Problematic for comparability, as a fund with significant AIM exposure may appear similar, in VfM metrics, to a fund holding illiquid private equity.

·         Misrepresentative for governance bodies, as AIM/Aquis securities trade on regulated public markets with continuous price formation.

·         Misleading for savers, who may believe these assets are private or illiquid.

For these reasons, we encourage the FCA and TPR to avoid categorising “quoted but not listed” public equities within the same broad “unlisted” grouping.

5. Request for clearer taxonomy within the VfM database and disclosures

We support the creation of a centralised VfM database, but recommend that the asset‑classification taxonomy:

1.        Separates AIM/Aquis Growth Market equities from private/unlisted equity.

2.       Ensures category labels reflect the actual trading environment and liquidity profile of assets.

3.       Supports accurate interpretation of performance and cost metrics by employers, trustees, IGCs/GAAs and members.

This change would be consistent with the aims of the framework to enhance comparability and transparency and would provide a more meaningful picture of how schemes invest in UK public markets.

6. Proportionality and consistency with wider regulatory objectives

Improving clarity around investment‑exposure categories aligns with:

·         HMT and DWP policy work on pension‑scheme investment in UK productive finance;

·         FCA work on listing reform and capital‑markets competitiveness;

·         Industry initiatives promoting transparency around flows into UK equities, particularly small‑ and mid‑caps.

We therefore see this refinement as a proportionate and constructive addition to the VfM framework.

7. Conclusion

We encourage the FCA and TPR to ensure that AIM and Aquis Growth Market equities are not grouped with unlisted equity within the VfM taxonomy, as this would materially improve the meaningfulness of VfM assessments for all users and support broader UK market‑competitiveness goals.

We hope you find these comments useful. Please do not hesitate to make contact if you have any questions, and we would also be pleased to provide additional issuer evidence.