The Value for Money Framework - CP 24/16

The IR 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 and many of the FTSE 250 constituents and some from companies listed overseas. However, the IR Society seeks to represent all equity issuers including smaller cap issuers, given they form an important pipeline for the capital markets and thus also for our membership.

The IR 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. As such, our response has been primarily constructed through the lens of a corporate issuer.

We have not answered all the specific questions, which are less relevant to our members, but we set out below our answer to Question 13, which relates to your proposal to require disclosure of certain sub-asset classes of equities.

Question 13:

A. Do you think we should break out ‘Quoted but not listed’ (eg AIM) and if so, how would that be useful?

Yes. We would support transparency and visibility of fund investment in the UK’s ‘unlisted’ quoted SME markets (AIM and Aquis) separately from unlisted equity because:

· in principle, it would be misleading and misrepresentative to include AIM and Aquis quoted equities within the ‘unlisted’ category, given these issuers are an important part of the ‘growth escalator’ for UK capital markets;

· this transparency would also likely be of interest/use to AIM companies in addition to pension fund savers because, for instance, it would facilitate investor targeting for AIM companies as they would know which funds have a meaningful proportion of unlisted but quoted equities, which could indicate an appetite for AIM shares; and

· including AIM investment within the ‘unlisted’ category could distort/skew those figures and prevent visibility of the amount being invested in unquoted equities, making it difficult for policymakers to assess progress against policy goals (and clouding the transparency for pension fund savers).

B. Would there be additional cost to doing this and can you indicate how much?

No, we believe this information should be fairly readily available for funds, so the costs should not be significant.

We hope you find these comments useful. Please do not hesitate to make contact if you have any questions.