The revised EU Shareholder Rights Directive (“SRD II”) was integrated into the FCA Handbook via the
Shareholders Rights Directive (Asset Managers and Insurers) Instrument 2019 and was subsequently
onshored to the UK. As such, SRD II applies to UK asset managers, including MIFID investment firms,
alternative investment fund managers (AIFMs), UCITS management companies and self-managed UCITS
(“asset managers”).
SRD II requires asset managers to adopt on a “comply or explain” basis an engagement policy describing
how it integrates in its investment strategy shareholder engagement relating to shares admitted to
trading on an EEA regulated market or any ‘comparable’ listed market outside the EEA.
Under FCA COBS 2.2.B.5R, we are required to:
1. Develop and publicly disclose an engagement policy that meets the requirements of COBS
2.2B.6R; and
2. Publicly disclose on an annual basis how our engagement policy has been implemented in a way
that meets the requirements of COBS 2.2B.7R; or
3. Publicly disclose why we have chosen not to comply.
The engagement policy must describe how a firm:
1. Integrates shareholder engagement in its investment strategy
2. Monitors investee companies on relevant matters, including: a) strategy; b) financial and non-
financial performance and risk; c) Capital structure; and d) social and environmental impact and
corporate governance;
3. Conducts dialogues with investee companies;
4. Exercises voting rights and other rights attached to shares;
5. Cooperates with other shareholders;
6. Communicates with relevant stakeholders of the investee companies; and
7. Manages actual and potential conflicts of interests in relation to the firm’s engagement.
On an annual basis, the firm must disclose a general description of voting behaviour, an explanation of
the most significant votes and reporting on the use of services of proxy advisors. The disclosure must
include how votes have been cast unless they are insignificant due to the subject matter of the vote or
to the size of the holding in the company.
Working Capital firmly believes in the importance of effective stewardship and long-term decision
making, involving transparency of engagement policies between institutional investors and the investee
companies. The Firm does not predominantly hold large positions in equity securities of listed issuers or
pursue an activist strategy. As such, the Firm does not currently maintain and will not publish an
engagement policy as specified by the Directive. The Firm shall periodically review its investment
strategies to determine whether its investment activities have changed to the extent that the Firm
should adopt an engagement policy under SRD II.