Law Commission Intermediated Securities Consultation: PLSA Response

The Law Commission has been tasked by the Department for Business, Energy & Industrial Strategy to undertake a scoping study into intermediated securities, and published a consultation as its first step in what we hope to be a broader programme of work aimed at helping institutional investors act as good stewards of their assets. 

The PLSA welcomes the consultation, noting that while the nature of intermediated relationships in the UK investment chain has a number of practical and administrative benefits, it also presents potential legal barriers to schemes’ ability to exercise their shareholder rights. 

We do, however, believe it is vital that any policy initiatives to improve the efficiency of voting procedures are separated from any wider intention to place a greater onus on pension funds to demonstrate active stewardship.