As part of the Capital Requirements Directive, introduced by the European Union in 2007, regulated firms have a requirement to publish a document describing the risks they face in their normal course of business, alongside a description of the capital held to support the business.
Pillar 3 complements the minimum capital requirements (Pillar 1) and the supervisory review process (Pillar 2), and its aim is to encourage market discipline by developing a set of disclosure requirements. These allow market participants to assess key pieces of information on a firm’s capital, risk exposures and risk assessment processes. The third pillar greatly increases transparency and the disclosures firms must make, and is designed to allow the market and investors to have a better understanding of the overall firm risk.
Article 22 of Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers (the "AIFMD"), as implemented in the United Kingdom through Chapter 3.3 of the Investment Funds sourcebook of the Financial Conduct Authority Handbook ("FUND 3.3"), requires that AIFMs shall for each of the AIFs that they market in the EEA make an annual report available to AIF investors and the FCA.
Under Rule 2.2.3R of the FCA's Conduct of Business Sourcebook, CF Partners Asset Management LLP ("CF Partners") is required to include on this website a disclosure about the nature of its commitment to the UK Financial Reporting Council's Stewardship Code (the "Code") or, where it does not commit to the Code, its alternative investment strategy. The Code is a voluntary code and sets out a number of principles relating to engagement by investors with UK equity issuers.
CF Partners acts as an investment manager and its investment strategy is such that one or more of the funds it manages (the “CFP Funds”) may hold long positions in equities, including UK equities. The Code is therefore relevant to some aspects of CF Partners' trading on behalf of the CFP Funds.
While CF Partners generally supports the objectives that underlie the Code, it has chosen not to commit to the Code. CF Partners’ investment strategy involves the CFP Funds holding positions in a variety of asset classes and in a variety of jurisdictions globally. CF Partners' approach in relation to engagement with issuers (and members of their management teams) in all of the jurisdictions in which the CFP Funds invest is determined on a case-by-case basis. Consequently, CF Partners does not consider it appropriate to commit to any particular voluntary code of practice relating to any individual jurisdiction.