Code of Stewardship / SRD II Disclosure Code of Stewardship / SRD II Disclosure

Code of Stewardship

The UK Stewardship Code 2012 has been replaced by the UK Stewardship Code 2020 (the “2020 Code”), which has extended the scope of the code beyond listed UK equities to fixed income and investments outside the UK, among other asset classes.

The FCA requires Stone Harbor Investment Partners (UK) LLP, an FCA regulated entity, to publish a statement on its website regarding the nature of its commitment to the Stewardship Code. A firm may decide to become a signatory to the Stewardship Code on a voluntary basis.

As the 2020 Code applies to asset classes in which Stone Harbor invests, our firm intends to apply to be accepted as a signatory to the Stewardship Code during the earliest application window in 2021. In the past, we have not elected to be signatories to the Stewardship Code as its tenets did not apply to the asset classes in which our firm invests. Nonetheless, we have been and remain committed to the broad values of the Stewardship Code. We look forward to posting a more detailed report in the coming months in regards to our commitment to compliance with the principles of the Stewardship Code in 2021.

 

Shareholder Rights Directive II

The revised Shareholder Rights Directive (“SRD II”) applies to EU asset managers, including MIFID investment firms, alternative investment fund managers (AIFMs), UCITS management companies and self-managed UCITS (“Asset Managers”), from 10 June 2019. Under SRD II, Asset Managers are required to adopt on a “comply or explain” basis an engagement policy describing how an asset manager integrates in its investment strategy shareholder engagement relating to companies that have a registered office in the EU and are listed on EU regulated markets (“EU investee companies”). For entities regulated by the UK Financial Conduct Authority (“FCA”), the FCA has further expanded the scope of SRD II to cover to investee companies whose shares are admitted to trading on a regulated market in the European Economic Area (“EEA”), including overseas companies with a secondary listing in the EEA, as well as to investee companies whose share are listed “on a comparable market outside the EEA”.

The Stone Harbor entities (“Stone Harbor Asset Managers”) listed below are considered to be Asset Managers under SRD II and are required to comply with SRD II, as implemented and enforced by the FCA or the Central Bank of Ireland, as applicable to that entity.

  • Stone Harbor Investment Partners (UK), LLP (MIFID firm authorised and regulated in the UK by the FCA. Registered in England and Wales, NO. OC317789. Registered office: 48 Dover Street, London W1S 4FF, England.)
  • Stone Harbor Investment Partners (AIFM) LLP (AIFM authorised and regulated in the UK by the FCA. Registered in England and Wales, NO. OC398371. Registered office: 48 Dover Street, London W1S 4FF, England.)
  • Stone Harbor Investment Partners Limited (authorised by the Central Bank of Ireland to act as a UCITS management company and an AIFM. Reference Number: C182357. Registered Office: Ten Earlsfort Terrace, Dublin 2, Ireland.)
  • Stone Harbor Investment Funds plc (authorised by the Central Bank of Ireland as an Undertaking for Collective Investment in Transferable Securities (UCITS). Reference Number: C44560. Registered Office: Ten Earlsfort Terrace, Dublin 2, Ireland.)

Please note that no Stone Harbor Asset Manager actively invests as a material part of its investment strategy or strategies in the shares of EU or EEA investee companies. In general, each Stone Harbor Asset Manager only expects to hold shares in EU or EEA investee companies as an investment ancillary to, or as a result of, a credit investment. On this basis, each Stone Harbor Asset Manager has determined that it is not necessary or appropriate to adopt an engagement policy for the purposes of SRD II. Each Stone Harbor Asset Manager shall periodically review its investment strategies to determine whether its investment activities have changed to the extent that the entity should adopt an engagement policy under SRD II.

For further details on any of the above information, please contact Paul Timlin.