Shareholder’s rights directive

­Shareholder Engagement Policy January 2023

This statement sets out Risk Tailors’ approach in meeting the requirements (‘Engagement Policy’) set out in SRD II and summarised in the FCA Handbook under COBS 2.2B.6 in relation to investments in shares traded on a regulated market.

1. Background

With the aim of enhancing the stability and sustainability of EU companies, in May 2017, the European Parliament and Council agreed an amendment to the 2007 Shareholder Rights Directive (the Directive) approving the Shareholder Rights Directive II (“SRD II”), of which the requirements are set out in Directive (EU) 2017/828.
The purpose of the SRD II is to address shareholder engagement for the companies whose shares are traded on an EU regulated market by requiring asset managers and institutional investors to put in place a shareholder engagement policy and to increase the transparency of their investment strategies. The SRD II was transposed and implemented by the Financial Conduct Authority (“FCA”) in the UK on 10 June 2019. The requirements came into force on 3 September 2020. The SRD II requires relevant firms to develop and publish a shareholder engagement policy which describes how they take into account shareholders’ engagement into their investment strategies, their processes with monitoring and interacting with investee companies, the integration of Environmental, Social and Governance (ESG) factors in investment decisions and the exercise of voting rights on behalf of shareholders.

2. Business Description

The main business of Risk Tailors Limited (“RiskTailors” or “the Firm”) is to provide investment management solutions to predominantly independent financial advisors (“IFAs”). The Firm offers various investment management solutions via discretionary managed model portfolios (“model portfolios”). The model portfolios invest in a combination of global equities, fixed income, exchanged-traded funds (“ETFs”) and regulated collective investment schemes based on various investment risk strategies. The Firm’s investment selection approach is based on the quantitative-based investment research provided by Fathom Consulting Limited (“Fathom”), one of RiskTailors’ shareholders. The Firm’s products are currently aimed at IFAs only.

3. Monitoring and interaction with Investee Companies

The Firm’s products consist of portfolios of ETFs whose nature is a very high degree of diversification. The Firm will monitor investments prior to investment and on an ongoing basis, however direct engagement with the investee companies will be limited to instances that further understanding is required for making investment decisions. Our team relies mainly on publicly available information and it does not conduct site visits to the investee companies. In addition to the analysis of past and future financial performance, the Firm recognises that the environmental, social and governance considerations around its investment decisions will be important and expect to integrate them fully in its analysis going forward.

4. Exercising Voting Rights and Other Rights Attached to Shares

By virtue of the discretionary arrangement, the Firm, who acts as investment manager, has been delegated the authority to make decisions to vote in the cases of market events, such as corporate actions. With regard to direct investments and unless otherwise instructed by the shareholders or the decisions to vote present conflicts of interest between the shareholders and the Firm, our investment and research team will therefore analyse the information available on a case-by-case basis and will ensure that the decisions made are in the best interests of the shareholders. The Firm does not currently utilise a third party proxy service provider.

5. Managing Actual and Potential Conflicts of Interests in relation to the Firm’s Engagement

The Firm has in place a Conflicts of Interests Policy. The Firm will review this Policy on an annual basis and where arrangements have changed for the publication on its website.