Recommendation 5

HM Government · verbatim extract Deferred

We welcome the Committee’s call for better transparency and accountability for investors. We would highlight the government-led Investing in Women Code as a significant initiative in this area. The Code produces an annual report on the investment landscape from across lenders, equity, and angel investors. It is evolving to improve its data collection capability with support from the Invest in Women Taskforce and will continue to champion data reporting by lenders and investors, including Venture Capital funds. The FCA collects various regulatory returns from authorised firms on a periodic basis to provide timely, accurate data to assist in meeting its statutory objective of protecting consumers, maintaining market integrity (for instance detection and prevention of market abuse and manipulation) and promoting competition. Regulatory returns also provide a fundamental baseline for the FCA to monitor and assess firms’ ability to meet its threshold conditions on an ongoing basis, e.g. via prudential returns. Since receiving its secondary international competitiveness and growth objective in 2023, the FCA has been putting growth and competitiveness at the heart of its approach. Growth is front and centre of the FCAs new strategy.3 As part of this, FCA is transforming how it works, including by streamlining data requests to reduce the burden on firms, while ensuring 3 https://www.fca.org.uk/publication/corporate/our-strategy-2025–30.pdf it has the right information to intervene where needed. In its recent letter to the Prime Minister,4 the FCA highlighted that they have recently reduced data requests for 36,000 firms, saving time and money for them. The FCA does not request reporting from venture capital firms, or other alternative investment fund managers (AIFMs), in relation to deals undertaken. FCA do not mandate which investment strategy and investment choices AIFMs should make. Rather, AIFMs are expected to comply with relevant rules in the FCA Handbook, to act as good agents by avoiding foreseeable harm and to deliver good outcomes to investors. They are also expected to act as good market participants, observing proper standards of market conduct. It should be noted that registered venture capital firms are generally smaller firms, and this recommendation would not align with the FCAs plans to streamline returns. In addition, versus regulatory reporting requested from other AIFMs and the wider population of asset managers, this request would be disproportionate and inconsistent with the FCAs overall approach to reporting. Innovate UK Response