Regulatory Disclosure

UK Stewardship Code Disclosure Statement

Under COBS 2.2 of the FCA Handbook, we are required to make a public disclosure in relation to the nature of our commitment to the above Code, which was published by the Financial Reporting Council (‘FRC’) in July 2010.

The Code aims to enhance the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities. It sets out good practice on engagement with investee companies and is to be applied by firms on a “comply or explain” basis. The FRC recognises that not all parts of the Code will be relevant to all institutional investors and that smaller institutions may judge some of the principles and guidance to be disproportionate. It is of course legitimate for some asset managers not to engage with companies, depending on their investment strategy, and in such cases firms are required to explain why it is not appropriate to comply with a particular principle.

The seven principles of the Code are that institutional investors should:

  • Publicly disclose their policy on how they will discharge their stewardship responsibilities;
  • Have and publicly disclose a robust policy on managing conflicts of interest in relation to stewardship;
  • Monitor their investee companies;
  • Establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value;
  • Be willing to act collectively with other investors where appropriate;
  • Have a clear policy on voting and disclosure of voting activity; and
  • Report periodically on their stewardship and voting activities.

Optis Investment Management does not currently comply with the Code for the following reasons:

  • Our investment strategy involves short-term investment
  • Our position sizes are usually small
  • We determine our approach to stewardship on a case by case basis, taking into account the actions that will lead to the most favourable outcome for the value of our investments.

Should any of the above factors change, we will review our commitment to the Code at that time and make appropriate disclosure.

For further details on any of the above information, please contact Gavin Butcher.

Optis Investment Management

FCA Pillar 3 Disclosure


Optis Investment Management Limited (“Optis”, “the Firm”) is incorporated in the UK and authorised and regulated by the Financial Conduct Authority (“FCA”). As such, the Firm has to comply with (i) the General Prudential Sourcebook (“GENPRU”) and (ii) the Prudential Sourcebook for Banks, Building Societies and Investment Firms (“BIPRU”). This follows the introduction of the Capital Requirements Directive (“CRD”) which represents the European Union’s application of the Basel Capital Accord. BIPRU 11.3.3 R requires Authorised Firms to publish certain details of their risks, capital and risk management in order to improve transparency and market discipline.


The FCA framework consists of three ‘Pillars’:

  • Pillar 1 sets out the minimum capital amount that meets the Firms credit, market and operational risk;
  • Pillar 2 requires the firm to assess whether its Pillar 1 capital is adequate to meet its risks and is subject to annual review by the FCA; and
  • Pillar 3 requires disclosure of specified information about the underlying risk management controls and capital position.

The rules in BIPRU 11 set out the provision for Pillar 3 disclosure. This document is designed to meet the Firms Pillar 3 obligations.

The Firm is permitted to omit required disclosures if the Firm believes that the information is immaterial such that omission would be unlikely to change or influence the decision of a reader relying on that information.

In addition, the Firm may omit required disclosures where the Firm believes that the information is regarded as proprietary or confidential. The Firm views proprietary information is that which, if it were shared, would undermine our competitive position. Information is considered to be confidential where there are obligations binding the Firms to confidentiality with our customers, suppliers and counterparties.

The firm has made no omissions based on immaterial, proprietary or confidential.

Scope and application of the requirements

Optis Investment Management Limited (“Optis”, “the Firm”) is authorised and regulated by the Financial Conduct Authority and as such is subject to minimum regulatory capital requirements. The Firm is categorised as a BIPRU 50k firm by the FCA for capital purposes. It is an investment management firm and as such has no trading book exposures.

The Firm is not a member of a group and so is not required to prepare consolidated reporting for prudential purposes

Risk Management

The Firm is governed by its Directors (“Principals”) who determine its business strategy and risk appetite. They are also responsible for establishing and maintaining the Firm’s governance arrangements along with designing and implementing a risk management framework that recognises the risks that the business faces.

The Principals also determine how the risk the Firm faces may be mitigated and assess on an ongoing basis the arrangements to manage those risks. The Principals meet on a regular basis and discuss current projections for profitability, cash flow, regulatory capital management, and business planning and risk management. The Principals manage the Firm’s risks business through a framework of policy and procedures having regard to relevant laws, standards, principles and rules (including FCA principles and rules) with the aim to operate a defined and transparent risk management framework. These policies and procedures are updated as required.

The Principals have identified that business, operational, market and credit risks are the main areas of risk to which the Firm is exposed. Annually the Principals formally review their risks, controls and other risk mitigation arrangements and assess their effectiveness. Where the Principals identify material risks they consider the financial impact of these risks as part of our business planning and capital management and conclude whether the amount of regulatory capital is adequate.

Risk Assessment

Optis has identified the significant risk types which have then been assigned High, Medium or Low weightings according to perceived impact on the Firm, overall likelihood of occurrence and reference to the Firm’s Risk Appetite. Risk Mitigation factors such as detective and preventative controls are then taken into consideration and a resulting risk score derived.

No capital was considered necessary to be assigned, as mitigation reduced all these risk scores to Low.

Operational Risk (BIPRU 6)

The Firm has opted to manage its Operational Risks via two distinct approaches within its overall Pillar 2 risk framework:

(a) Key operational risks are specified within the Firm’s Pillar 2 Risk framework, with details of any applicable mitigating actions and controls noted in each risk area or context. In the event that any specific residual (post-mitigation) risk is Material, the Firm will assign a corresponding level of capital to mitigate the risk factor. The Firm does not currently consider it necessary to allocate Pillar 2 Capital against its operational risks as identified.

(b) The Firm has undertaken an assessment of the minimum capital it would require to hold in the event that it might be required to wind up the business in an orderly fashion such that all liabilities could be met. In our opinion this would be no more than the Pillar I requirement.

Market Risk (BIPRU 7)

The Firm has no significant exposure to Market risk. The only exposure being foreign exchange risk on cash balances held in USD and not GBP.

Credit Risk (BIPRU 3 and also BIPRU 11.5.8 R)

For its Pillar 1 regulatory capital calculation of Credit Risk, under the credit risk capital component, the Firm has adopted the Standardised approach (BIPRU 3.4) and the Simplified method of calculating risk weights (BIPRU 3.5).

The Firm is primarily exposed to Credit Risk from the risk of non-collection of investment management fees. However the firm has mitigated this risk whereby the counterparty has placed a deposit with the Firm.

The Firm holds a bank account with a reputable UK Bank assigned a high credit rating.

Interest Rate Risk [BIPRU 11.5.12]

The Firm currently has no significant exposure to Interest Rate fluctuations.

Concentration Risk (BIPRU 10)

The Firm closely monitors and assesses its Non-Trading Book limits in line with BIPRU 10.5.2R to BIPRU 10.5.10R. When the Firm has a single exposure exceeding 25% of its capital resources, it is recorded as a breach and reported to the FCA and monitored until such time as is cleared upon receipt of fees. Also, the Firm monitors its position to ensure the sum of its exposures of more than 10% do not exceed 80% of its Regulatory Capital Resources.

Regulatory capital

The Firm is a Limited Company and its capital arrangements are established in its Articles. Its capital is summarised below.

The main features of the Firm’s capital resources for regulatory purposes are as follows:

Capital item £
Tier 1 capital less innovative tier 1 capital 200,000
Total tier 2, innovative tier 1 and tier 3 capital
Deductions from tier 1 and tier 2 capital
Total capital resources, net of deductions 200,000

Our Firm is small with a simple operational infrastructure. The Firm follows the standardised approach to market risk and the simplified standard approach to credit risk. The Firm is subject to the Fixed Overhead Requirement and is not required to calculate an operational risk capital charge though it considers this as part of its process to identify the level of risk based capital required.

As discussed above the firm is a BIPRU 50k firm and as such its capital requirements are the greater of:

  • Its base capital requirement of €50,000; or
  • The sum of its market and credit risk requirements; or
  • Its Fixed Overhead Requirement.

We have not identified credit risk exposure classes or the minimum capital requirements for market risk as we believe that they are immaterial.

It is the Firms experience that the Fixed Overhead Requirement establishes its capital requirements and hence market and credit risks are considered not to be material.


The Firm will be making Pillar 3 disclosures annually on its website. Going forward the disclosures will be made after completion of the annual audit and approval of the audited financial statements. The year-end is currently 30 June.


The information contained in this document has not been audited by the firm’s external auditors and does not constitute any form of financial statement and must not be relied upon in making any judgement on Optis Investment Management Limited or any of its affiliates.