Australia's Financial Services Council (FSC) which represents the country's fund management and pensions industry has launched an Internal Governance and Asset Stewardship Standard for investment managers and asset owners.

This is the first stewardship code introduced in Australia and the FSC noted that the country had lagged behind Asian markets including Japan and South Korea as well as other countries such as the UK, US,  the Netherlands, Switzerland, and Brazil. The FSC said that its asset stewardship standard, which has incorporated the strongest stewardship and governance elements from these jurisdictions, is mandatory for all its asset manager members. The anticipation is that other non-member fund managers will also wish to sign up to the standard.

The FSC said that implementing the standard would boost the global standing of these asset managers, and at the same time, the standard aimed to strengthen consumer confidence in Australian financial services and ensure the long term sustainability of the industry.

The Standard requires a non-prescriptive disclosure, utilising a ‘comply or explain’ rationale, where asset managers will, where relevant within their business practices, be required to either describe the policy underlying their practices or explain why they are not relevant to them.

FSC chief executive Sally Loane said: "Australian fund managers are responsible for managing and growing one of the biggest pools of funds in the world – almost $3 trillion – the retirement savings of millions of Australians. The vast bulk of these funds exist because of our mandatory superannuation system. Fund managers understand their role and responsibility very clearly, increasing the wealth and improving the livelihoods of the people whose money they invest, and they now have a standard which sets what is perhaps the highest bar in the world for stewardship and governance.

“Australia was until now one of the only major economies without a Stewardship Standard in place and the only signatory of the Asia Region Funds Passport without one. For this reason, we are especially proud and excited to launch our standard.”