The Templates
In 2018, the Financial Conduct Authority (FCA) launched the Institutional Disclosure Working Group (IDWG) following the FCA’s asset management market study as part of the remedies package and noted the success of the LGPS Code.
The FCA wanted to see more consistent and standardised disclosure of costs and charges for institutional investors. It thought that a standardised disclosure template should provide institutional investors with a clearer understanding of the costs and charges for a given fund or mandate. This should allow investors to compare charges between providers and give them a clear expectation of the disclosure they can expect.
In November 2018, the Cost Transparency Initiative (CTI) was launched between the SAB, Pensions UK and the Investment Association and became the organisation taking forward the work of the previous IDWG. For the LGPS funds to have the relevant data to investigate and understand their respective fees and costs, the SAB and the Investment Association developed the templates currently used under the Code.Signatories to the Code are expected to complete the appropriate template. These are either the Cost TI templates which are accepted in a number of currencies or the ILPA template accepted only in US Dollars.
As these templates are set and published by third-party organisations, they should not be changed by those completing them – other than to include the required information. The online system is not able to accept templates which have been changed (e.g. adding new cells, changing names of columns, etc.).
The CTI (Cost Transparency Initiative) is a combined group of the Investment Association, LGPS Scheme Advisory Board (SAB) and Pensions UK (then known as the Pensions and Lifetime Savings Association or PLSA). It has published a range of templates to date and those that are relevant for LGPS cost reporting and Code of Transparency signatories are the Main Account Template or the Private Markets Sub-Template.
The CTI templates list a series of broad headings for reporting costs and expenses and focuses on those areas which should already be available but may not have been supplied previously by asset managers either proactively or in a format easily useable by LGPS funds. Templates may be submitted in either MS Excel or machine-readable format (for the CTI Main Account template).
The system will accept correctly completed CTI templates in six currencies – GBP, EUR, USD, JPY, CHF and AUD. When uploading to the system in non-Sterling currencies, managers can choose the FX rate for conversion based on:
- Period end: selects the rate on the end date of the period as specified by the template
- Specified date: selects the specific day the FX rate will apply
- Average rate: selects an average between two dates within the reporting period. By default, the start and end of the period as specified in the template will be selected.
Templates from the Institute of Limited Partners Association (ILPA) can also be used for private markets data and is mainly designed to be completed in USD. However, the system has a currency field selection on upload so that it can be completed in non-USD currencies as well – GBP, EUR, JPY, CHF and AUD.
As above, when uploading to the system in non-Sterling, managers can choose the FX rate for conversion based on:
- Period end: selects the rate on the end date of the period as specified by the template
- Specified date: selects the specific day the FX rate will apply
- Average rate: selects an average between two dates within the reporting period. By default, the start and end of the period as specified in the template will be selected.
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