Member

With respect to the herding and benchmarking risk, our proposed framework has been deliberately designed to try to avoid the behaviours in systems such as that in Australia. Our proposals use forward-looking metrics and a four-point rating scale and they do not rely on fixed benchmarks, which gives schemes space to pursue diverse long-term investment strategies. The consultation actively seeks feedback on two possible approaches for incorporating forward-looking metrics into the assessment. The feedback and evidence we receive will directly inform how the final framework is designed. Taken together, these design choices provide the necessary safeguards against benchmarking-driven herding, without putting prescriptive conditions in the Bill. I can offer a bit more detail, but I think that we might come back to this as we go along.