Jurisdiction(s):
United Kingdom

Key definition

Engagement definition

What does Engagement mean? Engagement describes the ongoing dialogue and other stewardship activities by asset managers and institutional investors with their investee companies to monitor performance and governance, raise concerns and seek change. It includes routine meetings with boards and management, written correspondence, participation in consultations, proxy voting, and escalation (for example, collaborative engagement, public statements, filing or co‑filing resolutions, or requisitioning meetings) where issues persist. The term is descriptive rather than a defined legal term, but it is embedded in regulation and codes. In the UK, FCA COBS 2.2B (implementing and retaining aspects of SRD II) and the UK Stewardship Code 2020 expect firms...

Negotiating Engagement, Release and Reliance Letters in Lending and Acquisition Finance: Practical Guidance on Clauses, Liability, Disclosure and Syndication for In-house Banking Lawyers

Published by a LexisNexis Banking & Finance expert

Practice notes

It is commonplace for Engagement, release and reliance letters to be executed between the parties before external counsel is on board. Even where external lawyers are engaged, these letters often sit outside their remit, so the responsibility usually rests with in-house counsel to scrutinise and negotiate them. This Practice Note offers tips, guidance and flags potential issues for in-house counsel working on Lending transactions who are involved in reviewing and negotiating such letters.

When are such letters required and for what type of transactions?

Each letter serves a distinct purpose:

Release (or hold harmless) letters provide access to reports on different aspects of a prospective borrower’s business or market; they are prepared by third parties and are usually negotiated at the outset of a deal, when the lender is deciding whether to participate
Reliance letters are put in place when a lender seeks to rely on information or a report supplied by a third party in relation to a borrower, business or transaction; these are typically negotiated at the commitment letter stage or prior to...

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Web page updated on 21/05/2026

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