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12 April 2023
Elizabeth Pfeuti
April 12, 2023
The Financial Conduct Authority (FCA) has postponed the introduction of rules aimed at eradicating greenwashing across the UK’s asset management sector.
The UK regulator has delayed the implementation date for sustainability disclosure requirements (SDR) and investment labels rules to cope with an influx of feedback.
The proposals were designed to build transparency and aim to become the UK equivalent of the EU Sustainable Finance Disclosure Regulation (SFDR).
The FCA planned to publish a policy statement in the first half of this year, however this date has been moved to Q3 and the proposed effective dates will also be adjusted accordingly.
During the consultation stage of the proposed rules, the FCA received 240 written responses, which was significantly higher than expected.
As a result, the introduction of the rules has been delayed to allow the regulator sufficient time to assess and consider the feedback.
In a statement, the FCA said: “We are carefully considering the feedback to ensure that first and foremost the regime protects consumers but also recognises and takes account of any practical challenges that firms may have.”
As well as adjusting the timeline for the proposals, the FCA has stated it will use the feedback to consider its approach in the new policy.
This includes refining some of the specific criteria for the labels and clarifying how different products and strategies can qualify for the label.
In the published policy statement, the regulator will also clarify that it does not require independent verification of product categorisation to qualify for a label.
The FCA added: “We agree it is important that consumers can navigate to those products that meet their needs and preferences. This includes products that may not qualify for a label, but nevertheless have some sustainability-related characteristics.”
The FCA’s proposed rules for SDR and investment labels have been a source of debate as they have received praise and disapproval from other groups.
In January, UKSIF commended the rules for creating a “higher bar” for funds seeking to make sustainability claims.
Whereas in February, the Treasury Committee’s Financial Service Regulation Sub-Committee urged the FCA to research the potential cost implications of the rules for investors.
