UK FCA delays its final disclosure and investment labelling rules

When it published CP 22/20, “Sustainability Disclosure Requirements (SDR) and investment labels” (the CP) last October, the FCA’s expectation was that it would be ready with its Policy Statement and final rules by the end of H1 2023.

However, an update published on 29 March 2023, has pushed the timing back to Q3 2023.

The CP set out the FCA’s proposals for a regime which would increase transparency on the sustainability profile of products and firms and reduce the risk of harm arising from greenwashing.

Our client note on the CP can be found here and the response we submitted to the FCA is here.

FCA delays the date of its policy statement

The FCA’s update states that it received around 240 responses to the CP responses, and these voiced broad support for the proposals. It also noted that it had received ‘rich, constructive feedback on some of the detail’.

To allow it time to consider this properly, the FCA has decided to delay publication of the policy statement to Q3 2023.

The proposed effective dates will be pushed back accordingly.

The extra time will help the FCA ensure that the final rules will not only protect consumers but also take account of practical challenges that firms may have.

Do we know any more about what the FCA is looking at?

As a result of the feedback received the FCA will now be:

• considering its approach to the proposed marketing restrictions
• refining some of the specific criteria for the labels
• clarifying how different products, asset classes and strategies can qualify for a label (including multi-asset and blended strategies)
• clarifying (among other things) that it is not seeking to prescribe primary and secondary channels for achieving sustainability outcomes and
• confirming that it will not require independent verification of product categorisation to qualify for a label.

The FCA also notes that there will be a place for all in-scope products within the overall package of measures, including products that may not qualify for a label, but nevertheless have some sustainability-related characteristics.
We will continue to follow this work and will report further when the FCA publishes its PS in Q3 2023.