The U.K. Financial Conduct Authority is delaying the publication of new rules around sustainability disclosure and anti-greenwashing measures as it works through a "significant response" to its proposals.
The financial watchdog in October published its Sustainability Disclosure Requirements and investment labels consultation, which set out measures to help investors to "navigate the market and make better informed decisions." The consultation was closed to comment from the industry on Jan. 25.
An update Wednesday said the FCA had received around 240 written responses to its proposals, with "broad support for the proposed regime and outcomes we are seeking to achieve, and we have received rich, constructive feedback on some of the detail."
The proposed rules included: a general anti-greenwashing requirement, designed to ensure that any reference to the sustainability characteristics of a strategy are consistent with its sustainability profile and is not misleading; a labeling, naming and marketing disclosure requirement and rules for distributors; and the publication of sustainability performance-related disclosures.
The FCA had aimed to finalize its rules and publish a policy statement on the regulation by the end of June. However, in order to "take account of the significant response," the FCA has pushed that date back to the third quarter of this year. The proposed dates for the measures to take effect, starting on June 30, 2024, "will be adjusted accordingly," the FCA said.
The FCA said it is considering the feedback to ensure the regime protects consumers, but also that it "recognizes and takes account of any practical challenges that firms may have." The watchdog said that includes considering its approach to the marketing restrictions, "refining some of the specific criteria for the labels" and clarifying the qualifying criteria for different strategies and asset classes to be labeled. That labeling criteria consideration includes multiasset and blended strategies, the update said.
Finally, the FCA said "there will be a place for all in-scope products within the overall package of measures," so to include strategies that "may not qualify for a label, but nevertheless have some sustainability-related characteristics."
Separately, FCA CEO Nikhil Rathi addressed the proposed sustainability-related labeling of strategies in a speech at the Global Investment Management Summit in London on Wednesday.
The FCA wants "to help build the trust on which the growth of this sector is dependent. That is why regulators across the world are undertaking the same policy thinking we are," Mr. Rathi said, according to a transcript of his speech. "Clearer definitions and labeling will, we hope, bolster confidence in investments. As will a clearer regulatory regime for ESG data providers. We want everyone — investors, firms, regulators, to be able to see the wood for trees," he added.
