FCA 'closes loopholes' with introduction of fourth label under SDR but further clarification needed
The rules provide a degree of flexibility for asset managers, which means 'firms will need to make their own judgements about labels, disclosures and data, and anticipate end-consumer outcomes – all of which come with their own challenges'.
Seb Beloe, partner and head of research at WHEB Asset Management, praised the regulator for the introduction of a fourth label — the Sustainability Mixed Goals category, aimed at funds investing across different sustainability objectives and strategies — arguing it has managed to close «fund labelling loopholes» by doing so.
The UK Sustainable Investment and Finance Association (UKSIF) agreed, with CEO James Alexander arguing the final rules «address concerns often raised by savers over their funds' sustainability claims and profile».
The rules also provide a degree of flexibility for asset managers, noted Richard Monks, UK sustainable finance partner at EY, which means «firms will need to make their own judgements about labels, disclosures and data, and anticipate end-consumer outcomes — all of which come with their own challenges».
FCA unveils final SDR rules including fourth 'Mixed Goals' label for 'blended strategies'
He pointed to the anti-greenwashing rules, which will be subject to consultation until 26 January 2024, before coming into force on 31 May 2024.
Although the FCA had previously expected the anti-greenwashing rules to be implemented shortly after the publication of the SDR final rules, Monks argued the six-month implementation period reflects «the complexities that firms face in managing this risk».
But Lora Froud, investment management partner at Macfarlanes, highlighted there are still areas within SDR that need further clarification.
«It is not yet clear how and
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