Industry warns of 'tight' implementation timeline for SDR
investmentweek.co.ukThe new labelling regime is set to become mandatory for firms from 31 December 2024, but they can begin to use them from 31 July next year.
On 28 November, the regulator published its SDR and investment labels policy statement, which introduces a set of new rules aimed at tackling greenwashing, including investment product sustainability labels and restrictions on how terms like 'ESG', 'green' and 'sustainable' can be used.
Firms will be able to begin using labels from 31 July 2024, and the rules on naming and marketing will come into force on 2 December 2024.
Rules on ongoing product-level disclosures and entity-level disclosures for larger firms — with AUM of over £50bn — will become effective on 2 December 2025, and entity-level disclosures rules will be extended to smaller firms — with AUM of more than £5bn — on 2 December 2026.
FCA unveils final SDR rules including fourth 'Mixed Goals' label for 'blended strategies'
The FCA also published a guidance consultation paper on its anti-greenwashing rule, with the aim of helping firms better understand its expectations. The consultation period for the guidance is open until 26 January 2024, with the anti-greenwashing rule set to come into effect on 31 May 2024.
The rules have been largely welcomed by the asset management industry, but some sustainable finance regulation experts have raised concerns over the scope and speed of the product labelling regime's implementation.
«The FCA clearly expects firms to adhere to this high regulatory standard by the deadline, and companies now face a challenge to meet tight implementation timelines, with many needing to review and adapt their current plans,» said Richard Monks, UK sustainable finance partner at EY.
Phuong Gomard,
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