|
Listen to this story:
|
- UK funds have until April 2025 to comply with new naming and marketing rules under SDR.
- Funds must submit applications by October 1, 2024, to comply with Sustainability Disclosure Requirements (SDR).
- New rules aim to tackle greenwashing and ensure transparency in ESG-related claims.
The UK Financial Conduct Authority (FCA) has extended the deadline for sustainable fund marketing rules to April 2025. This extension applies to the “naming and marketing” rules designed to curb greenwashing. Funds must still submit applications to comply with the Sustainability Disclosure Requirements (SDR) by October 1, 2024, but now have additional time to make name changes and ensure marketing compliance.
The FCA explained that this extension is critical as some firms need more time to meet the new high standards for ESG labeling and product name changes. The watchdog emphasized that firms must continue taking all reasonable steps to comply with the rules, which take full effect on December 2, 2024.
The SDR, introduced in November 2023, aims to protect investors by ensuring that any environmental, social, or governance (ESG) claims made by funds are accurate. As global assets in ESG-oriented funds are expected to reach $34 trillion by 2026, this regulation is pivotal in maintaining the UK’s competitive edge in sustainable investment.
The FCA said in a statement, “We have provided support to firms to help them meet these new higher standards. In recent weeks, we have been encouraged to see good progress made by firms to comply with the rules.”
Firms that have submitted their disclosures for approval but need additional time to finalize their compliance can take advantage of this temporary flexibility. However, the FCA expects firms to comply as soon as possible without waiting until the final deadline in April 2025.
Related Article: SEB Launches New Fund with 50% Lower Carbon Intensity to Drive Sustainable Investments
This extension, though temporary, is part of a broader effort to enhance transparency and ensure that funds marketed with sustainability terms are true to their claims. The new rules require funds to substantively integrate ESG characteristics in their investment policies to avoid misleading investors.
Firms with additional questions or difficulties can seek guidance directly from the FCA to ensure they meet the required standards.
–