“We are also proposing targeted rules for the distributors of investment products to retail investors in the UK.”
The FCA said the anti-greenwashing rule will require firms to implement it immediately on publication of the policy statement which has a provisional date of June 30, 2023.
Firms that are distributors of in-scope products to retail investors, including platforms and advisers, will all have 12 months after the policy statement.
For the naming and marketing rules, there will be two deadlines. These are 12 months after the date of the policy statement (provisionally June 30, 2024) and 18 months after publication (December 30, 2024).
Firms that are providing portfolio management arrangements will be exempt from the naming and marketing rules when 90 per cent or more of the value of constituent products qualify for any label.
In a nine-page letter last year, Nick Miller, head of the FCA’s asset management supervision department, said the regulator had seen a high volume of applications for the authorisation of funds with an ESG focus.
At the time, it said applications for ESG funds must improve as it outlined guiding principles for the products.
Miller said although the FCA welcomed innovation within the sustainable investment market, it recognised that “innovation and the rapid pace of change present the industry with challenges”, such as around ESG-related data and metrics.
He added: “Against this backdrop, we are concerned by the number of poor-quality fund applications we have seen and the impact this may have on consumers. This must improve.”
sonia.rach@ft.com
What do you think about the issues raised by this story? Email us on FTAletters@ft.com to let us know
