@Wikimedia Commons.
The Financial Conduct Authority (FCA), the UK’s regulator for the financial services industry, has agitated some market players today in delaying its announcement around the Sustainability Disclosure Requirements (SDR) and investment labels until Q4 2023.
The SDRs were previously scheduled for Q3.
The SDRs are supposed to be a flagship part of the UK’s post-Brexit independent financial services industry that focuses on sustainability. They were designed to provide more clarity and surety for investors via labelling on sustainability, and were declared an integral part of the government “Greening Finance” roadmap, which was released in late 2021. They focus largely on providing clarity around greenwashing.
“A full update of the Grid is planned for the last quarter of 2023, where we
will update on all changes for all initiatives as usual."
The process around the framework making its through way consultation has seen several delays and other issues around its wording and stringencies.
In a note from the FCA’s CEO Nikhil Rathi and Sam Woods, Deputy Governor, Prudential Regulation, Bank of England, the regulatory grid was given an update that described a delayed timetable. “A full update of the Grid is planned for the last quarter of 2023, where we will update on all changes for all initiatives as usual," the note said. "Following this, we expect to return to the usual intervals of publishing the biannual updates to the Regulatory Initiatives Grid,” it continued.
The announcement follows the Royal Assent of the Financial Services and Markets Act 2023 (FSMA 2023 or the Act).
“It is deeply disappointing to see yet another delay to the publication
of the finalised SDR and fund labelling regulations.”
Several in the industry said the delay was disappointing as the regulations were crucial to increasing transparency on the sustainability profile of products and companies, as well as reducing the risk of harm that arises from greenwashing.
“It is deeply disappointing to see yet another delay to the publication of the finalised SDR and fund labelling regulations,” said James Alexander, Chief Executive of UKSIF. “We see these as crucial in the development of the UK’s sustainable finance leadership and building trust for consumers, and essential to give certainly to the industry on future regulatory requirements.”
Alexander added that the delay is symptomatic of the slow pace of implementation of other policies announced in the Green Finance Strategy in March this year, which included corporate disclosure requirements and the Green Taxonomy. These, he said, “must all be progressed as a matter of urgency”.
“If the government is serious about making the City, and the UK as a whole, a global leader in green finance, it needs to deliver, not delay,” Alexander added.
