FCA grants temporary flexibility for ‘naming and marketing’ sustainability rules  

September 12th, 2024


The Financial Conduct Authority (FCA) has offered firms temporary flexibility to comply with the ‘naming and marketing’ rules under its Sustainable Disclosure Requirements.

The rules require that funds marketed or sold with sustainability-related terms but without a label must have genuine sustainability characteristics and names that accurately reflect those characteristics.

They are designed to ensure that products cannot be described as having a positive impact on sustainability unless they genuinely do, to help investors make more informed investment decisions.

The rules are due to come into effect from 2 December 2024, but the FCA has noted that some firms are taking longer than expected to implement the required changes.

In particular, some firms seeking to use an investment label or change the name of their products need additional time to meet the higher standards and prepare the necessary disclosures for FCA approval.

Therefore, the regulator is granting temporary flexibility until 2 April 2025 for firms to comply with the rules in exceptional circumstances where the firm has submitted a completed application for approval of amended disclosures by 1 October 2024.

Firms are also eligible for the extension if they currently use one or more of the terms ‘sustainable’, ‘sustainability’ or ‘impact’ in fund’s name and intend to either use a label or change the fund’s name.

Even though the FCA has provided increased flexibility for compliance, it emphasised that firms should comply with the rules as soon as possible if they are able to do so rather than waiting until the April deadline.

In addition, it reminded all firms to continue adhering to all other relevant regulations, including the anti-greenwashing rules.

Last Updated: 12 September 2024