As mentioned in the SS&C blog “The Next Phase of SFDR”, the UK’s Financial Conduct Authority (FCA) has recently published final rules on Sustainability Disclosure Requirements (“SDR”) and investment labels.
In an announcement on November 28, 2023, the FCA said: “With an estimated $18.4 trillion of ESG-orientated assets now being managed globally, the FCA is putting in place new Sustainability Disclosure Requirements and an investment labels regime after detailed engagement with a range of stakeholders, including industry, other regulators and consumer groups.”
The announcement comes the week COP 28 kicks off in Dubai and it is hoped will support the UK’s position as a world-leading, competitive hub for asset management and sustainable investment.
'We’re putting in place a simple regime so investors can judge whether funds meet their investment needs—this is a crucial step for consumer protection as sustainable investment grows in popularity,” said Sacha Sadan, Director of Environmental, Social and Governance, FCA.
A summary of the rules is as follows:
These new labels can be used from July 31, 2024. There is no requirement for the use of a label to be externally verified.
The FCA has outlined minimum information that must be disclosed where a product without a label uses sustainability-related terms in naming or marketing. The consumer-facing disclosure must be reviewed and updated at least annually.
Industry reaction to the revisions was positive. James Alexander, the Chief Executive of the UK Sustainable Investment & Finance Association stated: “This is an important moment in our industry’s efforts to build greater confidence and trust among retail investors in the UK’s evolving sustainable investing market.”
How SS&C Can Help
SS&C offers a suite of comprehensive, modular real asset services to a diverse, global client base and has extensive experience supporting the needs of organizations that invest in and manage a broad range of infrastructure investments across the full spectrum of legal entity structures. We build, own and operate our own proprietary, advanced and scalable technology platforms, and also offer the flexibility to work in our clients’ systems.
SS&C can help firms manage all reporting aspects of their ESG investments. By partnering with leading third-party providers, SS&C offers an extensive suite of services and support in ESG data management, reporting and oversight. Together, we relieve you of the burden of data operations through a fully tailored and bespoke solution.
The result is a tailored solution to meet the unique requirements of your business while providing scalability, access to expertise and transparency to your data. As a global firm, SS&C operates with a follow-the-sun processing model to leverage time-zone differences and offer responsive, consistent customer service capabilities in any time zone.
References
https://www.fca.org.uk/publication/policy/ps23-16.pdf
https://www.fundoperator.com/archive/fca-presents-sustainability-disclosure-requirements/