Sustainable Disclosure Requirements and Investment Labeling System
The UK Financial Conduct Authority suspends the implementation of sustainable disclosure requirements and investment labeling systems, aiming to eliminate sustainable regulation of the asset management industry.
The UK Financial Conduct Authority believes that it is not a suitable time to apply sustainable disclosure requirements to the asset management industry for verification, but asset management companies still need to comply with anti-greenwashing rules.
Related Post: UK Financial Conduct Authority Releases Guidance on Anti-Greenwashing Rule
Sustainable Disclosure Requirements and Investment Labeling System Background
In November 2023, the UK Financial Conduct Authority issued sustainable disclosure requirements for investment products, requiring asset management companies and investment product distributors to comply with guidelines and help investors in sustainable asset allocation. Asset management companies need to disclose the sustainable goals, investment strategies, indicators, etc. of their investment products, and regularly review and update this information. For investment labels, the UK Financial Conduct Authority categorizes products into Sustainability Focus, Sustainability Improvements, Sustainability Impact, and Sustainability Mixed Goals.
In September 2024, the UK Financial Conduct Authority issued a temporary measure for sustainable disclosure requirements, delaying the effective date of the regulatory policy until April 2025 (originally scheduled for December 2024). The reason for this delay is that regulatory agencies have found that asset management companies need more time to prepare and adjust the information disclosure of ESG funds. In February 2025, the UK Financial Conduct Authority announced the cancellation of its plan to issue a policy statement in the second quarter, citing challenges faced by asset management in implementing sustainable disclosure requirements.
Although most stakeholders believe that implementing sustainable disclosure requirements and investment labeling systems can bring benefits to the market, regulatory agencies announced a suspension of sustainable disclosure requirements in April 2025. Asset management companies can voluntarily disclose information and use investment labels. The UK Financial Conduct Authority released sustainable disclosure requirements and investment label application cases in December 2024, providing reference for market participants.
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