UK: Overseas Funds and UK SDRs - consultation expected later this year

HM Treasury and the FCA issued their Roadmap on the Overseas Funds Regime on 1 May 2024, setting out the Government's plans for the coming months.  You can find our detailed note on the roadmap here.

A key question for the market is whether the UK's sustainability disclosure regime (SDR) will also be extended to apply to OFR funds. The Roadmap does not confirm the policy position but does set out the timeline for that decision to be made - with the first step being a treasury consultation.  The consultation is expected to open in Q3 2024. If the Government decides to extend the SDR to overseas funds, it aims to lay legislation this year and the FCA will then consult on its related rules and guidance in 2025.

On the FCA's part, it made clear in its November 2023 Policy Statement on the SDR and labelling regime (PS23/16) its desire to see a “level playing field for all firms operating across the market to maximise the benefits of the regime for consumers”, and its intention to continue working with HMT to understand the options for extending the regime to overseas recognised funds, including those marketing under the OFR.  No doubt this dialogue will continue in the coming months with a view to helping to shape the Treasury consultation which emerges.