UK: FCA temporary flexibility for firms on "naming and marketing"

The FCA has updated its website this morning with a statement offering limited temporary flexibility, until 5pm on 2 April 2025, for firms to comply with the ‘naming and marketing’ rules (i.e. ESG 4.3.2R to ESG 4.3.8R of the FCA's ESG sourcebook ) in relation to a sustainability product which is a UK authorised investment fund in exceptional circumstances where the firm:

• has submitted to the FCA a completed application for approval of amended disclosures in line with ESG 5.3.2R for that fund by 5pm on 1 October 2024; and
• is currently using one or more of the terms ‘sustainable’, ‘sustainability’ or ‘impact’ (or a variation of those terms) in the name of that fund and is intending either to use a label, or to change the name of that fund.

Why is this needed?

Through the FCA's engagement with industry and trade bodies, it has become clear it has taken longer than expected for some firms to make the required changes to ensure compliance with the ‘naming and marketing’ and disclosure rules, which come into force from 2 December 2024. In particular, some firms wishing to use an investment label, or which need to change the names of their products, require more time to meet the higher standards and prepare the disclosures needed for the FCA's approval.  As such, with a view to “getting SDR right” for investors, the FCA is seeking to take a pragmatic and outcomes-based approach.

Further detail

These temporary measures do not apply to funds using other sustainability-related terms in their names that are not specified above. 

Where firms are capable of complying with the rules from 2 December 2024, they are directed to do so. For those that are not, the FCA expects firms to comply with the rules as soon as they can, without waiting until 2 April 2025. 

Firms must continue to comply with all other relevant rules, including the anti-greenwashing rule.

Fund mergers, wind-ups and terminations 

Responding to queries about the authorisation of mergers, wind-ups or terminations before 2 December 2024, the webpage notes that the FCA will take a supportive, proportionate and outcomes-based approach in these circumstances.  

You can access the FCA's statement on its website here.