UK: FCA consultation on proposals for "minor amendments" to AGR and SDR

The FCA has published its Quarterly Consultation (CP24/26) No 46 which includes proposals to make what it considers to be some “minor amendments” to the Anti-Greenwashing Rule and SDR for clarification.  

The proposals include:

• Amending ESG 4.1.19R(2)(a) to clarify that where distributors are using the terms set out in ESG 4.3.2R(2) in either the name of a recognised scheme or a financial promotion relating to the scheme, they need to comply with both ESG 4.1.19R(2)(a) and ESG 4.1.19R(2)(b). This aligns with the FCA’s policy intention as set out in CP22/20 and follows the provision in ESG 4.1.19R(1) logically which sets requirements for distributors to prepare a notice.
• In ESG 4.3.1R(1)(a) - removing the Glossary term link from the word ‘communicates’ as that definition incorrectly limits the scope of para. (a) to financial promotions. By removing the link, the word ‘communicates’ will have its broader, natural meaning, as intended. 
• In ESG 4.3.1R(1)(b), making clear the FCA’s policy intention that the anti greenwashing rule should be read consistently with COBS 4.2.1R(2)(b)(i) and (iii) by replicating the exclusions with respect to ‘an excluded communication’ and ‘a third party prospectus’.
• Amending ESG 4.3.7R to add the words ‘where it is not using a sustainability label’ to make clear that the manager of a feeder fund must only comply with ESG 4.3.5R(3) when they are not using a sustainability label.
• Amending the wording ‘and/or’ in ESG 5.3.3R(6) to make clear that, where a manager is using a sustainability label, it must disclose the KPIs it is using under ESG 4.2.3R(3). Additionally, all managers, whether using a sustainability label or not, must include details of any metrics that a retail client may reasonably find useful in understanding the manager’s investment policy or strategy for the relevant product.
• Amending ESG 5.4.3R(1) so that for the first product-level report, managers have 16 months from the start of their use of a label or the terms in which to produce that report, allowing an additional 4 months to prepare it. Reporting should then continue on an annual basis.

The deadline for comments on the proposals is 13 January 2025