UK: FCA delays the publication of the final rules on applying SDR to portfolio management

[UPDATE 29/04/2025: The FCA has updated its website to confirm its view (following further consideration of feedback from CP24/8) that “now is not the right time to finalise rules on extending SDR to portfolio management”. This does not take the extension off the cards, but does push the timing further back (albeit the FCA is silent on its likely timeline here). Instead the FCA intend to prioritise its forthcoming multi-firm review into model portfolio services (as announced in the Asset Management & Alternatives February 2025 portfolio letter). The review will focus more broadly on how firms are applying the Consumer Duty to provide confidence that investors are receiving good outcomes from model portfolio services. ]

On 14 February 2025, UK Financial Conduct Authority (FCA) announced that it no longer intends to publish its policy statement on extending its Sustainability Disclosure Requirements (SDR) and investment labels to portfolio managers in Q2 2025.  

The FCA consulted on the rules in April 2024 and had been expected to publish its final rules in the second quarter this year, after already delaying them from the second half of 2024. (See our earlier blog post for more detail on the proposals under CP24/8.)

In an update to its webpage on 14 February 2025, the FCA states that it wants to take the necessary time to deliver the stated outcomes of ensuring “an extension of SDR to portfolio management delivers good outcomes for consumers, is practical for firms and supports growth of the sector”.

Following feedback from its consultation, the FCA acknowledges that it is taking longer than expected for some asset managers to comply with the SDR and labelling regime, which may impact portfolio managers.

The FCA does not specify when it now expects to publish the final rules but simply that it will continue to reflect on the consultation feedback and provide further information in due course.