The Financial Conduct Authority has kicked back its deadline for firms to comply with the Sustainability Disclosure Requirements (SDR) regime.
Introduced last November, the SDR regime includes new standards for investment funds, particularly around naming and marketing practices for sustainability-related products.
These rules are designed to ensure that funds using terms like ‘sustainable’ or ‘impact’ accurately reflect their sustainability characteristics.
They have been introduced following allegations of ‘greenwashing’, referring to the practice of making false, misleading, or exaggerated claims about a product, service, or company’s environmental or sustainability benefits.
The labelling rules officially take effect on 2 December, but the FCA is allowing for temporary flexibility until 2 April 2, 2025, for those needing more time to align with the naming and marketing rules.
Chris Cummings, chief executive of the Investment Association stated: "We are pleased that the FCA has listened to industry and granted investment management firms additional time to comply with the SDR investment labelling rules.
“Our industry has been working hard and at pace to implement the SDR requirements, which will raise standards and improve confidence for investors in the market for sustainable investments.
"Today's announcement will provide firms seeking to apply labels to funds with the much-needed additional time to work together with the regulator to comply with the new regulation.
“We will continue to work constructively with the FCA and support our members to meet these deadlines, noting the more limited extension for firms complying with the 'naming and marketing' rules."