The chief operating officer of the Financial Conduct Authority (FCA) has urged industry participants to get in touch regarding feedback on the application process of new sustainable fund labelling, as the regulator continues to respond to calls for further guidance.
Speaking at the UKSIF (UK Sustainable Finance and Investment Association) Leadership Summit on 6 November, Emily Shepperd, COO at the FCA, said: “We are absolutely in listening mode,” and pointed to additional guidance the regulator posted on its website in the past week displaying good and bad practice examples for firms applying for labels under Sustainability Disclosure Requirements (SDR).
“Tell us what you need to help get these labels,” she told attendees.
The regulator has faced criticism in recent months for the “back and forth” experience of applying for fund labels under SDR, with fund’s reportedly being rejected for a label with little insight on what needed to be changed to gain one.
This latest guidance appears to be a response to such criticisms, with the FCA stating that SDR and investment labels are “a new regime without precedent, and so, naturally, market practice is still evolving”.
Sheppard reiterated it is a learning curve for the regulator and the industry.
“While there’s a lot of progress being made firms want more clarity, and we remain mindful that firms will need time to implement existing rules and requirements. The SDR and investment labels are new regimes and market practice is evolving.
“We are also taking stock of our own processes to ensure firms have a smooth and consistent journey.”
She added the FCA has currently over 100 applications in process.
“We’re expecting some major names to come out to the next two weeks, and we’re expecting to have done everything by the end of November.”
Among the names to have announced an approved label so far are Jupiter, which adopted Sustainability Focus for its Ecology fund, and WHEB Asset Management, which gained a Sustainability Impact on the FP WHEB Sustainability Impact fund. However, sustainability specialists Stewart Investors have oped to not apply for a label and to drop ‘sustainability’ from its fund names.
