FCA pauses plans to extend disclosure, labelling rules

The UK's Financial Conduct Authority is pausing plans to extend its Sustainability Disclosure Requirements (SDR) and product labelling regime to portfolio managers, saying now is not the right time.

The FCA had announced some 12 months ago that it would apply the SDR to wealth managers and retail model portfolios, after having already applied the initial SDR framework - which covered things like anti-greenwashing measures and fund labelling requirements for asset managers - last year. However, since consulting with the industry, it has delayed publishing final policies.

Now, the regulator has "decided that it is not the right time to finalise rules on extending SDR to portfolio management." This was an update provided on the regulator's webpage for the consultation.

"Overall, there is broad support for extending SDR to portfolio management... However, we want to take time to carefully consider the challenges and ensure that portfolio managers are positioned to implement the regime effectively before introducing requirements," the FCA said.

Stakeholders raised several issues regarding implementation, it added.

These included the need for additional time to meet compliance demands; clarity on how naming conventions would apply across bespoke or complex portfolios and client structures; clarity on how they interact with other disclosure obligations; and guidance on how the labelling system would function in practice for portfolio managers.

The FCA said it will now prioritise its upcoming review of model portfolio services and reminded firms of their obligation to comply with the anti-greenwashing rule.