FCA’s Naming and Marketing Rules Delayed until April 2025

The FCA (Financial Conduct Authority) has announced its intention to grant firms additional time to comply with its ‘naming and marketing’ rules for sustainable investment products. In a statement published on 9th September, the FCA confirmed it is providing “limited temporary flexibility” until 2nd April 2025.

The ‘naming and marketing’ rules are one element of the FCA’s Sustainability Disclosure Requirements (SDR) and investment labels regime (PS23/16), published in November 2023. Under the rules, firms can use sustainability-related terms in product names if a label is used, or if the fund has sustainability characteristics and its name accurately reflect those characteristics.

The FCA acknowledges that especially for firms seeking to use an investment label under SDR, or for those that need to change the names of their products, additional time may be needed to comply with their “higher standards”.

Temporary flexibility will therefore be given to firms that are intending either to use a label, or to change the name of a fund that is using one or more of the terms ‘sustainable’, ‘sustainability’ or ‘impact’ (or a variation of those terms) in the name of a fund. The extension will not apply to funds using other sustainability-related terms.

The SDR established a set of sustainability-related product labels. Funds that meet the requirements of the SDR can opt into one of four sustainability labels: Sustainability Focus, Sustainability Improvers, Sustainability Impact. and Sustainability Mixed Goals.

No additional time will be given to comply with the anti-greenwashing rule, which came into effect on 31st May 2024. Firms are also expected to comply with the original naming and marketing rules deadline (December 2024) if they are able to, or as soon as they possibly can, without waiting until April 2025.