SDR and labels policy
Financial Conduct Authority
12 Endeavour Square
London E20 1JN

SIFMA Asset Management Group response to CP22/20: Sustainability Disclosure Requirements (SDR) and investment labels

Introduction

The Securities Industry and Financial Markets Association’s (SIFMA) Asset Management Group (AMG)1 welcomes the opportunity to comment on the Financial Conduct Authority’s consultation on Sustainability Disclosure Requirements and Investment Labels. We agree with the FCA that it is important that consumers can trust sustainable investment products.

We have two general points. First, it is important that this regime in its final form does not duplicate or adversely overlap with other existing rules or regulations which also offer protections for consumers more generally. For example, the Financial Services and Markets Act 2000 includes a Misleading Statements and Practices Order (2001) and FCA rules on financial promotions also already influence firms.

Second, capital markets are global and asset managers are very active on an international level. For investment internationally (including by foreign investors into the UK) to be optimal in its contribution to economic growth, it is important that rules and regulations between jurisdictions are broadly consistent and inter-operable with one another. As well as the frictions divergence introduces to cross-border investment, it also can make operations in multiple jurisdictions significantly inefficient. We make more specific reference to this later in this response but it also applies to the FCA’s engagements and coordination with foreign regulators – for example, the UK/U.S. Financial Regulatory Working Group – where this issue should be on the agenda so you can set out the FCA’s views and take input or questions from your foreign counterparts. We note that the FCA plans to consult separately on its approach to overseas products and we look forward to engaging with that exercise in due course.