The Managed Funds Association, a representative body for the alternative investment industry, has submitted a written response to the Financial Conduct Authority’s consultation paper on Sustainability Disclosure Requirements (SDR) and investment labels, expressing its support for the objectives but calling for greater clarity around how the rules will apply.
The Managed Funds Association (MFA), a representative body for the alternative investment industry, has submitted a written response to the Financial Conduct Authority’s (FCA) consultation paper on Sustainability Disclosure Requirements (SDR) and investment labels, expressing its support for the objectives but calling for greater clarity around how the rules will apply.
The MFA says it supports the FCA’s efforts to build greater transparency, consistency, and trust in the market for sustainable instruments, products, and the supporting ecosystem. Specifically, the MFA supports the FCA’s objectives of reducing greenwashing, increasing standardisation of sustainability information, and empowering consumers to make informed decisions. However, given alternative asset managers employ a wide spectrum of investment strategies and take various approaches to ESG issues, the MFA is calling on the FCA to provide greater flexibility and clarity on how the rules will be applied.
The MFA agrees with the FCA’s view that it is important to ensure that the proposed SDR rules are coherent with other regimes, such as the EU’s Sustainable Finance Disclosure Regulation (SFDR) and proposals by the Securities and Exchange Commission (SEC) in the US. Given that the two regimes are still being developed, the MFA proposes delaying the implementation of the proposals by at least twelve months.
“We support the FCA’s efforts to enhance transparency in ESG investing and provide greater clarity for the industry,” said MFA Head of Global Government Affairs Jillien Flores. “It is essential the final rule recognises the diversity of investment strategies that enable institutional investors—including pensions, foundations, and endowments—to achieve their sustainability goals. We look forward to continuing to engage with the FCA to emphasise the importance of implementing a regime that is interoperable with the frameworks in the US and EU.”
