Read a summary of The Big Exchange's response to the FCA's proposed regulation which aims to build transparency and trust by introducing a set of labels for different types of investment products.
On Wednesday 25th January, The Big Exchange formally responded to an ask from the FCA for feedback to a proposed bit of regulation it is looking to introduce in 2023 to make it clearer for retail investors to see what funds are really driven by sustainable strategies and which ones are not. As this is such an important area for us (and you), we wanted to let you know a bit more about what is coming down the pipe from the regulator and how we responded to the proposed changes.
As you may know, the Financial Conduct Authority (the FCA) are responsible for regulating the financial services industry in the UK. Its role includes protecting consumers, keeping the industry stable, and promoting healthy competition between financial service providers.
And on that note, the FCA have seen the growth in sustainable, impact and responsible labelled products available on the market and has also seen the growth in greenwashing (the practice of saying something has a greater environmental benefit than it really does) and are proposing to do something about it. The FCA wants to introduce some clear labelling and disclosure rules to make it clear to retail investors (the term for investors like yourself or you friends) about which type of investment product you’re choosing - to verify their sustainability credentials - and to try and stop greenwashing.
So they have put together a bit of regulation called Sustainable Disclosure Requirements to help customers navigate the myriad of financial products that say they are "doing good" for the environment or society. Without going into the full detail of the consultation (which you can find here) we will give you a brief overview of its intentions.
When the FCA propose some new regulation, they release what’s called a Consultation Paper which highlights what the FCA propose to do. The idea is that companies (like The Big Exchange) can respond to the Consultation Paper on how this will affect them and their customers and gives everyone the opportunity to provide feedback.
We wanted to take the time to respond and present a case to the FCA for how the new rules will affect customers like you who want to find investments that match your values. We won’t go through our full response but we wanted to summarise it and let you know our view for full transparency.
Our service only lists funds which we have screened and rated. We are already doing work for you to make sure that every fund you see on The Big Exchange is walking the talk and employing sustainable, impact and socially responsible strategies.
We know that you want to see behind the marketing and hear from a trusted source what your investment in a fund has exposure to. We know that you want to see what a fund actually does, how it does it, and understand what it does well – all to see whether this matches your values. We provide this to you now at no extra cost and we don’t see this changing. We will continue to provide even more transparency, access, and choice to environmentally and socially focused investments for you.
Please remember that when investing, making money is not guaranteed and your capital is at risk. The value of your fund can go down as well as up. Tax treatment depends on an individual’s circumstances and may be subject to change.
The Big Exchange (TBF) Limited is a wholly-owned subsidiary of The Big Exchange Limited. The Big Exchange (TBF) Limited is an Appointed Representative of Resolution Compliance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 574048). (7731)