The FCA has published finalised rules to improve transparency and trust in the ESG ratings market.
From 29 June 2028, any firm providing ESG ratings will need to apply to the FCA for appropriate authorisation or operate within an applicable exclusion.
Following the passing of the Financial Services and Markets Act 2000 (Regulated Activities) (ESG Ratings) Order 2025 which brings ESG ratings providers within the FCA’s regulatory perimeter, the FCA has now published its associated rules and perimeter guidance.
The FCA’s intentions are to:
- make ESG ratings more transparent, reliable and comparable;
- support better decision-making and greater confidence in the market; and
- be proportionate and support growth in sustainable finance.
This new regime requires ESG rating providers to comply with baseline FCA rules alongside tailored requirements to support trust in the market.
Duncan Scott
Duncan is a Principal Associate in the Funds and Financial Services team specialising in financial services regulation. Duncan advises clients across a wide range of sectors including banking, consumer finance, payment services, insurance, asset management and pensions with a particular focus on retail banking, regulated credit and payment services.