By Huw Jones
LONDON (Reuters) - Britain set out its "roadmap" on Wednesday for authorising investment funds from the European Union to offer products in the UK, a post-Brexit milestone that reflects how most funds sold to retail investors in the country are still listed in the EU.
The finance ministry and Financial Conduct Authority (FCA) published timelines for rolling out the new Overseas Funds Regime (OFR). It sets out how non-UK funds must obtain authorisation for sale in Britain, replacing the current post-Brexit system of temporary permissions.
"Today’s announcement therefore ensures UK investors will continue to benefit from the choice these funds provide, with the assurance that they come from a country with equivalent consumer protections," the finance ministry said in a statement.
Britain had already said in January it would grant long-term market access for EU investment funds, without costly new requirements such as mandatory valuation assessments.
"We want to make sure that consumers have as much choice as possible. That’s why we are investing in our systems to make sure that the overseas funds recognition process is smooth and efficient," added Sarah Pritchard, the FCA's executive director for markets and international.
The roadmap says that Britain will introduce legislation to put its January decision into law.
There will also be a public consultation in the third quarter on whether non-UK funds must comply with Britain's new sustainability labelling rules for funds, aimed at stopping 'greenwashing' or inflating green credentials to attract money.
If Britain decides to introduce such a requirement, any legislation would come into force in the second half of 2025, with the FCA following up with rules to flesh out the new law.
"The Government and the FCA would determine how any new rules should apply to funds that have already been recognised under the OFR before that point in time," the roadmap said.
The FCA said it also needs data from funds authorised under the new regime to see how they function and to supervise them properly. However, the watchdog said it would first undertake a wider review of data reporting by funds before applying any new rules.