FCA finalises rules requiring ESG rating providers to seek authorisation from June 2028
FCA finalises rules requiring ESG rating providers to seek authorisation from June 2028 #
The UK’s Financial Conduct Authority has published final rules requiring ESG rating providers to obtain authorisation, extending formal regulatory supervision to a sector previously outside its perimeter.
The rules, issued as policy statement PS26/22 on 3 November 2026, require any firm providing ESG ratings in the UK to obtain FCA authorisation from 29 June 2028. The regime covers both UK-based providers and overseas firms that offer ESG ratings to UK clients, unless a specific exclusion applies. Firms that miss their designated application window or are refused authorisation will be barred from taking on new business once the regime takes effect and will be expected to wind down that activity.
The framework sets obligations in four areas: transparency in how ratings are produced and communicated; governance standards; systems and controls; and management of conflicts of interest. Providers will also be required to engage with both users of ESG ratings and the entities being rated. The FCA said the regime has been designed to be proportionate to firms’ size and scale of activities, following concerns raised by smaller market participants during the consultation.
Applications for authorisation will open on 24 June 2027, with the FCA staggering intake windows ahead of the June 2028 go-live date to manage the volume of submissions.
Laura Dawes, the FCA’s director of authorisations and sustainable finance, said the new rules would address concerns about the quality and reliability of ESG data. “Trusted information is essential for well-functioning markets,” she said, adding that the framework was intended to improve transparency and raise standards while still supporting competition, innovation and growth.
The rules follow the UK government’s finalisation of enabling legislation in October 2025, which granted the FCA the statutory powers needed to extend its regulatory perimeter to cover ESG ratings. The FCA’s initial consultation paper setting out draft rules was published in December 2025.
The framework is broadly aligned with IOSCO standards. The international body called on regulators in 2021 to strengthen oversight of the ESG ratings market, citing inadequate disclosure of methodologies, outdated data, and unmanaged conflicts of interest. The EU has developed its own ESG ratings regulation, though the UK regime has been designed with differences suited to the domestic market.
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