The Financial Conduct Authority (FCA), the UK’s financial services regulator, has finalised rules that place providers of environmental, social and governance (ESG) ratings under its supervision for the first time. Firms in this market will need to seek authorisation from 24 June 2027.
The regime targets a segment of the market that shapes how capital gets allocated, yet until now it has operated outside the FCA’s oversight. The regulator’s goal is to make ESG ratings more transparent, dependable and comparable, so investors can place greater trust in the data behind their decisions.
The rules capture any firm or organisation that supplies ESG ratings or assessments. To help businesses establish whether their activities fall within the perimeter, the FCA has issued accompanying guidance.
Under the framework, providers must meet standards in five areas: transparency, governance, systems and controls, the handling of conflicts of interest, and how they engage with both the users of their ratings and the entities they rate. The FCA says the obligations scale with a firm’s size and activities, and that the design draws on existing and international standards.
The regulator is urging potentially affected firms to act immediately rather than wait for the 2027 application window. It will run webinars and offer access to its Pre-Application Support Service to assist with readiness.
In practical terms, firms are expected to assess whether the regime touches their business, study the final rules and guidance, determine whether they require authorisation, begin implementation work and make early contact with the FCA’s support teams.
FCA director of authorisations and sustainable finance Laura Dawes said, ‘Trusted information is essential for well-functioning markets. These rules will help improve transparency and raise standards across the ESG ratings market while supporting competition, innovation and growth.
‘Firms should check now whether they are in scope and start preparing for authorisation. We’ll continue to provide practical support to help them prepare.’
Copyright © 2026 RegTech Analyst
Copyright © 2026 RegTech Analyst
