PS26/22: ESG ratings: final regime
AI Analysis
The FCA has finalised the UK’s first regulatory regime for ESG rating providers under PS26/22. From 2028-06-29, in-scope firms must hold FCA authorisation and the relevant permission, with requirements covering transparency, governance, systems and controls, conflicts of interest, complaints and engagement with users and rated entities.
Key dates
- 2026-11-03
- FCA publishes PS26/22 and final rules; the FEES amendment relating to the regime comes into force.
- 2027-02-01
- FCA expects its Pre-Application Support Service for ESG rating authorisation applications to become available.
- 2027-06-24
- FCA authorisation gateway opens for ESG rating providers.
- 2027-07-31 Deadline
- Larger firms, defined by the FCA as firms expecting at least £500,000 of UK ESG-ratings revenue in the 12 months following application, should apply during the first month of the gateway, before the end of July 2027.
- 2027-08-31 Deadline
- Other firms should apply during the second month of the gateway, by the end of August 2027.
- 2028-06-29 Deadline
- The ESG ratings regime comes into force. In-scope providers must have FCA authorisation and the relevant permission unless an exclusion or exemption applies.
Suggested considerations
- Firms should inventory every product, score, opinion, label, ranking, colour-coded category and platform output that assesses one or more environmental, social or governance factors, including products not marketed as ESG ratings.
- Compliance teams may wish to apply the PERG 19 decision framework to each product: whether the activity is carried on by way of business, whether the firm produces and makes the rating available, whether investment decisions are likely to be influenced, the territorial connection, and whether an exclusion or exemption applies.
- Firms should document the distinction between unranked ESG data and provider-produced ratings, including the methodology, default thresholds, categories and user-configurable outputs embedded in software or analytics platforms.
- Potential applicants should identify the legal entity requiring permission, assess whether the activity is standalone or embedded in another regulated service, and prepare a regulatory business plan, governance map, resources assessment and threshold-conditions evidence.
- Prospective applicants should use the FCA’s Pre-Application Support Service from February 2027 and consider submitting applications promptly after the 2027 gateway opens.
- Larger firms should plan to submit applications during the first month of the gateway, before the end of July 2027, where forecast UK ESG-ratings revenue is at least £500,000 in the 12 months following application. Other firms should plan to apply during the second month, by the end of August 2027.
- Firms should perform a gap analysis against PRIN, SYSC, SM&CR, GEN, DISP, ESG-sourcebook and financial-crime expectations, with particular attention to methodology governance, data quality, conflicts, complaints, records, outsourcing and senior-manager accountability.
- Providers should review commercial terms, marketing and distribution arrangements to determine whether products could reasonably be expected to influence specified investment decisions, including where outputs are supplied through third-party financial platforms.
What changed
Providing an ESG rating becomes a regulated activity under article 63U of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, as amended by the Financial Services and Markets Act 2000 (Regulated Activities) (ESG Ratings) Order 2025. The activity generally requires a provider to produce and make available an opinion, score or combination based on an established methodology and defined ranking system, where the rating is likely to influence a decision to make a specified investment. Mere distribution of another provider’s rating is outside the activity. The regime applies to UK-located providers supplying ratings to UK or overseas recipients and to overseas providers supplying remunerated ratings to UK-located recipients. It can capture products labelled ESG data
Compliance impact
This is a high-impact final rule for providers because carrying on the regulated activity without the required permission after 2028-06-29 breaches the FSMA general prohibition and constitutes a criminal offence. Firms that miss the applicable application window, withdraw an application or are refused will be unable to take on new business after commencement and may need to wind down the activity,
Who is affected
Related regulations
References
AI-generated analysis. May contain errors or omissions — verify with the original FCA source before acting. Full disclaimer.
What the FCA said
We have finalised rules to improve transparency and trust in the environmental, social and governance (ESG) ratings market. ... Read PS26/22 (PDF)What we are changingFrom 29 June 2028, firms providing ESG ratings in the UK will need FCA authorisation and to have the relevant permission before carrying on that…
Extract from FCA . Read the full notice at the source for the authoritative text.