LexGo

Sustainable Finance Disclosure Regulation: the CSSF confirms that the compliance date remains 10 March 2021
26/11/2020

The Commission de Surveillance du Secteur Financier (the “CSSF”) has published a press release on 6 November 2020 confirming the dates of application of Regulation (EU) 2019/2088 on the sustainability-related disclosures in the financial services sector (“SFDR”). This press release is addressed to the attention of the financial market participants and financial advisers subject to SFDR established in Luxembourg and subject to the CSSF’s supervision (the “FMPs” and “FAs” as applicable).

The purpose of such CSSF’s press release is twofold: to convey information the European Supervisory Authorities (“ESAs”) received from the European Commission and to ensure FMPs and FAs’ full compliance with the following European Commission’ statements on the application dates of SFDR:

  • the application of the SFDR is not conditional on the formal adoption and entry into force or application of the regulatory technical standard (“RTS”);
  •  the RTS which underpin the SFDR will be delayed, until a later date, possibly January 2022 or later despite a first draft of RTS released in April 2020 and initially set to be finalized by year end;
  • the high level and principles-based requirements contained in the SFDR must be complied with as from 10 March 2021.

For the sake of completeness, the CSSF reminds that, as per the SFDR, the following entities established in Luxembourg subject to the CSSF’s supervision may notably qualify as:

(a) FMPs: alternative investment fund managers (AIFMs), UCITS management companies, managers of a qualifying venture capital fund or a qualifying social entrepreneurship fund, credit institutions or investment firms which provide portfolio management, and institutions for occupational retirement provision (IORP); and

(b) FAs: credit institutions, investment firms, AIFMs, and UCITS management companies which provide investment advice.

SFDR introduces requirements for the EU-based asset managers and for the investment funds they manage and may also have implications for non-EU asset managers, particularly where they have EU affiliates or market their funds or financial products into the EU.

SFDR is designed to apply to all managers and investment funds which are therefore required to consider the impact of SFDR, even though they have no particular focus or agenda on ESG/sustainable finance.

In addition, SFDR sets specific requirements for (i) ESG-labelled investment funds (i.e. investment funds which promote environmental or social characteristics), (ii) sustainable investment funds (i.e. investment funds with a sustainable investment objective) and (iii) carbon reduction investment funds (i.e. investment funds that aim to reduce carbon emissions).

The draft RTS set out requirements relating to the content, methodology and presentation of disclosures under SFDR and a template for principal adverse impacts and metrics or indicators to be used by the FMPs. It is intended that the ESAs will develop templates for precontractual and periodic report disclosures, but they are not included in the draft RTS.

In terms of immediate steps, FMPs and investment funds are required before the 10 March 2021 deadline to make pre-contractual, website and periodic disclosures of specified information on how they integrate sustainability risks in their investment decision making process and advisory processes (including asset due diligence processes) and how they consider the adverse sustainability impacts of their investments.

However, periodic reporting disclosures will start applying in respect of financial years commencing on 1 January 2022.

Disclosure of principal adverse impacts in funds’ offering documents and periodic reports will become applicable as from 30 December 2022.

Our dedicated team will closely monitor the finalization of the RTS and can assist in all phases of this two step compliance process.

For any questions regarding the above, please do not hesitate to contact our specialists. 

Related : CMS Luxembourg ( Mr. Aurélien Hollard ,  Mrs. Aurélia Viémont ,  Mr. Benjamin Bada )

[+ http://www.cms-db.com]

Mr. Aurélien Hollard Mr. Aurélien Hollard
Partner
Aur[email protected]
Mrs. Aurélia Viémont Mrs. Aurélia Viémont
Senior Counsel
[email protected]
Mr. Benjamin Bada Mr. Benjamin Bada
Partner
[email protected]

All articles Financial law

Lastest articles Financial law

Capital Markets Union: Commission Adopts Package of Measures to Ensure Better Data Access and Rev...
07/12/2021

On 25 November 2021 the European Commission adopted a package of measures to ensure better data access and revamped invest...

Read more

CSSF communiqués of 29 November and 2 December 2021 - prepare for a green holiday season
07/12/2021

The EU Regulation on the establishment of a framework to facilitate sustainable investment (the "Taxonomy Regulation&...

Read more

Update on SFDR/Taxonomy for Luxembourg funds
07/12/2021

The main disclosure requirements under the Regulation (EU) 2019/2088 on sustainability-related disclosures in the financia...

Update on SFDR/Taxonomy for Luxembourg funds Read more

New CSSF taxonomy fast track procedure
06/12/2021

On 2 December 2021, a CSSF press release on regulatory requirements and fast track procedure in relation to Regulation (EU...

New CSSF taxonomy fast track procedure Read more

Lastest articles by Mr. Aurélien Hollard

The ESAs delivered final draft RTS related to the SFDR 2019/2088 and Taxonomy Regulation 2020/852...
02/11/2021

Despite the main disclosures required pursuant to Regulation (EU) 2019/2088 on sustainability-related disclosures in the f...

Read more

Issuance and settlement of securities directly on blockchain: now a reality in Luxembourg
28/01/2021

Last summer in one of our e-alerts, we shared our insights on the key features of the bill of law n°7637 all...

Read more

With the implementation of SFDR approaching, the CSSF sets-up a fast track procedure
22/12/2020

With less less than 3 months to go until the Sustainable Finance Disclosure Regulation (“SFDR”) comes int...

Read more

ESMA Guidelines on performance fees in UCITS and certain types of AIFs
17/12/2020

On 3 April 2020, ESMA eventually released its much-anticipated final report on guidelines on performance fees in UCITS and...

Read more

Lastest articles by Mrs. Aurélia Viémont

Draft RTS and ITS on disclosure of information to investors under the European crowdfunding servi...
16/11/2021

On 9 November 2021, the European Banking Authority released draft regulatory technical standards (the “RTS”) o...

Read more

Updated FATF guidance for a risk-based approach to Virtual Assets and Virtual Asset Service Provi...
08/11/2021

On 28 October 2021, the Financial Action Task Force (“FATF”) published an updated version of its guidance for ...

Read more

New CSSF Circular on the new EBA guidelines on AML/CTF risk factors
06/10/2021

On 24 September 2021, the CSSF released its Circular 21/782 which (i) provides information on the EBA Guidelines (the &ldq...

Read more

Protection of the euro against counterfeiting: new requirements applicable to relevant institutions
26/07/2021

The Luxembourg legislator has adopted the bill of law 7464[1] amending i.a. the amended laws of 5 April 199...

Read more

Lastest articles by Mr. Benjamin Bada

With the implementation of SFDR approaching, the CSSF sets-up a fast track procedure
22/12/2020

With less less than 3 months to go until the Sustainable Finance Disclosure Regulation (“SFDR”) comes int...

Read more

ESMA Guidelines on performance fees in UCITS and certain types of AIFs
17/12/2020

On 3 April 2020, ESMA eventually released its much-anticipated final report on guidelines on performance fees in UCITS and...

Read more

Certain deadlines extended by financial sector laws during the crisis
03/07/2020

On 7 May 2020, the Luxembourg Parliament adopted a new law extending certain deadlines during the crisis as provided for i...

Read more

Coronavirus (COVID-19): Extension of CSSF reporting deadlines applicable to regulated entities
01/04/2020

On 30 March 2020, the Commission de Surveillance du Secteur Financier (the CSSF) issued an updated ver...

Read more

LexGO Network