Regulation (EU) 2019/ 2088, on the sustainability–related disclosures in the financial services sector (“SFDR”) comes into effect on March 10, 2021. SFDR lays down harmonised rules for market participants and financial advisers on transparency with regard to the integration of sustainability risks and the consideration of adverse sustainability impacts in their processes and the provision of sustainability–related information with respect to financial products.
Even though the regulatory technical standards (“RTS”) specifying the detailed requirements on the content, methodologies and presentation of sustainability–related disclosures are unlikely to be ready in time for the March 2021 deadline, the European Commission has made it clear that it considers that the application of the SFDR is not conditional on the formal adoption and entry into force or application of the regulatory technical standards.
As such, financial market participants under the supervision of the CSSF including the following:
- alternative investment fund managers (AIFMs);
- UCITS management companies;
- managers of qualifying venture capital fund;
- managers of qualifying social entrepreneurship fund;
- credit institutions;
- investment firms which provide portfolio management; and
- institutions for occupational retirement provision (IORP)
must comply with the high level and principle-based requirements laid down under SFDR as from March 10, 2021. Even if you do not consider sustainability related risk factors in your financial product or business, certain disclosures need to be made.
Please do not hesitate to contact us to see how BSP can assist you in understanding how and the extent to which SFDR applies to your business and your financial products.