Just over two years on, and SFDR is at a cross roads with three major consultation processes taking place simultaneously:
European Commission's consultation on the implementation of SFDR which aims at gathering information to identify potential short comings and explore options to improve the framework;
European Supervision Agencies (ESA)'s consultation on the regulatory technical standards (RTS) including additional PAIs;
ESMA consultation on ESG fund names which aims at defining minimum requirements for using ESG related terms in fund names
EC consultation on SFDR
The consultation was published on 14/9/2023 with a deadline to respond on 15/12/2023. It is looking to get feedback on the experiences with the implementation of the SFDR, including current SFDR requirements, interactions with other sustainable finance regulation, potential changes and potential establishment of a categorization for financial products.
Interactions with other sustainable finance legislation include:
The Q&A published in April 2023: which covered the Paris Aligned Benchmarks and Carbon Transition Benchmarks, DNSH, and good governance
CSRD: whether the requirements are consistent with SFDR
MiFID: how useful are certain articles on top of other obligations
ESA consultation on RTS
The ESA consultation started on April 2023 on the RTS (link) which ended on July 2023 with a final report publication expected in October 2023. The main topics addressed by the consultation are around the pre-contractual disclosures, periodic disclosures, website disclosures and PAIs.
CSSF data collection
In addition the Luxembourg regulator is conducting a data collection exercise.
Pre-contractual information: on March 2023 the CSSF issued communication for a second SFDR data collection. Whilst the first data collection focused on the implementation of SFDR, requirements of management companies and AIFMs, this data collection exercise focusses on the product disclosures (on a sub-fund level) covering pre-contractual information. The submission deadline was extended to 31/10/2023.
Periodic information: On 30 June, the CSSF issued a communication for a third SFDR data collection exercise. This data collection exercise focuses on the SFDR periodic disclosures (on a sub-fund level). The submission deadline is 31 January 2024.
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