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Great Fund Insights: SFDR and Taxonomy RTS checklist - What fund managers need to know

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07 October 2022

As the implementation date of 1 January 2023 looms for the Regulatory Technical Standards (RTS) under SFDR and the disclosure regime in the Taxonomy Regulation, asset management firms are progressing in their implementation of the website disclosures and pre-contractual and periodic disclosures for their article 8 and 9 funds under the RTS. This bulletin provides a checklist of actions and dates for asset managers.

Topics covered in this bulletin include:

1. How did we get here?

A summary assessment of how the SFDR was adopted on 27 November 2019, and entered into force on 12 July 2020, introducing a detailed a product disclosure regime for products in scope. We also discuss how it began to apply in a phased way beginning from 1 January 2022.

2. Final Regulatory Technical Standards (RTS)

A description of the final RTS, plus links to the official version of the RTS (including the disclosure templates firms are required to use going forward).

3. What do asset and fund managers have to do next, and by when?

A checklist of next steps for asset and fund managers, including which templates need to used going forward and by when, and other necessary updates to internal policies and procedure which need to be considered.

4. Other points to note, including:

Indicators – mandatory or optional?

A discussion of the references to indicators in the RTS, and whether these would be considered mandatory or optional by firms in the industry.

ESMA guidance

A look at current and future ESMA guidance, including a roadmap to explain work that is underway and planned for the next two years on ESG related matters.

Questions on key issues of interpretation

On 9 September 2022, the ESAs issued a list of questions for the European Commission on key points of interpretation.  In this section, we discuss the importance of managing expectations of internal stakeholders in the instance that the European Commission takes a stringent approach to SFDR and the Taxonomy Regulation when responding to questions around key points of interpretation.  

The meaning of “sustainable investment” under SFDR

A quick summary of how this continues to be a key issue.

Greenwashing

An overview of the various European Commission and ESMA initiatives that are underway around greenwashing, which will likely continue to be a governmental and regulatory priority moving forward.

In this bulletin we also include helpful key reference materials, such as:

  • Links to a copy of the SFDR, Taxonomy Regulation and the RTS
  • A cheat sheet which explains exactly what is covered in each of the key materials
  • A schedule outlining the SFDR timeline for asset managers from March 2021 up until 2023 and beyond

If you have any questions on the topics included in this bulletin, or ESG more generally, please get in touch with your usual A&O contact.