FAQs – Publicly offered investment products: Presentation Materials on industry workshops for ESG funds

The Securities and Futures Commission (SFC) has published an updated version of its presentation material regarding common ESG investment strategies used by ESG funds and corresponding frequently asked questions (FAQs).
The material describes the differences between thematic investments, best in-class investments, and impact investments, before moving on to the criteria to be considered for each type of investment. In other words, the document outlines the requirements an investment must fulfill to be considered „compliant“ with any of the three beforementioned strategies. The document also provides illustrative examples of the disclosure of an ESG fund investment strategy in the Key Facts Statements (KFS) and describes how ESG ratings on stocks or bonds may be incorporated in the selection process for possible investments. The document also briefly addresses the issue of recognition of European UCITS in Hong Kong that are considered ESG funds in line with Article 8 or Article 9 of the Sustainable Finance Disclosure Regulation (SFDR).
In this latest revised version, one FAQ was added anew at the end of the document (page 33) which reads as follows: as quoted:
Question: Pursuant to the EU SFDR regulatory technical standard, UCITS funds that are classified as falling under SFDR Article 8 and 9 are required to append the pre-contractual disclosures template (on a per product basis) (“SFDR Template Information”) to their prospectuses.
For UCITS SFDR Article 8 and 9 funds that are authorized by the SFC in Hong Kong (“Relevant Funds”), is it an option not to include the SFDR Template Information in their Hong Kong offering documents (“HKOD”)?
Answer: As far as the HKOD is concerned, regardless of whether the Relevant Funds are ESG funds pursuant to the SFC’s circular on ESG funds dated 29 June 2021, the overarching principle is that the HKOD must contain the information that is necessary for investors to make an informed judgement of the investment.
In respect of the SFDR Template Information, managers of Relevant Funds have the discretion to decide whether or not to include such information in the Relevant Funds’ HKOD. If the fund manager decides to include the SFDR Template Information in the HKOD of a Relevant Fund, these enhanced disclosures generally do not trigger amendments which require SFC’s prior approval and the updated bilingual HKOD should be filed with the SFC in accordance with 11.1B of the UT Code.
If the fund manager decides not to include the SFDR Template Information in the HKOD of a Relevant Fund, the SFDR Template Information should be provided to investors upon their request. The HKOD of the Relevant Fund must disclose how investors can make such request and in which language the SFDR Template Information will be available.