Q&A about the entry into force of the Delegated Regulation supplementing the Sustainable Finance Disclosures Regulation (SFDR)

On 31 January 2023, the Financial Services and Markets Authority (FSMA) published a set of frequently asked questions (FAQs) (only in French and Dutch) on the entry into force of Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 (the Sustainable Finance Disclosure Regulation Regulatory Technical Standards – SFDR RTS), which supplements the Sustainable Finance Disclosure Regulation (SFDR) with regulatory technical standards which entered into force on 1 January 2023.
These FAQs, dated 24 January 2023 in the French version, are intended for companies governed by Belgian law which provide management services in undertakings for collective investment (UCIs), and to public UCIs under Belgian law in providing support after the entry into force of the SFDR RTS and its requirements. More specifically, these FAQs aim to provide clarification on the applicable rules to UCITS management companies, self-managed undertakings for collective investment in transferable securities (UCITS), and managers of public and non-public alternative investment funds (AIFs).
The objective pursued by these FAQs is to answer the questions and concerns of the sector by bringing together the most relevant clarifications for UCIs recently published by the European Commission and the European Supervisory Authorities (ESAs) and specifying, on the basis of examples of the standard model already received by the FSMA, the expectations of the FSMA regarding the implementation of the SFDR RTS. The FSMA considers in particular that certain information relating to sustainability must always be included in the prospectus so that the investor understands the degree of ambition of the UCI in terms of sustainability and that he has sufficient information to make his investment choice.
The FAQs cover, for example, the content and presentation of the information relating to the promotion of environmental or social characteristics and objectives for sustainable investments in pre-contractual documents, on websites and in periodic reports. These FAQs bring together the clarifications published by the European Commission and the European Supervisory Authorities on the subject and sets out the FSMA’s expectations in this regard. The expectations and views of the FSMA set out in these FAQs are subject to interpretation of the provisions of the SFDR, the TR and the SFDR RTS at an European level. These FAQs are expected to evolve according to any clarifications at the level European Union and the FSMA doctrine on the matter.
The questions are the following (version 1 of 24 January 2023):
– Which entities are covered by these questions and answers?
– What happens to UCIs from 1 January 2023?
– How to implement the transparency requirements provided for in the Delegated Regulation?
– Does the prospectus have to contain information concerning the ESG characteristics or the objective sustainability required in communication FSMA_2021_06?
– Should the information concerning the alignment with the Taxonomy be included in the part of the prospectus relating to sub-funds?
– Is communication FSMA_2021_06 still applicable?
– Do key information documents need to be adapted?
– Should the name of UCIs be adapted on the occasion of the entry into force of the Regulation delegate?
– What information should be disclosed on the main negative impacts at the level of the
manager (Article 4 SFDR)?
– Can the indicators listed in Annex I of the Delegated Regulation be used outside of the Article 4 of the SFDR?
– What are the main negative impacts at the level of a UCI (Article 7 SFDR)?
– What are the requirements applicable to mutual funds promoting, among other things, environmental or social characteristics (Article 8 SFDR)?
– What are the requirements concerning UCIs with the objective of sustainable investment (Article 9 SFDR)?
– How to publish information relating to environmental or social characteristics and sustainable investments on websites (Article 10 SFDR)?
– What information should be published in periodic reports (Article 11 SFDR)?
– How to publish information relating to alignment with the Taxonomy (Articles 5, 6 and 7 TR)?
– What are the advertising requirements (Article 13 SFDR)?
– What are the elements to be taken into account when completing the standard templates listed in the appendix to the Delegated Regulation?
– What rules apply to the “do no significant harm” principle? (DNSH)?
– What is the role of the UCI reviewer with respect to sustainability information?
– What is the role of the depository of the UCI in relation to information relating to sustainability?