Updated FAQs on the entry into force of the Delegated Regulation supplementing the Sustainable Finance Disclosures Regulation (SFDR)

On 13 November 2023, the FSMA published an update to the FAQs on the entry into force of the SFDR RTS, which supplements the SFDR with regulatory technical standards (see event id=19366).
These FAQs, applicable to Belgian law-governed companies offering UCI management services, address SFDR RTS requirements. Initially published on 24 January 2023, the FAQs focus on UCITS management firms, self-managed UCITS, and AIF managers. They aim to clarify rules based on European Commission and ESAs publications and their alignment with FSMA expectations for SFDR RTS implementation.
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The latest update of the FAQ is dated 31 October 2023 and contains an additional Question 3.22 covering funds of funds on page 27. We would like to present the new question in full, together with a brief summary of its corresponding answer:
3.22 Can a fund of funds that invests solely in underlying UCI falling under Article 9 of SFDR itself be considered a UCI falling under Article 9 of SFDR?
The FSMA interprets Article 9 of the SFDR in such a way that a UCI must aim for sustainable investment, contributing to environmental or social objectives. While a fund of funds doesn’t directly invest in sustainable activities, the FSMA sees it falling under Article 9 if it solely invests in UCI that meet Article 9 criteria (except for hedging or liquidity purposes). The FSMA emphasizes transparency by requiring the prospectus and SFDR template to include information on the fund of funds‘ sustainable objectives or those of its underlying funds. For periodic SFDR disclosures, the FSMA expects the inclusion of names and sustainable objectives of each underlying UCI in the portfolio. The corresponding section of the SFDR template related to investments should be completed transparently.