Monday October 25 2021

News Source: Fund Regulation

Focus: ESG

Type: General

Country: European Union




The European Supervisory Authorities (ESAs) have developed through the Joint Committee (JC) draft Regulatory Technical Standards (RTS) with regard to the content and presentation of disclosures under Articles 8(4), 9(6) and 11(5) of Regulation (EU) 2019/2088 (hereinafter ‘Sustainable Finance Disclosure Regulation’ or ‘SFDR’).

The abovementioned Articles were inserted in the SFDR through Article 25 of Regulation (EU) 2020/852 (the ‘Taxonomy Regulation’ or the ‘TR’) which amends the SFDR. Following this amendment, the ESAs have been empowered to develop draft RTS on taxonomy-related product disclosures. Specifically, the ESAs have been empowered to develop further obligations to the SFDR product disclosures where the product makes sustainable investments contributing to environmental objectives.

The draft RTS text and accompanying Annexes included below set out the ESAs’ proposals. They reflect the responses to the ESAs’ Consultation Paper (JC 2021 22) published on 17 March 2021.

The draft RTS contain templates for pre-contractual and periodic product disclosures. The ESAs agreed to amend the existing finalised draft RTS and their accompanying templates in order to minimise duplication and complexity, thus creating a single ruleset. The ESAs’ finalised draft RTS1 (the ‘SFDR RTS’), which were published 4 February 2021, have already established the content, methodology and presentation of other disclosures to be made under the SFDR in accordance with the ESAs’ empowerments under Articles 2a, 4(6) and (7), 8(3), 9(5), 10(2) and 11(4) SFDR. The ESAs’ aim is to have the technical standards on disclosures rules function as a “single rulebook” for sustainability disclosures for both the original empowerments in the SFDR and the additional ones added by the TR.

In line with the ESAs’ empowerments, the draft RTS have been developed in the following areas:

  • According to Article 8(4) SFDR: Development of additional pre-contractual disclosures relating to the content and presentation of Article 8 SFDR products subject to Article 6 TR, concerning climate objectives and other environmental objectives under Article 9 TR respectively.
  • According to Article 9(6) SFDR: Development of additional pre-contractual disclosures relating to the content and presentation of Article 9 SFDR products subject to Article 5 TR, relating to disclosures concerning climate objectives and other environmental objectives under Article 9 TR respectively.
  • According to Article 11(5) SFDR: Development of additional rules on the content and presentation of information required under Article 5 and 6 TR for periodic disclosures relating to climate objectives and other environmental objectives under Article 9 TR respectively

In section 2 the general background and rationale of the proposal is presented. Section 3 includes the RTS and the mandatory templates for the product disclosures. Included in section 4 is an impact assessment that analyses the ESAs proposals and a feedback statement on the Consultation Paper.

Responses by the stakeholder groups of ESMA, EIOPA and EBA are attached as annexes to this final report.

Lastly, section 5 contains a draft consolidated SFDR RTS.

Click on the above link for further information.