CSSF SFDR fast track process

26 January 2021

The CSSF issued a communication to the market confirming that the implementation of EU regulation 2019/2088 will go ahead on March 10, 2021.

The communication set out the process for submission of the pre-contract disclosures, incorporating the required disclosures of the SFDR to be accompanied by a confirmation statement as part of the fast-track process.

The communication further stated:

Investment managers of UCITS and AIFs are to comply with harmonised rules on transparency with regards to sustainability risks, consideration of adverse sustainability impacts and provision of sustainability-related information;
Investment managers will need to disclose how sustainability risks are integrated into their investment decisions as well as assess and disclose what the likely impact such risks could have on the returns of the fund;
The approach to sustainability risk feeds into the UCITs prospectus and relevant disclosures to AIF investors;
Where the investment managers assessment of sustainability risk deems that there are no risks to the fund, then this will be included in the prospectus and relevant disclosures to AIF investors;
Where the investment manager does not consider adverse impacts of investment decisions on sustainability factors, this must be disclosed in the UCITs prospectus and relevant disclosure to AIF investors;
Funds that fall within the definition of financial products under the SFDR that either promote E & S characteristics, or have as their objective, sustainable investment, the UCITs prospectus and relevant disclosure to AIF investors will be required;
Integration of sustainability risks must also be ensured at the level of the investment managers risk management policy.

All UCITs prospectuses or relevant disclosures for AIFs must be submitted to the CSSF by February 28, 2021 accompanied by a confirmation letter provided by the CSSF.

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The communication further stated:

Investment managers of UCITS and AIFs are to comply with harmonised rules on transparency with regards to sustainability risks, consideration of adverse sustainability impacts and provision of sustainability-related information;
Investment managers will need to disclose how sustainability risks are integrated into their investment decisions as well as assess and disclose what the likely impact such risks could have on the returns of the fund;
The approach to sustainability risk feeds into the UCITs prospectus and relevant disclosures to AIF investors;
Where the investment managers assessment of sustainability risk deems that there are no risks to the fund, then this will be included in the prospectus and relevant disclosures to AIF investors;
Where the investment manager does not consider adverse impacts of investment decisions on sustainability factors, this must be disclosed in the UCITs prospectus and relevant disclosure to AIF investors;
Funds that fall within the definition of financial products under the SFDR that either promote E & S characteristics, or have as their objective, sustainable investment, the UCITs prospectus and relevant disclosure to AIF investors will be required;
Integration of sustainability risks must also be ensured at the level of the investment managers risk management policy.

All UCITs prospectuses or relevant disclosures for AIFs must be submitted to the CSSF by February 28, 2021 accompanied by a confirmation letter provided by the CSSF.