SFDR: European Commission revises upcoming implementation deadlines
The Sustainable Finance Disclosure Regulation (‘SFDR’) requires financial market participants and financial advisers to make pre-contractual disclosures to investors on how they integrate environmental, social and governance (‘ESG’) factors into their risk and decision-making processes. The SFDR also provides for the implementation of regulatory technical standards (‘RTSs’) to further specify certain aspects on the application of the said Regulation.
Due to the length and technical detail of the RTSs, the late submissions to the Commission by the ESAs, and envisaged amendments, the European Commission has decided to defer the original dates for application of the RTSs by six months, in order that these are applied by the 1st July 2022. The said deadline concerns RTSs under various provisions of the SFDR, including Articles 4(6), 4(7), 8(3), 9(5), 10(2) and 11(4). The MFSA has informed that it shall keep relevant financial market participants and advisers informed of any further developments and progress in this regard.
The MFSA has also invited financial market participants and financial advisors to compile and submit a survey by the 10th September 2021 in order to assess the market’s preparedness and compliance with the provisions of the SFDR. The survey encourages licence holders to carry out a self-assessment on their sustainable finance requirements by analysing which sustainability and ESG issues would be essential to their business, what their objectives should be and how to follow through same in their day-to-day operations. A guidance note has also been issued by the MFSA for this purpose.
The SFDR forms part of a wider action plan adopted by the European Commission in relation to sustainable finance. Readers are encouraged to read this article outlining the next steps to be followed by licence holders in this regard. Should you require further information or assistance, please do not hesitate to contact our financial services team at dfcs@dfadvocates.com .
Image credits: Treasury Today