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SFDR: European Commission adopts disclosure rules on sustainable investments

The European Commission has adopted a Delegated Regulation with regulatory technical standards (RTSs) to be used by financial market participants and financial advisors when disclosing sustainability-related information under the Sustainable Finance Disclosures Regulation (SFDR). The Delegated Regulation specifies the exact content, methodology and presentation of the information to be disclosed, thereby improving its quality and comparability. Amongst other objectives, the RTSs are expected to: (i) enhance the comparability of financial products from different financial services sectors; and (ii) facilitate the application of ‘sustainability preferences’.

The Delegated Regulation is part of a broader range of European Commission initiatives on sustainable development. These include initiatives to finance the transition to a sustainable economy in line with the European Green Deal and the European Climate Law. The Regulation also enables end investors to understand the sustainability-related ambition of financial products, and of manufacturers of financial products and financial advisers.

The Delegated Regulation will now be reviewed by the European Parliament and the Council, and expected to apply from the 1st January 2023. The Malta Financial Services Authority has also highlighted the importance for participants to make use of the current interim period until the said date to prepare for the application of the Delegated Regulation, whilst applying the relevant measures of SFDR and the Taxonomy Regulation.

DF Advocates has assisted a number of financial market participants, financial advisors and financial products in the implementation of SFDR-related requirements. Should you require any information or assistance in this regard, please do not hesitate to contact the financial services team at dfcs@dfadvocates.com .

Photo credit: Treasury Today

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