Financial Services Regulation and Compliance - Funds February 2023
Domestic
CBI filing process for updated SFDR pre-contractual disclosures
The revised SFDR Level 2 regulations have come into force. These include updated pre-contractual disclosure (PCD) and periodic reporting annexes which must be used by UCITS, RIAIFs and QIAIFs disclosing under Article 8 or Article 9 of the Sustainable Finance Disclosure Regulation (SFDR Level 1). The updated annexes include information for investors on investments in taxonomy-aligned fossil gas and nuclear economic activities. The CBI has established a streamlined filing process for PCD updates based on updated SFDR Level 2 requirements.
Regulatory flexibility for securities markets, investment management, investment firms and fund service providers in light of COVID-19
On 27 February 2023, the CBI confirmed the end of regulatory flexibilities which were allowed in light of COVID-19. The updated Q&A's state that measures previously communicated will not be extended.
The CBI updated its website guidance on national provisions governing marketing requirement for UCITS and AIFs
The CBI published revised website guidance on national provisions governing marketing requirement for UCITS and AIFs.
European
SFDR Level 2
The SFDR Level 2 has been updated to include nuclear/gas in accordance with the Complementary Climate Delegated Act (made under the Taxonomy Regulation). The amendments involve updates to the SFDR pre-contractual disclosure and periodic reporting templates (the annexes) which triggers a need for funds disclosing under SFDR Articles 8 and 9 to update their pre-contractual disclosures to the updated annexes.
ESMA UCITS Q&A
ESMA updated its Q&A on the application of the UCITS Directive with a new question 5e in the section dealing with issuer concentration section rules. It clarifies that the term “body” in Article 52(1)(b) means “credit institution” as mentioned in Article 50(1)(f) of the UCITS Directive. (Therefore, the term 'body' does not include any other counterparty which is not a credit institution.) This clarification only applies in the context of Article 52(1)(b) and should not affect the meaning of the term 'body' in other instances of the UCITS Directive.
ESMA Q&A on the Application of the AIFMD
ESMA updated its Q&A on the Application of the AIFMD with a new question on exemptions and the notion of “substantive direct or indirect holding" which should be assessed on a case-by-case basis by AIFMs supervisors.
ESMA report on EU MMFs
ESMA published its first market report on European Union Money Market Funds. This report covers the period from March 2020 to June 2022. ESMA proposed that the European Commission should consider a number of changes to the MMF Regulation, intended to make MMFs more resilient. Alongside key policy measures such as addressing the threshold effects for CNAV MMFs, and addressing liquidity related issues, ESMA suggested complementary reforms aimed at enhancing MMFs’ preparedness for a crisis.
IOSCO Investment Funds Statistics Report
IOSCO published its second investment funds statistics report which provides insights into the global investment funds industry. The report is based on a comprehensive collection of IOSCO members’ supervisory data as of end-2021.
For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.
Date published: 20 March 2023