Regulatory Update: SFDR – preparing for compliance

The EU Sustainable Finance Disclosure Regulation (SFDR) will apply from 10 March 2021. This compliance date represents the first major milestone in the implementation of the EU’s sustainable finance regulatory framework, a framework that will continue to evolve in the years ahead.

In order to assist members, Irish Funds has issued a publication on preparing for compliance under the SFDR. The publication covers:

• Scope and key timeframes

• Approaching compliance under an evolving regulatory framework

• A quick checklist for SFDR compliance by 10 March 2021

• Disclosures at the entity level

• Disclosures at the product level

• Q&A

• Looking beyond SFDR compliance

Central Bank fast-track process for prospectus updates under the SFDR

As previously advised, the Central Bank of Ireland is providing a fast-track process to deal with the volume of prospectus updates due to be filed under the SFDR. The mailbox for these filings opened on 11 January 2021 and will remain open until 10 March 2021.

The Central Bank has released a new communication on process clarifications relating to these filings, which firms should be aware of. It includes various Q&A on documentation and timing.

Looking ahead

The Level 2 rules supporting implementation of the SFDR have yet to be finalised and the European Supervisory Authorities (ESAs) are due to publish these by the end of January. They will become applicable at a later stage (yet to be clarified). Uncertainty also remains over the application of various aspects of the rules under the SFDR and the ESAs recently wrote a letter to the European Commission identifying certain priority issues for clarification. We will bring you further updates as these arise.