Communication on regulatory requirements and fast track procedure (UCITS only) in relation to Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investments and Regulation 2019/2088 on sustainability-related disclosures in the financial services sector
Reminder of the deadline of 1 January 2022 for certain updates of UCITS and AIFs pre-contractual documents related to the transparency of environmentally sustainable investments in pre-contractual disclosures in relation to the environmental objectives of climate change mitigation and climate change adaptation and the use of templates under draft SFDR Regulatory Technical Standards.
Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investments (“TR”), and amending Regulation (EU) 2019/2088 of 27 November 2019 on sustainability-related disclosures in the financial services sector (“SFDR”), requires financial market participants, for financial products subject to Articles 8 and 9 of SFDR, to provide for transparency with regard to the environmental objectives of climate change mitigation and climate change adaptation in pre-contractual disclosures by 1 January 2022.
The CSSF hereby reminds impacted financial market participants of this deadline of 1 January 2022 under the TR and informs those of the financial market participants, which have not yet submitted to the CSSF the required updates to the pre-contractual documents of UCITS and/or AIFs in accordance with Article 5, 6 and 7 of the TR, that the CSSF has put in place a TR FastTrack procedure to facilitate the submission of the prospectus updates of UCITS to the CSSF.
In order to benefit from this TR FastTrack procedure, updates must be limited to reflect only those changes required under said Articles 5, 6 and 7 TR.
Under this TR FastTrack procedure, each updated UCITS prospectus submitted for visa stamp will have to be accompanied by a confirmation letter. A template of the said confirmation letter in relation to UCITS is available here1. For any complete and TR compliant submissions under this TR FastTrack procedure received by the CSSF by 17 December 2021 at the latest, the CSSF will endeavour to release the visa stamp prior to 31 December 2021.
In relation to AIFs,
- Luxembourg-based authorised AIFMs should submit to the CSSF, for each AIF managed, the specific information required under SFDR and TR that has to be disclosed to investors, on the basis of article 6(3) of SFDR, in the disclosures to investors referred to article 23(1) of Directive 2011/61/EU. The information communicated to the CSSF in this regard should be strictly limited to the said specific information and sent to the following email address: email@example.com.
- In their communication to the CSSF, Luxembourg-based AIFMs should also clearly indicate where the said specific information has been disclosed to investors. Any future updates in this regard should be communicated to the CSSF in due time via the email address firstname.lastname@example.org indicated above.
- The same procedure applies to Luxembourg-based managers registered by the CSSF in accordance with the Regulation (EU) No 345/2013 or No 346/2013.
- Necessary updates in the prospectus of existing Luxembourg ELTIFs will be swiftly handled on a case by case basis.
- The above requirements also apply to AIFs managed by a Luxembourg-based registered AIFM referred to in Article 3(2) of the AIFM Law
- All Luxembourg-based AIFs managed by an AIFM not authorised or registered by the CSSF, should apply the requirements imposed by the AIFM’s competent authority.
In relation to pre-contractual disclosures required under SFDR, SFDR Level 1 requirements came into force on 10 March 2021 (please refer to the CSSF Communiqué dated 16 December 2020), whilst Level 2 requirements are to apply at a later date. In this context, the European Insurance and Occupational Pensions Authority (EIOPA), the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) jointly submitted to the European Commission draft regulatory technical standards (“RTS”) under Articles 8(4), 9(6) and 11(5) of the Sustainable Finance Disclosure Regulation 2019/2088 (JC 2021 50) on 22 October 2021. While the CSSF understands that it is currently being envisaged to defer the date of application of those RTS to 1 January 2023, it encourages financial market participants to use, already as of now, for disclosure purposes the new pre-contractual and periodic product information templates that have been provided in these draft RTS dated 22 October 2021. The different sections of these templates should be completed as far as possible and on a best effort basis during the transitional period.
Footnote 1. Practically, the professional duly appointed to submit the updated UCITS prospectus version for visa stamping by the CSSF must upload the updated UCITS prospectus version for visa stamping in clean version, in accordance with Circular CSSF 19/708 relating to the electronic transmission of documents to the CSSF alongside (for UCITS only) with the TR confirmation letter duly filled out and merged with the updated UCITS prospectus in track change version. Where a notice is foreseen to inform investors on the UCITS prospectus update, this notice shall also be uploaded and submitted as letter. Further technical details are available in the TR confirmation letter.