In accordance with the fourth subparagraphs of Articles 10 (1) of Regulations (EU) Nos 1093, 1094 and 1095/2010, the Commission informs the European Parliament and the Council that those draft regulatory technical standards could not be adopted by the Commission within . Speed Read Under SFDR, the European Supervisory Authorities (ESAs) have been mandated to develop various Level 2 measures, to take the form of Regulatory Technical Standards (RTS). the EBA, ESMA and EIOPA) in their . The European Commission has announced that it is delaying the applicability date of certain requirements of Regulation 2019/2088 on sustainability -related disclosures for the financial services sector (the "SFDR") . being maintained as laid down by the SFDR with effect from 2021, notwithstanding that the timetable for responding to the ESAs' joint consultation on ESG disclosures will not permit RTS to be developed by the ESAs by the original target date of 30 December 2020. In this welcome development for the industry, we examine the priority issues which the SFDR Q&A addresses. Third-party ESG-related industry standards will need to be reviewed as they get updated to align with the EU SFDR and the EU Taxonomy Regulation. The European Commission's proposal extends the scope of NFRD requirements to include all large companies, whether they are listed or not, without the previous 500-employee threshold. The European Commission has announced that the second part of the Sustainable Finance Disclosure Regulation (SFDR) will likely be delayed by another six months and adopted from 1 January, 2023. On 26 July 2021, the European Commission published a set of long-awaited Q&A guidance on the EU Sustainable Finance Disclosure Regulation (SFDR). The European Commission has once again delayed the second phase of the Sustainable Finance Disclosure Regulation (SFDR) by half a year to July 2022 due to "length and technicalities" involved in the directive.. 03.08.2021 EU law. 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. Finally, the European Commission has published in June 2020 draft amendments to the MiFID2, AIFMD and UCITS regimes, which focus on the integration of sustainability into existing organisational rules and conduct of business rules under the three regimes (the "Delegated Acts"). Our comparison . Fund Management Reporting. As reported by Reuters, in a letter to the European Parliament, we understand that the European Commission's Head of Financial Services Unit, John Berrigan, stated that the application of the Regulatory Technical Standards (RTS) to SFDR will be delayed by a further 6 months (1 July 2022) in order to avoid a last minute rush by financial market participants to comply with the detailed RTS. The five priority areas identified by the ESAs are: Key takeaways for fund managers are: Non-EU managers: CREDIT RATING AGENCIES. On 26 July 2021, the European Commission published a Q&A clarifying the application and implementation of the Sustainable Finance Disclosures Regulation ( SFDR ). On 4 February 2021, the ESAs published their final report on a draft RTS. This Update covers answers to questions that relate to some key areas of legal uncertainty under SFDR. To access this article please sign-in below or register for a free one-month trial. In accordance with the fourth subparagraphs of Articles 10 (1) of Regulations (EU) Nos 1093, 1094 and 1095/2010, the Commission informs the European Parliament and the Council that those draft regulatory technical standards could not be adopted by the Commission within . The plan is to bundle all RTSs in a single delegated act to be published at the end of 2021. The European Commission has published its long-awaited responses to questions raised by the European Supervisory Authorities in January this year. European Commission publishes SFDR Q&A Earlier this week, the European Commission issued a decision, annexed to which was a Q&A document which provides answers to questions raised by the ESAs on the interpretation of certain provisions of Regulation (EU) 2019/2088 (SFDR) in a letter dated 7 January 2021 (Commission Q&A). On 26 July 2021, the European Commission published a set of long-awaited Q&A guidance on the EU Sustainable Finance Disclosure Regulation (SFDR). In a letter dated 25 November 2021, 1 the European Commission's Director-General for Financial Stability, Financial Services and Capital Markets Union (the Director-General) confirmed that the date of application of the regulatory technical standards (RTS) under the Sustainable Finance Disclosure Regulation (SFDR) 2 will be deferred by a further six months to 1 January 2023. The European Commission announced yesterday that the single delegated act which will include the Regulatory Technical Standards . On 23 July 2021, the European Commission published a letter (dated 8 July 2021) to the European Economic and Financial Affairs Council (ECOFIN) and the Council of the EU, confirming that the RTS application date, under the Sustainable Finance Disclosure Regulation ( (EU) 2019/2088) (SFDR), has been delayed until 1 July 2022. Deferral of SFDR RTS. The main provisions of the SFDR have been applicable as of 10 March 2021, with a statutory instrument known as a Delegated Act containing more precise disclosure standards yet to be adopted by the European Commission. The European Commission's Sustainable Finance Action Plan (the "Action Plan") proposed a package of measures including, amongst other initiatives, a regulation imposing sustainability-related disclosures on financial market participants ("SFDR") and a regulation to establish an EU-wide common language (or taxonomy) to identify the extent to which economic activities can be considered . To do this, the European Commission made major strides towards standardizing ESG terminology, reporting, and disclosures with the development of the Sustainable Finance Disclosure Regulation (SFDR), a core pillar of the Commission's flagship Sustainable Finance Action Plan. The draft RTS relate to several disclosure obligations under the SFDR regarding the publication of: The six-month postponement was due to the "length and technical detail" of the directive, according to a letter to the Council of the European Union from the European Commission . On 26 July 2021, the European Commission published its long-awaited Q&A on the EU Sustainable Finance Disclosure Regulation (SFDR), in response to queries raised by the European Supervisory Authorities (ESAs) (i.e. (the RTS)2 - this is now being considered by the European Commission. These Joint Committee draft Regulatory Technical Standards (RTS) on ESG disclosures have been developed by the three European Supervisory Authorities (EBA, EIOPA and ESMA) under the EU Regulation on sustainability-related disclosures in the financial services sector Regulation (SFDR), which aims to strengthen protection for end-investors and improve the disclosures that they receive from a . As part of action 9 of the action plan - on strengthening sustainability disclosure - the European Commission followed through on this action in May 2018 with a proposal for a regulation on disclosures relating to . The Taxonomy Regulation tasks the Commission with establishing the actual list of environmentally sustainable activities by defining technical screening criteria for each . Benchmarks. The European Commission has published its reply to the European Supervisory Authorities letter seeking clarity on certain priority issues on sustainability related disclosures in the financial services sector ("SFDR"). The new Sustainable Finance Disclosure Regulation 1 (SFDR) introduced various disclosure-related requirements for financial market participants and financial advisors at entity, service and product level. The SFDR provides both guidelines for reporting on the entity level (i.e. On 26 July 2021, the European Commission published a set of long-awaited Q&A guidance on the EU Sustainable Finance Disclosure Regulation (SFDR). In the letter, John Berrigan, director general for the Commission's financial services division, told the European Parliament and Council that . The SFDR contain s principles-based requirements ("Level 1 requirements") that will be supplemented European Commission postpones SFDR Level 2 Measures until 1 January 2023. the investor), which went into force in May 2021, and the product level (i.e. The SFDR and the Delegated Acts are mutually reinforcing; European Commission publishes SFDR Q&A Earlier this week, the European Commission issued a decision, annexed to which was a Q&A document which provides answers to questions raised by the ESAs on the interpretation of certain provisions of Regulation (EU) 2019/2088 (SFDR) in a letter dated 7 January 2021 (Commission Q&A). The European Commission (the Commission) has notified the European Parliament and the European Council of a further 6 month delay to the application . The EU Commission has informed the European Parliament and Council that it intends to incorporate all the SFDR RTS, meaning the SFDR RTS submitted to the EU Commission in February 2021 as well as . The European Commission (the "Commission") recently issued long-awaited answers to questions raised by the European Supervisory Authorities earlier this year on the Regulation on Sustainability-related Disclosures in the Financial Sector ("SFDR"). In the meantime, on 15 March 2021, the ESAs published for consultation a new draft RTS for SFDR and the Taxonomy Regulation, A brief recap - ESAs' letter to the EU Commission January 2021. The application of the RTS had already been delayed from 1 January . Developments driven by the European Commission will need to be reviewed, particularly the Commission's focus on a potential social taxonomy and an extended environmental taxonomy. In light of this, on 23 April 2020 the three European Supervisory Authorities launched a joint public consultation on draft regulatory . The Commission has emphasised in its covering letter to the Guidance that its intention is only to clarify the application or implementation of SFDR. On 8 July 2021, the European Commission released the news that implementation of level 2 of the SFDR, also known as the Regulatory Technical Standards (RTS), was to be pushed out until 1 July next year. "Due to the length and technical detail of those 13 regulatory technical standards, the time of the submissions to the Commission, and to facilitate the . By a way of response to this request, on 26 July 2021 the European Commission has published its Q&A on the . Equivalence. The objective of Zeidler's summary and analysis is to help firms understand which areas have been clarified and which remain uncertain. SFDR Principles explained: New RTS provides guidance on key issues 1. Contents. On 7 January 2021 - less than eight weeks before the Sustainable Finance Disclosure Regulation (SFDR) 1 'go live' date - the . European Commission Rue de Spa 2 1000 Brussels Belgium JC 2021 02 7 January 2021 Ref: Priority issues relating to SFDR application Dear Mr Berrigan, I am writing to you as Chair of the Joint Committee of the European Supervisory Authorities (ESAs). In January 2021, the ESAs have requested some clarification from the European Commission with respect to several priority issues under SFDR that have been seen as major areas of concern for the industry and the regulators across the EU. Notwithstanding the global crisis unfolding, the European Commission reaffirmed its position that the SFDR should be implemented as at March 10 2021, citing the central importance of sustainable finance to the European economy. The European Commission has sent a letter to the European Parliament and the Council of the EU announcing a delay to the date of application of regulatory technical standards (RTS) under the Sustainable Finance Disclosure Regulation (SFDR). July 9, 2021: The European Commission asks the European Parliament for delay of the application of the SFDR Level 2 RTS until 1 July 2022. The European Commission will defer by six months the application date of detailed rules for requirements under the sustainable finance disclosure regulation (SFDR), according to a letter seen by IPE. EU - SFDR European Commission is expected to publish an EU Taxonomy Delegated Act toward the end of 2021; the act is expected to clarify which The expected application date for the SFDR single rulebook is January 2023. The Joint Committee of the European Supervisory Authorities (the body responsible for preparing the draft Level 2 measures under SFDR and submitting them to the European Commission for consideration) has written to the Commission seeking 'urgent clarification' on a number of key issues where the Level 1 text of the SFDR is somewhat ambiguous. Analytical cookies help us improve our website by providing insight on how visitors interact with our site, and necessary cookies which the website needs to function properly. 4. CORPORATE DISCLOSURE. The ESAs published on 23 July 2021 a letter sent by the European Commission on 8 July 2021 to the European Parliament and Council announcing that it intends to bundle all 13 RTS under SFDR into a single delegated act and to defer the application of 1 January 2022 by six months to 1 July 2022. Regulation on sustainability-related disclosure in the financial services sector. SFDR - Sustainable Finance Disclosure Regulation. The six-month postponement was announced in a letter to the Council of the European Union from the European Commission, dated 25 November, due to the "length and technical detail" of the directive. The European Commission will defer by six months the application date of detailed rules for requirements under the sustainable finance disclosure regulation (SFDR), according to a letter seen by IPE. . The European Commission found in an assessment of 344 "seemingly dubious claims" on the environment that nearly half (43%) were false or deceptive and 37% included purposely vague and misleading statements like "eco-friendly" and "sustainable". the fund). The EU Commission has informed the European Parliament and Council that it intends to incorporate all the SFDR RTS, meaning the SFDR RTS submitted to the EU Commission in February 2021 as well as the October Taxonomy RTS, in one instrument. During the course of the work on the draft regulatory technical standards under Regulation (EU) 8 The ESAs have stated that the detailed requirements in the RTS, once approved and adopted by the European Commission, should apply from 1 January 2022. The key disclosure requirements under SFDR (i.e., the Level 1 text) will apply in the EU from 10 March 2021, as previously stated by the European Commission. The Commission put forward the action plan on financing sustainable growth in March 2018. Analytical cookies help us improve our website by providing insight on how visitors interact with our site, and necessary cookies which the website needs to function properly. Not only will the SFDR help organisations to focus on ESG risks during the investment . In a letter, John Berrigan, deputy director-general for financial stability, financial services and capital markets union at the European Commission, said the delay would ensure a . This follows its . On 26 July 2021, the European Commission published a set of long-awaited Q&A guidance on the EU Sustainable Finance Disclosure Regulation (SFDR). The SFDR is a fundamental pillar of the EU Sustainable Finance agenda, having been introduced by the European Commission as a . SFDR: European Commission revises upcoming implementation deadlines. On 26 July 2021, the European Commission published a set of long-awaited Q&A guidance on the EU Sustainable Finance Disclosure Regulation (SFDR). On 26 July 2021, the European Commission published a set of long-awaited Q&A guidance on the EU Sustainable Finance Disclosure Regulation (SFDR). The European Union has been forced to delay the second phase of landmark rules that require asset managers to show how they take environmental and other issues into account by a further six months . These were initially expected to come into effect on 1 January 2022, but this has been revised as below. The European Commission has decided to push back the implementation of disclosure requirements under the Sustainable Finance Disclosure Regulation (SFDR) related to sustainable investment products by financial market participant to January 2023, its second delay, resulting in application of the rules coming into place a year past the initially planned date. Earlier this week, the European Commission issued a decision, annexed to which was a Q&A document which provides answers to questions raised by the ESAs on the interpretation of certain provisions of Regulation (EU) 2019/2088 ( SFDR) in a letter dated 7 January 2021 ( Commission Q&A ). This website uses cookies. The level 2 technical standards will not apply from The taxonomy regulation empowers the Commission to adopt delegated and implementing acts to specify how competent authorities and market participants shall comply with the obligations laid down in the directive.. SFDR RTS postponed by a further six months until 1 January 2023. The European Commission has again delayed the application of the second phase of the Sustainable Finance Disclosure Regulation (SFDR) rules by six months, to January 2023. The European Commission (the "Commission") recently issued the long-awaited answers to questions raised by the European Supervisory Authorities earlier this year on the Regulation on Sustainability-related Disclosures in the Financial Sector ("SFDR"). European Commission SFDR Q&A Published. Overall the Q&A is not very clearly drafted, and in many cases the Commission has not answered the specific question put to it, responding with just a summary . Working group on euro risk-free rates. Whilst some of the responses are helpful, a number of key points still remain unclear. In response to the uncertainty on various key aspects of SFDR, European financial supervisory authorities (ESAs) have recently requested the European Commission to clarify key areas of uncertainty regarding the scope and application of SFDR. More specific this Directive aligns corporate sustainability reporting with the SFDR and the Taxonomy Regulation. The European Commission . The European Commission followed through on this action in May 2018 with a proposal for a regulation on disclosures relating to sustainable investments and sustainability risks and amending Directive (EU) 2016/2341. On 26 July 2021, the European Commission published a Q&A clarifying the application and implementation of the Sustainable Finance Disclosures Regulation (SFDR).The Q&A was issued in response to the January 2021 'SFDR priority issues' letter from the European Supervisory Authorities' (ESA) which set out a range of questions on the following aspects of the regime: In January 2021, the ESAs issued a request for clarification to the European Commission and by a way of response to this request, on 26 July 2021, the European Commission published its Q&A on SFDR. EC Q&A on sustainability-related disclosures. First published by Irish Funds in their Autumn Newsletter. (17) Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84). The delay refers to […] The guidance was published in response to a request for a clarity by the European Supervisory Authorities on a number of specific points, many of which reflected issues raised by market . In particular, it is not intended to authoritatively interpret EU law (which is the preserve of the Court of Justice of the European Union) or to extend any of the rights or obligations of SFDR, or to introduce any new requirements. European Commission clarifies SFDR Level 1 Requirements. In line with the empowerment in Article 4(6) SFDR, the ESAs also sought input from the Joint Research Centre of the European Commission and the European Environment Agency as referred to in Article 4(6) SFDR. European Union, United Kingdom December 1 2021. The date of application of the October RTS is stated as 1 January 2022, however, the ESAs have noted that . The European Commission (the "Commission") has published a letter dated 25 November 2021 confirming that it is further postponing the application of the regulatory technical standards ("RTS") supplementing the EU Sustainable Finance Disclosure Regulation (EU/2019/2088) ("SFDR"), from 1 July 2022 to 1 January 2023. The European Commission has once again delayed the implementation of the second phase of the Sustainable Finance Disclosure Regulation (SFDR) until January 2023. This letter is the . First reports from asset managers and other in scope firms will therefore be expected by July 2023. This Update covers answers to questions that relate to some key areas of legal uncertainty under SFDR. The SFDR was introduced by the European Commission alongside the Taxonomy Regulation and the Low Carbon Benchmarks Regulation as part of a package of legislative measures arising from the European Commission's Action Plan on Sustainable Finance. The European Commission recognised the delay but nonetheless advocated for compliance by asset managers with SFDR . The European Commission has once again delayed the implementation of the second phase of the Sustainable Finance Disclosure Regulation (SFDR) until January 2023.. The 9 Therefore, although the RTS is . The guidance was published in response to a request for a clarity by the European Supervisory Authorities on a number of specific points, many of which reflected issues raised by market . This follows its . . ESMA, EBA and EIOPA).. This website uses cookies. As part of the European Commission's Action Plan on Sustainable Finance, the Sustainable Finance Disclosure Regulation (SFDR) aims to increase transparency to investors about financial products with sustainable objectives. This change broadens the scope of entities from 11,600 to 49,000 and means that all large companies are publicly accountable for their impact on people and the . FUND MANAGEMENT. In the letter, John Berrigan, director general for the Commission's financial services division, told the European Parliament and Council that . On 26 July 2021, the European Commission published a Q&A clarifying the application and implementation of the Sustainable Finance Disclosures Regulation (SFDR).The Q&A was issued in response to the January 2021 'SFDR priority issues' letter from the European Supervisory Authorities' (ESA) which set out a range of questions on the following aspects of the . The Commission has now deferred implementation of the SFDR RTS to 1 January 2023. Contents. The Deputy Director-General of the European Commission has announced in a letter that the application date of the RTS under the Sustainable Finance Disclosure Regulation (SFDR) has been delayed by a further six months to 1 January 2023. On 6 July 2021 the European Commission adopted the much-awaited decision C (2021) 4858 final (the "Decision") which provides, in its annex, very useful answers to the questions raised by the European Supervisory Authorities (i.e. Article 4 of the Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability related disclosures in the financial services sector Of these recent regulations, the Sustainability Related Financial Disclosure Regulation (SFDR) is the closest to being applied and will European Commission SFDR Q&A Published. And in that same week, the first Delegated Act supplementing Article 8 of the Taxonomy Regulation was adopted by the Commission too. Market Abuse. European Commission postpones SFDR Level 2 Measures until 1 January 2023. European Union: European Commission Publishes SFDR Q&A. The proposal was adopted as part of the sustainable finance package. The European Commission has decided to push back the implementation of disclosure requirements under the Sustainable Finance Disclosure Regulation (SFDR) related to sustainable investment products by financial market participant to January 2023, its second delay, resulting in application of the rules coming into place a year past the initially planned date. The guidance was published in response to a request for a clarity by the European Supervisory . On 7 January 2021, the Joint Committee of the European Supervisory Authorities (ESAs) sent a priority issues letter to the European Commission regarding the application of the Sustainable Finance Disclosure Regulation (SFDR, link).During the course of the work on the draft regulatory technical standards under the SFDR, the ESAs have encountered several important areas of uncertainty in the . The Q&A was issued in response to the January 2021 ' SFDR priority issues ' letter .