MFSA issues Circular on the implementation of the Sustainable Finance Disclosure Regulation (‘SFDR’)

The MFSA has, on the 9 February 2021, issued a circular on the implementation of the SFDR and the process which it will implement for the submission of offering documents of locally based collective investment schemes which must be updated in line with the SFDR requirements.

The SFDR provides that financial market participants, which include alternative investment fund managers, UCITS management companies and investment firms or credit institutions providing portfolio management under MiFID II are required, to make pre-contractual and ongoing disclosures to investors regarding the integration of sustainability risks and impacts of adverse sustainability as well as the promotion of ESG characteristics and sustainable investments wherever applicable. It is important to note that such obligations apply to all financial market participants, irrespective of whether they offer products that promote ESG characteristics or have sustainable investment objectives.

The MFSA has informed the industry that it has established a fast-track filing process for the submission of offering documents which are updated in line with the SFDR. Through this process, UCITS Management Companies, AIFMs and MiFID II investment firms which manage PIF structures by way of delegation, will be able to ‘self-certify’ their compliance with SFDR and notify the MFSA accordingly.

The circular also lists the documentation which must be filed with the MFSA together with the updated offering documents and highlights that submissions are to be made by no later than 10 March 2021. Submissions made after the 3 March 2021 will be processed on a best-effort basis by the MFSA before the SFDR deadline.

To read the MFSA circular, please click here.

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