ESG - Taxonomy Disclosures : Luxembourg Fast-Track Procedure

On the 2 December 2021, the CSSF has implemented a fast-track procedure pushing further the application of Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investments (the Taxonomy Regulation) and amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR).

What has the CSSF just published?

The Commission de Surveillance du Secteur Financier (the CSSF) has just published a press release implementing a Taxonomy fast-track procedure (the TR FastTrack Procedure) for management companies of undertakings for collective investment in transferable securities (the UCITS ManCos) and for alternative investment fund managers (the AIFMs, together with the UCITS ManCos, the Fund Managers) to facilitate the CSSF filings of Taxonomy updated prospectuses issuing documents to the CSSF.

Indeed, in accordance with the Taxonomy Regulation, financial market participants for financial products subject to Articles 8 and 9 of SFDR are required 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.

Fund Managers, which are impacted by this deadline of 1 January 2022 and which have not yet submitted to the CSSF the required updates to the pre-contractual documents of undertakings for collective investment in transferable securities (UCITS) and/or alternative investment funds (AIFs) in accordance with Taxonomy Regulation Articles 5, 6 and 7, must submit the updated pre-contractual documents of the UCITS/AIFs they have under management to the CSSF via the TR FastTrack Procedure.

How to benefit from this TR FastTrack Procedure?

The TR FastTrack Procedure can be used only for updates reflecting the changes required under the Taxonomy Regulation which itself depends on the SFDR categorisation regime as reflected below:

The application of the TR FastTrack Procedure further depends of the type of investment structures concerned by this filing which is summarized below:

TR FastTrack Procedures for UCITS

Each updated UCITS prospectus submitted for visa stamp will have to be accompanied by a confirmation letter. The CSSF provides a template of the confirmation letter in relation to UCITS in this link. The CSSF specified that, 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.

TR FastTrack Procedures for 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 said specification has to be sent to the following email address: opc@cssf.lu.

• 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 indicated above.

• The above requirements also apply to AIFs managed by a Luxembourg registered AIFM.

EuVCAs & EuSEEs

The same procedure applies to European Venture Capital Funds (EuVECA) subject to Regulation (EU) No 345/2013 and European Social Entrepreneurship Funds (EuSEF) subject to Regulation (EU) No 346/2013.

ELTIFs

The CSSF has indicated that necessary updates in the prospectus of existing Luxembourg European Long-Term Investment Funds (ELTIFs) subject to Regulation (EU) 2015/760 will be handled swiftly by the regulator on a case-by-case basis.

For further information, please don’t hesitate to reach out to our asset management & investment funds team in Luxembourg.