CSSF communication on the upcoming entry of SFDR RTS

On the 27th July 2022, the CSSF issued a press release on regulatory requirements relating to Regulation (EU) 2019/2088 of 27 November 2019 on sustainability-related disclosures in the financial services sector (SFDR) and the entry into force of the Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 with regard to regulatory technical standards (SFDR RTS or SFDR Level 2 Provisions).

What has the CSSF published?

The Commission de Surveillance du Secteur Financier (CSSF) has published a press release on regulatory requirements in relation to SFDR and upcoming entry into force of SFDR Level 2 Provisions, regarding specific updates of pre-contractual and periodic documents of undertakings for collective investment in transferable securities (UCITS) and alternative investment funds (AIFs and together with UCITS, Funds).

Deadline

The SFDR Level 2 Provisions require alternative investment fund managers (AIFMs) and UCITS management companies (UCITS Mancos, together with AIFMs, Fund Managers) to present by the 1st January 2023, for Funds subject to Articles 8 and 9 of the SFDR, precontractual and periodic disclosure information in the format of templates provided in the annexes of the SFDR RTS.

The SFDR RTS further requires mandatory website product disclosure to be displayed in a separate website section titled ‘Sustainability-related disclosures’ by Fund Managers.

Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investments (EU Taxonomy) requires Fund Managers, for Funds subject to Articles 8 and 9 of SFDR, to provide precontractual documents and periodic reports in regards to the environmental objectives referred to in Article 9 of the EU Taxonomy, by the 1st January 2023.

Requirements for the filing of precontractual documents and periodic reports with the CSSF

Precontractual documents

The CSSF requires Fund Managers, which have not submitted the required updates to prospectus/issuing documents of UCITS and/or AIFs in accordance with the provisions of the SFDR RTS and the EU Taxonomy, to submit their updated precontractual documents by the 31st October 2022 at the latest.

• The CSSF will give priority for visa-stamping to prospectuses of UCITS in which updates are limited to the sustainability related disclosure changes indicated above.
• Provided these submissions follow the filing procedure set out below and are complete, compliant and received by the CSSF by 31 October 2022, the CSSF will endeavour to release the visa stamp prior to the 31st December 2022.

In this context, UCITS will need to follow the following procedure: each duly updated UCITS prospectus, including only the sustainability related disclosure changes, should be filed for visa stamp by 31 October 2022 at the latest with and accompanying RTS confirmation letter. A template of the said RTS confirmation letter will be made available shortly by the CSSF.

The updated precontractual documents for visa stamping must be electronically filed with the CSSF.

Periodic reports
In its press release, the CSSF indicates that annual reports of UCITS and AIFs issued as of 1 January 2023, (whether AIFs are managed by a registered or an authorised AIFM) must comply with the product disclosure requirements in periodic reports laid down in article 11 of the SFDR and clarified further by the SFDR RTS, by using the mandatory templates.

The CSSF also highlights that Luxembourg domiciled UCITS ManCos and authorised AIFMs must ensure that the annual reports of the managed UCITS and AIFs domiciled in other jurisdictions than Luxembourg, comply with the periodic disclosure requirements laid down in the SFDR and SFDR RTS.
These annual reports must be electronically filed with the CSSF.

Additional Guidance

For both precontractual documents and periodic reports, the CSSF expects to receive a dedicated precontractual and periodic disclosure template for each sub-fund/compartment.

The precontractual and periodic disclosure templates shall not be amended except as foreseen under Article 2 of the SFDR RTS (i.e. the size and font type of characters and the colours).

In the event that a Fund Manager deems sections of the precontractual or periodic template not to be relevant for a given fund or sub-fund/compartment, those sections must still be maintained in the pre-contractual and periodic disclosure template and shown as being not applicable to the given fund or sub-fund/compartment.

The CSSF expects Fund Managers to present the required precontractual and periodic disclosure information exclusively in the dedicated templates, with the exception of disclosure items required under the SFDR and not foreseen to be disclosed in the templates.

Data collection exercise

The CSSF indicates in its press release that it intends to launch, in the near future, a dedicated data collection exercise to digitally collect the information contained in the precontractual and periodic disclosure templates by covering also AIFs managed by a Luxembourg based AIFM, which were not concerned by the filing procedure outlined above. Information on timing and practical procedure of data collection will be communicated by the CSSF at a later stage.