Market-shifting rules are being rolled out in the EU. Irina Stoliarova, senior associate with the law firm GSK Stockmann, outlines the key dates and potential opportunities.<\/p>\n<\/p>\n
What are the top regulatory <\/strong>challenges facing Luxembourg fund firms, in terms of sustainable finance, over the next few years?<\/strong><\/p>\n<\/p>\n The first regulatory challenge, undoubt\u00adedly, is the Sustainable Finance Disclo\u00adsure Regulation, adopted at the end of 2019 and the high-level principle-based requirements of which are applicable as of 10 March 2021. However, the 10 March deadline was just the first step of a long\u00adterm sustainable finance journey and of SFDR implementation. Market players will have to deal over the next years with different levels of its implementation steps.<\/p>\n<\/p>\n It is important to highlight that, as of now, mandatory transparency disclosures have to be complied with by financial market participants only on a best effort basis, given that the level 2 measures-\u00adthe so-called regulatory technical standards (RTS) that provide the detailed technical guidelines on how to imple\u00adment the various requirements in prac\u00adtice–are not yet applicable.<\/p>\n<\/p>\n [At the time of writing,] the draft RTS have not yet been endorsed by the Euro\u00adpean Commission. Initially it was expected that the RTS would be applicable as of 1 January 2022, however, in the begin\u00adning of July, the EU commission announ\u00adced a postponement of SFDR RTS until 1 July 2022.<\/p>\n<\/p>\n Are there other regulatory changes coming?<\/strong><\/p>\n<\/p>\n Another tremendous innovation is defi\u00adnitely the EU Taxonomy Regulation. The taxonomy intends to establish a frame\u00adwork to classify environmentally econom\u00adic activities. The taxonomy is, in principle, a set of rules that is independent from the SFDR However, for the definition of the environmental aspect, the SFDR refers to the Taxonomy Regulation. The taxon\u00adomy also supplements the SFDR and estab\u00adlishes an additional layer of disclosures for the financial products that follow an environmental strategy.<\/p>\n The taxonomy will apply as of 1 Jan\u00aduary 2022 with regard to the first two environmental objectives, climate change mitigation and climate change adapta\u00adtion, and as of 1 January 2023 as regards the other environmental objectives.<\/p>\n<\/p>\n Why is it important to have this taxonomy?<\/strong><\/p>\n<\/p>\n Because, basically, it helps market play\u00aders to understand which activities can potentially be considered as environ\u00admentally sustainable and which are not, by providing additional criteria and fac\u00adtors, which market participants will have to apply or will use as guidance.<\/p>\n<\/p>\n What should Luxembourg fund firms be doing to prepare?<\/strong><\/p>\n<\/p>\n Put in place specific policies and pro\u00adcesses to be efficient from an ESG per\u00adspective. It is also important to hire staff with expertise in this sector and train [them] as necessary.<\/p>\n Data is of great importance and is a key element in this area. Therefore, financial market participants should use the current interim time to identify and try to collect the required data for reporting, required disclosures, and to put in place workflows and teams to deal with this.<\/p>\n<\/p>\n It is nevertheless clear that these rules are here to stay, and that sustainable finance is a long-term trend with significant oppor\u00adtunities for the fund industry. Mitigating the current challenges should therefore be the strategy for fund managers, by get\u00adting familiar with the new rules and tak\u00ading steps to implement them as far as possible. Those that are able to do so in a cost-efficient manner are likely to be those that can benefit from the opportu\u00adnities in terms of performance, growth of assets under management and reputa\u00adtion that sustainable finance products can bring to those players.<\/p>\n<\/p>\n The interview is published in Delano, Issue October 2021 and available as PDF and online<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" Market-shifting rules are being rolled out in the EU. Irina Stoliarova, senior associate with the law firm GSK Stockmann, outlines the key dates and potential opportunities. What are the top regulatory challenges facing Luxembourg fund firms, in terms of sustainable finance, over the next few years? The first regulatory challenge, undoubt\u00adedly, is the Sustainable Finance … Continued<\/a><\/p>\n","protected":false},"author":35,"featured_media":31048,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[630],"tags":[],"ausgabe":[],"class_list":["post-31689","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-media-review"],"acf":{"postdownloads_lux":[{"download_lux":31690,"anzeigetitel_lux":"DOWNLOAD"}],"pressekontakt":{"name":"","email":"","phone":""},"ansprechpartner":[{"anwalt":""}]},"_links":{"self":[{"href":"https:\/\/gsk-lux.com\/en\/wp-json\/wp\/v2\/posts\/31689","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gsk-lux.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gsk-lux.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gsk-lux.com\/en\/wp-json\/wp\/v2\/users\/35"}],"replies":[{"embeddable":true,"href":"https:\/\/gsk-lux.com\/en\/wp-json\/wp\/v2\/comments?post=31689"}],"version-history":[{"count":0,"href":"https:\/\/gsk-lux.com\/en\/wp-json\/wp\/v2\/posts\/31689\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gsk-lux.com\/en\/wp-json\/wp\/v2\/media\/31048"}],"wp:attachment":[{"href":"https:\/\/gsk-lux.com\/en\/wp-json\/wp\/v2\/media?parent=31689"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gsk-lux.com\/en\/wp-json\/wp\/v2\/categories?post=31689"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gsk-lux.com\/en\/wp-json\/wp\/v2\/tags?post=31689"},{"taxonomy":"ausgabe","embeddable":true,"href":"https:\/\/gsk-lux.com\/en\/wp-json\/wp\/v2\/ausgabe?post=31689"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}