Prior to SFDR changes, the Central Bank of Ireland will expedite the approval of fund updates

In order to accommodate investment managers' preparations for SFDR level 2 compliance, the Central Bank of Ireland (CBI) is expediting the clearance procedure for revisions to fund documentation.

The European Supervisory Authorities (ESAs) requested clarification from the European Commission last month as asset managers rushed to modify their fund papers in time for the deadline.

The European Commission has not yet provided answers to its questions.

Due to the degree of difficulty in the regulation, the European Union postponed the implementation of the second phase of SFDR by six months last year.

Partner Gayle Bowen of the legal firm Pinsent Masons stated: "Managers now need to prepare for the December deadline as a matter of urgency. The Central Bank has indicated that it will conduct inspections of disclosures and will expect managers to have considered and adopted the Level 2 measures. "

Any assertions made in a fund's offering materials must be able to stand on their own.

By December 1st, asset managers must submit revisions to the central bank. In January, the SFDR will be upgraded to the following level.

ESA has questions about how businesses that do not specify how revenues are used would be treated in accordance with the SFDR's Article 2 definition of "sustainable investments."

Companies are required to report on 18 obligatory principle adverse impacts and optional areas on hazards to a product's value owing to environmental harm under Level 2 obligations.

By fLEXI tEAM