Commission’s SFDR Q&As – key points and implications

On 26 July 2021, the European Commission published a set of questions and answers on SFDR (the Q&As).

These responded to a number of issues of interpretation raised by the European Supervisory Authorities in their letter of 7 January 2021.

The Q&As cover the following broad issues:

• the application of SFDR to

  • registered (sub-threshold) AIFMs

  • non-EU AIFMs marketing an ESG fund in the EU under an NPPR;

• how the SFDR applies in respect of the 500-employee threshold for principal adverse impact reporting on parent undertakings of a large group;

• the application of Article 9 of SFDR;

• the meaning of "promotion" in the context of products promoting environmental or social characteristics; and

• the application of SFDR product rules to portfolios and dedicated funds.

Our client briefing note looks at both what the Commission's answers say and our view of their implications for asset managers.

If you have any questions about the contents of the Note, please contact any of those named in it.