Central Bank of Ireland publishes Markets Update 10 (14 November 2022)

On 14 November 2022, the Central Bank of Ireland (CBI) published Issue 10 of its regular Markets Update, which contained a single item, an information note (the Note) on the implementation of the SFRD and Taxonomy Regulation for Irish regulated firms and other market participants.

Information note on implementation of SFDR and Taxonomy

The Note sets out the findings of the CBI’s “gatekeeper review” of investment fund disclosures, highlighting the CBI’s expectations around the implementation of the EU’s SFDR and Taxonomy Regulation and providing a roadmap for how the CBI will supervise these requirements in the future.

The Note is aimed at informing market participants of the main disclosure issues encountered in the review and outlines risks that the CBI has observed in terms of potential greenwashing. The report also highlights areas of good practice identified and sets out the CBI’s expectations.

Key findings of the CBI’s “gatekeeper review” concern;

• SFDR classification;
• generic sustainability risk and/or taxonomy alignment disclosures;
• quantification of taxonomy-alignment;
• integration of sustainability risks; and
• pre-contractual product disclosures and benchmark indices.

The Note includes a non-exhaustive list of areas of interest that market participants should pay particular attention to as they progress their implementation of SFDR and Taxonomy regulation requirements. This list includes;

• adaption of risk management frameworks;
• article 8 ‘Guardrails’;
• marketing material;
• fees & costs;
• securities lending; and
• fund service providers.

By January 2023 the CBI expects any information provided to investors (via fund documentation, marketing material or otherwise) to be fully aligned with the requirements of SFDR, the Taxonomy Regulation and related available guidance.

For more detail, see our summary of the Note here.