Global Trustee and Fiduciary Services Bite-Sized Issue 8 2024

11 QUICK LINKS AIFMD CBDC CRYPTOASSETS CSDR FINTECH FSB FUND LIQUIDITY MAR MIFID II/MIFIR OPERATIONAL RESILIENCE REMUNERATION SUSTAINABLE FINANCE/ ESG UCITS ASIA PACIFIC EUROPE IRELAND NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 8 | 2024 ESAs: Updated Q&As on SFDR and SFDR Delegated Regulation On 25 July 2024, the European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) published updated consolidated questions and answers (Q&As) on the Sustainable Finance Disclosures Regulation (SFDR) and the SFDR Delegated Regulation. The updated Q&As cover: • Scope issues; – QA4: An AIFM should maintain a website to comply with Art. 10; – QA5: Disclosures under SFDR cannot override behavioural obligations in other EU legislation. • PAI disclosures; – QA26: A company is considered to be active in the fossil fuel sector as soon as it derives any revenues from any of the activities mentioned in the definition; – QA27: The calculation of energy consumption intensity should be performed so that each high impact sector is aggregated and disclosed separately; – QA28: In converting values to EUR financial market participants should use the exchange rate at the end of the fiscal year end for all the reference points; – QA29: Financial market participants (e.g. UCITS) aggregating the adverse impact of their products should use a look-through approach to the investee companies causing the GHG emissions. • Financial product disclosures; – QA20: How to calculate the share of sustainable investment that qualify as environmentally sustainable under the EU Taxonomy; – QA21: How financial products measure sustainable investments at economic activity and investment level. – QA22: Where a financial product invests in other financial products it should look through to the underlying investments to consider the adverse impacts arising; – QA23: Delegation does not affect the financial market participants (FMPs) responsibilities under SFDR; – QA24: Disclosure of efficient portfolio management and money market fund exposures held by UCITS; – QA25: The disclosures applicable to financial products in the SFDR Delegated Regulation also apply equally to financial products that passively track Paris Aligned Benchmarks (PABs) or Climate Transition Benchmarks (CTBs). – QA26: ESAs expect FMPs to publish the information referred to in Article 10(1)(c)-(d) by publishing the templates in Annexes II-V of the SFDR Delegated Regulation. – QA27: SPVs or holding companies whose purpose is to hold real assets like cars or real estate, would be considered investee companies for which good governance checks would not have to be undertaken; – QA28: Financial products that apply the exact same requirements as those applicable to PABs or CTBs can be used by the FMP to explain how the continued effort of attaining the objective of reducing carbon emissions is ensured in achieving the objectives of the Paris Agreement. Link to Q&As here