To print this article, all you need is to be registered or login on Mondaq.com.
On 22 March 2024 the Luxembourg regulator (the CSSF) released
its supervisory priorities in the area of sustainable finance,
which are bringing a few insights on the Luxembourg’s
regulator’s priorities in this area.
The CSSF highlighted once again importance of integration of
sustainability and adequate consideration of sustainability risks
in financial strategies as part of a long-term objective towards
more sustainable future. The CSSF is aiming, in support of its
ambition, at fostering a cohesive implementation of the sustainable
finance framework across the financial sector and ensuring the
integration of ESG requirements in the CSSF’s supervisory
practice.
In that respect, the CSSF emphasised that the primary
responsibility of ensuring compliance with applicable requirements
lies with the supervised entities and their board members, who
should ensure that the integration of ESG factors in traditional
governance, risk management and compliance tools is a focal point
within their organisations, and endeavour to make suitable ESG
education a priority for themselves and their personnel.
The CSSF confirmed that it will continue to monitor fund
managers’ compliance with the SFDR, the SFDR RTS and the
Taxonomy Regulation. In doing so, the CSSF will focus on the areas
described hereinafter.
The CSSF expects fund mangers’ organisational arrangements
to take due account of the integration of sustainability risks,
notably in terms of human resources and governance, investment
decision or advice processes, remuneration and risk management
processes and policies and management of conflicts of interest as
required under SFDR.
SFDR, the SFDR RTS and the Taxonomy Regulation lay down
transparency requirements regarding the provision of
sustainability-related information in pre-contractual and periodic
documentation of financial products, and the CSSF will continue to
assess compliance with such requirements. The CSSF will also
continue to assess and verify that sustainability-related
disclosures made are consistent across the fund documentation and
marketing material and verify compliance with product website
disclosures’ requirements.
Most importantly, the CSSF will undertake supervisory actions to
ensure that portfolio holdings reflect the name, the investment
objective, the strategy, and the characteristic displayed in the
documentation to investors.
Finally, the CSSF reminds fund managers that it remains their
responsibility to ensure that the information provided to the CSSF
in the different data collection exercises is being kept up to date
at any point in time. The CSSF will conduct further thematic
on-site inspections on the integration of sustainability-related
provisions in the organisation.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
POPULAR ARTICLES ON: Environment from Luxembourg
#CSSFs #Supervisory #Priorities #Fund #Managers #Area #Sustainable #Finance #Environmental #Law
