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    EC Publishes Rules on Integration of Sustainability Risks and Factors

    August 02, 2021

    The European Commission published two directives and five delegated regulations on integration of sustainability risks and sustainability factors into governance and activities of various entities. These regulations apply to insurance and reinsurance undertakings, investment firms, Undertakings for Collective Investment in Transferable Securities, and Alternative Investment Fund Managers. The published rules are context of directives such as the revised Markets in Financial Instruments Directive (MiFID II), the Alternative Investment Fund Managers Directive (AIFMD), the Solvency II Directive, and the Insurance Distribution Directive (IDD). The published directives and regulations shall enter into force on the twentieth day following that of their publication in the Official Journal of the European Union.

    In this context, the following directives and regulations have been published:

    • Commission Delegated Directive (EU) 2021/1270 amending Directive 2010/43/EU as regards the sustainability risks and sustainability factors to be taken into account for Undertakings for Collective Investment in Transferable Securities. Member states shall adopt and publish, by July 31, 2022 at the latest, the laws, regulations, and administrative provisions necessary to comply with this Directive. They shall apply those measures from August 01, 2022.
    • Commission Delegated Directive (EU) 2021/1269 amending Delegated Directive (EU) 2017/593 as regards the integration of sustainability factors into the product governance obligations. Member states shall adopt and publish, by August 21, 2022 at the latest, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall apply those provisions from November 22, 2022.
    • Commission Delegated Regulation (EU) 2021/1256 amending Delegated Regulation (EU) 2015/35 as regards the integration of sustainability risks in the governance of insurance and reinsurance undertakings. It shall apply from August 02, 2022.
    • Commission Delegated Regulation (EU) 2021/1257 amending Delegated Regulations (EU) 2017/2358 and (EU) 2017/2359 as regards the integration of sustainability factors, risks and preferences into the product oversight and governance requirements for insurance undertakings and insurance distributors and into the rules on conduct of business and investment advice for insurance-based investment products. It shall apply from August 02, 2022.
    • Commission Delegated Regulation (EU) 2021/1254 correcting Delegated Regulation (EU) 2017/565 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organizational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive. This Regulation shall be binding in its entirety and directly applicable in all Member States.
    • Commission Delegated Regulation (EU) 2021/1253 amending Delegated Regulation (EU) 2017/565 as regards the integration of sustainability factors, risks, and preferences into certain organizational requirements and operating conditions for investment firms. It shall apply from August 02, 2022.
    • Commission Delegated Regulation (EU) 2021/1255 amending Delegated Regulation (EU) No 231/2013 as regards the sustainability risks and sustainability factors to be taken into account by Alternative Investment Fund Managers. It shall apply from August 02, 2022.

     

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    Effective Date: August 22, 2021

    Keywords: Europe, EU, Insurance, Securities, Investment Firms, Solvency II, Insurance Distribution Directive, MiFID II, AIFMD, UCITS, ESG, Sustainable Finance, Governance, EC

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