In a letter to ESAs, EC addressed the application of Regulation 2019/2088 on the sustainability-related disclosures in the financial services sector and the related technical standards. The co-legislators had agreed in March 2019 on an ambitious timeframe for the Regulation 2019/2088, requiring the joint development by ESAs of most of the draft regulatory technical standards by December 30, 2020 and the application of the provisions of Regulation 2019/2088from March 10, 2021. However, in view of the ongoing pandemic, EC is extending the deadline for public consultation of the draft regulatory technical standards for the application of this regulation. Nevertheless, the application of the regulation is not conditional on the formal adoption and entry into force or application of the regulatory technical standards, as the regulation lays down, at Level 1, the general principles of the sustainability-related disclosures.
With regard to the integration of sustainability risks in the investment decision‐making process, financial market participants must, in accordance with the applicable sectoral legislation, already consider sustainability risks in their internal processes. Regulation 2019/2088 requires transparency in this respect, with no further details necessary in the regulatory technical standards. In relation to the transparency of adverse sustainability impact, numerous financial market participants currently comply with the non-financial reporting requirements under Directive 2013/34/EU or adhere to international standards and might consider using that information. Even without the full regulatory technical standards, no impediments exist to compliance by financial market participants and financial advisers with the Level 1 requirements laid down in Regulation 2019/2088.
Therefore, all application dates are being maintained as laid down by Regulation 2019/2088 with effect from 2021. Thus, financial market participants and financial advisers subject to the regulation will need to comply with its high-level and principle-based requirements from that time. To provide financial market participants and financial advisers adequate time for implementation, the regulatory technical standards will become applicable at a later stage. This will also allow national competent authorities, as designated in accordance with the sectoral legislation referred to in Article 6(3) of Regulation 2019/2088 and in accordance with the Capital Requirements Directive (2013/36/EU), to prepare for the orderly and effective supervision of compliance by financial market participants and financial advisers with the requirements of the framework. EC is ready to coordinate with ESAs and national competent authorities on this approach and a number of trade associations in the financial services sector have indicated that they have initiated targeted actions to assist their membership with implementation.
Keywords: Europe, EU, Banking, Insurance, Securities, ESG, COVID-19, Regulation 2019/2088, Disclosures, Climate Change Risk, Sustainable Finance, CRD, ESAs, EC
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous ArticleEBA Report Examines Quality of TLAC and MREL Instruments in EU
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
ISDA is consulting on the implementation of fallbacks for the sterling LIBOR ICE Swap Rate and for the USD LIBOR ICE Swap Rate.
BIS and BoE launched the BIS Innovation Hub Center in London, which is the fourth new Innovation Hub Centre to be opened in the past two years.
ESRB published recommendations on the reciprocation of macro-prudential measures in Belgium, France, Luxembourg, Norway, and Sweden.
SEC announced that the Office of Information and Regulatory Affairs released the Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions.
EC published the Delegated Regulation 2021/931, which supplements the Capital Requirements Regulation (CRR or Regulation 575/2013) with regard to the regulatory technical standards specifying the method for identifying derivative transactions with one or more than one material risk driver.
BCBS is consulting on preliminary proposals for the prudential treatment of cryptoasset exposures of banks.
EBA issued a revised list of validation rules under the implementing technical standards on supervisory reporting.
BIS Innovation Hub, BDF, and SNB announced that, together with a private-sector consortium led by Accenture, they will conduct an experiment using wholesale central bank digital currency (wCBDC) for cross-border settlement.
ESAs published two amended implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs).