EC Issues Amending Regulation Related to SFDR
The European Commission (EC) published a joint statement on the U.S.-EU financial regulatory forum and adopted an amending regulation for certain provisions in the Sustainable Finance Disclosures Regulation (SFDR or Regulation 2022/1288).
Regulation on sustainable disclosures. EC adopted the Delegated Regulation 2023/363 that amends and corrects the regulatory technical standards laid down in the Sustainable Finance Disclosure Regulation or SFDR. These standards are on the content and presentation of information in relation to disclosures in pre-contractual documents and periodic reports for financial products investing in environmentally sustainable economic activities. The SFDR Regulation sets out the details of the content and presentation of the information in relation to the principle of "do no significant harm." It also specifies the content, methodologies, and presentation of information in relation to sustainability indicators and adverse sustainability impacts and the content and presentation of the information to be provided in pre-contractual documents, on website and in periodic reports, in relation to the promotion of environmental or social characteristics and sustainable investment objectives of financial products. This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Union.
Statement on Financial Regulatory Forum. The recent discussion of the EU-U.S. Financial Regulatory Forum, which was held on February 7-8, 2023, centered on six themes for regulatory cooperation: market developments and financial stability risks, sustainable finance and climate-related financial risks, regulatory developments in banking and insurance, operational resilience and digital finance, regulatory and supervisory cooperation in capital markets, and anti-money laundering and countering the financing of terrorism (AML/CFT). With regard to sustainable finance and climate-related financial risks, participants highlighted the progress made on the implementation of the Sustainable Finance Disclosures Regulation (SFDR), the development of European Sustainability Reporting Standards, and the proposal to enhance disclosures on climate risks by issuers and on environmental, social, and governance (ESG) practices by certain funds and investment advisers. The participants agreed to continue the bilateral exchange on sustainability-related disclosures and their engagement in international fora, including on standards being developed by the International Sustainability Standards Board (ISSB). Participants also updated each other on developments related to the implementation of Basel III reforms and shared views on operational resilience, digital finance, and crypto-asset-related issues. with the next Forum meeting expected in the Summer of 2023.
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Keywords: Europe, Americas, US, EU, Banking, Basel, Regtech, Sustainable Finance, ESG, Climate Change Risk, SFDR, Reporting, Disclosures, EC
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