Regulator in Quebec Issues Guidance on ESG Disclosures by Funds
AMF, the financial regulator of Quebec announced that the Canadian Securities Administrators (CSA) published guidance on the disclosure practices of investment funds, whose investment objectives reference environmental, social, and governance (ESG) factors and other funds that use ESG strategies (also called ESG-related funds). The guidance is based on existing regulatory requirements and addresses areas of disclosure, including investment objectives, fund names, investment strategies, risk disclosure, continuous disclosure, and sales communications.
The guidance follows the CSA Roundtable on ESG-related regulatory issues in asset management, which was held on September 27, 2021. The guidance document is intended to
- provide an overview of common ESG-related terms and strategies.
- briefly summarize key international and domestic developments in this area, including the recommendations from the IOSCO Report relating to investment product-level disclosure.
- provide relevant and practical guidance for investment funds, particularly ESG-related funds and their IFMs to enhance the ESG-related aspects of the funds’ regulatory disclosure documents and ensure that the sales communications of such funds are not untrue or misleading and are consistent with the funds’ regulatory offering documents.
The guidance also aims to prevent “greenwashing,” whereby a fund’s disclosure or marketing intentionally or inadvertently misleads investors about the ESG-related aspects of the fund. The guidance will help prevent greenwashing by allowing investors to monitor the fund’s ESG performance and, therefore, evaluate the fund’s progress in terms of meeting its ESG-related investment objectives. CSA continues to monitor the ESG-related disclosure of funds, as part of its ongoing continuous disclosure review program.
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Keywords: Americas, Canada, Banking, Securities, IOSCO, CSA, Disclosures, ESG, Investment Funds, Sustainable Finance, Quebec, AMF
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