The CSSF issued communications, respectively on 27 July and 6 September 2022, to the investment fund industry relating to (i) the regulatory requirements concerning Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”) and the upcoming entry into force of SFDR Level 2 provisions (the “SFDR RTS”), and (ii) the SFDR RTS confirmation letter.

The SFDR RTS requires financial market participants to present by 1 January 2023, for financial products subject to Articles 8 and 9 of SFDR, precontractual and periodic disclosure information in the format of templates set out in the annexes of the SFDR RTS. A fast-track procedure relating to the visa stamp of the issuing documents is now available concerning articles 8 and 9 regulated funds, in other words, UCITS and regulated AIFs (alternative investment funds).

As a reminder, the SFDR RTS also precise mandatory website product disclosure requirements applicable to financial market participants through the need for a separate website section titled, ’Sustainability-related disclosures’. Regulation (EU) 2020/852 of 18 June 2020, on the establishment of a framework to facilitate sustainable investments (the “Taxonomy Regulation”) requires financial market participants, for those financial products subject to Articles 8 and 9 of SFDR, to provide by January 1, 2023, for transparency in pre-contractual documents and periodic reports concerning the environmental objectives referred to in Article 9, points (c) to (f) of the Taxonomy Regulation.

Q.1 What is the fast track process relating to SFDR RTS?

The CSSF expects to receive the updated pre-contractual documents by October 31, 2022, at the latest, for financial market participants who have not yet submitted to the CSSF the required updates to the issuing documents of UCITS and/or regulated AIFs under the SFDR RTS and the Taxonomy Regulation. If submissions following the filing procedure in Q.3 are compliant and received by the CSSF by 31 October 2022, the CSSF will endeavour to release the visa stamp before 31 December 2022.

Q.2 What are the conditions?

The CSSF will give priority for visa stamping to the issuing documents and may release the visa stamp before 31 December 2022, if the following conditions are fulfilled:
– changes made to the pre-contractual documents are limited to the insertion of the templates according to the annexes of SFDR RTS and that for all the sub-funds subject to Article 8 or 9 SFDR;
– the updated filed prospectus is accompanied by the RTS confirmation letter and the related table, duly filled in and signed by authorised persons; and
– any other changes made apart from changes made about the insertion of the standardised annexes pursuant to SFDR RTS must be minor, of editorial nature only and not entail a material change for investors.

Moreover, on an indicative basis, the precontractual and periodic disclosure templates shall not be amended except as foreseen under Article 2 of the SFDR RTS, i.e. the size and font type of characters and the colours. If a financial market participant deems sections of the pre-contractual or periodic template not relevant for a given fund or sub-fund/compartment, those sections shall still be maintained in the precontractual and periodic disclosure template and shown as being not applicable.

Where a notice is foreseen to inform investors of an update of the issuing documents, this notice shall also be uploaded and submitted to the CSSF. Regarding UCITS, the RTS confirmation letter shall be duly filled out and merged with the prospectus in the track change version.

Q.3 What is the procedure?

– Each duly updated UCITS prospectus, including only the sustainability-related disclosure changes, should be filed for visa stamp with an accompanying RTS confirmation letter. A template of the RTS confirmation letter is now available for UCITS from 6 September 2022.

– Each AIF regulated by the CSSF, which, on the basis of Article 6(3) of SFDR, is obliged or intends to publish the pre-contractual disclosure templates in an annexe to its issuing document, shall submit the issuing document to the CSSF within the set deadline. The RTS confirmation letter template for regulated AIFs is now available from 6 September 2022.

The updated pre-contractual documents for visa stamping shall be filed electronically with the CSSF under the provisions set out in Circular CSSF 19/708 relating to the electronic transmission of documents to the CSSF.

Finally, after submission for examination, the CSSF may ask for prompt clarification or confirmation, if needed, with potential reiteration until completion and consent on disclosures to be inserted. Thus, obtaining the visa stamp may also depend on the ability of the applicant to communicate relevant information requested by the CSSF after the first submission of the updated version of the issuing document including the templates, the RTS confirmation letter, and the related table.

Please feel free to contact our investment management team concerning the update of your issuing documents and completion and filing of the RTS confirmation letter and the relevant annexes pursuant to SFDR RTS.