CSSF extends submission deadline for SFDR pre-contractual disclosure data collection

The Commission de Surveillance du Secteur Financier (CSSF) has made significant strides in its efforts to enhance transparency regarding sustainability-related information in the financial sector, guided by the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation (TR). A vital part of this initiative is the data collection exercise relating to pre-contractual product disclosure information. In a recent turn of events, the CSSF announced an extension to the initial submission deadline for this exercise.

In its communiqué issued on 27th July 2022, the CSSF announced its intention to launch a data collection exercise related to SFDR and TR. This move was followed up by a communiqué published on 24th March 2023 detailing the launch of the data collection exercise.

Investment fund managers (IFMs) and institutions for occupational retirement provision (IORPs), qualifying as financial market participants (FMPs), were required to include sustainability-related information in the pre-contractual disclosures of financial products in accordance with SFDR, TR, and the SFDR Regulatory Technical Standards (RTS). The aim of this data collection exercise was to collect, in a digital format, information contained in pre-contractual disclosure documents/templates.

A broad range of FMPs were included in the scope of this data collection exercise, covering UCITS management companies, authorized AIFMs, registered AIFMs in relation to all Luxembourg-domiciled regulated AIFs they manage, and IORPs subject to specific laws.The user guide provided clarifications on the content and the format of the information to be reported.

Following discussions with financial market participants, the CSSF recognized the complexities of SFDR reporting and extended the deadline for the initial report submission on pre-contractual information for all financial products within the scope of the data collection exercise. As per CSSF communiqué dated 4 May 2023, FMPs are now requested to submit their initial report(s) by 15th June 2023 on a best-effort basis, and in any event, by 31st October 2023.

The decision to extend the initial submission deadline for the SFDR data collection exercise on pre-contractual disclosures underscores the CSSF's commitment to engaging with market participants and recognizing the complexities of SFDR requirements. While the extension provides additional flexibility, it is critical for FMPs to stay vigilant and ensure that their disclosures are compliant, accurate, and up-to-date.

If you have any questions regarding the information above, our investment management team is here to help you. Please do not hesitate to contact us for expert guidance.


Latest EU Regulations update: Navigating Sustainability-Related Disclosures and Investments in 2023

In its communication dated 20 April 2023, the CSSF recently drew attention to several publications related to sustainability-related disclosures in the financial services sector. These publications include Regulation (EU) 2019/2088 – SFDR, Commission Delegated Regulation (EU) 2022/1288 (the SFDR RTS), and Regulation (EU) 2020/852 – the EU Taxonomy Regulation.

  1. The European Commission adopted a third set of Q&As on the interpretation of SFDR, published by the ESAs on 14 April 2023. The first and second sets of Q&As were adopted and published by the ESAs in July 2021 and May 2022, respectively. The third set of Q&As includes amendments to the first and second Q&As.
  2. The European Commission also published two draft delegated acts relating to the EU Taxonomy Regulation on 5 April 2023. The first draft delegated act provides a new set of technical screening criteria for four environmental objectives, including sustainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems. It also includes amendments to the Taxonomy Disclosures Delegated Act. The second draft delegated act adds or complements the technical screening criteria for climate change mitigation for certain economic activities in the transport and manufacturing sectors. The draft delegated acts are open for feedback until 3 May 2023.
  3. Furthermore, the ESAs published a consultation paper on a proposed review of the SFDR RTS regarding PAI and financial product disclosures on 12 April 2023. The consultation period will be open until 4 July 2023.

In light of these recent publications and developments, financial services firms operating within the European Union must ensure that they are compliant with all relevant regulations and delegated acts. Firms should also stay abreast of any updates or changes to these regulations and delegated acts and adapt their compliance programs accordingly.

If you have any questions regarding the information above, our investment management team is here to help. Please don’t hesitate to contact us for expert guidance.

CSSF launches data collection exercise for IFMs on sustainability-related disclosures under SFDR

The CSSF has launched a data collection exercise related to the SFDR. The exercise focuses on the collection of information regarding organisational arrangements of IFMs.

The data collection is necessary for the CSSF to assess the compliance of IFMs with the requirements applicable under SFDR .

The CSSF is requiring Luxembourg-domiciled UCITS management companies, SIAGs, authorised AIFMs, managers of a qualifying venture capital fund registered in accordance with Article 14 of Regulation (EU) No 345/2013 and managers of a qualifying social entrepreneurship fund registered in accordance with Article 15 of Regulation (EU) No 346/2013 to complete a dedicated questionnaire via the launch of a new eDesk module, “SFDR-IFM disclosures” as from 2 February 2023.

The questionnaire must be completed and submitted by an eDesk user linked to the IFM.

The deadline for submission of the questionnaire is 2 March 2023.

IFMs must ensure that the information provided is being kept up-to-date, and can use the “Create update declaration” function under the new eDesk module to allow the amendment of information initially submitted.

The CSSF will communicate further details on timing and practical proceeding of the data collection for the collection of information contained in the PAI statements and in the precontractual and periodic disclosure templates.

The CSSF also reminds industry participants that a Common Supervisory Action exercise (CSA) in relation to sustainability risks and disclosures is currently under discussion at ESMA level, focusing on both SFDR Level 1 and Level 2 provisions as well as the requirements outlined in the ESMA Supervisory Briefing on Sustainability risks and disclosures in the area of investment management.

Taxonomy: EU Commission publishes FAQ to clarify the content of the disclosures delegated regulation under Article 8

The EU Commission published on 6 October 2022 the updated FAQs to clarify the content of the Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 (the “Disclosures Delegated Regulation”) under Article 8 of Regulation (EU) 2020/852 of 18 June 2020 (the “Taxonomy Regulation) to assist with its implementation. Article 8 of the Taxonomy Regulation applies to undertakings which are subject to an obligation to publish non-financial information according to Article 19a or Article 29a of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, as amended (the “Directive 2013/34”). Therefore, large undertakings which are public-interest entities exceeding on their balance sheet dates the criterion of the average number of 500 employees during the financial year should pay attention to the updated FAQs. Idem for the public-interest entities, which are parent undertakings of a large group exceeding on its balance sheet dates, on a consolidated basis, the criterion of the average number of 500 employees during the financial year. The terms large undertakings and public-interest entities are defined in Directive 2013/34.

The prior version of the updated FAQs dated January 2022 contained 22 frequently asked questions on how financial and non-financial undertakings should report taxonomy-eligible economic activities and assets under the Disclosures Delegated Regulation. The Disclosures Delegated Regulation contains disclosure provisions for non-financial undertakings, assets managers, credit institutions, investment firms, insurance and reinsurance undertakings, as well as disclosure rules common to all financial undertakings and disclosure rules common to all financial undertakings and non-financial undertakings concerning the implementation of Article 8 of Taxonomy Regulation.

The 33 frequently asked questions are separated into the following 9 points:

  • General FAQs;
  • Non-financial undertakings;
  • Financial undertakings;
  • Asset managers;
  • Insurers;
  • Credit institutions;
  • Debt market;
  • Interaction with other regulations;

The EU Commission clarifies the following points in the updated FAQs:

  • How is “Taxonomy-eligible economic activity” defined;
  • How may asset managers weigh their holdings in a portfolio to report Taxonomy-eligible assets?;
  • How to identify Taxonomy-eligible activities of which activity descriptions contain qualifiers, such as ‘low carbon’ and ‘climate-related perils?;
  • How should a credit institution with a Markets in Financial Instruments Directive (MiFID) investment firm license report its Taxonomy-eligible economic activities?;
  • How to assess and report the Taxonomy-eligibility of a debt asset such as a bond or loan?;
  • Can green debt instruments from non-EU entities be reported as Taxonomy-eligible?;
  • Can green sovereign debt be reported as Taxonomy-eligible?;
  • What activities should an insurer and a reinsurer consider when reporting their underwriting activities in the context of Taxonomy-eligibility reporting?; and
  • How does the Disclosures Delegated Regulation interact with the proposed requirements on corporate sustainability reporting (‘the CSRD proposal’)?

The updated FAQ is available here.

Don’t hesitate to contact our banking, finance and capital markets team if you need further information.

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CSSF fast-track procedure for visa-stamping regarding SFDR RTS


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.


Sustainable Finance - implementation of SFDR level 2 deferred until January 1, 2023

Implementation of the SFDR regulatory technical standards will be deferred by a further six months to January 1, 2023. The European Commission has confirmed this in a letter to the EU Council on November 25, citing the length and technical detail of the legislation. The delay is attributed to the Commission’s desire to ensure the smooth implementation of the rules by fund managers, financial advisers and regulators. The SFDR level 2 provisions were originally due to be implemented at the beginning of 2022, but in July the Commission pushed back the deadline until July 2022 because of hold-ups that delayed agreement on the RTS and the decision to bundle the 13 standards into a single delegated act.

Feel free to get in touch with our investment management team for more information.

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Sustainable Finance - CSSF launches fast-track procedure for compliance with the Taxonomy Regulation

The Financial Sector Supervisory Authority (CSSF) has announced on December 2 the introduction of a fast-track procedure to facilitate submission of updated prospectuses or issuing documents update for UCITS and alternative investment funds under the EU’s Taxonomy Regulation, ahead of a deadline of January 1.

The beginning of next year is the deadline for updates of pre-contractual documents for UCITS and AIFs to incorporate information on environmentally sustainable investments in pre-contractual disclosures relating to climate change mitigation and adaptation goals and the use of templates under the draft regulatory technical standards for the Sustainable Finance Disclosure Regulation.

The Taxonomy Regulation of June 18, 2020 (“TR”), including amendments to the SFDR of November 27, 2019, requires financial market participants to provide transparency for funds subject to SFDR articles 8 and 9 in their pre-contractual disclosures by January 1, in accordance with articles 5, 6 and 7 of the Taxonomy Regulation.

The TR FastTrack procedure is restricted to updates required under articles 5, 6 and 7. Each updated UCITS prospectus submitted for a certified electronic ‘visa stamp’ must be accompanied by a confirmation letter, for which the CSSF has provided a template for UCITS here. The CSSF says that for complete and compliant submissions under the fast-track procedure received by December 17, it will endeavour to provide visa stamps before December 31.

Luxembourg-based authorised AIFMs should submit to the CSSF for each AIF managed the information required under the SFDR and the Taxonomy Regulation to be disclosed to investors under SFDR Article 6(3), sent to the e-mail address opc@cssf.lu. The AIFMs should also indicate where the information has been disclosed to investors, and future updates should be communicated to the CSSF in a timely manner.

The same procedure applies to Luxembourg-based managers registered by the CSSF under the EU venture capital funds (EuVECA) and social entrepreneurship funds (EuSEF) regulations, and to AIFs managed by a Luxembourg registered AIFM, while the regulator says updates to the prospectuses of existing Luxembourg ELTIFs will be handled swiftly on a case-by-case basis. All Luxembourg-based AIFs managed by an AIFM not authorised or registered by the CSSF should apply the requirements imposed by the AIFM’s home regulator.

The CSSF notes that while the SFDR Level 1 requirements regarding pre-contractual disclosures came into force on March 10 this year, the Level 2 requirements have been delayed. The European Commission wrote to the EU Council on November 25 announcing that the implementation of the SFDR regulatory technical standards will now be delayed until January 1, 2023.

However, the CSSF encourages financial market participants already to use for disclosure purposes the pre-contractual and periodic product templates provided in the draft RTS published on October 22. It says the various sections of the templates should be completed as far as possible on a best-efforts basis during the transition period.

Feel free to get in touch with our investment management team for more information.


Financial lawyers in Luxembourg

Sustainable Finance I CSSF issues update on SFDR fast-track procedure ahead of March 10 deadline

The CSSF has reminded on February 5 UCITS management companies and alternative investment fund managers of their deadline to comply with the Sustainable Finance Disclosure Regulation of March 10.

On December 16, 2020, the regulator announced the establishment of a fast-track procedure for approval of revised prospectuses and issuing documents adapted to meet the SFDR requirements regarding pre-contractual information.

UCITS Mancos and AIFMs must submit amended prospectuses and issue documents at the latest by February 28 to meet the March 10 deadline.

The CSSF says it has also adapted the confirmation letter incorporated in the SFDR fast-track procedure so that it can also be used to support the review of sustainability-related disclosures in prospectuses or issuing documents submitted under the regulator’s ordinary amendment procedure rather than the fast-track facility.

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Sustainable Finance | Luxembourg regulator implements SFDR fast track procedure

The CSSF has alerted Luxembourg-based investment fund managers about the regulatory requirements arising from Regulation (EU) 2019/2088 on Sustainability-Related Disclosures in the Financial Services Sector, otherwise known as the SFDR which will be applicable from March 10, 2021.

The Luxembourg regulator has announced on December 16, 2020, details of a fast-track approval system for updating funds’ prospectuses or offering documents to incorporate sustainability disclosures, one of the requirements under the regulation.

The SFDR requires managers of UCITS and alternative investment funds, along with other financial products, to comply with transparency rules on incorporating sustainability risks into their investment strategies, considering potential adverse impacts, and the provision of other sustainability-related information.

No deferral of SFDR compliance

The European asset management industry had lobbied vigorously for the deferral by up to a year of the legislation’s provisions coming into force because of the impact on the industry of the Covid-19 pandemic and notably an ongoing delay in the publication of regulatory technical standards setting out details of how the regulation is to be interpreted and implemented.

The deadline for publication of the standards, at the end of 2020, will not be met because of an extension required to the public consultation period, the European Commission says. However, on October 20, the Commission announced that the application of the SFDR in March would not be conditional on the formal adoption and entry into force of the regulatory technical standards.

Therefore, all deadlines for the SFDR remain in force, but investment fund managers will be required to comply not with detailed standards, but the high-level principle-based requirements set out in the regulation. This will entail more judgement-based decisions by both industry members and regulators.

Assessing the impact of sustainability risks on strategy and returns

Article 6 of the SFDR requires managers to indicate how they integrate sustainability risks into their investment decisions and assess and disclose the likely impact of such risks on the returns of a particular fund.

The sustainability risk assessment approach and related disclosures must be published in UCITS prospectuses as well as other fund offering documents. Suppose the risk assessment concludes that no sustainability risks are relevant for a fund. In that case, the reasons must be explained to investors, and managers must also disclose if they do not consider any adverse impact of investment decisions on sustainability factors for a fund.

Prospectuses of UCITS or offering documents of alternative funds qualifying as financial products that promote environmental or social characteristics, or a combination of them, according to Article 8 of the regulation, or that have sustainable investment as their objective under Article 9 may also need to be modified.

Disclosure to investors

The updating of disclosures requires prior categorisation of the sustainability characteristics or nature of the fund according to the SFDR where applicable, and related information, including the fund’s name, should not mislead end-investors by exaggerating the impact of sustainability in its investment policy. Sustainability risks must also be integrated into the manager’s risk management policy.

The CSSF requires managers to assess their situation concerning the SFDR disclosure obligations and submit an updated UCITS prospectus or fund issuing document at the latest by February 28, 2021. This information should be provided to AIF investors under Article 6 (3) (a) of the SFDR.

Managers should also ensure they comply with requirements on the publication of information on their websites and the update of policies and processes relating to sustainability risk policies, the investment decision-making process, adverse impacts as defined under Article 4 of the SFDR and remuneration policies. They should take appropriate measures to remedy any gaps and ensure information remains up to date.

Fast-track procedure for fund prospectus updates

Disclosures required under Article 6 (3) (g) and, if applicable, Articles 7, 8 and/or 9 of the SFDR must be incorporated into UCITS prospectuses. Management companies are required to assess the new disclosure obligations and submit an updated prospectus for each Luxembourg UCITS they manage to the CSSF by February 28.

The CSSF has implemented a dedicated fast-track procedure to facilitate the submission of revised prospectuses or issuing documents to the CSSF, both for UCITS management companies and AIFMs submitting updates for SIFs and Part II funds. The facility is restricted to updates reflecting changes required under the SFDR; modifications to the investment policy and restrictions material according to CSSF Circular 14/591 cannot benefit from the fast-track procedure.

How does the fast-track process work?

Each updated prospectus or issuing document submitted must be accompanied by a letter confirming their conformity, as well as providing evidence that the investment fund manager has upgraded its policies and processes to comply with the SFDR.

A template of the confirmation letter is available on the CSSF website. It must be signed by at least one representative of either the UCITS ManCo, an investment company that has not designated a management company, AIFM or a legal advisor, or another representative of the manager or fund.

The updated prospectus or issuing document version submitted for approval by the CSSF must be uploaded in a clean version, in accordance with Circular 19/708 on electronic transmission of documents to the CSSF alongside the confirmation letter, merged with the updated prospectus or issuing document in track-changes version. If a notice is planned to inform investors about the update, it must also be uploaded and submitted as a letter.

Upon acceptance by the CSSF, the prospectus or issuing document will be visa-stamped and returned through the e-file/Sofie channel. If the filing is deemed unsatisfactory, the manager or fund will receive a notice requesting the submission of a freshly revised version.

For further information, please get in touch with Olivier Sciales at oliviersciales@cs-avocats.lu.

Luxembourg corporate lawyers

Sustainable Finance | CSSF fast track procedure

Head of investment fund supervision Marco Zwick says the CSSF will launch a fast-track procedure for updating fund prospectuses to help asset managers meet the deadline of March 10 for compliance with the EU’s Sustainable Finance Disclosure Regulation (SFDR). He says boards of directors will have to certify that funds meet the SFDR requirements to disclose sustainability risks in their portfolios, and the CSSF will conduct sample checks. However, the regulator recognises that asset managers lack details about the rules since the European Commission has not yet published regulatory technical standards, and in many cases may struggle to obtain needed information from companies in which funds have invested.

Source: Lux regulator to “fast track” ESG disclosures (available here)