Legal Updates

Introduction

As readers will be aware, Irish-domiciled funds falling within the scope of Article 8 or Article 9 of the SFDR are required to incorporate an “SFDR” annex into their pre-contractual documentation in order to comply with disclosure obligations imposed under Commission Delegated Regulation (EU) 2022 1288 (SFDR Level 2 Measures).

On 17 February 2023 legislation amending the SFDR Level 2 Measures was published in the Official Journal and entered into force on 20 February 2023 (Revised SFDR Level 2 Measures). Under the revised disclosure rules, fund management companies with Article 8 or Article 9 funds must use updated pre-contractual and periodic reporting annexes in order to provide information to investors on investments in taxonomy-aligned fossil gas and nuclear economic activities.

On 20 February 2023, the Central Bank of Ireland (Central Bank) confirmed that it will facilitate a fast-track filing process for pre-contractual updates required under the Revised SFDR Level 2 Measures and published a process clarification document in which it set down the parameters of this process.

General

The Central Bank has confirmed that the responsibility for ensuring compliance with all applicable disclosure obligations, including those arising under the Revised Level 2 Measures, rests with the relevant UCITS management company, AIFM or the board of directors in the case of a self-managed UCITS fund or internally managed AIF (Managers). Each Manager will be required to certify compliance with the applicable disclosure requirements via an attestation.

It also confirms that the Central Bank will be carrying out sample checks of filings made by Managers and will engage with any applicants where questions arise in respect of the disclosures made. This may result in the Central Bank requiring revisions to be made to the pre-contractual disclosures at a later date.

Scope of Fast-Track Filing Process

In addition to being used to file the updated pre-contractual annexes contained in the Revised Level 2 Measures, the Central Bank has confirmed that Managers can use the fast-track filing process for updates related to other SFDR level 1 or 2 requirements or other SFDR related updates that arise due to clarifications from the European Commission, the ESAs, or the the Central Bank on SFDR-related matters.

Any changes to the existing prospectus/fund supplement other than those listed above cannot be made via the fast-track filing process and must be submitted to the Central Bank in accordance with its normal filing requirements.

The fast-track filing process is not available for new fund/sub-fund applications.

Applicable Timeframe for the Fast-Track Filing Process

The Central Bank has noted that updated pre-contractual annexes which comply with the Revised Level 2 Measures should be submitted to the Central Bank “as soon as possible and at the earliest available opportunity”.

While the Central Bank goes on to note that it will keep the submission of the revised documents under review and that the fast-track process will be “time limited”, it has not (for the moment at least) imposed a specific deadline in this regard.

Reclassification of fund under the SFDR

The Central Bank has confirmed that it is not possible to avail of the fast-track process where a fund proposes to change its classification under the SFDR. In such circumstances, the submission must be made through the normal post-authorisation review process applicable to the relevant fund.

Change of Name

The Central Bank has confirmed that it is possible to use the fast-track process to incorporate a change of name into the fast-track filing process.

If you have any questions relating to this briefing, please get in touch with your usual Dillon Eustace contact.