Legal Updates

Introduction

As readers will be aware, Irish domiciled funds which fall within the scope of Article 8 or Article 9 of the SFDR¹ will be required to update their pre-contractual documentation to incorporate an “SFDR” annex by 1 January 2023 in order to comply with disclosure obligations imposed under Commission Delegated Regulation (EU) 2022 1288 (SFDR Level 2).

On 4 October 2022, the Central Bank of Ireland (Central Bank) formally confirmed that it will facilitate a fast-track filing process for pre-contractual updates required under SFDR Level 2 and published a process clarification document in which it set down the parameters of this process.

In order to avail of the Central Bank’s fast-track filing process, filings must be made no later than 1 December 2022.

General

The Central Bank has confirmed that the responsibility for ensuring compliance with the disclosure obligations arising under SFDR Level 2 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 (collectively referred to as 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 SFDR Level 2 annexes, the Central Bank has confirmed that Managers can use the fast-track filing process to update existing SFDR-related disclosures in order to address recent guidance published by the European Commission, the ESAs, ESMA and the Central Bank on SFDR-related disclosures. It can also be used to incorporate any product level PAI disclosures required under Article 7(1)(a) for funds falling within the scope of Article 6 of the SFDR and to make amendments to the disclosures relating to investment policies and strategies to ensure consistency with the disclosures contained in the SFDR annex.

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.

Fund Reclassifications and Change of Name

Helpfully, the Central Bank has confirmed that it is possible to use the fast-track process in circumstances where the original classification of the relevant fund under the SFDR is changing. In such circumstances, a rationale for the reclassification must be included as part of the filing.

It is also possible to incorporate a change of name into the fast-track filing process where such name change is being made in order to comply with the guidance provided by ESMA in its recent supervisory briefing.

1 Regulation (EU) 2019/2088