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Fund Management Companies Prepare for August Deadline

AUTHORs: Tara Doyle Services: Asset Management and Investment Funds DATE: 14/07/2022

Fund Management Companies Prepare for August Deadline PDF | 0.70 MB

Amending delegated acts (“Delegated Acts”) under the UCITS Directive and the Alternative Investment Fund Managers Directive (“AIFMD”) are due to apply from 1 August 2022.1

The delegated acts are designed to complement the requirements set out in the Sustainable Finance Disclosure Regulation (“SFDR”) and the Taxonomy Regulation and seek to integrate sustainability risks and considerations into the UCITS and AIFMD frameworks.  Fund managers will be required to:

  • integrate sustainability risks and take into account sustainability factors in the management of their funds, including organisational procedures and resourcing;
  • consider potential conflicts of interest arising as a result of that integration;
  • take sustainability risks into account as part of the due diligence in the selection and ongoing monitoring of investment; and
  • update risk management policies to include details of procedures to manage sustainability risk.

A “sustainability risk” is defined in the SFDR as “an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment.”  “Sustainability factors” are defined as any environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters”.  AIFMs, UCITS management companies and self-managed UCITS will need to take into account sustainability factors as part of their duties towards investors.

Read more on this publication here.

Please get in touch with your usual Asset Management and Investment Funds Department contact or any of the contacts listed in this publication should you require further information in relation to the material referred to in this update.

1Commission Delegated Directive (EU) 2021/1270 and Commission Delegated Regulation (EU) 2021/125