Application of RTS under the SFDR – further delayed to 1 January 2023

Dechert LLP

In a letter dated 25 November 2021,1 the European Commission’s Director-General for Financial Stability, Financial Services and Capital Markets Union (the Director-General) confirmed that the date of application of the regulatory technical standards (RTS) under the Sustainable Finance Disclosure Regulation (SFDR)2 will be deferred by a further six months to 1 January 2023. The application date had previously been pushed back by six months from 1 January 2022 to 1 July 2022 by letter from the Director-General dated 8 July 2021.3

The Letter also notes that, in view of the further deferral of the application of the RTS, the Commission envisages that financial market participants which publish a statement on their due diligence policies on principal adverse impacts of investment decisions on sustainability factors (the statements referred to in Article 4(1)(a), 4(3) and (4) of SFDR) will have to comply with the related disclosure requirements on principal adverse impacts laid down in the RTS for the first time by 30 June 2023. The Letter states that the first reference period for this reporting under the RTS will be 1 January 2022 to 31 December 2022, a period falling prior to the new effective date of the RTS.

In the Letter, the Director-General informs the European Parliament and the European Council that the draft RTS submitted to the European Commission on 22 October 2021 by the European Supervisory Authorities4 could not be adopted by the Commission within the three-month period given their length and technical detail.

Footnotes

1) The letter published by the Commission dated 25 November 2021 (Letter) is available here.

2) Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector, as amended by Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (Taxonomy Regulation).

3) The letter published by the Commission dated 8 July 2021 is available here.

4) The European Insurance and Occupational Pensions Authority, the European Securities and Markets Authority and the European Banking Authority.

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