Legal & Regulatory News

European Securities and Markets Authority highlights key priorities for asset management industry in 2022, focusing on sustainable finance and systemic risk

On 24 March 2022, Natasha Cazenave, Executive Director of the European Securities and Markets Authority (ESMA) gave a speech highlighting the key priorities for the asset management industry in 2022, focussing on sustainable finance and systemic risk.

In the speech, it was suggested that demand remains strong for ESG products, with increased allocation of sustainable investment products and vehicles being seen throughout the portfolios of investors. It was noted that market participants are preparing for new disclosure requirements which will come into effect on 1 January 2023 as part of the Sustainable Finance Disclosure Regulation ((EU) 2019/2088)(SFDR) and ESMA is continuing to maintain an open dialogue with EU national competent authorities to support a consistent interpretation of the regulatory requirements.

Furthermore, it was noted that ESMA is working alongside the European Banking Authority and the European Insurance and Occupation Pensions Authority to prepare a review of the indicators for principal adverse impacts, which are a key part of the SFDR disclosures. Out of a sample of 27,000 EU funds representing EUR 10 trillion assets under management, it was noted that 30% included in their precontractual documentation an SFDR Article 8 or Article 9 statement. It was suggested that ESMA would look to provide technical advice to the European Commission on future initiatives in this area based on national authorities’ supervisory experience and that they are also working towards publishing guidance and questions and answers on a number of stakeholder questions that they have received with regard to the implementation and timing of the SFDR.

Click here to access the ESMA speech by Natasha Cazenave.