Following the entry into force of the Sustainable Finance Disclosure Regulation (“SFDR“) in December 2020, the provisions of the said Regulations will become effective on the 10th March 2021.
By way of background, the SFDR will require financial market participants and financial advisors to make pre-contractual and ongoing disclosures to investors regarding the integration of sustainability risk, the impacts of adverse sustainability, as well as the promotion of ESG characteristics and sustainable investments (as applicable).
In this respect, pursuant to a circular dated 9th February 2021, the Malta Financial Services Authority (“MFSA“) communicated the process to be adopted for the submission of updates to the pre-contractual documents (prospectus) of locally based Collective Investment Schemes before the 10th March 2021 (the “SFDR Deadline“).
Fast-track Filing Process
The MFSA has established a fast-track filing process for the submission of the required updates to the offering documents, pursuant to which UCITS management companies, AIFMs and Investment Firms authorized under MiFID II which manage PIF structures by way of delegation will be able to self-certify their compliance with SFDR and notify the MFSA accordingly.
Insofar as documentation is concerned, licence holders will be required to submit the following documents:
(i)The updated offering documentation of the relevant Scheme and its Sub Funds (if applicable) – although it ought to be stressed that this fast-track filing process is only applicable to changes required for the purposes of compliance with SFDR and if there are to be any further changes to the offering documents, these should be made under a separate cover;
(ii)An attestation duly executed by the board of the respective financial market participant (i.e. the management company or [in the case of a self-managed fund] the fund itself) stating that the amendments made to the offering documentation are in line with the requirements of the SFDR and that no other amendments have been made to the offering documentation;
(iii)A resolution from the board of directors of the relevant collective investment scheme confirming that they have seen and approve the changes made;
(iv)A confirmation from the compliance office of the relevant scheme that the proposed changes are in line with the requirements of the SFDR;
(v)[In the case of AIFs], the AIFM’s approval of the contents of the offering documents;
(vi)[In the case of NAIFs], the documentation usually required for any amendments to the offering documents of a NAIF under the provisions of Part B II of the Investment Services Rules for Investment Services Providers.
While the hard deadline for submission is the 10th March 2021, the MFSA has indicated that any submissions made after the 3rd March 2021 will be processed on a best-efforts basis before the SFDR Deadline (i.e. 10th March 2021).
Moreover, any submissions made after 10th March 2021 will be treated as any other change to an offering document and may therefore be subject to comments, thus delaying the approval process and resulting in a breach of the provisions of the SFDR for as long as it would take for the offering documents to be approved.
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr. Katya Tua on email@example.com