On 12th May 2021 the Malta Financial Services Authority (“MFSA”) issued a Circular in regard to the Sustainable Finance Disclosure Regulation (“SFDR”), and the application of Article 17(1).
Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27th November 2019 on sustainability‐related disclosures in the financial services sector and its obligations entered into force on 10th March 2021, wherein Financial Market Participants and Financial Advisers were defined and required to disclose information with regards to the integration of sustainability in their investment decision-making process or their investment or insurance advice, the consideration of adverse sustainability impacts in their processes, and to provide sustainability-related information with respect to financial products.
In Article 17(1) of the SFDR it is noted that certain categories may be exempted, and Article 17(2) provides Member States with the chance to apply the requirements of the SFDR to such entities at their discretion.
This MFSA Circular is effectively noting the MFSA’s position vis- à-vis to the SFDR’s applicability for select investment firms and insurance businesses. SFDR is generally NOT applicable to the hereunder, unless MFSA, as the competent authority ‘opts in’ the applicability at their discretion:
to investment firms which provide investment advice that are enterprises irrespective of their legal form, including natural persons and self‐employed persons, provided that they employ fewer than three persons.
The MFSA has stated that it shall not deem SFDR to be applicable to the above, though it is to be noted that the position of the Authority may be revised in view of future developments in the area of sustainable finance and/or as the Authority may deem fit.
With over 30 years of experience in the sector, CSB Group offers a wealth of services related to Regulated Financial Services. Should you require any further guidance on the above, please do not hesitate to contact us at [email protected] where one of our consultants will be able to guide you further.