The latest component of the European Commission’s sustainable finance action plan went live last month, leaving pension funds in key EU jurisdictions uncertain about precisely what the rules will mean, IPE research finds.
According to Morningstar, SFDR (the Sustainable Finance Disclosures Regulation) forms a “critical part of operationalising the action plan and will distinguish more clearly between different kinds of sustainable investing”.
SFDR applies to a range of “financial market participants”, including asset managers, banks, insurers and pension funds. There was some initial opposition to subjecting pension funds to the same rules as large commercial financial entities when in many cases pension funds do not compete for business, but as one Dutch lawyer told IPE, that battle was lost.
EBA Consults On The List Of Advanced Economies To Determine Equity Risk Under The New Market Risk Regime Date
08/04/2021
The European Banking Authority (EBA) launched today a public consultation on its draft Regulatory Technical Standards (RTS) on the list of countries with an advanced economy for calculating the equity risk under the alternative standardised approach (FRTB-SA). These RTS are part of the phase 3 deliverables of the EBA roadmap for the new market and counterparty credit risk approaches. The consultation runs until 2 July 2021.
Institutions using the alternative standardised approach to determine own funds requirements for market risk are required to compute the equity risk stemming from their trading book positions in accordance with a prescribed set of risk factors and corresponding risk weights. To determine the appropriate risk-weight, institutions are to identify whether a risk factor refers to an advanced economy or an emerging market. Risk factors mapp
ESG: Green, greener, greenest.
When the EU’s landmark Sustainable Finance Disclosure Regulation (SFDR) came into force on March 10, it was widely welcomed and hailed as a ‘game-changer’ in the fight against greenwashing.
A core component of the bloc’s green agenda, the regime is designed to promote greater transparency in finance – but questions remain regarding its implementation.
SFDR calls on asset managers to classify their funds according to three primary categories – article 6, which makes no claims of sustainability, or articles 8 and 9, which both claim environmental, social and governance (ESG) credentials and require firms to provide data to support the claims.
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