Sustainable finance: the AFM and AMF publish a common position on the content of the prospectus for green bonds
The Dutch and French financial market supervisory authorities advocate a regulation allowing a greater transparency towards investors in order to allow the development of the green bond market in the European Union.
As part of its action plan for sustainable finance, the European Commission announced its intention to define the content of the prospectus for green bond issuances by the end of the second quarter of 2019. As these types of issuances represent a financing tool for projects in favour of the energy transition and are subject to a strong investor interest, the Autoriteit Financiële Markten (AFM) and the Autorité des Marchés Financiers (AMF) wish to contribute to the ongoing European debate. Sustainable finance is indeed a priority for these authorities.
For the AFM and AMF, the prospectus that will be used for green bonds must enable investors to make an informed decision while allowing the green bond market to develop.
The position paper, which was sent to the European Commission, states that if an issuer chooses to qualify its bond issuance as ‘green’, the prospectus should include additional information regarding the use of proceeds, the selection of funded projects and the management of proceeds. The issuer should also specify whether it intends:
- to comply with green bond standards
- to publish a reporting on the use of the green bond proceeds
- to mandate a third party verification.
This additional information in the prospectus, while remaining reasonable for green bond issuers, would help to enhance transparency and therefore investor confidence, which is essential for the development of the European green bond market.
This position paper fits in with the AFM’s ambition to contribute to a sustainable financial system and prosperity in the Netherlands as an independent market conduct supervisor. As part of its focus on sustainable finance, the AFM is currently exploring developments in the sustainable bond market in the Netherlands.
More informationPosition Paper on Green / Social / Sustainable Bonds
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