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Information provision, risk management and advice

The Sustainable Finance Disclosure Regulation (SFDR) prescribes rules with respect to transparency on sustainability on the part of financial market participants and financial advisers.

The aim of the SFDR is to improve the provision of information to end investors on the sustainability effects of the investment policy and investment decisions of financial market participants. The SFDR will have a major impact on companies subject to supervision and this legislation and regulation.

Changes to MiFID II, the UCITS Directive and AIFMD

The European Commission amended Six Delegated Acts on 21 April 2021. This concerns Delegated Acts under UCITS, AIFMD, MiFID, Solvency II and IDD. The purpose of these amendments is that these market parties should identify, assess and manage relevant financial and operational risks arising from developments with respect to sustainability and include sustainability factors in their product development procedures and their investment advice to clients.

For example, this means that financial enterprises must consider potential negative effects on relevant sustainability factors in their investment decisions, reformulate certain policy documents and ensure that sufficient capacity and expertise for effective mitigation of sustainability risks is available. The rules will apply with effect from October 2022.