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Further to the public statement issued on 14 December 2023, ESMA has issued a final report outlining the guidelines in relation to fund names which utilise ESG or sustainability-related terms (the "Guidelines").
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Further to the public statement issued on 14 December 2023,
ESMA has issued a final report outlining the guidelines in relation
to fund names which utilise ESG or sustainability-related terms
(the "Guidelines"). The Guidelines are applicable to,
inter alia, asset managers, including UCITS Management Companies,
Alternative Investment Fund Managers and self-managed collective
investment schemes and provide a minimum threshold of 80% of
investments which should be used to meet environmental, social
characteristics or sustainable investment objectives. The
Guidelines also apply a number of exclusion criteria for different
terms used in fund names.
Furthermore, it should also be noted that, in line with the
Guidelines, a temporary deviation from the applicable threshold and
exclusions should be treated as a passive breach and corrected in
the best interest of the investors, provided that the deviation is
not due to a deliberate choice by the fund manager.
The Guidelines will be translated into all EU languages and will
subsequently be published on ESMA's website. They will start
applying three months after that publication. The transitional
period for funds existing before the application date will be six
months after that date. Any new funds created after the application
date should apply the Guidelines immediately in respect of those
funds.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
