ESA Joint Committee · sfdr-43 Final

Regulation (EU) 2019/2088 applies to financial market participants and financial advisers. In particular, in respect of investment firms as defined in point (l) of Article 4(1) of Directive 2014/65/EU

Regulation
SFDR
Answered
2021-07-14
Answer provided by
European Commission
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Question

Regulation (EU) 2019/2088 applies to financial market participants and financial advisers. In particular, in respect of investment firms as defined in point (l) of Article 4(1) of Directive 2014/65/EU, Article 2(1)(b) of Regulation (EU) 2019/2088 defines ‘an investment firm which provides portfolio management’ as one of the financial market participants to which it applies and Article 2(11)(d) of Regulation (EU) 2019/2088 defines ‘an investment firm which provides investment advice’ as one of the financial advisers to which it applies. For portfolios, or other types of tailored financial products managed in accordance with mandates given by clients on a discretionary client-by-client basis, do the disclosure requirements in SFDR apply at the level of the portfolio only or can they apply at the level of standardised portfolio solutions? If the disclosure requirements of Regulation (EU) 2019/2088 apply at the portfolio level, how is it possible to maintain confidentiality obligations to the client in view of the disclosures required, especially the website disclosures required by Article 10 of Regulation (EU) 2019/2088?

Answer

The definition of ‘financial product’ in point 12 of Article 2 of Regulation (EU) 2019/2088 makes no distinction whether the products are tailored to specific preferences or requirements of end investors, or not. Transparency of the promotion of environmental or social characteristics and of sustainable investments on websites in accordance with Article 10 of Regulation (EU) 2019/2088 must ensure compliance with Union and national law governing the data protection, and where relevant, also ensure confidentiality owed to clients. Where a financial market participant makes use of standardised product solutions, transparency of those solutions might be a way for complying with requirements on website disclosures laid down by Regulation (EU) 2019/2088.
View original on ESA Joint Committee (EBA, ESMA, EIOPA) ↗

This Q&A is published by ESA Joint Committee (EBA, ESMA, EIOPA) and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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