In line with SFDR Delegated Regulation and the SFDR Q&As (JC 2023 18), a UCITS
management company disclosing its UCITS under Article 9 SFDR may next to
"sustainable investments" (i.e. in the "remainin

Question

In line with SFDR Delegated Regulation and the SFDR Q&As (JC 2023 18), a UCITS
management company disclosing its UCITS under Article 9 SFDR may next to
"sustainable investments" (i.e. in the "remaining portion" of the investment portfolio),
also include "investments for certain specific purposes such as hedging or liquidity",
provided that those are in line with the sustainable investment objective of the UCITS.
a) Can efficient portfolio management techniques (EPM) be considered "investments
for certain specific purposes such as hedging or liquidity"?
b) Can money market funds be considered as "investments for certain specific
purposes such as hedging or liquidity"?

ESA Joint Committee (EBA, ESMA, EIOPA) · Accepted Answer

a) EPM techniques (such as those referred to in Article 51(2) of the UCITS Directive
(Directive 2009/65/EC) can only fall within the “remaining portion” if used for hedging or
liquidity purposes, not when used for any other purpose.
b) Money market funds (“MMFs”) should not automatically be considered as liquidity in Article
9 financial products. Whether such an investment can be considered as part of the
“investments for certain purposes such as hedging or liquidity” for Article 9 financial
product depends on the type of money market fund invested in e.g. on whether the MMF

qualifies as cash equivalent under IFRS accounting rules (i.e. if it is readily convertible to
known amounts of cash and subject to an insignificant risk of changes in value).

In line with SFDR Delegated Regulation and the SFDR Q&As (JC 2023 18), a UCITS management company disclosing its UCITS under Article 9 SFDR may next to "sustainable investments" (i.e. in the "remainin

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