• Deborah

On April 21, the European Commission (EC), as part of its sustainability finance package, adopts six delegated acts published firstly in June 2020 and that were subject to a consultation process (see our piece on this subject here).


Each delegated act focuses on a specific subject including:

  • Obligation for investment companies to integrate sustainability risks and sustainability factors in the management of UCITS funds.

Management companies (MCs) will also be required to identify the types of conflicts of interest that may arise as a result of the integration of sustainability risks in their processes, systems and internal controls. The principal adverse impacts of investment decisions on sustainability factors should also be taken into account by MCs.

  • Obligation for investment firms to integrate sustainability factors and preferences into the product governance framework.

It includes the obligations for investment firms to have in place adequate product governance arrangements to ensure that products and services they intend to offer or recommend are compatible with the needs, characteristics, and objectives, including any sustainability related objectives, of an identified target market and that the intended distribution strategy is consistent with the identified target market.


  • Obligation for alternative investment fund managers (AIFMs) to take into account sustainability risks and sustainability factors.

Risk management policies and procedures will have to be implemented to necessary to enable AIFMs to assess for each AIF their manages the exposure of that AIF to market, liquidity, sustainability and counterparty risks, and the exposure of the AIF to all other relevant risks, including operational risks, which may be material for each AIF their manages.


Amendments are being made to the UCITS Directive, the Alternative Investment Fund Managers Directive (AIFMD), MiFID II, the Solvency II Directive, and the Insurance Distribution Directive (IDD).


The amendments shall apply from October 2022.

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