Sustainable Finance Disclosure Regulation: EU Commission delays RTS (level II) application date
The EU Commission has written the European Supervisory Authorities (ESAs) regarding the application of the Sustainable Finance Disclosure Regulation (SFDR) and related regulatory technical standards (RTS).
In March 2019 the co-legislators agreed on a timeline to develop most of the RTS by 30 December 2020 and the application of the SFDR’s provisions from 10 March 2021.
Owing to the economic and market stress caused by the COVID-19 pandemic the deadline for the public consultation on the draft RTS was extended.
These RTS will specify detailed requirements on the content and presentation of disclosed information and transparency, regarding potential adverse impacts at entity level, the relevant mandate, in addition to the content and presentation of the disclosed information and foresee standards on the underpinning methodologies.
- Current state of play:
The letter notes that the application of the SFDR is not conditional on the formal adoption and entry into force or application of the RTS, and that there are no impediments to financial market participants and financial advisers complying with the Level 1 requirements without the full RTS.
The Commission has therefore advised:
- that all applications dates as laid down by the Regulation are being maintained with effect from March 2021
- but the RTS will become applicable at a later stage in order to provide participants and advisers adequate time for implementation and national competent authorities to prepare for orderly and effective supervision.