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How to comply with the Belgian regulator’s requirements in the context of SFDR (Sustainable Finance Disclosure Regulation)

06 April 2021

In connection with the entry into force on 10 March 2021 of the European regulation on sustainability-related disclosures in the financial services sector, the Sustainable Finance Disclosure Regulation ("SFDR"), the Belgian regulator (“FSMA”) has set out a number of practical guidelines in a communication dated 9 March 2021, some of which anticipate the regulatory technical standards that the European Commission will have to adopt in the near future. The guidelines are addressed to Belgian regulated firms providing portfolio management and/or investment advisory services (including credit institutions, asset management and investment advice companies, insurance companies, pension funds and (management companies of) UCITS funds and AIFs) and aim to create more transparency to allow the buyer to make an assessment of (i) the way in which sustainability risks are taken into account in the creation and management of that financial product or service, and (ii) the impact of the investment decisions or investment advice of the financial market participants on sustainability factors. The FSMA expects companies' procedures to be transparent and to indicate which environmental, social and governance (“ESG”) aspects have been taken into account and, if necessary, to draw up an action plan as soon as possible in order to comply with these provisions. Since 10 March 2021, the abovementioned companies must provide information at company level, on: The way in which they integrate sustainability risks into their management and/or investment advice (Article 3 SFDR) and the integration of sustainability risks into their remuneration policy (Article 5 SFDR) In the context of management and/or investment advice, the ...

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