ESMA - European Securities and Markets Authority

12/13/2024 | Press release | Distributed by Public on 12/13/2024 04:11

ESMA puts forward Q&As on the application of the Guidelines on funds’ names

The European Securities and Markets Authority (ESMA), the EU's financial markets regulator and supervisor, is today publishing Q&As with further details on specific aspects of the practical application of the Guidelines on funds' names using ESG or sustainability-related terms.

The Q&As are related to green bonds [UCITS, AIF], the convergence on "meaningfully investing in sustainable investments" [UCITS, AIF] and the definition of controversial weapons [UCITS, AIF][1]. The objective is to ensure a smooth application of the Guidelines through common understanding of key concepts.

  • The Q&A on green bonds explains that investment restrictions related to the exclusion of companies do not apply to investments in European Green Bonds. For other green bonds, fund managers may use a look-through approach to assess whether the activities financed are relevant for the exclusions;
  • The Q&A on "meaningfully investing in sustainable investments" presents a common understanding among national competent authorities that funds may not be "meaningfully investing in sustainable investments" if they contain less than 50% of sustainable investments; and
  • The Q&A on controversial weapons specifies that the reference for the exclusion related to controversial weapons should be the one referred to in SFDR principal adverse impact indicator 14.

ESMA has decided to clarify the treatment of Green Bonds because of the imminent application of the European Green Bonds Regulation and the reference in the mandates in the AIFMD and UCITS Directive noting that sectoral legislation takes precedence.


Further information:

Dan Nacu-Manole

Communications Officer
[email protected]

[1] Two links are provided as identical Q&As were published for UCITS and AIFs.