Sustainable finance: New delegated acts for UCITS, AIFMD and MiFID II
On 8 June 2020, the European Commission published a set of draft delegated acts, including the following:
- A draft delegated directive amending Commission Directive 2010/43 to implement certain provisions of the UCITS Directive;
- A draft delegated regulation amending Commission Regulation 231/2013 to implement certain AIFM provisions;
- Two delegated acts amending two delegated acts to implement MiFID II requirements on product governance, organisational requirements and the functioning of investment firms.
The draft delegated acts amending UCITS and AIFM requirements elucidate the duty of investment fund managers to consider social and environmental factors, as well as risks in their governance, organisation, conflict of interest policies, investment due diligence, as well as their risk policies and procedures. Under these self-same acts, companies are equally required to prepare a report to the client explaining how the investment recommendation caters for the client's sustainability preferences, as well as their investment objectives, risk profile and ability to bear losses.