Sustainable Finance Disclosure Regulation – Effective 10 March 2021

Tue Feb 9 2021

Dear Member,

As previously advised, the Sustainable Finance Disclosure Regulation (“SFDR”) will come into effect on the 10th of March 2021.

Who does the Regulation apply to?

  • Insurance intermediaries who provide insurance advice with regard to IBIPs.
  • Investment Intermediaries who provide investment advice (through providers such as Davy/BCP etc) to both retail and professional investors.
  • The rules apply to all financial products, including IBIPs, portfolio management, pension products and PEPPs, regardless of whether they are designed as “green” products with an ESG profile.

National Discretion – Members who employ fewer than three people

Article 17 (1) of the SDFR exempts insurance intermediaries, which provide advice on IBIPs, and investment firms, which provide investment advice, provided that they employ fewer than three people. Article 17 (2) provides Member States with a discretion to apply the Regulation to these entities.  Although such advisers may not be required to provide information in accordance with the SFDR, they would be required to consider and factor in sustainability risks in their advisory processes.

The Department of Finance held a consultation on this discretion with the closing date for submissions the 29th of January. In the Brokers Ireland submission, we advocated for the exercise of this exemption.  Brokers Ireland will update members once a decision is advised by the Department of Finance.

Member Guidance

To assist members in complying with the regulation, member guidance is now available in the following section of the Brokers Ireland Website – Members Area/Compliance Support/ Sustainable Finance Disclosure Regulation.    The guidance provided is on a general basis.  The European Commission has recently published regulatory technical standards for the regulation and therefore the guidance may be subject to change following the application date of the regulatory technical standards.  Brokers Ireland will continue to update members accordingly.

For further enquiries, please email compliance@brokersireland.ie

 


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