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Irish Central Bank reviews fast-track sustainability disclosure submissions in funds sector

The Central Bank of Ireland (CBI) has begun a planned review of submissions received under last year’s temporary fast-track filing process for updates to contractual documents by fund management companies.

The process was put in place in November 2021 to enable fund managers to make disclosures about environmental and sustainability risks, as required under the EU’s Taxonomy Regulation, which came into effect on 1 January 2022. 

Fund managers were required to update and certify their prospectuses to comply with the regulation. The fast-track filing process was intended to facilitate an orderly implementation of the new rules and filings complying with the Taxonomy Regulation had to be made by 14 December 2021.

The Irish Funds Industry Association told its members in an update email last week that the Central Bank had advised the organisation it was reviewing a sample of submissions made under the process, covering approximately 25% of fund management companies and alternative investment fund managers operating in Ireland. 

Fund management expert Áine Ní Riain of Pinsent Masons said the CBI had indicated its intention to carry out the review when it announced the fast-track filing regime. The CBI warned in November that the fast-track regime did not provide scope for a lesser quality of disclosures than would otherwise be produced.

However, Ní Riain said there was no official view from the CBI as to what disclosures would be acceptable.

“It will be interesting to receive insight as to the Central Bank’s expectations on these disclosures at this point. In particular, it will be interesting to see whether the Central Bank’s views on disclosures around percentage alignment have changed since early December and, also, its expectations around the application of the technical screening criteria that were published in the Official Journal only days before the fast-track window closed in December,” Ní Riain said.

Sustainable finance remains a headline topic, with increased disclosure requirements being imposed on a range of financial services firms around Europe and the UK regarding the way in which they are seeking to mitigate climate change and their exposure to climate risk.

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