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EU Regulation 2019/2088 on the Sustainability-Related Disclosures: What are the Necessary Steps?

Updated: Jan 29


March 10, 2021, is a decisive day for IFMs, UCITS and alternative investment fund managers and all financial products who must comply with European Regulation 2019/2088 (SFDR) regarding:

  • meeting transparency regulations on the incorporation of sustainability risks as part of investment strategies,

  • consideration of negative sustainability impacts.

How to Comply With SFDR?


By March 10, fund managers must:

  • incorporate sustainability risks into the investment decision-making process,

  • provide evidence of their integration,

  • assess and disclose the expected impact on the investment returns.

This is required by Article 6 of the SFDR, which outlines how this information must be disclosed in fund prospectuses, website and all pre-contractual documentation and made available to investors. Likewise, where financial market participants deem sustainability risks not relevant, there is a requirement to clearly explain why in the prospectus and made it available to the investors. In addition, according to Article 7 of the SFDR, if IFMs decide not to consider the adverse effects or negative impacts of risk choices on the fund's sustainability factors, it is their responsibility to highlight this decision in the prospectus, websites and all pre-contractual documents and notify investors.

Other essential information concerns funds that incorporate environmental, social, or both characteristics, and sustainable investment funds. They are both required to update the prospectus information to make investors aware of the SFDR provisions (Articles 8 and 9).

It is worthy to note that considering sustainability factors in investment decision-making and advice processes aims to achieve benefits beyond the financial markets. As stated in the Regulation, including sustainability factors increases the resilience of the economy and the financial system's overall stability. Therefore, financial market participants and financial advisors must provide the necessary information to enable final investors to make educated investment decisions.


Role of Fund Managers


It is up to fund managers to ensure that compliance operations are met in the manner and within the timeframe required. In particular, IFMs must:

  1. Update UCITS prospectus, or issuing document for visa stamp, stating the fund's condition to its obligations under the SFDR. This document must be submitted to the CSSF by February 28, 2021.

  2. Ensure compliance with the publication and ongoing updating of information on the websites regarding:

  • Risk and sustainability policies

  • Investment decision-making processes

  • Negative sustainability impacts as defined in Article 4 of the SFDR

  • Remuneration policies

CSSF’s Fast-track Implementation: Luxembourg Financial Reality


Luxembourg's financial sector is growing strongly, as is sustainable finance, a trend that is now more than evident. The Government has promoted many innovative initiatives towards sustainable finance, confirming its position as a European leader in this field. The SFDR establishes obligations for financial market participants and financial advisors. In particular, the CSSF clarifies which entities the European regulation is aimed at:


  • FMPs: alternative investment fund managers (AIFMs), UCITS management companies, managers of a qualifying venture capital fund or a qualifying social entrepreneurship fund, credit institutions or investment firms which provide portfolio management, and institutions for occupational retirement provision (IORP);

  • FAs: credit institutions, investment firms, AIFMs, and UCITS management companies that provide investment advice.

The information in Articles 6, 7, 8, and 9 of the SFDR must be included in UCITS prospectuses and submitted by IFMs to the Luxembourg CSSF by February 28 for each fund they manage.


To simplify the process, the CSSF has made available a fast-track procedure.

How Does the Fast-Track Procedure Work?


Step 1

The fund manager is required to submit a confirmation of the updated prospectus/issuing document submitted for visa stamp and SFDR compliance policies and processes. The confirmation letter must be signed by the following parties involved:

  • a representative of the UCITS management company

  • a representative of the investment company that has not designated a management company

  • a representative of the AIF or legal counsel or any other representative of the IFM or fund

Click here to get the confirmation letter template.

Step 2

The prospectus/issuing document submitted for visa stamp must be uploaded in a clean version (CSSF Circular 19/708 on e-document transmission) together with the filled-in confirmation letter, the updated prospectus/issuing document, and, if applicable, the investor information notice concerning the update.

Step 3

After CSSF approval, the prospectus/issue document will be visa stamped and returned via e-file/Sofie channel. Conversely, suppose the CSSF does not consider the submitted documentation to be valid. In that case, the manager or fund will be notified to submit a new version of the prospectus/issue document.

Please note that this fast-track process is limited to SFDR related changes.

Our dedicated team will keep monitoring the ESG policy implementation and configuration process in financial realities. Specifically, MAQIT's partner Frank Wiseler is on hand for any related needs.

Find out how we can help you.

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