On Oct. 2, AUT FMA issued update on ESMA guidelines on fund names.
AUT FMA will incorporate ESMA guidelines on funds using ESG or sustainability-related terms in their fund names into its administrative practice as of Nov. 21, 2024.
Follows May 2024 ESMA issued report with guidelines on ESG fund names, #153820.
Also follows Jan. 2024, AUT FMA updated on regulatory changes, new rules, #197102.
Compliance
For new funds in particular, AUT FMA will review the requirements as binding criteria in the fund regulations of the funds as part of the approval process.
To monitor ongoing compliance with new requirements and reduce risk of greenwashing, AUT FMA conducts targeted supervision to review compliance with disclosed investment strategy and monitor compliance with the new requirements.
ESMA Guidelines
Guidelines intended to protect investors from unsubstantiated sustainability claims.
Stipulate a minimum threshold of 80% of investments for the use of these terms.
I.e. if the name implies a specific ESG investment objective, then at least 80% of the assets under management must meet this objective.
Guidelines also provide for exclusion criteria: depending on the ESG-related term in the fund name, investments in companies in certain sectors are excluded.
Austrian Funds
Over 200 funds with over €40 bln assets under management directly affected.
Almost all domestic investment companies offer such sustainability funds.
Indirectly, new guidelines on fund names also relevant to other sectors of the financial market, e.g. securities sales at banks, unit-linked life insurance policies, pensions.
