AUT FMA Use of ESG in Fund Names


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.

Regulators AUT FMA
Entity Types Bank; IA; Ins; Inv Co; Pension
Reference PR, 10/2/2024; ESMA34-472-440, 5/14/2024; ESG
Functions Advertising; Compliance; Environment; Financial; Legal; Reporting
Countries Austria
Category
State
Products Banking; Fixed Income; Fund Mgt; Insurance; Pensions; Securities
Regions EMEA
Rule Type Final
Rule Date 10/2/2024
Effective Date 11/21/2024
Rule Id 228690
Linked to Rule :153820
Reg. Last Update 10/2/2024
Report Section EU

Last substantive update on 10/07/2024