Legal Framework

Consob warning notice of March 4, 2021

Disclosures obligations on sustainability in the financial services sector

As of 10 March, Regulation (EU) 2019/2088 on disclosure (hereinafter, also SFDR) on sustainability in the financial services sector will apply to financial market participants (FMPs) and financial advisors (FAs). It lays down disclosure obligations on sustainability at entity level (information referring to the entity/activity) and at product level ("financial products" defined in Article 2, para. 1, point. 12 of the SFDR).

The information envisaged by the SFDR is to be provided by different means, i.e. websites, pre-contractual disclosures and periodic reporting.

Pursuant to Recital 11 of the SFDR, the Regulation integrates the disclosure obligations already provided for in the current sectoral regulations on products and services, while also maintaining (Recital 12) the requirements to act in the best interest of final investors, imposed to financial market participants and financial advisors by the existing frameworks.

On 4 February 2021, the ESAs published and sent to the European Commission the draft of the Final Report on Regulatory Technical Standards (hereinafter RTS) relating to the SFDR. The Final Report relates to disclosures obligations regarding, among others, the principal adverse impacts on sustainability factors of investment decisions/advice; the pre-contractual and periodic disclosures on the characteristics/sustainability objectives of the product; the product disclosure through websites to describe the characteristics/sustainability objectives of the product and the methodologies used.. It also contains templates for pre-contractual and periodic product disclosure.

On 25 February 2021, the ESAs published also a Supervisory Statement ( to point out that, in order to fulfil the disclosure obligations provided for under Articles 2a , 4, 8, 9, and 10 of the SFDR - pending the entry into application of the relevant RTS, (currently envisaged as of 1 January 2022), financial entities may refer to the draft Final Report on RTSs, published on 4 February 2021 even though these RTSs may undergo changes in the ongoing adoption process.

Periodic reports to Consob pursuant to Resolution no. 17297/2010 are to be integrated with a description of the measures taken and the controls carried out to comply with the provisions of the SFDR 1[1].

Paolo Savona

[1] In particular, asset management companies (SGR)and EU management companies (SGA) that carry out the activity for which it has been authorised and/or market their own or third-party UCITS in the Italian territory are required tonotify, in addition to the yearly “Report on the organizational structure" by 31 March, ("of , any significant interim changes of the management company processes (so-called "per event" information), within the terms provided for in the aforementioned resolution 17297/2010.

See also: Q&A on sustainability‐related disclosures in the financial services sector (Regulation (EU) 2019/2088) of 4 March 2021