ESMA publishes its Final Report on Guidelines on funds’ names using ESG or sustainability-related terms

Following the publication on 14 December 2023 by the European Securities and Markets Authority (“ESMA”) of its Public Statement on Guidelines on funds’ names, the CSSF hereby informs market participants that ESMA published on 14 May 2024 its Final Report thereon. In this Final Report, ESMA provides an overview of the feedback received on the related ESMA consultation, which ran from 18 November 2022 to 20 February 2023, and explains how this feedback has been considered. The Final Report also contains the final Guidelines on funds’ names (the “Guidelines”). These Guidelines apply to UCITS management companies (as well as UCITS which have not designated a UCITS management company), alternative investment fund managers including internally managed AIFs, EuVECA, EuSEF and ELTIF and Money Market Fund managers.

The purpose of the Guidelines is to specify the circumstances where the fund names using ESG or sustainability-related terms are unfair, unclear or misleading. Investment fund managers and internally managed funds (“IFMs”) that include ESG or sustainability-related terms in the names of the UCITS and AIFs they manage must comply with the requirements included in the Guidelines.

The CSSF draws the attention of market participants to the fact that the Guidelines apply to IFMs managing UCITS or AIFs, irrespective of whether they are disclosing under Articles 6, 8 or 9 of SFDR. IFMs are thus expected to carry out a self-assessment of the applicability of the Guidelines to the products they manage and to ensure compliance of fund names with these Guidelines.

The Guidelines will apply three months after the date of their publication on ESMA’s website in all EU official languages. IFMs of any new funds created after the date of application of the Guidelines, should apply these Guidelines immediately in respect of those funds. IFMs of funds existing before the date of application of the Guidelines should comply with the Guidelines with respect to those funds at the latest six months after the date of application of the Guidelines.