EU: SFDR Level 2 amendments may be delayed

With the clock ticking on the three months that the European Commission (the “Commission”) has to approve and adopt the draft Delegated Regulation amending the SFDR Level 2 (“draft amending SFDR RTS”), the future looks uncertain. The Commission has indicated that it will not adopt the ESAs proposed amendments (see our previous blogpost and webinar) before the end of the current EU legislative cycle. 

Background

At a European Parliament session held on 23^rd January to facilitate the Parliament’s scrutiny of the draft SFDR RTS, Hélène Bussières, Deputy Head of the Asset Management Unit at the Commission, indicated that approval of the draft will be delayed.

The delay is attributed to a myriad of factors, ranging from the backlog of work at the Commission to the length and complexity of the proposed SFDR Level 2 amendments themselves. 

Even though, Bussières is of the view that amendments to the SFDR Level 2 could come into effect in 2025, others see a risk of the can being kicked further down the road – particularly given the wider review of SFDR that is expected to follow under the next Commission. The upcoming European Parliament elections, and the priorities of those elected in June will also no doubt be key in shaping the timing and the substance of any amendments ultimately agreed.

As is the case with all things uncertain, only time will tell… 

The briefing paper for the European Parliament scrutiny session can be found here.