The European Securities and Markets Authority ("ESMA") published the official translations of its guidelines on funds' names using ESG or sustainability-related terms (the "Guidelines") in August 2024, confirming the application date of 21 November 2024 for new Irish undertakings for collective investment in transferable securities ("UCITS") and alternative investment funds ("AIFs") . The Guidelines specify the conditions that apply where certain terms are used in fund's names, as detailed in our briefing note.
Existing funds established prior to 21 November 2024 have until 21 May 2025 to make the necessary changes to comply with the Guidelines, which may involve:
- a change to the name of the fund; or
- changes to the investment policy / strategy to comply with the Guidelines.
Following a submission by Irish Funds in June 2024 requesting the implementation of a streamlined filing process, the Central Bank of Ireland ("Central Bank") published a process clarification confirming that a streamlined process would apply with respect to changes to funds' names. Following feedback from industry, which outlined that a very small proportion of funds would be able to avail of the fast-track if it was restricted to changes to fund names only, the Central Bank issued an updated process clarification confirming that, where the changes were to the fund's name or involved minor changes to Sustainable Finance Disclosure Regulation ("SFDR") related disclosures in the prospectus, supplement or SFDR Annex, then the streamlined filing process may be used.
The Central Bank has stated that the minor changes to fund documentation should not represent a material change to either of the investment objective, investment policy, strategy or risk profile of the fund and should be made solely for the purpose of bringing the fund into compliance with the Guidelines.
UCITS management companies and alternative investment fund managers ("AIFMs") will be required to certify compliance with the Guidelines via an attestation that must be submitted to the Central Bank with the filing. Where there are minor changes to the fund documentation, the process clarification refers to the fund board and the fund's legal provider must also providing an attestation.
Filings must be made with the transition period (21 November 2024 to 21 May 2025) for existing funds. The Central Bank will carry out a sample review of the submissions noted via the fast-track process.
We understand that, while the Central Bank is not expected to issue further guidance in relation to implementing the Guidelines, ESMA may publish guidance, including relating to the treatment of green bonds and the meaning of the term "invest meaningfully", in Q1 2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
