The Central Bank of Ireland (CBI) has streamlined its filing process so that funds can comply with the European Securities and Market Authority’s (ESMA) ESG fund naming rules more efficiently.
In a market update, the Irish regulator said it had updated its filing process to “reflect implementation of ESMA’s guidelines on funds names using ESG or sustainability-related terms.”
The CBI added this will “result to an ability, in addition to changes to fund names, to incorporate minor changes to disclosure in the offering documentation and pre-contractual documentation made solely for the purpose of bringing the fund into compliance with the Guideline requirements”.
It comes as the rule change deadline fast approaches, with ESG fund naming rules set to come into effect on 21 November.
The rules – published in May – state ETFs using the term ESG or sustainable in their name must have at least 80% of investments tied to environmental or social characteristics.
In July, BaFin started to use ESMA’s ESG fund naming rules earlier than expected as the German regulator encouraged “a level playing field” for EU funds.
In June, Morningstar Sustainalytics research found passive funds will be “disproportionately” impacted by the EU’s updated ESG and sustainability fund naming rules.
Out of its 1600 funds impacted by the new rules, the research found 21% (354) are ETFs and index funds. However, they account for almost half (45%) of the $40bn worth of stocks affected by the exclusion rules.
