The Central Bank of Ireland (CBI) has said it will fast-track the filing process for funds seeking to change their name to comply with new ESG naming rules under the Sustainable Finance Disclosure Regulation (SFDR).
It means UCITS or Alternative Investment Funds (AIFs) applying to change their name will see their applications “streamlined” to meet the deadlines.
New funds will be required to adhere to the guidelines from 21 November, while existing funds will have to make sure any changes are made within the transition period which will run from the November deadline to 21 May 2025.
The changes are thought to “disproportionately” impact ETFs. Under the rules, published in May, funds with the term ESG or sustainable in their name must have at least 80% of investments tied to environmental or social characteristics.
Out of its 1600 funds impacted by the new rules, just 21% (354) are ETFs and index funds, according to Morningstar data.
However, they account for almost half (45%) of the $40bn worth of stocks affected by the exclusion rules.
The CBI said any other changes made to fund documents as a result of changes to SFDR guidelines will not be included in the fast-track process.
In August, the European Securities and Markets Authority (ESMA) updated its guidelines on ESG fund naming rules, setting the November deadline.
ESMA has implemented the guidelines to protect investors from greenwashing and unsupported sustainability claims.
