Consolidated Q&As on the SFDR
The European Supervisory Authorities published consolidated Q&As with additional Q&As on the following.
- The meaning of the term "water usage" (IV. PAI disclosures, Q&A 30).
- Clarification about how to calculate useful internal floor area for owned real estate assets (IV. PAI disclosures, Q&A 31).
- Best practice for financial products when disclosing percentages of environmentally sustainable investments and socially sustainable investments in PCDs where the percentages do not equal the total minimum proportion of sustainable investments in the asset allocation section (V. Financial product disclosures Q&A 29).
- How financial products should calculate top investments or shares of investments in periodic disclosures (V. Financial product disclosures Q&A 30).
IMF on investment funds regulation provision and systemic risk monitoring in the Euro area
The IMF published a Euro Area: Publication of Financial Sector Assessment Program Documentation-Technical Note on Investment Funds Regulation, Supervision and Systemic Risk Monitoring. Some highlights are set out below.
- The majority of funds are held by institutional investors and the share of funds held by investors outside of the EU continues to grow.
- Given the importance of the oversight role of depositaries in the EU, the independence requirements for these entities should be strengthened.
- Reform of the MMF Regulation should be a priority, noting that recent reforms in the US, and upcoming in the UK, mean the EU would remain an outlier within key MMF jurisdictions with a regulatory framework not fully in line with international recommendations. This could create regulatory arbitrage and greater potential uncertainty in periods of stress.
- Authorities should swiftly move towards a single reporting framework which enables data accessibility between the authorities.
- Macroprudential powers allowing ESMA to top up national leverage limits or liquidity requirements for significantly leveraged investment funds.
- System-wide stress testing (incl. banks and non-banks).
AML/CFT
AML: EBA Opinion on ML/TF risks affecting the EU’s financial sector
The European Banking Authority (EBA) published its 2025 Opinion on ML/TF risks affecting the EU’s financial sector.
The opinion outlines observations regarding the ML/TF risk landscape in the context of geopolitical developments, legislative reforms and digitalisation, looking in particular at FinTech, RegTech, crypto assets, fraud, AI and restrictive measures. The opinion also considers AML/CFT trends by sector.
For more information on these topics please contact any member of A&L Goodbody's Asset Management & Investment Funds team.
