Read the CySEC Circular C704
Memo #30-2025
CySEC Circular No: C704
Date: 05/05/2025
Subject: Analytical Guidance on Sustainable Finance Regulatory Framework-Investment Fund Managers Perspective
Purpose: To inform Cyprus Investment Fund Managers on the relevant Sustainable Finance Regulatory Framework and of the findings of the relevant CySEC supervisory exercise and relevant supervisory expectations.
In Summary:
CySEC has issued the Circular C704 on 02/05/2025 to provide information and guidance to Cyprus Investment Fund Managers (Cyprus UCITS Management Companies and Self-Managed Cyprus UCITS [‘CyUCITS MCs’], Cyprus Alternative Investment Fund Managers and Self-Managed Cyprus AIFs [‘CyAIFMs’] and Sub-Threshold Cyprus Alternative Investment Fund Managers and Self-Managed Cyprus AIFs [‘sub- threshold CyAIFMs’]) on the Sustainable Finance Regulatory Framework and the developments on this Regulatory Framework, as well as to inform regarding relevant supervisory expectations taking into consideration the findings of the relevant CySEC supervisory exercise on a sample of Cyprus Investment Fund Managers (‘CyIFMs’) undertaken during 2023 and 2024 on the sustainability-related disclosures and the integration of sustainability risks in the Investment Fund Sector.
At the European Securities and Markets Authority (‘ESMA’) level, Environmental, Social and Governance (ESG) Disclosures have been decided as a Union Strategic Supervisory Priority (USSP) for the years 2023, 2024 and 2025. With regards to the Investment Management (‘IM’) sector, in the context of the joint identification and prioritization of risks by ESMA and the Member States (‘MS’), the integration of ESG factors as well as greenwashing, is placed at the highest level of supervisory priorities.
This Circular C704 provides information and guidance on the current relevant Regulatory Framework on Sustainable Finance, the applicability of this Circular C704, the disclosure obligations of the Sustainable Finance Disclosure Regulation (‘SFDR’), the relevant website disclosures regarding what information must be published on CyIFMs websites. It also provides information and guidance on the minimum pre-contractual disclosures by all CyIFMs, the periodic reports disclosures, the content/presentation and consistency of marketing communications, the operational obligations of CyIFMs, as well as it provides information on the upcoming EU Regulatory updates.
CySEC informs that it expects CyIFMs to adhere to the content of this Circular C704 and ensure the enhancement of their company’s and investment funds’ ESG culture through the adoption of policies, procedures and practices that ensure compliance with the applicable legal obligations regarding the integration of sustainability risks and disclosures.
Read the CySEC Circular C704
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