Malta Fund Managers Must Comply with ESMA’s New Sustainability Guidelines from March 2024
The European Securities and Markets Authority (ESMA) has issued final guidelines for fund managers in Malta to promote environmental, social, and governance (ESG) awareness among investors. The new rules will be applicable to asset managers operating in Malta, including:
Affected Fund Managers
- UCITS Management Companies
- Alternative Investment Fund Managers
- Self-managed collective investment schemes
The guidelines set a minimum threshold of 80% of investments aimed at meeting environmental, social characteristics, or sustainable investment objectives. This means that fund names must demonstrate how they meet these thresholds.
Consequences for Non-Compliance
Fund names that do not meet the thresholds will be treated as a passive breach and must be corrected in the best interest of investors. The exemption applies only where the deviation is not due to a deliberate choice by the fund manager.
Timeline for Compliance
The guidelines will be translated into all EU languages and published on ESMA’s website within three months. They will come into effect following publication. Funds existing before the application date will have six months to comply with the new rules, while new funds created after that date must adhere to the guidelines immediately.
Industry Reaction
In a statement, regulatory experts hailed the move as a significant step towards promoting transparency and accountability in the investment industry. “These guidelines demonstrate ESMA’s commitment to ensuring that investors are protected and informed about the environmental and social impact of their investments,” said Paul Falzon, Senior Regulatory Advisor.
Key Takeaways
- Fund managers in Malta must comply with new sustainability guidelines from March 2024
- The guidelines set a minimum threshold of 80% of investments aimed at meeting ESG objectives
- Non-compliance will result in passive breaches and corrections in the best interest of investors
- Funds existing before the application date have six months to comply, while new funds must adhere immediately