On 21 March 2022, the Decree implementing Commission Delegated Directives (EU) 2021/169 and 2021/1270 (Besluit implementatie gedelegeerde richtlijnen (EU) 2021/1269 en 2021/1270, the Implementation Decree) was published for public consultation by the Dutch Minster of Finance.
Commission Delegated Directive (EU) 2021/1270 amends Commission Delegated Directive 2010/43/EU thereby imposing obligations on management companies of Undertakings for Collective Investment in Transferable Securities (UCITS) to, among other things:
- when identifying the types of conflicts of interest the existence of which may damage the interests of a UCITS, include conflicts of interest that may arise as a result of the integration of sustainability risks in their processes, systems and internal controls. Those conflicts may include conflicts arising from remuneration or personal transactions of relevant staff, conflicts of interest that could give rise to greenwashing, mis-selling or misrepresentation of investment strategies and conflicts of interests between different UCITS managed by the same management company;
- when considering principal adverse impacts of investment decisions on sustainability factors, disclose how their due diligence policies take those principal adverse impacts into account;
- ensure that its risk management policy also comprises procedures necessary to enable it to assess for each UCITS it manages the exposure of that UCITS to sustainability risks.
Commission Delegated Directive (EU) 2021/1269 amends Commission Delegated Directive 2017/593/EU in a way that means investment firms manufacturing and distributing financial instruments should consider sustainability factors in the product approval process of each financial instrument and in the other product governance and oversight arrangements for each financial instrument that is intended to be distributed to clients seeking financial instruments with a sustainability-related profile. Commission Delegated Directive 2017/593/EU supplements MiFID II with regard to, amongst other things, product governance obligations.
To achieve these changes in the Netherlands, the Implementation Decree will amend the Decree on Conduct of Business Supervision of Financial Undertakings (Besluit Gedragstoezicht financiële ondernemingen Wft), the Decree on Prudential Rules for Financial Undertakings AFS (Besluit prudentiële regels Wft) and the Decree Administrative Fines Financial Sector (Besluit bestuurlijke boetes financiële sector).
The closing date for responses to the public consultation is 22 April 2022.