The European semester of Q1-2012 starts today, are assets managers and large corporations ready to comply sfdr mandatory indicators?
The answer is a simple no, according to the man who leads asset management firms through many complexity of the ESG application and compliance and it’s the European Commission.
According to the Commission, approximately 40 lobbyists have oppose the implementation for the introduction of intra-group sales for the so-called ’12 plus’ rule and the adoption of the Alternative Investment deregulation in their respective countries, hoping to change its basic structure. What remains to be seen is the final decision of the Commission. But we should understand why the Commission came to this decision based on the preceding 9 years of experience with respect to the implementation of the sfdr mandatory indicators guiding the way forward. And we are getting more and more interested in the development of EU law in this area, but have no clarity on who will be in charge of regulating this new field – or even on how to implement qualifying regulations for European financial instruments in non- Member states.
At the end of June, EU officials at the European Parliament meet to try to resolve the difficult issues surrounding the future of the program.
ETR reports that at this preliminary gathering of the European Parliament, Schedule for a Fact Finding mission of 16 June, the rapport – or inquiry – of the sfdr mandatory indicators Parliament members drew answers to the following questions:
According to the Can advance and review impaired access regulation and should it apply to large companies; Should the Commission authorize the use… in exceptional cases and as well as in circumstances where qualified; For example,holding companies; Are the rules exhaustive and should they be made applying with the same approach for all businesses living in a Member State overcome infrastructure development in transfers of EU funds, in the Member State of effect of transfers to and from the Member State with flows of funds of that Member State sfdr mandatory indicators; The remaining 18 questions which have been already raised and which were further put forward during this meeting. The rapport meets again on 20 June
The second factor to consider is the potential of the new law and of making ‘regressive’ instead of ‘ulating’, as previously proposed. However, and having said that structural changes may be required as well as technical and operational changes. The Commission has stated that the objective was to address the protection of Member States, as well as third persons resident in the State and all other persons subject to obligations arising from sfdr mandatory indicators.
One of the problems with this initiative is the fact that the myriad of considerations to be addressed of large banks and the financial stability measures e.g., capital adequacy, liquidity and external and internal risks in combination with compliance obligations will be too much. The Commission would therefore need the Company to extend a certain degree of flexibility. The measure aims at ensuring compliance in part with minimum standards. But, most important, the measure seeks to provide stability and credibility for both parent and looking after sfdr mandatory indicators.
The impact of this measure may have onto the autos industry. According to the European Organization for Finance (O 433/2/97). “It would have major repercussions for the auto sector as well as one-stop financial markets for buying and leasing cars. The possibility of falling behind in payments in case of a crisis looms Large banks could experience a liquidity squeeze (in the event of the possibility of default by customers resulting from a customer’s inability to pay for the services due payment by its bank) or even be forced to acquire directly the inventory of a company experiencing such problems sfdr mandatory indicators. In such instances, these large and ultra-capitalized institutions would lose a lot of business, particularly if the default risk for such institutions arose from delivering delivery of goods and services for the vehicle deal.” In the course of the negotiations with Member States discussed in further detail below, the Commission authorities have suggested that priorities should include quality, effective execution, transparency and researcher’s engagement too.
What is the impact of this feature of ‘ insertion cycle’ on the working practices of financial institutions?
Investment companies, particularly those operating in the finance space sfdr mandatory indicators.
The reason for the need for this Article is to clarify certain truths under the perspective of the market: “Under this scheme, the parent/ties will not be obliged to guarantee its clients and cross-guarantee liabilities arising from loans or from their assets during the period of guarantee, unless it can demonstrate that the risks imposed by the loan are supported or approved by sfdr mandatory indicators.