In the ever-evolving world of finance, it can be challenging for fund managers to keep up with the latest regulatory changes. The Sustainable Finance Disclosure Regulation (SFDR), introduced by the European Union, is one such regulation that has been a hot topic of discussion since its launch. Recently, the European Commission has provided some much-needed clarity on SFDR, and Eve Ellis, an asset management partner at Ropes & Gray, has weighed in on the implications for fund managers.
Ellis, who is based in the firm’s New York office, spoke to The Drawdown about the recent clarifications provided by the European Supervisory Authorities on SFDR. The regulation requires strict labeling for ESG-related products and introduces the first product labeling regulation of its kind. However, the need for further clarification on the definition of sustainable investments raised some questions among fund managers.
According to Ellis, the new guidance clarifies how fund managers should proceed to comply with SFDR. While the guidance retains some flexibility for managers in setting their sustainable investment objectives, it emphasizes that this is a significant responsibility for managers, and the threshold for what qualifies as a sustainable investment should be relatively high.
Ellis also touched on the 500-employee threshold, which requires general partners (GPs) to check the local employment law in the country where their managers are based to determine whether they fall under SFDR requirements. This demonstrates the importance of understanding the nuances of each jurisdiction when it comes to compliance with regulatory requirements.
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Ropes & Gray is a global law firm serving clients for over 150 years. With a focus on providing exceptional client service, the firm has become a leading advisor to businesses, financial institutions, and governments. Ropes & Gray has over 1,400 lawyers and professionals in 11 offices worldwide, including Boston, New York, London, and Tokyo.
The firm has a long history of serving clients in the financial services industry, with expertise in asset management, private equity, and hedge funds. Ropes & Gray has also been recognized for its commitment to diversity and inclusion, ranking among the top firms for diversity and women’s initiatives.
In addition to its legal services, Ropes & Gray is committed to providing thought leadership on important issues facing the financial industry. The firm regularly publishes insights on its website and collaborates with industry publications to share its expertise.
Ellis is one of many talented lawyers at Ropes & Gray who is committed to helping clients navigate complex regulatory environments. She has extensive experience advising fund managers and other financial institutions on a range of issues, including compliance, regulatory filings, and SEC examinations.
In conclusion, the recent clarifications provided by the European Commission on SFDR have important implications for fund managers, and it is crucial for them to understand the new guidance to ensure compliance. Ropes & Gray, with its long history of advising clients in the financial services industry, is well-positioned to help clients navigate these changes and achieve their goals.