CSSF (Luxembourg) publishes FAQ on the Sustainable Finance Disclosure Regulation

On 2 December 2022, the Commission de Surveillance du Secteur Financier (“CSSF”), Luxembourg’s supervisory authority, issued a FAQ clarifying some issues arising out of the Sustainable Finance Disclosure Regulations (“SFDR”).


The CSSF clarifies that the FAQs apply to the “Financial Market Participants” (“FMPs”) as provided below:

  • Alternative Investment Fund Managers (AIFMs);
  • UCITS Management Companies;
  • Managers of a qualifying EuVECA; and
  • Managers of a qualifying EuSEF.

The FAQs also applies to the below “Financial Products:

  • Alternative Investment Funds (AIFs); and
  • Undertakings for Collective Investment in Transferable Securities (UCITS).

The CSSF highlights that the FAQs are to be read in conjunction with the Q&As issued by the EU Commission, clarifications issued by the European Supervisory Authorities and other CSSF communications on SFDR.

The FAQs tackle, amongst other issues, updates of prospectuses/issuing documents; website disclosures; pre-contractual disclosures; and periodic disclosures.

Updates of prospectuses/Issuing documents

As from 1 January 2023, the regulatory technical standards that supplement the SFDR (the “RTS”) require that mandatory templates are prepared for Article 8 and Article 9 financial products. The CSSF confirms that any changes to such pre-contractual templates are to follow the same process as applied with respect to any other changes to the prospectus/issuing document.

The CSSF goes on to clarify, that with respect to those financial products that are introducing the templates in order to comply with SFDR and RTS, such an inclusion of the mandatory templates, will not constitute a material change as defined under Circular CSSF 14/591.

Website disclosures

The CSSF clarifies that were a Luxembourg FMP delegates portfolio management to another investment fund manager, the accountability and responsibility of the FMP with respect to Article 10 SFDR on website disclosures (with respect to the financial product which it manages) remain with the FMP.

Pre-Contractual disclosures

Minimum Thresholds – Article 8 / Article 9 Financial Products

Where Article 8 or Article 9 funds disclose minimum investment thresholds, the CSSF clarifies that such investment thresholds are binding commitments with respect to the investment strategy of the that financial product. The FMPs need to ensure ongoing compliance with all the rules provided in the prospectus and furthermore, the depositary is responsible to monitor compliance with investment restrictions as per applicable legal provisions related to obligations of oversight.

Sustainable Investments – Article 9 Financial Products

The CSSF clarifies that with regards to financial products classified as Article 9 funds under the SFDR, underlying assets of such financial products must all qualify as “sustainable investments” (in terms of Article 2(17) of SFDR) as from the day when the investment is made and on an on-going basis throughout the duration of the financial product. However, this does not prevent financial products from including other investments for certain specific purposes such as hedging or liquidity which need to fit the overall sustainable investment objective of the fund.

Exclusion Strategies – Article 8 / Article 9 Financial Products

With regards to financial products that are disclosing under Article 8 of SFDR, the CSSF highlights that the use of exclusion strategies may be considered sufficient for financial products to be seen as promoting environmental or social characteristics under Article 8 of SFDR. The CSSF however states that, financial products disclosing under Article 8 of SFDR are to provide a detailed description, in order for investors to understand, how the investment strategy (that is based solely on an exclusion strategy) results in the promotion of environmental or social characteristics.

The CSSF explains that with regards to financial products having sustainable investment as their objective (Article 9 financial products), an exclusion strategy will not suffice to evidence such an objective given that all the underlying assets of the financial product must qualify as “sustainable investments” as provided in Article 2(17) of SFDR. Exclusions strategies (that are in line with the investment strategy of the financial product), may be used on top of the positive investment selection process of the fund.

Periodic disclosures

The FAQs highlight that financial products disclosing pursuant to Article 8 or Article 9 of SFDR, need to comply with the periodic disclosure requirements under Article 11 of SFDR and the RTS. This includes the use of the prescribed templates as set out in the RTS as part of the annual reports issued after 1 January 2023.

Get in touch with our team in Luxembourg for more information.