Enhancing SFDR Compliance and Upgrading to Article 9 Status
Overview
Overview
An asset manager sought to elevate its fund from an Article 6 to an Article 9 classification under the Sustainable Finance Disclosure Regulation (SFDR). This transition aimed to integrate sustainability objectives into the investment strategy, ensuring compliance with evolving regulatory standards and enhancing transparency for investors.
Achieving Article 9 status required a meticulous review of sustainability commitments, clear investor communications, and approval from the Financial Market Authority (FMA). Aspect Advisory was engaged to conduct a comprehensive regulatory assessment, refine sustainability disclosures, support investor communications, and secure regulatory approval for the reclassification.
Our Approach
Our Approach
Aspect Advisory deployed a structured and strategic methodology centered on compliance, transparency, and regulatory alignment.
> Regulatory Compliance Review & Gap Analysis
- Conducted a detailed assessment of the fund’s investment policies, prospectus, and sustainability disclosures.
- Identified gaps and misalignments with Article 9 criteria and developed a roadmap for compliance.
- Engaged with the FMA to address queries, refine documentation, and align with regulatory expectations.
- Benchmarked the fund’s sustainability framework against industry best practices.
> Prospectus Enhancement & Disclosure Updates
- Revised the fund’s prospectus to clearly articulate sustainability objectives, methodologies, and reporting commitments.
- Strengthened transparency by refining ESG-related disclosures in line with SFDR obligations.
- Developed a structured sustainability narrative, fostering investor clarity and confidence.
- Provided guidance on integrating sustainability commitments into the fund’s website and investor materials.
> Regulatory Submission & Approval Process
- Coordinated with legal and compliance teams to prepare the necessary documentation for regulatory approval.
- Addressed feedback from the FMA, ensuring full compliance with SFDR Article 9 requirements.
- Streamlined the approval process by implementing a robust ESG framework and a clear disclosure strategy.
Outcome
Outcome
Aspect Advisory’s expertise enabled the fund to successfully transition to Article 9 status, achieving:
- Regulatory Approval – Secured FMA clearance for the Article 9 reclassification.
- Enhanced Transparency & Investor Confidence – Strengthened sustainability disclosures to foster trust.
- Stronger Market Positioning – Positioned the fund as a leader in sustainable investing, attracting ESG-focused investors.
- Reduced Regulatory Risk – Proactively mitigated compliance risks, ensuring alignment with SFDR.
Business Focus
Business Focus
The transition to Article 9 status was not just a regulatory exercise—it was a strategic decision to position the fund as a leading sustainable investment vehicle. By successfully navigating the reclassification, the asset manager achieved:
- A stronger ESG investment framework, ensuring alignment with investors’ sustainability preferences.
- Market differentiation, strengthening the fund’s appeal to institutional investors focused on ESG.
- Long-term regulatory preparedness, mitigating potential compliance risks as regulations continue to evolve.
Expertise and Skills Leveraged
Expertise and Skills Leveraged
- Regulatory Compliance & Governance – Ensured full SFDR Article 9 compliance and adherence to best practices.
- Sustainable Investment Strategy – Integrated sustainability at the core of fund operations.
- Investor Relations & Reporting – Improved clarity and transparency in sustainability communications.
Insight: Strengthening Regulatory Compliance and Risk Management in the Banking Sector
Insight: Strengthening Regulatory Compliance and Risk Management in the Banking Sector
- Strategic Alignment is Critical for Article 9 Reclassification
Sustainability must be embedded into the investment strategy, not just reflected in disclosures.
- Regulatory Approval Requires a Robust ESG Narrative
A well-documented sustainability framework increases the likelihood of a smooth transition.
- Investor Expectations Are Evolving
Investors demand measurable sustainability outcomes, making transparency a key competitive advantage.
Key Takeaways from the Project
Key Takeaways from the Project
- Sustainability Integration is Key – Compliance with Article 9 requires genuine sustainability integration, not just improved disclosures.
- Clear ESG Narratives Accelerate Approvals – A structured, well-documented sustainability framework improves the chances of regulatory success.
- Transparency is a Competitive Advantage – Investors are increasingly prioritizing funds with clear and measurable sustainability commitments.
- Regulatory Engagement is Essential – Close collaboration with regulators helps in addressing feedback proactively, reducing approval delays.
Why This Case Study Matters
Why This Case Study Matters
As sustainability regulations evolve, asset managers must adapt to maintain market credibility and regulatory compliance. Aspect Advisory’s strategic guidance not only facilitated this transition but also reinforced the fund’s position as a sustainable investment leader.
By aligning regulatory requirements with best practices in ESG reporting and transparency, we ensured a seamless transition to Article 9 status, setting a benchmark for responsible investing in the financial sector.