ALFI responds to the European Commission Call for Evidence on the revision of SFDR

In its response, ALFI acknowledges that diverging views remain in the market regarding possible amendments to the Regulation. However, given that SFDR has increased transparency and investors have become accustomed to the current regime, while financial market participants have invested substantial resources in implementing SFDR, ALFI reiterates its preference for the current SFDR regime to be maintained - with targeted amendments.

In the alternative, if SFDR 2.0 was to introduce a categorisation system for financial products, ALFI notes that there would also be support for such a system within the industry. ALFI accordingly proposes aspects that should be considered for a possible categorisation system.

Any changes should be thoroughly tested throughout the value chain prior to adoption.

ALFI further highlights that it is critical for the SFDR to be interoperable with the relevant wider regulatory frameworks that apply to financial market participants and financial products, to ensure consistency and avoid duplication, conflicts and disproportionate regulatory burden (e.g., taking into account the Omnibus, MiFID investor preferences, AIFMD, etc.). Therefore, ALFI proposes that the European Commission awaits the outcome of the Omnibus negotiations prior to proceeding with the SFDR proposals.

View the ALFI response.