On 21 August 2024, ESMA published the translations in all official EU languages of its Guidelines on funds’ names using ESG or sustainability-related terms (the Guidelines).

The Guidelines will start applying on 21 November 2024 (the Application Date) – i.e., three months after this publication.

Any new funds created on or after the Application Date are expected to apply these Guidelines from launch. For funds existing before the Application Date, there is an additional six-month transition period, ending on 21 May 2025.

Notwithstanding the above, the application of the Guidelines in any particular case is dependent on the approach taken by the national competent authorities, which must notify ESMA by 21 October 2024 whether they (i) comply, (ii) do not comply, but intend to comply, or (iii) do not comply and do not intend to comply with the Guidelines.

The objective of the Guidelines is to ensure that investors are protected against unsubstantiated or exaggerated sustainability claims in fund names, and to provide fund managers with clear and measurable criteria to assess their ability to use ESG or sustainability-related terms in fund names.

For full details of the requirements under the Guidelines, please refer to our OnPoint “ESMA Publishes Guidelines on Funds' Names Using ESG or Sustainability-Related Terms”, available here.