Even if the fund delegates part of its portfolio to another manager, the financial market participant must report PAIs for 100% of the fund. Delegation does not change accountability.
A financial market participant manages a fund disclosing according to Article 8 or 9 SFDR. It manages 30% of this fund and delegates the management of the remaining 70%. Should the reported product level PAI be a weighted average of the internally and externally managed portfolios? In the context of Article 4 SFDR disclosures, how should investments made by a delegate be treated?
At the level of the financial product, the ESAs expect disclosure on PAI to cover all investments of the product, irrespective of whether the investment management is delegated or not. Considering the fact that delegation has no impact on the accountability of the delegator, it is expected from the delegating financial market participant to have the same level of information about the investments it made itself and the investments made by its delegate. In this regard, the ESAs expect all investments to be reported. At the financial market participant level, for the purpose of including investments by such a fund in a financial market participant’s PAI disclosure (under Article 4 SFDR), all investments should be included in the reporting disclosed by the delegator, with the impact in the various indicators in Table 1 of Annex I of the Delegated Regulation weighted according to the value of those investments. For the purpose of calculating the “current value of all investments” for the Article 4 SFDR disclosures, referred to under points 1 to 4 in the formulas of Annex I of the Delegated Regulation, where part of the investments may be made by a delegate, the financial market participant must ensure that it has information from the delegate to be able to fulfil the PAI disclosure requirements under Article 4(1)(a), 4(3) and 4(4) SFDR, as specified in Chapter II and Annex I of the Delegated Regulation.
European Supervisory Authorities (ESAs)
