21 October 2024
Ref.: 2303149

Circular no.: 27/2024
To entities in the financial market and financial advisers, cf. the first paragraph of Article 1 of Act no. 25/2023 and pension funds that offer minimum insurance protection within the meaning of Act no. 129/1997, the Association of Companies in Financial Services and the National Association of Pension Funds.

Subject: Rules on sustainability-related disclosures in the financial services sector no. 1023/2024.

The Central Bank of Iceland has issued Rules on sustainability-related disclosures in the financial services sector no. 1023/2024.1 The Rules enter into force on 1 December 2024 and transpose into Icelandic law two delegated regulations of the European Union on sustainability-related disclosures in the financial services sector; on the one hand Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 supplementing Regulation (EU) 2019/20882 of the European Parliament and of the Council, and on the other hand Commission Delegated Regulation (EU) 2023/363 of 31 October 2022,3 which supplements and amends the aforementioned delegated regulation. The Rules are laid down pursuant to the second paragraph of Article 8 of Act no. 25/2023 on sustainability-related disclosures in the financial services sector and a classification system for sustainable investments.

The Rules apply to entities in the financial market and financial advisers, cf. the first paragraph of Article 1 of Act no. 25/2023. Although the Rules apply without restrictions to the activities of pension funds relating to supplementary insurance protection, only the provisions of Articles 4-10 and Article 12 of Delegated Regulation (EU) 2022/1288 apply to pension funds that offer minimum insurance protection when they publish information pursuant to Articles 3-5 of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the SFDR Regulation). The Rules were published in the Official Gazette on 30 August last.4

The delegated regulations contain a technical regulatory standard supplementing the provisions of the SFDR Regulation, which was transposed into Icelandic law by item 1 of Article 2 of Act no. 25/2023. The delegated regulations concern the content and presentation of information in connection with the principle of 'do no significant harm5', specify the content, methodology and presentation of information in connection with sustainability indicators and adverse impacts on sustainability, and the content and presentation of information in connection with the promotion of environmental or social characteristics and sustainable investment objectives in pre-contractual documents, on websites and in periodic reports. In the annexes to the delegated regulation (EU)

[1] Cf. the Central Bank of Iceland's discussion document no. 3/2024 (Discussion documents | the Financial Supervisory Authority (fme.is), which was announced by Circular no. 18/2024. No comments were received by the Central Bank.

[2] See p. 128: su-nr-58-is-01-08-2024.pdf (efta.int)

[3] See p. 200: su-nr-58-is-01-08-2024.pdf (efta.int)

[4] stjornartidindi.is/Advert.aspx?RecordID=4d694726-b27f-415c-935a-b501bf26f5a5

[5] The principle of 'do no significant harm' relates to the disclosure of the principal adverse impacts of investment decisions on sustainability factors. Information on financial products regarding the principle of 'do no significant harm' explains how indicators of adverse impacts have been taken into account.

2022/1288 contains a template for a statement on principal adverse impacts on sustainability, a template for pre-contractual disclosure for certain financial products and a template for periodic disclosure for certain financial products.

By this circular, the Financial Supervisory Authority of the Central Bank of Iceland directs the above-mentioned entities to begin preparations for the entry into force of the requirements of Regulation (EU) 2022/1288, as amended by Regulation (EU) 2023/363.

If questions arise regarding this circular, they can be sent to the email address: sedlabanki@sedlabanki.is.

Yours faithfully,
CENTRAL BANK OF ICELAND

Linda Kolbrún Björgvinsdóttir
Managing Director
Conduct Supervision

Erna Ágústsdóttir
Lawyer
Conduct Supervision