SFC Consultation Conclusions on the Management and Disclosure of Climate-related Risks by Fund Managers

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On 29 October 2020, the Securities and Futures Commission (SFC) issued a Consultation Paper on the Management and Disclosure of Climate-related Risks by Fund Managers (Consultation Paper), which proposed requiring fund managers to take climate-related risks into consideration in their investment and risk management processes and make appropriate disclosures. The SFC proposed that the Fund
Manager Code of Conduct (FMCC) be amended to provide high-level principles and that a circular be issued to set out expected standards for complying with the FMCC (collectively referred to as the SFC’s proposed requirements).

The consultation ended on 15 January 2021. The SFC received 52 written submissions, including submissions from various industry associations, asset management firms, professional bodies and individuals.

Click here to read the full Consultation Conclusion

In general, the SFC received positive feedback on the proposed requirements focusing on climate-related risks which would at the initial stage apply to fund managers managing collective investment schemes (CISs). Respondents also agreed with the proposal to make reference to the well-recognised Task Force on Climate-related Financial Disclosures (TCFD) Recommendations in developing the requirements and to implement them using a two-tier approach, i.e., with baseline requirements for all fund managers and enhanced standards for fund managers with assets under management (AUM) that equal or exceed certain threshold (Large Fund Managers).

Source: The Securities and Futures Commission (SFC)

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