Three days ago, the Luxembourg regulator CSSF published its circular 24/863 which implements the ESMA Guidelines on the use of ESG terminology in the names of investment funds. The Guidelines were first published in May 2024 and have the objective of regulating which ESG related terms (such as “green”, “sustainable” or “equality”) can be used in the names of investment funds, and under which conditions, among others setting out thresholds for the portfolio composition of such funds.

Beyond merely replicating the ESMA Guidelines, the CSSF also revealed a fast-track procedure for those existing funds that are under its supervision (this should mainly concern UCITS and SIFs) and therefore have to conduct an approval procedure in case they need to make any changes in their documentation (to their name or ESG related disclosures) to comply with these new rules.

The new guidelines apply from 21 November onwards for newly established funds, while existing funds have until 21 May 2025 to comply. Of course these rules also apply to investment funds (such as RAIFs or partnerships) that are not directly supervised by the CSSF; these should therefore also make a self-assessment whether they need to make any changes, but do not need to conduct an approval procedure with the CSSF.

The fast-track procedure with the CSSF (called “PPP” or “priority processing procedure” – don’t we all just love acronyms) involves completing a form (of course it does) that has to be signed, summarising the contemplated changes and providing a number of representations. These changes have to be limited to amending the name, or making verey slight changes to any ESG related disclosures (otherwise a normal approval procedure has to be used instead of the PPP).

I authored about this subject can be found here.