On November 4, 2021, the Ontario Securities Commission issued a press release referencing the Recommendations on Sustainability-Related Practices, Policies, Procedures and Disclosure in Asset Management (the Final Report) published by the Sustainable Finance Task Force (STF) of the International Organization of Securities Commissions (IOSCO) on November 2, 2021. The Final Report sets out recommendations for securities regulators and policymakers, as applicable, that aim to improve sustainability-related practices, policies, procedures and disclosure in asset management. The Ontario Securities Commission (OSC) was a co-lead of the STF workstream that produced the Final Report, which follows the consultation report that was published on June 30, 2021.
The Final Report: The Final Report sets out recommendations for securities regulators and policymakers, as applicable, that aim to improve sustainability-related practices, policies, procedures and disclosure in asset management:
Asset Manager Practices, Policies, Procedures and Disclosure: Securities regulators and/or policymakers, as applicable, should consider setting regulatory and supervisory expectations for asset managers in respect of the:
(a) development and implementation of practices, policies and procedures relating to material sustainability-related risks and opportunities; and
(b) related disclosure.
Product Disclosure: Securities regulators and/or policymakers, as applicable, should consider clarifying and/or expanding on existing regulatory requirements or guidance or, if necessary, creating new regulatory requirements or guidance, to improve product-level disclosure in order to help investors better understand:
(a) sustainability-related products; and
(b) material sustainability-related risks for all products.
Supervision and Enforcement: Securities regulators and/or policymakers, as applicable, should have supervisory tools to monitor and assess whether asset managers and
sustainability-related products are in compliance with regulatory requirements and enforcement tools to address any breaches of such requirements.
Terminology: Securities regulators and/or policymakers, as applicable, should consider encouraging industry participants to develop common sustainable finance related terms and definitions, including relating to ESG approaches, to ensure consistency throughout the global asset management industry.
Financial and Investor Education: Securities regulators and/or policymakers, as applicable, should consider promoting financial and investor education initiatives relating to sustainability, or, where applicable, enhance existing sustainability related initiatives.
Please see: https://www.iosco.org/library/pubdocs/pdf/IOSCOPD688.pdf
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
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