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The FSC Announced Disclosure Rule for ESG funds issued by Securities Investment Trust Enterprise (SITE)

In order to standardize the common format of information disclosure by ESG funds, and strengthen the integrity of the prospectus on ESG investment policies, the FSC issued Disclosure Rule for ESG funds, and the key points are as follows:
I.    When a SITE raises and issues a ESG fund, at least the following contents must be disclosed in the fund issuance plan and prospectus in the SITE’s application:
(I)    Investment objectives and measurement standards: The main sustainable investment focus and objectives of the ESG fund, and the relation between the ESG principle adopted and investment focus must be explained. The fund must set one or more sustainable investment objectives and specify the assessment criteria to measure the degree of realization of the sustainable investment objectives.
(II)    Investment strategy and method: The investment strategy type adopted by the SITE to achieve sustainable investment objectives, the specific method of integrating ESG factors into the investment process, the process of considering relevant ESG factors, and the assessment and measurement methods for these factors must be explained.
(III)   Allocation of investment proportion: The minimum proportion of the fund’s net asset value which is invested in ESG related priority targets, and how the overall use of the fund assets can be ensured not to cause significant damage to the sustainable investment objectives must be explained.
(IV)   Reference performance benchmark: If the fund has set a benchmark for ESG performance, the characteristics of the benchmark and whether the benchmark is consistent with the relevant ESG investment priorities of the ESG fund must be explained.
(V)     Exclusion policy: Whether there are exclusion policies for the ESG fund investment and the types of exclusion must be explained.
(VI)    Risk: The risk description of the fund’s ESG investment priorities must be included.
(VII)   Stewardship report: The applicable stewardship policy and implementation method of the ESG fund, and the methods or ways of inquiring the SITE’s stewardship report must be explained.
(VIII)  Periodic assessment and reporting: After raising and issuing the ESG fund, the SITE must disclose the regular assessment information to investors on the company's website two months after each year end.
II.    For an existing fund with an ESG theme, if the contents above are not completely disclosed in the prospectus, the improvement must be completed within six months after the release of these disclosure rule.
III.    For an existing SITE fund which plans to be renamed as an ESG fund, if the “investment strategy and characteristics” in the prospectus of the fund already include words such as "sustainability" and "corporate social responsibility", or concurrently cover investment operation strategies or asset allocation concepts concerning the environment (such as water resources, green resources, green energy, natural resources, climate change resistance or anti-warming), society (such as social inequality elimination or gender equality) and governance, on the premises of not changing the product positioning and basic investment policies and strategies, the SITE may not need to hold a meeting of beneficiaries, but must submit a lawyer's opinion stating that it has no significant impact on the interests of the beneficiaries, and then apply with the Commission for approval of the amendment, and announce and notify the beneficiaries 30 days before the amendment to the trust deed comes into effect.

Contact unit: Securities Investment Trust and Consulting Division, Securities and Futures Bureau
Tel: (02) 2774-7320
If you have any questions, please write to: FSCMAIL

Visitor: 2625   Update: 2021-07-13