ESMA Publishes New Q&As On Its Fund Naming Guidelines

On 13 December 2024, ESMA published three new questions and answers ("Q&As") which provide welcome clarification on the application of some key elements of its Guidelines on funds' names using ESG or sustainability-related terms (the "Guidelines").

The new Q&As address:

1. compliance with PAB/CTB exclusion criteria (defined below) in the context of green bonds and other use of proceeds instruments [UCITS ID2368, AIF ID 2370];
2. the interpretation of "meaningfully investing" in sustainable investments for funds which use a sustainability-related term in their name [UCITS 2373, AIF 2374]; and
3. the definition of the term "controversial weapons" [UCITS 2371, AIF 2372].

The objective of each of the Q&As is to ensure a smooth application of the Guidelines through common understanding of key concepts.