The Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, has fined Aviva Investors Luxembourg €56,500 ($59,358) for failing to comply with professional obligations under the Sustainable Finance Disclosure Regulation (SFDR).
The fine pertains to five sub-funds issued by Aviva under Article 8 of the SFDR, which requires funds to promote “environmental and social characteristics.” However, a CSSF investigation revealed discrepancies between the investing strategies outlined in the funds’ prospectus and their actual investments.
The regulator found that several bonds held by the funds were issued by countries with environmental, social, and governance (ESG) scores below the exclusion threshold specified in the prospectus. For other sub-funds, the CSSF determined that the measures in place to target United Nations Sustainable Development Goals (SDGs), as claimed in the prospectus, were inadequate.
“The measures put in place by the Manager did not allow it to ensure that the SDGs disclosed in the Fund’s prospectuses were effectively primarily targeted by these sub-funds,” the CSSF stated in a press release.
Aviva Investors in a response to a media house query said, “Aviva Investors worked with the CSSF to ensure that their concerns were swiftly addressed after they were raised.” The company noted that remedial actions, including updating the prospectus wording and monitoring framework, had been deemed adequate by the CSSF.
Aviva also clarified that no financial harm had been caused to investors in the Emerging Market Bond fund as a result of holding bonds deemed noncompliant with the terms of the prospectus.
