Regulation (EU) 2019/2088 (“SFDR”) of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector came into force on the 10th of March 2021.
Cilia Formosa Financial Advisors (“Cilia Formosa” or “Company”) falls in scope of the SFDR obligations as a Financial Adviser since it provides investment advice to clients in relation to investment products.
Integration of sustainability risks
Under the obligations emanating from Article 3 of the SFDR, Financial Advisers are required to publish on their website information about their policies on the integration of sustainability risk in their investment advice.
Cilia Formosa does not have separate ESG focused processes, and when providing investment advice, the Company does not automatically exclude a particular product on Environmental, Social and Governance (“ESG”) grounds. However, where applicable and appropriate, Cilia Formosa shall favour products that promote and provide solutions that are consistent with ESG Factors and shall limit investment advice in relation to products which have negative impacts on ESG.
ESG Factors are not the primary determinants in the provision of investment advice as the Company believes it must first ensure that a product is suitable for a particular client, for example the risk tolerance and time horizon with respect to a particular product is in line with the client’s profile.
Consideration of sustainability adverse impacts
Under the obligations emanating from Article 4 of the SFDR, Financial Advisers are required to publish on their website information as to whether the Company considers principal adverse impacts (“PAIs”) on sustainability factors when providing investment advice.
PAIs are impacts arising from a particular investment advice that might eventually have a negative effect on ESG Factors. Cilia Formosa provides investment advice on a limited number of investment options and therefore does not consider the adverse impacts of investment decisions on sustainability factors when providing investment advice. Nonetheless, the Company will endeavour to favour sustainable investments when providing investment advice.
Remuneration policy
Cilia Formosa does not have separate ESG focused processes, however, in accordance with the obligations under Article 5 of the SFDR, the Remuneration Policy of Cilia Formosa includes information on how the Policy is consistent with the integration of sustainability risks. The Company promotes transparency on its remuneration policies in relation to its investment advice in order to promote sound and effective risk management with respect to sustainability risks.
Last update: August 2021
