The AMF Position-Recommendation DOC-2020-03 (the “AMF Doctrine”) was amended at the end of 2024 to allow the use of ESG-related terms in fund names, provided they comply with European Securities and Markets Authority’s (“ESMA”) fund naming guidelines (the “Guidelines”), as a minimum.
The AMF Doctrine governs the marketing of fund products in France that promote non-financial characteristics, such as ESG characteristics to retail investors. Its primary goal is to prevent greenwashing by ensuring that funds marketed as sustainable or ESG-aligned meet stricter standards than those required under the SFDR.
On the other hand, the Guidelines introduce quantitative thresholds (e.g., proportion of ESG related investments and/or sustainable investments) that will apply as a condition for funds using ESG and/or sustainability related terms in their names, as well as minimum safeguards (including the exclusion criteria).
The updates introduce two main changes to the AMF Doctrine:
First, the requirement to significantly reduce the investment universe by at least 20% can now be met through exclusions. Previously, this reduction could not be achieved solely by excluding certain industries or entities. However, due to the Guidelines, exclusions such as avoiding tobacco-producing companies or entities that fail to adhere to the UN Global Compact are sufficient to satisfy this criterion.
Second, foreign funds marketed in France that comply with the Guidelines but do not fully meet AMF requirements must include a mandatory disclaimer in their French marketing materials. The disclaimer ensures transparency and states:
French: « L’attention des investisseurs est attirée sur le fait que cet [INSERT FUND NAME] présente, au regard des attentes de l’Autorité des marchés financiers, une communication disproportionnée sur la prise en compte des extra-financiers dans sa gestion. »
English translation (for information purposes only): “ Investors should note that, relative to the expectations of the Autorité des Marchés Financiers, [FUND NAME] presents disproportionate communication on the consideration of non-financial criteria in its management.”
One minor update was made in reference to the Transparency Code, referenced to in the AMF Doctrine. The AMF continues to recommend that funds provide a document explaining their approach to non-financial criteria. However, with the January update, this document no longer needs to be modelled on the Transparency Code.
The amended AMF Doctrine applies since 1st January 2025.
The Zeidler Legal Team are here to assist with any questions or support you may need regarding the AMF Doctrine. Contact us for more information.
