All you need to know about EET

The EET is the official FinDatEx data exchange template for ESG data, which is in the process of being defined to support the Regulatory Technical Standards (RTS) for the Sustainable Finance Disclosure Regulation (SFDR) due to take effect across the EEA on 1 January 2023. It aims to facilitate the exchange of critical ESG fund and regulatory data between market participants, enabling compliance to not only SFDR, but also MiFID (Markets in Financial Instruments Directive) and IDD (Insurance Distribution Directive) regulations. 

What is the EET?

The EET, a response to the EU’s Sustainable Finance Disclosure Regulation (SFDR), is the official FinDatEx data exchange template for ESG data. The EET will provide the required data set for all funds to explain a fund’s ESG characteristics. There will be levels of reporting depending on the fund definitions (article 6, 8 and 9).

Why is it needed?

The EET facilitates the exchange of ESG data between market participants and is necessary to comply with European Financial Market Regulation. UK Funds that are in scope of the Task Force on Climate-Related Financial Disclosures (TCFD) also have the ability to enter relevant information in the EET.

The industry challenge

Who does it impact?

Financial market participants that fall into scope of SFDR (Article 2).

EET must be provided for all products marketed in the EU, including funds classified as Article 6, 8 or 9 according to the SFDR Level 1 Regulatory Technical Standards (RTS).

The Disclosure requirements within the EET depend on the ESG characteristics of the financial product (refer to what’s in scope).

Who needs EET?

Fund Distributors and Financial Advisers that have to facilitate fund selection per the sustainable preferences as communicated in IDD (Insurance Distribution Directive) and MiFID (Markets in Financial Instruments Directive), such as:

  • Insurance companies and intermediaries (for BIPs),
  • Fund of fund managers, and
  • Investment firm or credit institutions which provide investment advice (including wealth managers and wealth management platforms).

The challenge for Fund Managers

  • Regulatory compliance – Keeping abreast of changing regulations and developments to the FinDatEx requirements template
  • File production – Creation of the EET file including simple Y/N flags for more complex calculations
  • Quality assurance – Validation of coverage and quality against FinDatEx definitions
  • Data dissemination – Ensuring that your EET file reaches fund distributors on time, containing accurate information

The challenge for Fund Distributors

  • Regulatory compliance - Keeping up-to-date with the regulation and developments to the FinDatEx requirements template
  • Data collection and aggregation – Collection of data across all share classes available
  • Quality assurance – Validation of coverage and quality against FinDatEx definitions
  • Supply/Data delivery – Ensuring that you have regular, timely and accurate provision of data

Timelines

The EET, while it is not a regulatory initiative, has been developed by the industry for the industry and will undoubtedly become the industry standard for transmitting ESG data between financial market participants. 

Here are the key dates:

  • December 2021: FinDatEx publishes draft EET for industry consultation
  • Early 2022: FinDatEx target date to publish the final EET
  • H1 2022: Fund Managers to source data and arrange file production
  • 1 May 2022: Target implementation date for EET to enable compliance ready for 1 January 2023 for the implementation of SFDR Level 2 RTS
  • 1 January 2023: Implementation date for SFDR Level 2 RTS

How we can help

ESG & regulatory expertise

ESG & regulatory expertise

Consult with our in-house ESG and regulatory experts available to advise on compliant solutions. We are actively involved in several working groups with industry associations and regulatory bodies, actively steering discussions .

ESG & SFDR Reporting

ESG & SFDR Reporting

We operate a fully integrated service including the creation and dissemination of ESG and SFDR documents. This allows you to meet international ESG reporting and disclosure requirements. 

Proven track record

Proven track record

From UCITS to PRIIPs, MiFID and other regulations, we have always delivered on time and have more than 25 years’ experience in facilitating seamless data exchange.