Sustainability-related information in the financial services sector (SFDR Regulation) announcement
Regulation (EU) 2019/2088 of the European Parliament and of the European Council on the provision of sustainability-related information in the financial services sector (hereinafter the SFDR Regulation)
SFDR Regulation started applying in March 2021 and requires financial market participants (FMPs) and financial advisers to disclose at entity and product level how they integrate sustainability risks and principal adverse impacts in their investment decision making processes. It also introduces additional product disclosures for financial products making sustainability claims. The objective of the regulation is to provide transparency to investors about the sustainability risks that can affect the value of their investments and about the adverse impacts such investments have on the environment and society with a view to supporting EU climate and sustainability neutral targets. The SFDR also aims at strengthening investors protection and making it easier for investors to compare financial products and services on their sustainability claims, with a view to guiding their investments decisions.
Within the framework of the decree, Firstbrokers Oy acts as a financial advisor, which provides insurance advice on individual and group pension insurances and investment insurances for the decision-making of investors and companies. The regulation has been enacted so that sustainability risks, including harmful ones would be taken into account and sustainable investing would be better promoted both before concluding the insurance contract and during its life cycle. Firstbrokers Oy takes sustainability factors into account in its insurance advice, with the focus on harmful and sudden changes that can harm the principal.
When providing insurance advice, Firstbrokers Oy relies only on financial market operators who have been on the Finnish market for a longer period, meet the requirements of the relevant operator's domestic financial solvency and possibly also audit their solvency by international rating agencies. Firstbrokers Oy does not provide investment advice in the pension and investment insurance products of these financial market operators, if they contain an instrument where the return of the insurance product depends on the chosen investment object, but only insurance advice that focuses on the client's goals, objectives and purpose of use of the insurance product during its entire life cycle. Firstbrokers Oy only receives remuneration from its principal and does not have any compensation for staff in insurance consulting that could possibly distort sustainable development or favor a certain financial market operator or insurance product. The insurance advice provided by the company may include insurance technical, insurance law, insurance management or other advice before or during the insurance period.
In this insurance consultation, the principal is given all the information legally required about the financial market operator's insurance product, including costs, possible sustainability index, associated charges and possible third-party payments. This information is updated annually and in the event of changes. Firstbrokers Oy gives to its principal a sufficient number of insurance products available on the market to evaluate and recommend in its insurance advice. The principals of Firstbrokers Oy are companies, so the suitability of a personal insurance product for an individual insured cannot be determined by the company.
The insurance advice provided by Firstbrokers Oy only applies to financial market participants and insurance products approved for the Finnish market, the supervision of which is mainly monitored through the communications and registers of the Financial Supervisory Authority. In addition to this, financial market participants are monitored in Firstbrokers Oy's partner networks, and we are informed of harmful risks. Financial market participants' money laundering risks are monitored using separate software.
Adverse sustainability risk and its degree will be notified immediately after the information is received to the customers who have received insurance advice from the relevant financial market operator. These can be, for example, various supervisory or sanctioning actions directed by the Financial Supervisory Authority against the financial market operator, or harmful changes in the company's financial situation.
Firstbrokers Oy's information in accordance with the SFDR regulation is generally available on the company's website in Finnish and English and particularly in insurance products related to the regulation during insurance advice in written form to the principal.