Sustainable Finance Disclosure Regulation (SFDR)
In line with the European Union’s understanding of sustainability, sustainability should not be limited to ecological aspects, but should rather take into account the entire ESG spectrum (environment, social and governance). In this regard, Reuss Private Access AG is subject to disclosure requirements under the Sustainable Finance Disclosure Regulation (OffenlegungsVO), Art. 5 to 8 TaxonomieVO and the delegated VO (EU) 2022/1288. In fulfilment of these disclosure requirements, we disclose the following:
Sustainability strategy (Art. 3 SFDR):
Sustainability risks can directly impact the value of investments by amplifying other relevant risks, such as market risk, credit and counterparty risk, liquidity risk, legal risk, reputational risk or operational risk. Sustainability risks can, among other things, lead to a significant deterioration in a company’s financial profile, profitability or reputation and thus have a significant negative impact on the value of the company. The failure to take sustainability factors into account in investment management can have adverse effects on the environment (e.g. climate, water, biodiversity), on social interests and employee concerns, and can also be detrimental to the fight against corruption and bribery. Although certain sustainability principles have an inherent influence on corporate governance and the interpretation of business strategy and in order to avoid legal disadvantages, Reuss Private Access AG declares that it explicitly does not observe sustainability criteria in the course of its business activities.
Reuss Private Access AG’s business model is based on contractually agreed fixed compensation criteria for specific services relating to certain financial instruments. The company’s main services are the acceptance and transmission of orders for one or more financial instruments (investment brokerage) and, to a very limited extent, investment advice, exclusively for investment funds. In addition, these services are provided exclusively to professional clients. It is assumed that this client category ‘[…] has sufficient experience, knowledge and expertise […] to make its own investment decisions and properly assess the associated risks.’
Performance-related fees based on investment decisions that take into account sustainability factors and sustainability risks have no influence on the company’s performance.
In view of the business strategy, taking sustainability criteria into account would be neither appropriate nor expedient and would unduly restrict the range of products and services provided by the company.
Reuss Private Access AG therefore does not take these criteria into account in accordance with Art. 4 (1) (b) and (5) (b) SFDR, nor is this planned under the current business strategy.
Sustainability risks in relation to the remuneration policy:
The remuneration policy of Reuss Private Access AG is aligned with its corporate philosophy and strategy, as well as with its values, objectives and long-term interests. The inclusion of sustainability risks has no impact on the remuneration policy.
The remuneration policy for the company’s employees is designed in such a way as to avoid creating incentives for excessive risk-taking. Employees are remunerated exclusively on the basis of the fixed remuneration components specified in their employment contracts. There are no plans to pay variable remuneration in the form of bonuses. Similarly, there are no plans for employees to receive variable remuneration components or other additional remuneration components for achieving specific targets (e.g. for achieving sales targets). Should performance-related compensation components for specific employees be considered at a later date, the position of the employee will be taken into account in each individual case (in particular, whether and to what extent this employee performs control functions or similar), and the stipulation that performance criteria that would trigger such compensation will be interpreted in the long term. In addition, in these cases, an appropriate relationship between the variable and fixed compensation components must always be ensured, with the fixed compensation component representing the majority of the total compensation in any case.
Regardless of the company’s strategy with regard to sustainability criteria, the design of the remuneration policy is nevertheless conducive to the appropriate management of sustainability risks. It is designed in such a way that there are no incentives to take excessive risks. The interests of the client are taken into account at all times as part of the remuneration policy. Furthermore, no incentives are provided for frequently buying and selling financial instruments. Overall, the remuneration system is designed to avoid conflicts of interest. The above also applies with regard to sustainability risks. The remuneration system is set up neutrally, i.e. no incentives are provided to take on certain sustainability risks or to avoid them.
Transparency in the consideration of sustainability risks (pre-contractual information and explanations):
Since the company’s business activities do not involve an investment process, nor are investment decisions made by the company or its clients in direct relation to the activities performed by the company, nor are valuations made by the company on financial products or their potential returns, sustainability aspects are not taken into account separately in the pre-contractual phase or beyond. In addition, considering the client base described above, it can be assumed that clients are able to assess any risks appropriately.
The company does not provide any investment advice. In individual cases, the company may provide investment advice, but this is only provided to investment funds or an external financial portfolio management company, whereby these must be able to independently assess any sustainability risks based on their investment policy, risk management measures and the professional portfolio management provided. Furthermore, sustainability criteria are not the focus of the advisory services in these cases. Upon request and at the client’s request, further details on the subject of sustainability and the above information will be provided.
Transparency in the event of adverse sustainability impacts at the level of the financial product:
The company itself does not issue any financial products. Furthermore, it does not provide portfolio management or advice to clients in the context of asset management. Since the financial products covered by the company’s services are generally not authorised for non-professional (retail) clients and are only authorised in certain markets, disclosing these financial products and how they (if applicable ), promote environmental or social characteristics or a combination thereof, how they fulfil these characteristics and whether and how they use an index and whether this is compatible with their characteristics, would be contrary to the basic sales requirements of MiFID II. Consequently, Reuss Private Access AG does not disclose this information at this point in order to avoid any legal disadvantage with regard to regulatory distribution requirements in relation to specific financial products that are not authorised for public distribution.
In principle, it should be mentioned that, in the context of providing its services, neither for clients nor for the company itself are the sustainability components of a financial product of material significance. The information pursuant to Art. 8 and 9 SFDR in relation to a specific financial instrument can be obtained by the professional client at any time from the underlying prospectus or information provided by the issuer of the financial product. These can also generally assess whether the financial product falls within the scope of Articles 8 and 9 SFDR.
Reuss Private Access AG therefore does not take into account any adverse effects of investment decisions on sustainability factors (Art. 4 SFDR and Art. 12 and 13 del. VO (EU) 2022/1288).
The above information is always kept up to date in accordance with Art. 12 SFDR.
As of November 2024