SFDR Disclosures

SFDR Disclosures – No consideration of adverse impacts of its investment decisions and investment advice on sustainability factors.

Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (“Sustainable Finance Disclosure Regulation” or “SFDR”) became applicable as of 10 March 2021. SFDR aims to achieve more transparency regarding how financial market participants and financial advisers integrate sustainability risks into their investment decisions and investment advice by way of Principal Adverse Impacts (“PAIs”). Rizzo Farrugia falls within the scope of the Regulation and is below disclosing the required information in terms its regulatory requirements.

Rizzo Farrugia is considered a financial market participant in respect of its portfolio management service offering.  Rizzo Farrugia is a financial adviser when it provides investment advice. Rizzo Farrugia does not consider any adverse impacts of its investment decision and investment advice on sustainability factors.

For the purposes of undertaking portfolio management and investment advice, Rizzo Farrugia undertakes a suitability assessment and accordingly obtains sustainability preferences from  clients in respect of environmentally sustainable investments, sustainable investment/s and other investments that consider PAIs so as to ensure that its’ investment decisions and/or investment recommendations are in line with the client’s specific sustainability preferences.

Without prejudice to its obligation to make investment decisions and/or investment recommendations in line with clients’ sustainability preferences, Rizzo Farrugia has an Investment Committee in place to determine which financial instruments it makes available to its clients and the respective distribution strategy.  Rizzo Farrugia identifies financial instruments on the basis of the nature and complexity of such financial instrument, and on the basis of financial and non-financial information. Whereas Rizzo Farrugia may consider non-financial information in respect of any financial instrument, Rizzo Farrugia does not consider the PAIs of its investment decisions on sustainability factors.

As per SFDR, PAIs are determined with reference to specific Adverse Sustainability Indicators and on the basis of complex metrics for investee companies, sovereign and supranational bonds, and other investment in real estate assets.

Rizzo Farrugia, in its investment advice and investment decisions, offers a diverse range of financial instruments that would make such determination difficult in the absence of reliable and available data that is capable of being determined across such instruments.

Whilst, at this point in time, in view of its relatively small size and potentially cumbersome application of the Regulation, Rizzo Farrugia does not formally and explicitly integrate sustainability risks and consider the PAIs of its investment decisions and advice on sustainability factors as indicated by Article 4 of the Regulation (EU) 2019/2088, it nonetheless considers, as part of its overall considerations prior to any investment decisions or advice, any significant environmental, social or governance implications connected to a proposed investment that are known to it or that it may become aware of and that may be considered to impact the long-term financial performance of that proposed investment. Rizzo Farrugia also aims to steer away from any investments which may be significantly in conflict with what the Company considers to be socially and/or environmentally responsible investment decisions or advice.

Rizzo Farrugia continues to monitor the transparency and availability of ESG data and ratings and may accordingly reconsider its decision to consider principal adverse impacts in the future.

Remuneration Policy

Rizzo Farrugia offers transparency and consistency in its remuneration strategy. As required in terms of Article 5 of the SFDR in relation to the transparency of remuneration policies in relation to the integration of sustainability risks, Rizzo Farrugia does not have remuneration practices that are linked to the distribution of sales including under advisory and non-advisory distribution, nor practices linked to any other specific quantitative criteria. Its remuneration policy seeks to ensure that any variable remuneration practices do not incentivise risk taking, including at the cost of any sustainability risk. Accordingly, remuneration to its staff is predominantly of a fixed nature, with variable remuneration accounting for a negligible part and based on satisfactory fulfilment of job requisites rather than quantitative targets, and therefore, not incentivised by risk taking and hence deemed to be sustainability risk neutral.

09.01.2025