It is not clear whether a parent undertaking is required to aggregate an Entitlement to Acquire and/or Financial Instrument with Similar Economic Effect (collectively the “Article 13 Financial Instruments”) which its subsidiary undertaking holds indirectly. For instance, where a subsidiary owns share options having voting rights (i.e. an Article 13 Financial Instrument - article 13(1)(a)) in an issuer, but holds those share options through a trustee (therefore falling under article 10(g)), would the subsidiary’s ‘indirect’ control over the voting rights pursuant to the share options (registered in the name of the trustee) need to be aggregated by the parent?

The doubt arises because article 10 of the Transparency Directive which creates a list of cases where an indirect holding is said to arise cross-refers only to article 9 (i.e. to holdings of voting rights), and not to Article 13 Financial Instruments. Accordingly, there is doubt, whether the reference to “indirect” holdings of Article 13 Financial Instruments in article 13a(1) (regarding aggregation) should be interpreted with the plain English meaning of “indirect” which refers to a parent-sub relationship, or whether it should be extended to include all the forms of indirect ownership under article 10 of the Transparency Directive.

The European Commission clarified in Q&A II.1 that, pursuant to Article 9(3) of SFDR, financial products tracking a Paris-aligned Benchmark (PAB) or a Climate Transition Benchmark (CTB) are deemed to make sustainable investments. Based on this clarification, can such financial products hold investments eligible under PAB/CTB requirements, which may, however, not qualify as sustainable investments within the meaning of Article 2(17) of SFDR under the relevant financial market participant’s own methodology?
Can the clarification provided by Q&A II.1 also be extended to:
- Financial products disclosing under Article 9(3) of SFDR that apply all requirements of Commission Delegated Regulation (EU) 2020/1818 for PABs/CTBs, but that do not passively track such indices?
- Other types of financial products that have a reduction in carbon emissions as their objective and disclose under Article 9(3) of SFDR (i.e. without tracking a PAB/CTB or applying the requirements applicable to these indices)?

In the case where a financial market participant, such as a fund manager (delegator), delegates the portfolio management of a fund to an investment firm (delegatee), is the delegatee investment firm subject to the same SFDR disclosure obligations for the portfolio management it performs for that fund as when it deals with discretionary portfolio management mandates with end investors?

Can derivatives settled in stablecoins—namely asset-referenced tokens or electronic money tokens as defined in Article 3(6) and (7) of Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA) - be classified as financial instruments under Section C of Annex I to Directive 2014/65/EU? More specifically, can such instruments be deemed to meet the criterion of derivatives settled in cash?

In addition, does EU legislation permit the use of unauthorised stablecoins – namely asset-referenced tokens and electronic money tokens that do not comply with Titles III and IV of MiCA – for the settlement of derivatives?

It follows from Article 1(9)(b) and Article 2(4)(b) AIFMD II that the AIFM or UCITS management company shall ensure that the performance of the functions in Annex I or II of the respective directives, as well as the provision of the services referred to in Articles 6(4) or 6(3), complies with the requirements of AIFMD II. Considering that portfolio management and risk management may be delegated to entities located in the EU or to regulated entities located in third countries, to which extent are delegates or subdelegates of AIFMs or UCITS management companies subject to the AIFMD and UCITS Directive?