Sustainable Finance Disclosure Regulation (SFDR)
Since March 10, 2021, the European Regulation on Sustainability Disclosures in the Financial Services Sector 2019/2088, also known as the Sustainable Finance Disclosure Regulation (SFDR), has been applicable. The aim of this European regulation is to make customers (more) aware of the sustainable impact that certain financial products have, so that they can make an informed and sustainable choice. In this document you will find information prepared by Major Capital Management B.V. (“Major Capital”), registered under Chamber of Commerce number 82427755, on the sustainability of the Major Capital Crypto Fund (the “Fund” or the “Funds”).
This document was last updated on November 29th, 2021.
Below is how Major Capital implements the SFDR, following the article numbers from the Regulation.
Article 4 and 7 SFDR – Adverse impacts on sustainability at entity and product level
The Fund does not qualify as a sustainable fund and/or a fund with a primary focus on sustainable characteristics and/or objectives. The Fund is therefore not suitable for investors who want to invest in a fund that focuses on sustainability. When investing in crypto, equity and real estate, sustainability aspects are not taken into account in investment decisions. Given the nature of the activities of the Fund, an assessment of sustainability aspects is complex and it is impossible to include sustainability aspects in the investment decisions of the Fund.
The investments of the Fund include crypto. The crypto portfolio consists of a mix of investments in cryptocurrencies, Initial Offerings, Blockchain technology & Smart Contract technology. The starting point is that these are not products focused on sustainability and, in addition, the sustainability aspects of such products are difficult to assess (such as the impact and energy consumption related to mining cryptocurrencies).
When the Fund invests in shares, no account is taken of sustainability aspects. Because, among other things, use is made of trading in shares with the aid of algorithms and bots, no influence can be exercised on the sustainability of the investment. It is therefore possible that Major Capital directly or indirectly invests in shares related to unsustainable industries such as coal products.
In principle, sustainability aspects are not taken into account for real estate. It will often concern indirect real estate investments in real estate fractions, which also limits the assessment of sustainability aspects. In that case, a third party will make the direct investment in one or more real estate properties, whereby it will not always be sufficiently clear to Major Capital whether, and if so, to what extent, sustainability aspects have been taken into account.
Sustainability Major Capital Funds
Major Capital aims to follow market standards with respect to sustainability. However, given the nature and activities of the Fund, see above, sustainability aspects are not included in the investment decisions of Major Capital. At the moment there are no concrete plans to include these sustainability aspects in the near future. This could change as soon as the impact and sustainability aspects can be better assessed.
Article 3, 5 and 6 SFDR – Integration of sustainability risks, sustainability risk policies and remuneration policy for the integration of sustainability risks
Article 6 of the SFDR requires managers to indicate how sustainability risks are taken into account in the investment process. A sustainability risk is an environmental, social or governmental (ESG) change, which may negatively affect the value of an investment. These risks are divided into physical risks, transition risks and reputation risks. Examples of these three categories could be a natural disaster (a physical risk), the Dutch nitrogen decree (transition risk: investors in PAS projects run a financial risk) or a company promising not to invest in palm oil, but ultimately doing so anyway (reputation risk).
Major Capital does not integrate sustainability risks into the investment decisions of its funds. Sustainability risks are considered relevant, but are not a determining factor in the search for and selection of new investment opportunities.
Major Capital Hybrid Fund (coming soon) & Major Capital Hybrid Fund – Invite Only (coming soon)
Making indirect and automated investments, among other things, makes it complex, if not impossible, for Major Capital to take sustainability risks into account.
Major Capital Crypto Fund (AFM number: 50027151) & Major Capital Algorithmic Crypto Fund – Invite Only (coming soon)
The making of automated investments and the nature of the activities (Crypto investments), makes it complex, if not impossible, for Major Capital to take sustainability risks into account.
Amendment of the SFDR
As of March 10, 2021, the SFDR has entered into force. However, the European Commission has announced that the implementation of the technical standards, the Regulatory Technical Standards (RTS), will not enter into force until a later date. As this elaboration of the provisions in the SFDR is not yet final and interpretation of this provision is not yet clear on all fronts, Major Capital may amend and supplement this paragraph at a later date after publication of these technical standards.