Published on: 27 October 2026 | By: Xenia Neofytou, B.Sc. (Hons), FCCA
Founder & Managing Director, CX Financia | CySEC Advanced Certificate Holder
Introduction
On 27 October 2026, the Cyprus Securities and Exchange Commission (CySEC) issued Circular C809 to remind regulated entities of the publication by ESMA of the Third Thematic Note on Impact Claims and the Fourth Thematic Note on Transition Claims, both released on 12 October 2026. This circular is a clarification of existing ESG obligations under CySEC’s Sustainable Finance framework (Circulars C704 and C683) and does not introduce new regulatory requirements or deadlines. You must consider this guidance when making sustainability-related claims to ensure they are clear, fair, and not misleading.
CySEC Circular C809 – At a Glance
- Issued date: 27 October 2026
- Applies to: Cyprus Investment Fund Managers (CyIFMs), including UCITS Management Companies, Alternative Investment Fund Managers (AIFMs), sub-threshold AIFMs, and Cyprus Investment Firms (CIFs)
- Deadline: No submission deadline set by this circular
- Key requirement: Consider ESMA’s Third and Fourth Thematic Notes on Impact Claims and Transition Claims when complying with existing ESG obligations under CySEC’s Sustainable Finance framework
What Does This Circular Require?
What firms must do. You must ensure that any sustainability-related claims, particularly impact and transition claims, are clear, fair, and not misleading. This requires you to review and align your disclosures and marketing materials with the guidance provided in ESMA’s Third and Fourth Thematic Notes.
Legal basis. Existing ESG obligations under CySEC Circulars C704 (for CyIFMs) and C683 (for CIFs), which incorporate ESMA’s guidance on sustainability-related disclosures
Regulatory objective. To promote transparency and protect investors by ensuring that sustainability-related claims made by regulated entities are accurate, substantiated, and not misleading
Who Is in Scope?
The circular applies to all entities regulated by CySEC that are subject to ESG disclosure obligations under the Sustainable Finance framework.
- Cyprus Investment Fund Managers (CyIFMs), including:
- Cyprus UCITS Management Companies and Self-Managed Cyprus UCITS (CyUCITS MCs)
- Cyprus Alternative Investment Fund Managers and Self-Managed Cyprus AIFs (CyAIFMs)
- Sub-Threshold Cyprus Alternative Investment Fund Managers and Self-Managed Cyprus AIFs (sub-threshold CyAIFMs)
- Cyprus Investment Firms (CIFs)
These entities are already subject to CySEC’s Sustainable Finance circulars (C704 and C683) and must now incorporate ESMA’s latest thematic guidance into their compliance frameworks.
Edge cases and exceptions:
- Sub-threshold CyAIFMs: Although subject to lighter regulatory requirements, you must still ensure compliance with ESG disclosure obligations where applicable
- Self-managed funds: You are directly responsible for aligning sustainability claims with ESMA’s guidance, even if managed internally.
While this circular targets existing entity structures, newly established vehicles must also incorporate these sustainability standards from inception. If you are structuring or launching new investment vehicles, our Fund & AIFM Licensing (AIF / RAIF / AIFM) and Investment Firm Licensing (CySEC CIF) services can help ensure your governance and disclosure frameworks meet CySEC requirements from day one.
Practical Implementation: What Firms Should Do
In practice, you should review all sustainability-related claims in your marketing materials, fund documentation, and client communications to ensure they align with ESMA’s Third and Fourth Thematic Notes. Focus on impact claims (e.g., claims about positive environmental or social outcomes) and transition claims (e.g., claims about alignment with net-zero or decarbonisation pathways).
Common mistakes include vague language, unsubstantiated claims, or overstating the sustainability benefits of a product or service. CySEC expects you to provide clear evidence and context for any sustainability-related claims, avoiding terms that could mislead investors about the actual impact or transition progress. To prevent reputational exposure and regulatory non-compliance, firms should embed sustainability risk protocols directly into their operational oversight through structured Internal Audit & Risk Management Compliance.
How to Apply This Correctly
- Review ESMA’s Third Thematic Note on Impact Claims and Fourth Thematic Note on Transition Claims, available on ESMA’s website
- Identify all sustainability-related claims in your marketing materials, fund documentation, and client communications
- Assess whether each claim is clear, fair, and not misleading, with particular attention to impact and transition claims
- Ensure claims are substantiated with evidence and avoid vague or exaggerated language
- Update disclosures and materials to align with ESMA’s guidance, where necessary
- Train relevant staff on the requirements of the thematic notes to ensure ongoing compliance
Compliance Officer Checklist
- Reviewed ESMA’s Third and Fourth Thematic Notes on Impact and Transition Claims
- Identified all sustainability-related claims in marketing materials and fund documentation
- Assessed claims for clarity, fairness, and accuracy, focusing on impact and transition claims
- Substantiated claims with evidence and removed or revised any misleading language
- Updated disclosures to align with ESMA’s guidance
- Provided training to staff on the requirements of the thematic notes
Evidence to Retain
- Copies of ESMA’s Third and Fourth Thematic Notes on Impact and Transition Claims
- Documented review of sustainability-related claims in marketing materials and fund documentation
- Evidence of updates made to disclosures or materials to align with ESMA’s guidance
- Training records for staff on the requirements of the thematic notes
Why This Matters
Non-compliance with ESMA’s guidance on sustainability-related claims exposes your firm to regulatory scrutiny, reputational damage, and potential enforcement action. CySEC expects you to proactively align your disclosures with this guidance to protect investors and maintain market integrity. Failure to do so may result in findings of misleading advertising or breaches of conduct-of-business rules. Ensuring ongoing alignment across all marketing and legal disclosures requires an active regulatory framework, such as our ongoing Regulatory Compliance & AML Advisory solutions.
Frequently Asked Questions
Are the ESMA Thematic Notes legally binding?
No, the thematic notes are guidance. However, CySEC expects you to consider them when complying with existing ESG obligations under Circulars C704 and C683. For official regulatory text and supervisory updates, you can consult the Cyprus Securities and Exchange Commission (CySEC) official portal.
Do we need to submit anything to CySEC under Circular C809?
No, this circular is a reminder to consider ESMA’s guidance. There is no submission requirement or deadline associated with it.
What are impact claims under ESMA’s Third Thematic Note?
Impact claims refer to statements about positive environmental or social outcomes resulting from an investment, product, or service. They must be clear, fair, and substantiated.
What are transition claims under ESMA’s Fourth Thematic Note?
Transition claims relate to statements about alignment with net-zero, decarbonisation, or other sustainability transition pathways. They must avoid misleading investors about progress. Detailed principles on greenwashing and sustainability disclosure expectations are available through the European Securities and Markets Authority (ESMA).
Does this apply to sub-threshold AIFMs?
Yes, sub-threshold AIFMs must comply with ESG disclosure obligations where applicable and consider ESMA’s guidance on sustainability claims.
How often should we review our sustainability claims?
CySEC expects you to review claims regularly, particularly when new guidance is issued, to ensure ongoing compliance with ESG obligations.
How CX Financia Can Support You
At CX Financia, we help firms navigate the evolving ESG regulatory landscape. Our comprehensive range of Financial & Compliance Services includes Regulatory Compliance reviews to align your disclosures with ESMA and CySEC guidance, Risk Management frameworks to mitigate sustainability-related risks, and Internal Audit support to ensure ongoing compliance. If you need assistance interpreting or implementing these thematic notes, contact us for tailored advice.
Read the CySEC Circular C809
Read more at Regulatory Updates
Disclaimer
This article provides general information and is not regulatory or legal advice. While we strive for accuracy, you should consult the original circular and seek professional advice for your specific circumstances.