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Friday’s guest column kind of nailed it

Paris-based manager Eurazeo breaks new ESG ground; Finra to take an unusual step.

Cheap green: Friday’s guest column from Neil Caddy of Fried Frank, “ESG financing: cheaper source of debt or too expensive to ignore?”, couldn’t have been better timed. Just after we published it, we published this story about how Paris-based Eurazeo renewed a credit line which is now indexed against ESG performance criteria – the first credit facility of its type in the EMEA region. The line’s conditions mean it must use savings from reduced fees to meet the ESG criteria – namely funding projects to reduce greenhouse gas emissions. Interestingly, if Eurazeo fails to meet the criteria, the fees kick in, but the banks will allocate the income to emissions reductions projects – though it’s not clear if they’re contractually obliged to do so.

Reg BI: Finra said in its own examination priorities letter that it will start prioritizing Regulation Best Interest in its first year. Normally, says compliance consultant Todd Cipperman, regulators give firms time to put systems and operations in place to comply with new laws and regs. Not so, with Reg BI: as sister publication Regulation Compliance Watch noted, the SEC’s Office of Compliance Inspections and Examinations is set to question broker-dealers about their progress, ahead of the June implementation date. That said, lawsuits threaten to delay the controversial rule.

Email prepared by Graham Bippart