The short answer: both the Council and the European Parliament now back an opt-out from SFDR 2.0 categorisation for AIFs marketed exclusively to per se professional investors. That makes some form of exemption likely to survive trilogue. But it is narrower than it sounds, it does not switch off the marketing restrictions, and for many private funds raising capital today it will not be the deciding factor. The decision you need to make now is about fund documentation, not about the exemption.
Where the process stands
The Commission published its SFDR 2.0 proposal on 20 November 2025. It replaces the Article 8 and Article 9 framework with three voluntary product categories: Sustainable, Transition and ESG Basics. Each requires at least 70% of the portfolio to support the stated strategy.
The Council agreed its negotiating mandate on 24 June 2026. ECON adopted the Parliament's position on 10 September 2026, and the plenary endorsed it as Parliament's negotiating mandate on 5 October 2026. Trilogues are under way. Estimates for a final agreement range from the end of 2026 to mid-2027. Both institutions support a 24-month application period, which points to the new rules applying in 2029.
Until then, the current SFDR regime continues to apply in full.
What the opt-out actually covers
The Commission's proposal contained no exemption for professional-only funds. The Council and Parliament both reintroduced one, limited to AIFs made available exclusively to per se professional clients under MiFID II Annex II, Section I. Three points matter in practice:
- Elective professionals break it. If a single elective professional or retail investor sits in the structure, potentially including through a feeder, the opt-out is not available. Funds with family office, HNW or wealth platform sleeves should assume they are out of scope.
- It is not a full disapplication. Under the Parliament's text, opted-out AIFs remain subject to the Article 6a restrictions on sustainability claims in fund names and marketing materials. Any sustainability content in pre-contractual disclosures must stay secondary and limited (the Parliament text caps it at 10% of the investment strategy disclosure), and a prescribed warning is required in periodic reports.
- LPs do not opt out. Pension schemes and insurers will still want sustainability data for their own reporting. Some advisers report that early LP feedback on the new categories has been positive, which may make a categorised fund easier to sell than an opted-out one.
The other point private markets should watch: the ramp-up period
The 70% threshold may be reached over a phase-in period disclosed in pre-contractual documents. The Council would cap that at three years, unless sectoral legislation provides otherwise. The Parliament sets no maximum. For a buyout, infrastructure or real assets fund deploying over four or five years, the outcome of that single point may decide whether a category is realistically available at all.
What to do now
If you are launching or fundraising in the next 18 months, your fund will very likely straddle both regimes. Two concrete steps:
- Map your investor base against the per se professional test today. If the target LP list includes elective professionals or a feeder for private wealth, stop treating the opt-out as a fallback.
- Build flexibility into the LPA and PPM. Draft sustainability language and investment restrictions so the fund can migrate into Transition or ESG Basics (or rely on an opt-out) without an LP consent process once the final text lands.
The positions are now substantially settled, but the text is not. Fossil fuel treatment in the Transition category and the phase-in cap are the two private-markets points most likely to move in trilogue.
If your next fund will be marketed in the EU, screen a mandate or schedule a consultation with our team.
Regulatory position as of 19 October 2026. Informational only, not legal advice. Confirm with local counsel before marketing activity.
Sources
- Proskauer, Parliament's Position on SFDR 2.0
- Morrison Foerster on the Council mandate
- Linklaters, Parliament adopts its negotiating mandate
- Travers Smith, the stage is set for trilogue
- Arthur Cox, SFDR 2.0 update
Image: Middelgrunden wind farm 2009-07-01 edit filtered, Photo by Kim Hansen. Postprocessing (crop, rotation, color adjustment, dust spot removal and noise reduction) by Richard Bartz and Kim Hansen., CC BY-SA 3.0, via Wikimedia Commons.
