EU: Final ESMA Guidelines on UCITS V remuneration provisions: ESMA addresses the application of the proportionality principle under UCITS V and AIFMD

The European Securities and Markets Authority ("ESMA") has published its final guidelines on the remuneration requirements of the UCITS V directive (the "UCITS V Guidelines").  The key issue addressed by ESMA is the ability for smaller or less complex managers to disapply certain of the more onerous remuneration requirements (including the "Pay Out Process Rules") on the basis of the proportionality principle.

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EU: ESMA disagrees with the EBA on proportionality: guidelines on remuneration under UCITS V are published for consultation

On 23 July 2015, the European Securities and Markets Authority (“ESMA”) published its draft guidelines on the implementation of the UCITS V remuneration principles for consultation.  In the consultation, ESMA’s approach to the application of proportionality differs from that of the European Banking Authority (EBA) in its consultation on revised CRD IV remuneration guidance, with ESMA suggesting that the co-legislators may have envisaged the possibility that the application of proportionality could lead to the disapplication of certain of the remuneration principles.    Continue reading

UK: High earners reporting for limited licence/limited activity IFPRU firms – action required by 10 November

Limited licence/limited activity firms subject to the requirements of the Capital Requirements Directive (CRD IV) will have received email correspondence from the FCA requesting information in relation to their high earners in 2013.  This information has not previously been collected by the FCA from such firms and we have received a number of queries as to why this is now being requested, and whether firms are required to comply by the 10 November deadline.   Continue reading

Problem, process and prognosis: the legal challenge to the EU Bonus Cap

Yesterday afternoon it was announced that the UK Government has launched a legal challenge in the Court of Justice of the European Union against the cap on variable remuneration introduced by the new capital requirements directive (“CRD IV”).  Although this may ultimately result in the cap being overturned, the UK may nonetheless have to implement the provisions in the interim, in which case, those affected will be hoping that the decision of the Court of Justice is reached before the 2015 bonus round when the bonus cap is likely to bite.      Continue reading 

EU: First appeal decision of the joint Board of Appeal of EBA, ESMA and EIOPS

Last month, the joint Board of Appeal of the European Supervisory Authorities (the Appeal Board) published its first decision allowing an appeal brought by an Estonian company, SV Capital OU (“the customer”) against the European Banking Authority (EBA).  The case arose following litigation brought by a customer against its bank, from the EBA’s decision not to investigate the alleged failure of national competent authorities to take regulatory action, at the customer’s request.  The case is of interest because it effectively holds that the assessment of suitability of the management of a credit institution does not simply apply to management at the level of the credit institution, but can also apply to key function holders who have a crucial role in the day-to-day management of its business. Continue reading