On March 31, the European Securities and Markets Authority (ESMA) published final guidelines on sound remuneration policies for staff, under the Undertakings for the Collective Investment in Transferable Securities V (UCITS V) Directive (UCITS V Guidelines). ESMA also published an amendment to the Alternative Investment Fund Managers Directive (AIFMD) remuneration guidelines (AIFMD Remuneration Guidelines), and confirmed it has written a letter to the European Commission, European Parliament and European Council calling for further clarity on proportionality in relation to the remuneration principles.
The UCITS V Guidelines apply to management companies and competent authorities in relation to remuneration policies and practices under the UCITS V Directive. The UCITS V Guidelines set out: (1) guidelines on how to identify the categories of staff and remuneration captured by the requirements; (2) guidelines for management companies part of a group; and (3) guidelines on governance arrangements for remuneration (including management bodies, supervisory functions, remuneration committees and control functions), risk alignment and disclosure. The amendment to the AIFMD Remuneration Guidelines relates to AIFMs belonging to a group.
Next steps are for the UCITS V Guidelines and AIFMD Remuneration Guidelines to be translated into the official languages of the European Union, with final texts published on ESMA’s website. The UCITS V Guidelines will apply beginning January 1, 2017 (subject to transitional provisions), and the amendment to the AIFMD Remuneration Guidelines also will apply on January 1, 2017.
For further information on the development of the UCITS V Guidelines and AIFMD Remuneration Guidelines, see the Corporate & Financial Weekly Digest editions of January 15, July 31, 2015, and February 15, 2013.
A copy of the UCITS V Guidelines and the amendment to the AIFMD Remuneration Guidelines can be found here.
A copy of ESMA’s letter can be found here.
A copy of ESMA’s accompanying press release can be found here.