On March 31, 2016, the European Securities and Markets Authority published its final report on Guidelines on the sound remuneration policies under the Units in Collective Undertakings Directive and the Alternative Investment Fund Managers Directive, including the final Remuneration Guidelines under UCITS V and revised Remuneration Guidelines under the AIFMD. ESMA also published a letter addressed to the European Commission, the European Parliament and the Council of the European Union in which ESMA recommends that legislation is required to provide clarity on the application of the proportionality principle to the remuneration requirements under EU laws. ESMA’s view is that, under both the UCITS Directive and AIFMD, in certain circumstances the pay-out process rules would not apply and the pay-out process rules could potentially be adjusted for some managers who are subject to those rules. However, in line with the position taken by the EBA for the Capital Requirements Directive, ESMA has developed its UCITS Remuneration Guidelines without taking proportionality into account.

The UCITS Remuneration Guidelines will apply to UCITS management companies and national regulators from January 1, 2017 and will apply for the calculation of payments relating to new awards of variable remuneration to identified staff for the first full performance period after January 1, 2017.

The amended AIFMD Guidelines make provision for the application of the remuneration rules in a group context, in particular where the group may be subject to the remuneration requirements under the CRD. The amended AIFMD Guidelines will apply from January 1, 2017.

ESMA’s final report, including the UCITS Remuneration Guidelines and the revised AIFMD Guidelines is available at: https://www.esma.europa.eu/press-news/esma-news/esma-publishes-ucits-remuneration-guidelines, ESMA’s letter on proportionality is available at: https://www.esma.europa.eu/press-news/esma-news/esma-publishes-ucits-remunerationguidelines and the EBA’s Opinion on proportionality under CRD is available at: http://finreg.shearman.com/europeanbanking-authority-guidel