On October 14, 2016, ESMA published two sets of final Guidelines on Sound Remuneration Policies under the Undertakings for Collective Investments in Transferable Securities Directive and the Alternative Investment Funds Management Directive. The Guidelines follow ESMA's final report that was published in March of this year.
The UCITS Sound Remuneration Guidelines will apply to management companies, including those that are subsidiaries of credit institutions subject to sector-specific remuneration principles, and investment companies that have not designated a management company authorized under the UCITS Directive. The Guidelines set out the obligations of the management company to manage its financial situation and the governance of remuneration (which includes issues such as the design, approval and oversight of the remuneration policy) and outline the requirements for establishing and applying remuneration policies and practices for management companies and their identified staff, specifying the categories of identified staff.
The AIFMD Remuneration Guidelines have been amended to expand the scope of the current AIFMD Guidelines to make provision for the application of the remuneration rules to AIFMs that are part of a group, in particular, where the group may be subject to the remuneration requirements under the CRD. The UCITS Sound Remuneration Guidelines will apply from January 1, 2017 and will apply to 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 will apply from January 1, 2017.
The Guidelines on Sound Remuneration under UCITS are available at: https://www.esma.europa.eu/document/guidelines-sound- remuneration-policies-under-ucits-directive, the amending Guidelines on Sound Remuneration under the AIFMD are available at: https://www.esma.europa.eu/document/guidelines-sound-remuneration-policies-under-aifmd-2 and the final report is available at: https://www.esma.europa.eu/sites/default/files/library/2016-411_final_report_on_guidelines_on_sound_remuneration_policies_under_the_ucits_directive_and_aifmd.pdf.
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