Consultation on Guidelines on remuneration policies for investment firms

The European Banking Authority (EBA) launched today a public consultations on its new Guidelines on remuneration policies under the Investment Firms Directive (IFD). This guidance specifies the remuneration provisions that Class 2 investment firms should comply with, taking into account the proportionality principle.  Sound remuneration policies ensure an alignment of the variable remuneration of identified staff with the risk profile of the investment firm and the assets it manages, and they must be gender neutral. The consultation runs until 17 March 2021.

While the remuneration framework for investment firms is largely aligned to the one for credit institutions, some differences exist. These Guidelines specify those provisions, including the application of waivers to the requirement to pay out a part of the variable remuneration of identified staff under deferral arrangements and in instruments and the setting of a ratio between variable and fixed remuneration.

The draft Guidelines apply at both individual and consolidated level.

Consultation process

Comments to the two consultations can be sent to the EBA by clicking on the "send your comments" button on the respective consultation page. Please note that the deadline for the submission of comments is 17 March 2021.

A public hearing will take place on 17 February 2021 from 14: 00 to 16:00. All contributions received will be published following the end of the consultation, unless requested otherwise.

Legal basis, background and next steps

These draft Guidelines have been developed in accordance with Articles 26 and 32 of Directive 2019/2034/EU, which require firms to have gender neutral remuneration policies and mandates EBA to develop Guidelines in this area.

The principle of equal pay for male and female workers for equal work or work of equal value is laid down in Article 157 of the Treaty on the Functioning of the European Union (TFEU). Institutions need to apply this principle in a consistent manner.

The EBA Guidelines will apply to competent authorities across the EU, as well as to investment firms (Class 2) on a solo and consolidated basis.