Response to consultation on Guidelines on sound remuneration policies
Go back
In particular, we do consider to include any employee in the scope is not justified. These guidelines should be limited to risk takers as defined by the EBA and adopted by the European commission in March 20141.
At this stage, the current Directive “CRD4” allows in its article 92 (2) flexibility to adapt the application of the remuneration rules in a way that is appropriate to the size, the internal organisation and nature, the scope and the complexity of institutions activities.
Indeed, it’s not relevant to treat entities that are only involved in low-risk activities (in general these institutions do not practice high and complex remunerations) the same way as systemically important institutions that, due to their size and very nature, can impact the sector in its entirety.
As CRD4 mentioned it, the application of remunerations policies and practice shall be ensured by the national supervisors which know the local market, the general principles of national contract and labour law and are able to analyze if the long-term interests of institutions are preserved.
As many others members states within EU, France made the choice to adapt under strict conditions the remuneration requirements for regulated institutions (credit institutions, investment firms but also financing companies2) or groups (under the threshold of 10 billion EUR total balance sheet) as it is the case since CRD3.
Q 2: Are the guidelines in chapter 5 appropriate and sufficiently clear?
We think the definition of “staff” should be further clarified.In particular, we do consider to include any employee in the scope is not justified. These guidelines should be limited to risk takers as defined by the EBA and adopted by the European commission in March 20141.
Q 5: All respondents are welcome to provide their comments on the chapter on proportionality, with particular reference to the change of the approach on ‘neutralisations’ that was required following the interpretation of the wording of the CRD. In particular institutions that used ‘neutralisations’ under the previous guidelines for the whole institution or identified staff receiving only a low amount of variable remuneration are asked to provide an estimate of the implementation costs in absolute and relative terms and to point to impediments resulting from their nature, including their legal form, if they were required to apply, for the variable remuneration of identified staff: a) deferral arrangements, b) the pay out in instruments and, c) malus (with respect to the deferred variable remuneration). In addition those institutions are welcome to explain the anticipated changes to the remuneration policy which will need to be made to comply with all requirements. Wherever possible the estimated impact and costs should be quantified, supported by a short explanation of the methodology applied for their estimation and provided separately for the three listed aspects.
Application of the principle of proportionality is extremely important for our member’s activities which present the following particularities: no or few banking deposits and a low risk profile due to a collateral.At this stage, the current Directive “CRD4” allows in its article 92 (2) flexibility to adapt the application of the remuneration rules in a way that is appropriate to the size, the internal organisation and nature, the scope and the complexity of institutions activities.
Indeed, it’s not relevant to treat entities that are only involved in low-risk activities (in general these institutions do not practice high and complex remunerations) the same way as systemically important institutions that, due to their size and very nature, can impact the sector in its entirety.
As CRD4 mentioned it, the application of remunerations policies and practice shall be ensured by the national supervisors which know the local market, the general principles of national contract and labour law and are able to analyze if the long-term interests of institutions are preserved.
As many others members states within EU, France made the choice to adapt under strict conditions the remuneration requirements for regulated institutions (credit institutions, investment firms but also financing companies2) or groups (under the threshold of 10 billion EUR total balance sheet) as it is the case since CRD3.