- Question ID
-
2013_577
- Legal act
- Directive 2013/36/EU (CRD)
- Topic
- Remuneration
- Article
-
92
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Not applicable
- Article/Paragraph
-
n.a.
- Name of institution / submitter
-
Berger Martina
- Country of incorporation / residence
-
Austria
- Type of submitter
-
Individual
- Subject matter
-
Remuneration - Secondment contracts
- Question
-
This question regards the application of the remuneration policies of the so called "secondment contracts/assignment contracts" from a third country. In Directive 2013/36/EU (CRD) it is stated (as well as the FAQ) that "the rules also apply to i) subsidiaries established outside the EEA of institutions which have their head office in the EEA and ii) subsidiaries established inside the EEA of institutions which have their head office outside the EEA". If an executive member of a credit institution is "sent" on the terms of a secondment contract by a third country credit institution to a EU member credit institution (which however is not only a subsidiary), do the remuneration policies apply (if the staff member is paid by the third country institution and also on the basis of the contract with the third country institution).
- Background on the question
-
The question arised regarding secondment contracts of employees based in Switzerland, the USA or Japan, seconded to subsidiaries in EEA-countries (operating under the banking licence of these countries).
- Submission date
- Final answer
-
Article 92(1) of Directive 2013/36/EU (CRD) states that the application of paragraph 2 of that Article and of Articles 93, 94 and 95 of the CRD shall be ensured by competent authorities for institutions at group, parent company and subsidiary levels, including those established in offshore financial centres. Staff seconded to an EU subsidiary who, were they employed directly by the EU subsidiary, would fall into the scope of the EBA RTS on the definition of staff whose professional activities have a material impact on the institution's risk profile (identified staff) for remuneration purposes (once formally adopted and published in the official journal) shall therefore also be subject to the provisions of Articles 92, 93, 94 and 95 of CRD as they are implemented in the Member State where the subsidiary is located and applicable Regulatory Technical Standards.
In light of this, for the purposes of short term secondments, for example where a person is only residing in a Member State for a few weeks to carry out project work, it is unlikely such seconded staff of a third country institution would be identifiable under the applicable RTS. In any case short-term contracts cannot be used as a means of circumventing the spirit of the CRD and any related standards or guidelines. Furthermore, it should be noted that the awarding of remuneration under such secondment contracts may be subject to further review in any future revisions of EBA guidelines on remuneration.
- Status
-
Archive
- Answer prepared by
-
Answer prepared by the EBA.
- Note to Q&A
-
Update 26.03.2021: This Q&A has been archived as the issue it deals with has been addressed in paragraph 69 of EBA/GL/2015/22.