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which closed in September.
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The Draft Bill
proposes to amend the ARPFE to apply the
CRD IV bonus cap (100% to 200% of fixed pay)
for AIFMs, managers of UCITS and proprietary
trading investment institutions that are part of
a consolidated group (e.g. banks, investment
firms, payment institutions and electronic money
institutions, insurers and financial conglomerates).
These AIFMs, managers of UCITS and proprietary
trading investment institutions would no longer
benefit from the exemption of the bonus cap
referred to above and, consequently, would fully
be caught by the bonus cap rules.
The Draft Bill relates to the European Banking
Authority Guidelines on Sound Remuneration
Policies (EBA Guidelines) that were published
in 21 December 2015 and came into effect on 1
January 2017.
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According to these EBA Guidelines,
identified staff of the AIFM or the manager of the
UCITS who also have a material impact on the
CRD IV consolidation group’s profile to which
the AIFM or manager of UCITS belongs shall
fall within the scope of the EBA Guidelines and
therefore the CRD IV bonus cap applies.
Commentary on the proposal
The Draft Bill will have a more significant impact
than foreseen by the EBA Guidelines, as we
illustrate below.
•
Increased personnel scope
In practice, there will be only a very limited
number of staff of an AIFM or a manager of
the UCITS who meet the quality referred to
in the EBA Guidelines (e.g. a director who is
both a director of the AIFM or the manager
of the UCITS and of the parent company of
the CRD IV consolidation group).
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However,
the Draft Bill does not make a distinction
between identified staff and regular staff. As
a result, the bonus cap will apply to all staff
working under the responsibility of an AIFM
or manager of UCITS of a consolidation group
referred to below (under the Draft Bill).
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•
Wider definition of consolidation group
As far as the relevant consolidation group
is concerned, the Draft Bill goes beyond the
EBA Guidelines. Where the EBA Guidelines
are limited to AIFMs or managers of UCITS
belonging to a consolidation group of a