AIFMD Remuneration-related Disclosures

ESMA released its latest ESMA UCITS & AIFMD Q&A on the 5th of October 2017 and it covers 2 new questions and answers relevant to the AIFMD remuneration disclosure requirements in annual reports :

The detailed ESMA responses set out below will need to be considered in relation to the AIFMD Remuneration Disclosure Requirements:

• How the AIFM applies the remuneration disclosure requirements in annual accounts to the identified staff of the delegate of the AIFM (to whom portfolio management or risk management activities have been delegated).
• The presentation of the disclosure of AIFM delegates’ staff remuneration in annual reports.

AIFMD Remuneration Disclosures 

Question 1: Do the remuneration-related disclosure requirements under Article 22(2) (e) of the AIFMD also apply to the staff of the delegate of an AIFM to whom portfolio management or risk management activities have been delegated? 

Answer: Yes. In line with the approach followed under the AIFMD Remuneration Guidelines, AIFMs can ensure compliance in one of the following two ways: 

1. where the delegate is subject to regulatory requirements on remuneration disclosure for its staff to whom portfolio management or risk management activities have been delegated that are equally as effective as those under Article 22(2)(e) of the AIFMD, the AIFM should use the information disclosed by the delegate for the purposes of fulfilling its obligations under Article 22(e) of the AIFMD and Article 107 of the AIFMD Level 2 Regulation; or 
2. in other cases, appropriate contractual arrangements should be put in place with the delegate allowing the AIFM to receive (and disclose in the annual report for the relevant AIF(s) that it manages) at least information on the total amount of remuneration for the financial year, split into fixed and variable remuneration, paid by the AIF and/or the AIFM to the identified staff of the delegate – and number of beneficiaries, and, where relevant, carried interest – which is linked to the delegated portfolio. This means that the disclosure should be done on a prorated basis for the part of the AIF’s assets which are managed by the identified staff within the delegate. 

In both situations set out above, the disclosure may be provided on an aggregate basis i.e. by means of a total amount for all the delegates of the AIFM in relation to the relevant AIF. 

Question 2: Can the information mentioned under Article 22(2) (e) and (f) of the AIFMD be disclosed in the annual report by the way of a link to a document where the relevant information is available? 

Answer: No. The information prescribed by Article 22(2)(e) and (f) of the AIFMD should be included in the annual report. This is without prejudice to references in the annual report to other documents where additional information may be found.