Remuneration requirements under the UCITS V regime
27 May 2016
Regulatory News Alert
Form for compliance
On May 18th 2016, the CSSF published a form aiming to gather information on existing (pre UCITS V) remuneration practices of companies/entities falling under the UCITS V Regime and to anticipate on possible requests from relevant entities to rely on the proportionality principle in the future. Such a form had already been sent by CSSF to some Luxembourg entities on an individual basis (targeted companies/entities being management companies and self-managed investment1).
While the CSSF already requested in the past remuneration related information to companies covered by the AIFMD or CRD regimes, the requests at that time were either very specific (on a case by case basis) or limited to extracts from the remuneration policy.
The proactive approach of the CSSF for UCITS V and the level of details requested in the form may be seen as a real interest from the CSSF in (i) having a better control of compliance with remuneration requirements under UCITS V and (ii) greater level of information before making any decision.
The form consists in an Excel-sheet document, which is split into three sections:
1/ General information
The first tab focuses on company identification and contact details only.
2/ Current situation
The second tab is dedicated to the analysis of the existing remuneration policy, its compliance with the UCITS V requirements and a focus on Identified Staff. A precise identification of risk takers is required, with disclosure of information about their amount of variable remuneration (in cash and instrument separately), as well as their percentage of variable remuneration over their fixed remuneration.
3/ Future situation
The third tab assesses the potential application of the proportionality principle with respect to the different characteristics as defined by the ESMA Remuneration Guidelines. Consequently, companies in scope have to detail the argumentation they intend to apply to benefit from proportionality principle; taking into account the three following main criteria: (i) size, (ii) internal organization and (iii) the nature, scope and complexity of the activities. Moreover, the categories of staff targeted by the application of the proportionality principles have to be identified and justified as well.
1 Management company as defined under Chapter 15 of the law of 17 December 2010 on undertaking for collective investment (hereafter the “2010 law”) or internally managed investment company (SIAG) as defined in article 27 of the 2010 law.
How can Deloitte support you on this matter?
Deloitte experts can support you to fulfil this form and / or check that the information you provided are accurate and consistent. This can be crucial, notably when arguing for the application of the proportionality principle.
Moreover, we can review your whole policy, assess its compliance and help you to optimize it in order to support in the best way your business while being compliant.