Implementing the remuneration requirements of CRD V: Key actions for Level 3 firms

Financial Services Reward

Following the effective date of CRD V in December 2020, the new Directive bought in a number of changes to remuneration requirements that are particularly impacting on Level 3 firms. These include:

  • Introduction of the fixed to variable remuneration cap for all Material Risk Takers.
  • Extension of the requirements around performance adjustment meaning that all variable remuneration awarded to Material Risk Takers should be subject to malus and clawback provisions.
  • Changes to the identification of Material Risk Takers
  • Application of the PRA’s requirements on buy-outs of unvested variable remuneration for new joiners.
  • Changes to the tests for determining your firm’s proportionality status.
  • Updating relevant policy documentation to reflect the enhanced CRD V requirements.

As we near the end of the calendar year, we’ve produced the attached document to act as a helpful checklist highlighting key actions that Level 3 firms will want to consider to ensure compliance with CRD V, particularly when determining performance outcomes for the 2021 financial year.

Financial Services Reward – November 2021

Key actions flyer
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