EBA Issues Guidelines for Banks and Investment Firms Under CRD and IFD

The guidelines on remuneration benchmarking exercise integrate additional requirements introduced by CRD5 regarding the application of derogations and the benchmarking of gender pay gap. EBA also added guidance to harmonize the benchmarking of approvals granted by shareholders to use higher ratios than 100% between the variable and fixed remuneration. EBA provided separate guidelines on the remuneration and gender pay gap benchmarking exercise for investment firms under the IFD. Both the Guidelines for credit institutions and the new Guidelines for investment firms integrate changes made to the remuneration and disclosure requirements under the CRD and the Capital Requirements Regulation (CRR) as well as the new remuneration framework for investment firms under the IFD and the Investment Firms Regulation (IFR). The approach taken in the guidelines for investment firms is consistent with the corresponding guidelines for banks. In accordance with the principle of equal pay for equal work or work of equal value and measures to ensure equal opportunities, the benchmarking of the gender pay gap will allow competent authorities to monitor the implementation of such measures and their development at different levels of pay. EBA introduced templates for the benchmarking of the gender pay gap and revised the templates for the data collection, in light of the European Commission’s Implementing Regulation on disclosures. Benchmarking data will be collected annually under the updated guidelines while the first data collection will be conducted in 2023 for the financial year 2022. The first data on the gender pay gap will be collected in 2024 for the financial year 2023. The updated guidelines will come in effect from December 31, 2022.  

The guidelines on data collection exercise on high earners reflect the amended remuneration framework laid down in CRD5, including the introduction of derogations to pay out a part of the variable remuneration in instruments and under deferral arrangements. The need to update these guidelines stemmed from the remuneration regime introduced for investment firms and laid down in IFD and IFR. EBA has updated the templates and instructions accordingly and provided a specific template for high earners in investment firms. The CRD and the IFD require competent authorities to collect information on the number of natural persons, per institution and investment firm, respectively, who are remunerated EUR 1 million or more per financial year, in pay brackets of EUR 1 million. The information should also include details on their job responsibilities, the business area, and the main elements of the salary, bonus, long-term award, and pension contribution. The data regarding high earners under the updated guidelines will be collected annually in 2023, for the financial year that ends in 2022. Data on high earners should be submitted by the firms to the competent authorities by August 31, 2023 and from the competent authorities to the EBA by October 31, 2023. The updated guidelines will come in effect from December 31, 2022.

Related Links

• Press Release on Remuneration Benchmarking
• Benchmarking Guidelines Under CRD (PDF)
• Benchmarking Guidelines Under IFD (PDF)
• Press Release on High Earner Data
• Guidelines on High Earner Data (PDF)

Keywords: Europe, EU, Banking, Central Bank Liquidity, Basel, Operational Risk, Guidelines, CRD, IFD, CRR, IFR, Investment Firms, Disclosures, Benchmarking Exercise, Reporting, Remuneration Benchmarking, High Earners Data, EBA