Featured Product

    EC Finalizes Standards to Identify Material Risk-Takers Under CRD

    June 09, 2021

    EC published the Delegated Regulation 2021/923, which supplements Capital Requirements Directive (CRD IV or Directive 2013/36/EU), with regard to the regulatory technical standards setting out the criteria to define managerial responsibility, control functions, material business units, and a significant impact on the risk profile of a material business unit. Regulation 2021/923 also sets out criteria for identifying staff members or categories of staff whose professional activities have an impact on the risk profile of an institution that is comparably as material as that of staff members or categories of staff referred to in Article 92(3) of that Directive. Regulation 2021/923 shall enter into force on the fifth day following that of its publication in the Official Journal of the European Union.

    The regulation states that institutions shall identify staff members or categories of staff as having an impact on an institution’s risk profile that is comparably as material as that of the staff members referred to in Article 92(3) of CRD IV where those staff members or categories of staff meet any of the qualitative or quantitative criteria laid down in Regulation 2021/923. Staff members shall be deemed to have a material impact on an institution’s risk profile where one or more of the qualitative criteria, laid down in Regulation 2021/923, are met. Staff members shall be deemed to have a material impact on the risk profile of an institution where any of the following quantitative criteria are met:

    • The staff members have been awarded in or for the preceding financial year a total remuneration that is equal to or greater than EUR 750,000
    • Where the institution has over 1,000 members of staff, the staff members are within the 0.3% of staff, which has, within the institution, been awarded the highest total remuneration in or for the preceding financial year on an individual basis

    The average total remuneration of all members of the management body and senior management shall be calculated by considering the total of the fixed and variable remuneration of all members of the management body in its management function and supervisory function as well as of all staff that belongs to the senior management as defined in Article 3(1), point (9), of CRD IV. For the purposes of this Regulation, variable remuneration that has been awarded but has not yet been paid shall be valued as at the date of the award without taking into account the application of the discount rate referred to in Article 94(1), point (g)(iii), of CRD IV or reductions in payouts, through clawback, malus or otherwise. All amounts of the variable and fixed remuneration shall be calculated gross and on a full-time equivalent basis. The regulation also stipulates that the remuneration policies of an institution shall set out the reference year for the variable remuneration that they take into account when calculating the total remuneration. That reference year shall be either the year preceding the financial year in which the variable remuneration is awarded or the year preceding the financial year for which the variable remuneration is awarded. Although Regulation 2021/923 repeals the Delegated Regulation 604/2014, the repealed regulation (604/2014) shall continue to apply to investment firms until June 26, 2021.

     

    Related Link: Regulation 2021/923

    Effective Date: June 14, 2021

    Keywords: Europe, EU, Banking, Investment Firms, CRD IV, Basel, Remuneration, Operational Risk, Material Risk-Takers, Governance, EC

    Related Articles
    News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News
    News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699