The European Banking Authority (EBA) published today its revised Guidelines on sound remuneration policies for investment firms under the Investment Firms Directive (IFD).
The final Guidelines provide further details on how the provisions under IFD on remuneration policies and variable remuneration of identified staff should be applied by class 2 investment firms [1]. The Guidelines are as far as possible consistent with the existing Guidelines under the Capital Requirements Directive (CRD). Relevant differences between IFD and CRD (e.g., the absence of a bonus cap and differences in instruments and the length of deferral periods) have been taken into account.
All aspects of the remuneration policy must be gender-neutral in accordance with IFD remuneration requirements. Institutions should, therefore, comply with the principle of equal pay for equal work or equal value of work. The provisions on anti-discrimination and equal opportunities have been retained as they are important to foster diversity in the longer term and to reduce the gender pay gap over time.
Legal basis and next steps
These Guidelines have been developed on the basis of Articles 30(4) and 32 (9) of Directive (EU) 2019/2034, which mandates the EBA to develop guidelines on remuneration policies for investment firms specifying the IFD remuneration requirements. The Guidelines have been developed in cooperation with the European Securities and Markets Authority (ESMA).
The EBA Guidelines will apply to Competent Authorities across the EU, as well as to credit institutions and investment firms on an individual and consolidated basis. The Guidelines will enter into force on 30.4.2022.
[1] i.e. investment firms that are non-systemically relevant investment firms which do not qualify as small and non-interconnected investment firms either and to which the IFD and the Investment Firms Regulation (IFR) applies without limitation
