{"id":"circulars/cssf-22-797","title":"Circular CSSF 22/797","type":"circular","date":"2022-01-31","kind":"circular","html":"

Circular CSSF 22/797 is a CSSF circular, published 31 January 2022. Subject: 1) Application of the Guidelines of the European Banking Authority on sound remuneration policies under Directive 2013/36/EU (EBA/GL/2021/04) 2) Repeal of Circulars CSSF 17/658 and CSSF 11/505.

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Relevant for: Credit institutions, Investment firms.

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Keywords: Remuneration.

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Repeals Circular CSSF 11/505, Circular CSSF 17/658.

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Text

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  1. APPLICATION OF THE GUIDELINES OF THE EUROPEAN BANKING AUTHORITY ON SOUND REMUNERATION POLICIES UNDER DIRECTIVE
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2013/36/EU (EBA/GL/2021/04) 2) REPEAL OF CIRCULARS CSSF 17/658 AND 11/505

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Circular CSSF 22/797 Re: 1) Application of the Guidelines of the European Banking Authority on sound remuneration policies under Directive 2013/36/EU (EBA/GL/2021/04) 2) Repeal of Circulars CSSF 17/658 and 11/505

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Luxembourg, 31 January 2022

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Ladies and Gentlemen,

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To all credit institutions, as

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Subject: Application of the Guidelines of the European Banking Authority (EBA) on

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defined in point 12 of

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sound remuneration policies under Directive 2013/36/EU (EBA/GL/2021/04) and

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Article 1 of the amended

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repeal of Circulars CSSF 17/658 and 11/505.

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Law of 5 April 1993 on the financial sector (LFS), and all CRR investment firms, as defined in point 9a. of Article 1 of the LFS, as well as all other investment

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The purpose of this circular is to inform you that the CSSF, in its capacity as competent authority, applies the Guidelines of the EBA on sound remuneration policies under Directive 2013/36/EU

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firms falling under the

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(EBA/GL/2021/04) (the

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“Guidelines”),

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published on 2 July 2021. Consequently, the CSSF has integrated the Guidelines

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scope of application of Circulars CSSF 17/658 and 11/505

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Purpose of the Circular

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into its administrative practice and regulatory approach with a view to promote supervisory convergence in this field at European level. All credit institutions, as defined in point 12 of Article 1 of the amended Law of 5 April 1993 on the financial sector (LFS), and all CRR investment firms, as defined in point 9a. of Article 1 of the LFS, shall duly comply with them. Circular CSSF 17/658 regarding the adoption of the EBA Guidelines on sound remuneration policies (EBA/GL/2015/22) and Circular CSSF 11/505 regarding details relating to the application of the principle of proportionality are hereby repealed.

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The Guidelines The Guidelines are issued by the EBA in accordance with Articles 74(3) and 75(2) of Directive 2013/36/EU 1.

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1 Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).

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The Guidelines apply in relation to the sound and gender-neutral remuneration policies that credit institutions and CRR investment firms should have in place for all their staff and for staff whose professional activities have a material impact on the institutions’ risk profile in accordance with Articles 92 to 95 of that Directive (identified staff), including for staff and identified staff on an individual and consolidated or sub-consolidated basis. The Guidelines apply as from 31 December 2021. The Guidelines specify in detail the requirements within Directive 2013/36/EU on remuneration policies, the respective governance arrangements and processes that should be applied when remuneration policies are implemented. They are an update of the Guidelines on sound remuneration policies under Directive 2013/36/EU published by the EBA in 2015 (EBA/GL/2015/22) to accommodate the changes to CRD that have been introduced by Directive 2019/878/EU 2. In particular, the guidance on severance pay, retention bonuses and discretionary pension benefits has been clarified to avoid such payments being used to circumvent remuneration requirements. The Guidelines further specify how the threshold that represents a low amount of variable remuneration under Article 38-6 (2) b) of the LFS should be calculated which is different from the calculation of the ratio between variable and fixed remuneration. The Guidelines also clarify the requirements which apply in a group context.

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The text above is the opening of the document; the PDF carries the whole.

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Document page, PDF. Source: Commission de Surveillance du Secteur Financier (CSSF), reproduced with the CSSF's consent. The French text prevails.

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