{"id":"circulars/cssf-25-884","title":"Circular CSSF 25/884","type":"circular","date":"2025-04-14","kind":"circular","html":"

Circular CSSF 25/884 is a CSSF circular, published 14 April 2025 and updated 16 April 2025. Subject: 1) Application of the Guidelines of the European Banking Authority on sound remuneration policies under Directive (EU) 2019/2034 (EBA/GL/2021/13) 2) Clarification of the remuneration requirements applicable to the SNI IFR investment firms under Directive (EU) 2019/2034.

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Legal basis: Law of 5 April 1993 on the financial sector.

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Relevant for: Investment firms.

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Keywords: Internal governance, Remuneration.

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Circular CSSF 25/884 1) Application of the Guidelines of the European Banking Authority on sound remuneration policies under Directive (EU) 2019/2034 (EBA/GL/2021/13) 2) Clarification of the remuneration requirements applicable to the SNI IFR investment firms under Directive (EU) 2019/2034

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Circular CSSF 25/884 1) Application of the Guidelines of the European Banking Authority on sound remuneration policies under Directive (EU) 2019/2034 (EBA/GL/2021/13) 2) Clarification of the remuneration requirements applicable to the SNI IFR investment firms under Directive (EU) 2019/2034 To all IFR investment firms, as defined in Article 1, point (9a-1), of the amended Law of 5 April 1993 on the financial sector (the “LFS”).

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Luxembourg, 14 April 2025 Ladies and Gentlemen, The primary 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 (EU) 2019/2034 (EBA/GL/2021/13) (the “Guidelines”), published on 22 November 2021. Consequently, the CSSF has integrated the Guidelines into its administrative practice and regulatory approach with a view to promoting supervisory convergence in this field at European level. Investment firms that qualify as “non-SNI IFR investment firms” or “Class 2 IF” in accordance with Article 1, point (9a-2), of the LFS shall duly comply with the Guidelines. The secondary purpose of this circular is to clarify the remuneration requirements applicable to investment firms that qualify as “small and non-interconnected investment firms” or “Class 3 IF” (the “SNI IFR investment firms”) in accordance with Article 12(1) of Regulation (EU) 2019/2033 (the “IFR”). SNI IFR investment firms shall continue to comply with the provisions of Circular CSSF 10/437.

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  1. The Guidelines The Guidelines are issued by the EBA in accordance with Articles 26(4) and 34(3) of Directive (EU) 2019/2034 (IFD). The primary purpose of the Guidelines is to define in more detail the requirements of Articles 38-20 to 38-23 of the LFS with respect to remuneration policies. They address more particularly the following aspects: 1)
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the sound and gender-neutral remuneration policies that non-SNI IFR investment firms shall

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have in place for all their staff including for staff whose professional activities have a material impact on the investment firms’ risk profile or the assets they manage (the “identified staff”). In particular, remuneration policies must be gender neutral in accordance with Article 1, point (26-2), of the LFS and respect the principle of equal pay for male and female workers for equal work or work of equal value; 2)

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the governance arrangements and processes which shall apply, in particular, with regard to

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the requirement to set up a remuneration committee and the review of the remuneration processes and practices by the internal control functions;

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the structure of remuneration and the remuneration of specific functions, such as members

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of the management and supervisory function of the management body or control functions; 4)

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the remuneration policy, award and pay-out of variable remuneration for identified staff,

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while also providing specifications to facilitate the implementation of the derogations under paragraphs 3 and 4 of Article 38-22 of the LFS (the proportionality principle); and 5)

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the calculation of the appropriate ratio between the variable components and the fixed

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components of the total remuneration. The Guidelines apply on an individual basis in accordance with Article 38-15 of the LFS and, unless Article 8 of the IFR is applied by the CSSF, on a consolidated basis in accordance with Article 7 of the IFR. Rules pertaining to the application of the remuneration requirements in a group context are clarified in the Guidelines.

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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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