November 2019: EBA Consultation on CRR II Remuneration Disclosures

The European Banking Authority (EBA) has published a consultation paper in relation to draft implementing technical standards (ITS) that specify uniform disclosure formats and associated instructions for certain disclosures required under the Capital Requirements Regulation, as amended by the recently published Capital Requirements Regulation II (CRR II), including remuneration disclosure requirements. Consultation submissions are required by 16 January 2020 and can be submitted here by clicking on the ‘Consultation Papers’ tab near the bottom of the screen and then clicking on the ‘Send your comments’ button at the bottom.
 
Key points

  • CRR II provided a mandate to the EBA in CRR II for the publication of uniform disclosure formats and associated instructions in relation to certain disclosure requirements, including the remuneration disclosure requirements.
  • CRR II introduced some clarifications to the disclosures on remuneration that were required under the original Capital Requirements Regulation. Further information on some of these clarifications can be found here.
  • The ITS specifies uniform disclosure tables and templates for the remuneration disclosures required under CRR II. These are set out at Annex 37 of the draft ITS.
  • The ITS specifies instructions for firms to refer to when completing the tables and templates set out at Annex 37. These instructions are set out at Annex 38 of the draft ITS.
  • The uniform disclosure formats are intended to convey sufficiently comprehensive and comparable information to enable the assessment of risk and demonstrate compliance.

Timing
 
Consultation submissions are required by 16 January 2020.
 
The EBA expects to submit a revised draft ITS to the European Commission in June 2020.
 
The CRR II changes, including the ITS, are anticipated to apply from 28 June 2021.  
 
Tapestry comment 
The approach that firms have taken to the disclosures required under Article 450 of the Capital Requirements Regulation can sometimes be inconsistent. Although the mandatory topics are (usually!) disclosed, the extent of the disclosure and style of approach taken to the disclosure is different between firms. This can sometimes make direct comparison between the remuneration policies and practices of firms difficult. The ITS is intended to minimise this inconsistency and ensure that the remuneration information disclosed is sufficiently comprehensive and comparable. We recommend that firms review Annexes 37 and 38 of the draft ITS and ensure, before the consultation period ends, that the instructions, tables and templates are clear and workable, to ensure that you have the opportunity to feed into the consultation process if any issues are identified. We intend on participating in the consultation process so if you would like us to incorporate any of your comments, please provide these to us as soon as possible and by 16 December at the latest.
 
If we can assist you with your remuneration structures and compliance, please do let us know.

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