As we reported here, the regulation of remuneration within EU-regulated banks is subject to significant change, probably the biggest change since the introduction of the bonus cap in 2014. On 7 June 2019, the Capital Requirements Directive V (CRD V) and Capital Requirements Regulation II (CRR II) were published in the Official Journal of the EU and will enter into force on 27 June 2019 (20 days following publication).
The adopted texts can be accessed here:
Following entry into force:
- CRD V must be implemented into local law by EU member states by 28 December 2020 (and to apply those measures from 29 December 2020); and
- CRR II will apply directly (without local implementation) from 28 June 2021.
We will be hosting a webinar on 27 June 2019 to discuss the changes and how they may impact your remuneration policies and practices. If you would like to join, please use the registration button below.
The implementation deadline for CRD V will fall into December 2020, earlier than some firms may have hoped. It may be that the application for the rules to firms will be pushed back to the first performance year beginning on or after 1 January 2021. However, member states may choose to implement CRD V prior to the December 2020 deadline. The Investment Firms Directive and Investment Firms Regulation that will impact the regulation of investment firms (currently caught by CRD IV / CRR) has not yet been published and so there is a risk that the timing of implementation of those rules does not line up with CRD V / CRR II.
We will update you when further clarity is available. In the interim, firms should be preparing for the implementation and application of the remuneration changes.
Tapestry has significant experience advising financial services firms on their remuneration compliance, particularly in relation to remuneration regulations. If you would like to discuss your remuneration compliance, please do contact us.