- Article 21, § 1, 6°, Articles 67 to 71 and Annex II of the Banking Law
- Regulation of 1 April 2014 on proprietary trading activities
- Commission Delegated Regulation (EU) No 604/2014 of 4 March 2014 supplementing Directive 2013/36/EU of the European Parliament and of the Council with regard to regulatory technical standards with respect to qualitative and appropriate quantitative criteria to identify categories of staff whose professional activities have a material impact on an institution's risk profile
- Commission Delegated Regulation (EU) No 527/2014 of 12 March 2014 supplementing Directive (EU) No 2013/36/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the classes of instruments that adequately reflect the credit quality of an institution as a going concern and are appropriate to be used for the purposes of variable remuneration
- Decision (EU) 2015/2218 of the European Central Bank of 20 November 2015 on the procedure to exclude staff members from the presumption of having a material impact on a supervised credit institution’s risk profile (ECB/2015/38)
- Circular NBB_2016_44 of 10 November 2016 / EBA Guidelines of 27 June 2016 on sound remuneration policies (EBA/GL/2015/22)
- Circular NBB_2014_08 of 1 September 2014 concerning the EBA Guidelines of 16 July 2014 on the data collection exercise regarding high earners (EBA/GL/2014/07)
- Circular NBB_2014_09 of 1 September 2014 concerning the EBA Guidelines of 16 July 2014 on the remuneration benchmarking exercise (EBA/GL/2014/08)
The remuneration policy should aim to ensure that the personal objectives of the staff members are aligned with the long-term interests of the credit institution. To this end, the credit institution should establish and maintain a remuneration policy and remuneration practices that promote effective risk management.
Credit institutions must identify the members of staff to whom the specific requirements on remuneration apply ("identified staff"). These include in particular the categories of staff whose professional activities have a material impact on the credit institution’s risk profile.
This identification process must be carried out on the basis of the criteria set out in the regulatory technical standards adopted by the European Commission (Delegated Regulation (EU) No 604/2014). According to the 4th recital and the introductory sentence of Article 2 of this Regulation, institutions must also take account of the results of their own risk assessments so that all staff whose professional activities may have a material influence on the institution’s risk profile are actually identified. In addition, pursuant to Article 9, § 2 of the Regulation of 1 April 2014, all staff members who are authorized to perform risky transactions and who are employed in trade departments should in any case be considered as Identified Staff.
According to the 14th recital in this Regulation, the identification process must be adequately documented, including in respect of staff identified solely on the basis of the level of their remuneration, but who were not ultimately included because their professional activities were considered to have no material impact on the institution’s risk profile (see Decision (EU) 2015/2218 of the ECB for the procedural aspects in this regard).
The NBB requires that at least 1 % of the total number of staff is selected as Identified Staff.
According to Article 75(2) of CRD IV, the EBA must issue guidelines on sound remuneration policies which comply with the principles set out in Articles 92 to 95 of CRD IV. These guidelines were published on 27 June 2016 and will guide the NBB in its actual monitoring of the remuneration policies and practices of credit institutions. Credit institutions should therefore, in addition to the statutory provisions on sound remuneration policies, implement these guidelines and comply with them. This is covered in more detail in Circular NBB_2016_44.
The Bank expects every credit institution to examine how it will comply with the requirement of Article II.6 of the Banking Law pursuant to which at least 50 % of all variable remuneration must comprise an appropriate balance between shares or equivalent instruments and, if possible, other capital instruments mentioned in the law. The conditions under which the said capital instruments can be used for variable remuneration are listed in the regulatory technical standards adopted by the European Commission (Commission Delegated Regulation (EU) No 527/2014).
According to Article 450 of Regulation No 575/2013, institutions shall disclose certain quantitative information regarding the remuneration policy and practices. The NBB uses the collected information to benchmark remuneration trends and practices. Institutions selected by the NBB for this purpose should report on a yearly basis, pursuant to Circular NBB_2014_09 of 1 September 2014.
Furthermore, by virtue of Article II.20 of the Banking Law, institutions should provide the NBB with information on the number of persons in the institution that benefit from remuneration of at least EUR 1 million per financial year, in remuneration tranches of EUR 1 million, and on their job description, the financial sector concerned, and the primary elements of remuneration, including bonuses, long-term benefits and pension contributions. The reporting methods are discussed in Circular NBB_2014_08 of 1 September 2014.