Report from the Commission to the European Parliament and the Council. Assessment of the remuneration rules under Directive 2013/36/EU and Regulation (EU) No 575/2013

The Capital Requirements Directive (‘CRD’) and the Capital Requirements Regulation (‘CRR’) contain a number of requirements regarding the remuneration policies and practices of credit institutions and investment firms. These requirements were introduced in the aftermath of the 2008 financial crisis to ensure that remuneration policies do not encourage excessive risk-taking behaviour.

The first set of rules on remuneration in the financial sector was put forward at EU level in the Commission Recommendation of 30 April 2009. This was followed by the introduction of binding rules on remuneration for credit institutions and investment firms in CRD III, adopted in 2010. Those rules, which had to be implemented by the Member States by January 2011, were further extended following the adoption of CRD IV in 2013 (with the new rules applicable as of 2014).

This report was prepared to meet the obligation under Article 161(2) of the CRD that requires the Commission to report to the European Parliament and the Council on the efficiency, implementation and enforcement of the remuneration rules, and in particular on the impact of the maximum ratio between variable and fixed remuneration.

The details of the assessment required by the CRD of the efficiency, implementation and enforcement of the remuneration rules in general are set out in the Commission Staff Working Document SWD(2016)265 that accompanies this report. This assessment allowed identifying a number of rules in respect of which the Commission may consider further action, and a detailed evaluation of those individual rules is presented in the Commission Staff Working Document SWD(2016)266. This assessment will be taken into account in the context of the wider revision of the CRD and CRR now under consideration.

ESO: Background information: EU rules on remuneration for credit institutions and investment firms work, but the proportionality principle needs to be clarified http://www.europeansources.info/record/eu-rules-on-remuneration-for-credit-institutions-and-investment-firms-work-but-the-proportionality-principle-needs-to-be-clarified/

EUR-Lex: SWD(2016)265: Detailed assessment of the remuneration rules under Directive 2013/36/EU and Regulation (EU) No 575/2013 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2016:265:FIN

EUR-Lex: SWD(2016)266: Evaluation of the deferral and pay-out in instruments rules under Directive 2013/36/EU http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2016:266:FIN

---