On 29 October 2020, the European Banking Authority (EBA) issued a public consultation on its guidelines on sound remuneration policies. The consultation proposals take into account the amendments introduced by the Fifth Capital Requirements Directive (CRD V) in relation to institutions’ sound remuneration policies and in particular the requirement that those remuneration policies should be gender neutral.

The proposed amendments to the guidelines also seek to clarify how the remuneration framework applies on a consolidated basis to investment firms and other financial institutions that are subject to a specific remuneration framework (for example, firms subject to the Undertakings for Collective Investment in Transferable Securities Directive, the Alternative Investment Fund Managers Directive or the revised Market in Financial Instruments Directive) and are no longer subject to the so called bonus cap.

The sections in the guidelines on severance payments and retention bonuses are also being revised based on supervisory experience regarding cases of circumvention.

The consultation closes on 29 January 2021. The final guidelines are expected in the first half of 2021.