The European Securities and Markets Authority (ESMA) has published two sets of guidelines:

  • guidelines on sound remuneration policies under the Undertakings for Collective Investments in Transferable Securities Directive (UCITS Remuneration Guidelines);and
  • guidelines on sound remuneration under the Alternative Investment Fund Managers Directive (AIFMD Remuneration Guidelines).

The UCITS Remuneration Guidelines apply to management companies as defined under Article 2(1)(b) of the UCITS Directive and Member State competent authorities (NCAs). They also apply to investment companies that have not designated a management company authorised pursuant to the UCITS Directive. The purpose of the UCITS Remuneration Guidelines is to ensure common, uniform and consistent application of the provisions on remuneration under Articles 14a and 14b of the UCITS Directive.

The AIFMD Remuneration Guidelines amend the Guidelines on sound remuneration policies under the AIFMD and have the same scope of application. Specifically paragraph 33 is amended that deals with AIFMs being part of a group.

Both guidelines apply from 1 January 2017.

NCAs must notify ESMA whether they comply or intend to comply with both sets of guidelines, with reasons for non-compliance, within two months. ESMA will publish a compliance table based on the responses from the NCAs.

View ESMA issues guidelines on remuneration practices under UCITS Directive and AIFMD, 14 October 2016

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