On 22 November 2021, the European Banking Authority (EBA) published its revised guidelines on sound remuneration policies for investment firms under the Investment Firms Directive (IFD).
The guidelines have been developed on the basis of Articles 30(4) and 32(9) of the IFD which mandates the EBA to develop guidelines on remuneration policies for investment firms specifying the IFD remuneration requirements.
The guidelines apply to class 2 investment firms (investment firms that are non-systemically relevant investment firms which do not qualify as small and non-interconnected investment firms either and to which the IFD and the Investment Firms Regulation (IFR) applies without limitation). The guidelines apply on an individual basis in accordance with Article 25 of the IFD and Article 7 of the IFR and unless Article 8 of the IFD is applied by Member State competent authorities, on a consolidated basis. All investment firms must also comply with the national implementation of the requirements under the Markets in Financial Instruments Directive II.
The guidelines specify further the requirements on remuneration policies in the IFD with regard to the respective governance arrangements and processes which should be applied when remuneration policies for all staff and for identified staff are implemented. Remuneration policies must be gender neutral in accordance with the IFD and respect the principle of equal pay for male and female workers for equal work or work of equal value. The guidelines specify the elements that investment firms should implement in this regard.
The guidelines come into force from 30 April 2022.