Regulatory Alerts2014-01-01 | Interpretation Guide to the Ordinance on the Supervisory Requirements for Institutions’ Remuneration SystemsInterpretation Guide to the Remuneration Ordinance for Institutions
Issued by the German Federal Financial Supervisory Authority (BaFin), this guide translates EU CRD IV directives into binding national rules governing remuneration systems across financial institutions. It requires institutions to align pay structures with long-term corporate and risk strategies, enforce appropriate fixed-to-variable ratios, implement deferral mechanisms for variable compensation, and clearly identify risk-takers among staff and management bodies. The framework mitigates excessive risk-taking by linking incentives to sustainable performance, ensuring transparent bonus calculations, and preserving the oversight authority of internal audit and remuneration control committees.
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