Regulatory Alerts2009-12-21
Circular 22/2009 (BA) - Supervisory Requirements for Remuneration Systems of Institutions
The German Federal Financial Supervisory Authority (BaFin) issued Circular 22/2009 to establish supervisory requirements for the remuneration systems of financial institutions. The document mandates that remuneration structures must align with strategic goals, avoid excessive risk-taking incentives, and ensure appropriate oversight through dedicated committees and annual reporting. It imposes specific obligations on institutions to identify risk-takers, cap guaranteed bonuses, defer variable pay, and publicly disclose remuneration details to enhance transparency and accountability.
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