New Remuneration Ordinance for Medium-sized Securities Institutions
BaFin drafts regulations for securities institutions for the first time

Affected institutions

BaFin is currently consulting on a draft of a remuneration regulation (WpIVergV) for managing directors and risk takers of medium-sized securities institutions (§ 2 para. 17 WpIG). In doing so, BaFin is guided by the Remuneration Ordinance for Institutions (Institutsvergütungsverordnung), which, since the introduction of the WpIG, only applies to institutions that fall under the KWG.

Affected persons

The risk takers covered by the WpIVergV are the managing directors of an institution as well as all employees whose activities have a significant impact on the risk profile of the institution. In principle, all remuneration components are affected.
The aim of the provisions is to oblige institutions to link sustainable qualitative and quantitative criteria to the granting of remuneration to risk takers, which prevent conflicts of interest and false motivations and do not run counter to control and monitoring units.

Object of implementation

The draft of the WpIVergV contains special rules for the design of the remuneration systems of risk takers of so-called medium-sized securities institutions. Small securities institutions are not affected by the WpIVergV.

Essential regulatory content

The draft of the WpIVergV contains special rules for the design of the remuneration systems of risk takers of so-called medium-sized securities institutions. Small securities institutions are not affected by the WpIVergV.
Essential regulatory content You are obliged to adapt your remuneration strategy and your remuneration system to your business and risk strategy, and to and risk strategy and to structure the remuneration of the risk takers appropriately. For this purpose, the WpIVergV contains numerous requirements that must be complied with. These requirements include, in particular, the amount of variable remuneration, questions of appropriateness, measures for the evaluation and adjustment of the remuneration system as well as individual remuneration and remuneration components, the manner of granting variable remuneration and partial retention (deferred payments) as well as the regular review of the implementation of these requirements.

Responsibilities

Responsible for the implementation of the WpIVergV are, with regard to the managing directors, the supervisory body or, failing that, the managing directors of the institution and, with regard to the other risk takers, the managing directors of the institution.

Implementation in organisational guidelines

The requirements of the WpIVergV must be implemented in your organisational guidelines, in particular in your remuneration system; furthermore, committees must be set up and responsibilities defined, if necessary.
We have many years of experience in the implementation of the previous Remuneration Ordinance for Institutions (Institutsvergütungsverordnung) and therefore know exactly what is important and how you can implement the requirements in a way that suits your corporate culture. Please feel free to contact us at any time and arrange a meeting.