UCITS Remuneration Guidelines


In a similar way to the problems facing the EBA in interpreting CRDIV, ESMA is uncertain as to whether the underlying legislation allows complete disapplication or neutralisation and to what extent it can reduce certain obligations. It has therefore sought legal advice on these issues and given very little guidance in these guidelines.

Subject to that though, it gives some indication of what it would like to happen. It proposes to allow smaller fund managers in terms of complexity, activity, internal organisation, balance sheet or assets under management to disapply certain pay-out rules e.g. paying in fund units and deferral.

However, final answers on these questions will take some time. While ESMA has confirmed that it is only variable remuneration earned on or after 1 January 2017 that will be affected by the new rules, whether satisfactory answers can be obtained in time from the European and UK authorities remains to be seen and so the period of uncertainty for fund managers looking to take advantage of proportionality will continue.