EBA欧洲银行-2013-07-04-Public-hearing-CP-on-draft-RTS-on-identified-staff_12页_246kb

EBA Draft RTS on Identified Staff Summary

Core Content

The European Banking Authority (EBA) published a Consultation Paper (CP) on draft Regulatory Technical Standards (RTS) for the identification of staff whose professional activities have a material impact on the institution's risk profile. This initiative is part of the implementation of the Capital Requirements Directive (CRD) and aims to ensure consistent application of remuneration policies across the European Union.

Main Objectives

• Harmonisation of Identification Criteria: To standardise the methods used by institutions to identify staff with significant risk impact.
• Appropriate Number of Identified Staff: To ensure that all Member States have a suitable number of staff identified under the CRD requirements.
• Alignment of Remuneration with Risk: To provide appropriate incentives for long-term and sustainable risk-taking by identified staff.

Key Information

EBA’s Mandate

• The EBA is mandated under Article 94(2) of CRD to develop draft RTS on qualitative and quantitative criteria for identifying staff.
• These standards must be submitted to the European Commission by 31 March 2014.

CRD Requirements

• Article 92(2) of CRD requires competent authorities to ensure that total remuneration policies, including salaries and discretionary pension benefits, are applied to categories of staff such as:
  • Senior management
  • Risk takers
  • Staff engaged in control functions
  • Employees in the same remuneration bracket as senior management and risk takers
• The identification of such staff must align with the institution's risk profile and be proportionate to its size and complexity.

Background and Rationale

• A study on the implementation of CEBS/EBA remuneration guidelines found that:
  • Institutions use varied processes and criteria to identify identified staff.
  • Some criteria are insufficient to capture the full risk impact.
  • There is a tendency to identify very few staff, which undermines the risk management objectives of the CRD.
• The lack of consistent identification leads to misalignment between remuneration and risk-taking, affecting prudential regulation.

Structure of the Draft RTS

• The draft RTS outlines a self-assessment process for institutions to identify staff.
• It includes internal criteria and regulatory qualitative/quantitative criteria.
• The identification criteria are based on:
  • Function responsibilities (including managerial roles)
  • Individual and collective competencies and responsibilities
  • Remuneration levels

Regulatory Qualitative Criteria

• Identify:
  • Members of the management body
  • Senior management
  • Other staff with key functions or managerial responsibilities over risk takers
• Additional criteria include authority to commit to credit risk exposures and market risk transactions above certain thresholds (as a percentage of Common Equity Tier 1 capital).

Regulatory Quantitative Criteria

• Based on total remuneration:
  • Absolute threshold: Staff earning more than EUR 500,000
  • Relative threshold: Top 0.3% of staff by remuneration
• Based on remuneration bracket: Staff in the same bracket as senior management and risk takers
• Based on variable remuneration: Exceeding 75% of the fixed component and EUR 75,000

Identified Staff Definition

• Staff is considered identified if at least one of the following is met:
  • Internal criteria
  • Regulatory qualitative criteria
  • Regulatory quantitative criteria
• Staff identified only through remuneration bracket or variable remuneration criteria may be excluded if the institution can demonstrate that they do not have a material impact on the risk profile.
• The draft RTS requires institutions to document the identification results, including a list of identified and excluded staff.

Next Steps

• Comment Period: Institutions can submit comments to EBA-CP-2013-11@eba.europa.eu by 21 August 2013, referencing EBA/CP/2013/11.
• Feedback Statement: EBA will finalise the draft RTS, incorporating received comments, and publish a feedback statement.
• Submission to EU COM: The final draft RTS will be submitted to the European Commission by 31 March 2014 for adoption.