EBA欧洲银行-BVCA-Submission-28229_11页_679kb

报告摘要

CEBS CP42: Summary of BVCA Response on Remuneration Guidelines

Core Content

The BVCA has responded to the CEBS Consultation Paper (CP42) on guidelines for remuneration policies and practices. The response highlights the unique nature of private equity and venture capital (PE/VC) firms in comparison to traditional banking and investment banking institutions, emphasizing the need for proportionality and tailored regulatory approaches.

Main Points

1. Proportionality in Remuneration

The BVCA supports the CEBS recognition of proportionality in applying remuneration provisions of CRD3.
They argue that private equity firms, which use long-term deferral and risk adjustment mechanisms such as carried interest and co-investment, should not be subject to the same rigid remuneration structures as banks.
They suggest that the principles of deferral, share-based payment, and performance adjustment can be neutralized for private equity firms, as these structures inherently align the interests of managers with those of investors over the long term.

2. Applicability to Staff

The BVCA agrees that staff with no material impact on a firm's risk profile should not be subject to specific remuneration principles.
They suggest that the same logic could apply to partners, founders, or owner-managers in non-partnership structures, provided that their distributions reflect a return on investment or residual profits after costs.

3. Application to the AIFM Directive

The BVCA notes that the AIFM Directive, which will apply from H1 2013, is focused on investor protection, not prudential regulation.
They emphasize that the AIFM Directive's remuneration provisions are distinct from CRD3 and should not be treated as a simple template.
They recommend that CESR (now ESMA) conduct a targeted consultation on the AIFM Directive's remuneration principles before publishing guidelines.

4. Carried Interest and Co-Investment

The BVCA explains that carried interest and co-investment are integral to the PE/VC industry and serve as effective tools for risk management and alignment with investor interests.
They express concern that the reference to "carried interest models" in paragraph 13 of CP42 could be misinterpreted as a criticism of these structures.
They advocate for the removal or rephrasing of such references to avoid negative connotations.

5. Retention Periods and Public Disclosure

The BVCA supports the idea that retention periods should not be required for the share-based part of deferred remuneration if the firm has justified the neutralization of the relevant principles.
They argue that public disclosure requirements could be disproportionately burdensome for small private equity and venture capital firms.
They suggest that disclosure should be limited to a summary of governance and conflict of interest management, rather than detailed remuneration arrangements.

Key Recommendations

Neutralisation of Certain Provisions: The BVCA believes that several provisions of CRD3 should be neutralized for private equity firms, including:
- Annex V, section 11, point (o): The requirement that a substantial portion of variable remuneration be paid in shares.
- Annex V, section 11, point (q): The requirement for mandatory deferral of variable remuneration.
- Annex V, section 11, point (h): The multi-year performance assessment framework.
- Annex V, section 11, point (l): The fixed-to-variable remuneration ratio requirement.
- Annex V, section 11, point (r): The requirement for ex-post adjustment based on the firm's financial situation.
Clarification in Guidelines: They urge CEBS to make it clear that the guidelines are primarily focused on the banking and investment banking sectors and should not be used as a template for the AIFM Directive.

Conclusion

The BVCA stresses that private equity and venture capital firms operate under different regulatory contexts and that their remuneration structures are designed to align with long-term investor interests. They believe that a proportionate and differentiated approach is necessary to ensure fair and effective regulation without creating an unlevel playing field.

Appendix Summary

Legal Structure: Illustrative diagrams show a typical UK-headquartered PE firm structure, including fund commitments, profit sharing, and the role of the general partner.
Carried Interest: Explained as a long-term incentive mechanism that is only payable on realisation of profits and not based on accounting valuations.
Co-Investment: Described as a practice where team members invest their own money alongside fund investors, ensuring alignment of interests.
Variations in Legal Structure: Include offshore fund establishment, parallel fund vehicles, and the use of permanent capital vehicles.