Commission Delegated Regulation (EU) 2021/2154 of 13 August 2021 supplementing Directive (EU) 2019/2034 of the European Parliament and of the Council with regard to regulatory technical standards specifying appropriate criteria to identify categories of staff whose professional activities have a material impact on the risk profile of an investment firm or of the assets that it manages (Text with EEA relevance)

• CELEX: Delegated Regulation (EU) 2021/2154
• Articles: 6

Article 1 Definitions

For the purposes of this Regulation, the following definitions shall apply:

(1)

‘managerial responsibility’ means a situation in which a staff member heads a business unit or a control function and is directly accountable to the management body as a whole or to a member of the management body or to the senior management;

(2)

‘control function’ means a function that is independent from the business unit it controls and that is responsible for providing an objective assessment of the investment firm’s risks, review or report on those, including, but not limited to, the risk management function, the compliance function and the internal audit function;

(3)

‘business unit’ means a business unit as defined in Article 142(1), point (3), of Regulation (EU) No 575/2013.

Article 2 Application of criteria

1.   Where this Regulation is applied on an individual basis in accordance with Article 25 of Directive (EU) 2019/2034, compliance with the criteria set out in Articles 3 and 4 of this Regulation shall be assessed against the investment firm’s individual risk profile.

2.   Where this Regulation is applied on a consolidated basis in accordance with Article 25 of Directive (EU) 2019/2034, compliance with the criteria set out in Articles 3 and 4 of this Regulation shall be assessed against the risk profile of the investment firm on a consolidated basis.

3.   Where Article 4(1), point (a), is applied on an individual basis, the remuneration awarded by the investment firm shall be considered.

4.   Where Article 4(1), point (a), is applied on a consolidated basis, the consolidating investment firm shall consider the remuneration awarded by any entity that falls within the scope of consolidation.

5.   Article 4(1), point (b), shall only apply on an individual basis.

6.   Article 4(1), point (c), shall apply on an individual and consolidated basis.

Article 3 Qualitative criteria

Staff members shall be deemed to have a material impact on an investment firm’s risk profile or that of the assets it manages where one or more of the following qualitative criteria are met:

(a)

the staff member is a member of the management body in its management function;

(b)

the staff member is a member of the management body in its supervisory function;

(c)

the staff member is a member of the senior management;

(d)

in investment firms with a total balance sheet equal to or more than EUR 100 million, staff members with managerial responsibility for business units that are providing at least one of the services that require authorisation listed under points (2) to (7) of Annex I, Section A, to Directive 2014/65/EU of the European Parliament and of the Council  ( 7 ) ;

(e)

the staff member has managerial responsibilities for the activities of a control function;

(f)

the staff member has managerial responsibilities for the prevention of money laundering and terrorist financing;

(g)

the staff member is responsible for managing a material risk as referred to in Article 28(3) of Directive (EU) 2019/2034 within the investment firm or is a voting member of a committee responsible for managing a material risk to which the investment firm is exposed;

(h)

in an investment firm that is authorised for providing at least one of the services listed under points (2) to (7) of Annex I, Section A to Directive 2014/65/EU, the staff member is responsible for managing one of the following activities:

(i)

economic analysis;

(ii)

information technology;

(iii)

information security;

(iv)

outsourcing arrangements of critical or important functions as referred to in Article 30(1) of Commission Delegated Regulation (EU) 2017/565  ( 8 ) .

(i)

the staff member meets either of the following criteria with regard to decisions for approving or vetoing the introduction of new products:

(i)

the staff member has authority to take such decisions;

(ii)

the staff member is a voting member of a committee which has authority to take such decisions.

Article 4 Quantitative criteria

1.   Subject to paragraphs 2 to 5, a staff member shall be deemed to have a material impact on an investment firm’s risk profile or that of the assets it manages where any one of the following quantitative criteria is met:

(a)

the staff member has been awarded a total remuneration which is equal to or greater than EUR 500 000 in or for the preceding financial year;

(b)

where the investment firm has over 1 000 staff members, the staff member is within the 0,3 % of staff, rounded to the next higher integral figure, who has, within the investment firm, been awarded the highest total remuneration in or for the preceding financial year;

(c)

the staff member was in or for the preceding financial year awarded total remuneration that is equal to or greater than the lowest total remuneration awarded in that financial year to a member of staff who meets one or more of the criteria set out in Article 3, points (a), (c), (d), (h) or (i).

2.   The criteria laid down in paragraph 1 shall not apply where the investment firm determines that the staff member, or the category of staff to which the staff member belongs, has no material impact on the risk profile of the investment firm or of the assets it manages.

3.   The condition of paragraph 2 of this Article shall be assessed on the basis of objective criteria which take into account all relevant risk and performance indicators used by the investment firm to identify, manage and monitor risks in accordance with Article 28 of Directive (EU) 2019/2034 and on the basis of the duties and authorities of the staff member or categories of staff and their impact on the investment firm’s risk profile or that of the assets it manages, when compared with the impact of the professional activities of staff members identified in accordance with Article 3 of this Regulation.

4.   The application of paragraph 2 by an investment firm, in respect of a staff member referred to in paragraph 1, point (b), or a staff member who was awarded a total remuneration of EUR 750 000 or more in or for the preceding financial year, shall be subject to the prior approval of the competent authority responsible for the prudential supervision of that investment firm.

The competent authority shall only give its prior approval where the investment firm can demonstrate that the condition set out in paragraph 2 is satisfied, having regard to the assessment criteria set out in paragraph 3.

5.   Where the staff member was awarded total remuneration of EUR 1 000 000 or more in or for the preceding financial year, the competent authority shall only give its prior approval under paragraph 4 in exceptional circumstances. In order to ensure the consistent application of this paragraph, the competent authority shall inform the EBA before giving its approval in respect of such a staff member.

The existence of exceptional circumstances shall be demonstrated by the investment firm and assessed by the competent authority. Exceptional circumstances shall be situations that are unusual, very infrequent or far beyond what is usual. The exceptional circumstances shall relate to the staff member concerned.

Article 5 Calculation of the total remuneration awarded

1.   All amounts of the variable and fixed remuneration shall be calculated gross and on a full-time equivalent basis.

2.   Investment firms’ remuneration policies shall set out the reference year for the variable remuneration taken into account when calculating the total remuneration. That reference year shall be either the year preceding the financial year in which the variable remuneration is awarded or the year preceding the financial year for which the variable remuneration is awarded.

Article 6 Entry into force

This Regulation shall enter into force on the fifth day following that of its publication in the Official Journal of the European Union .