Regulation of Remuneration Policies in the Financial Sector
At a time where legislators and supervisory authorities were grappling to find appropriate international regulatory responses to the global financial crisis, some of the efforts have been concentrated on putting the emphasis on sound corporate governance. In that context, regulating remuneration in the financial sector was a key measure of the European Union's regulatory response to the financial crisis and is quite likely an important feature of the post-crisis era.
The aim of this Article is to assist readers in navigating the European regulatory framework for remuneration in the financial sector as it is drawn by CRD IV, Solvency II, AIFMD, UCITS V, and MiFID, and, where applicable, their implementing legislation in Luxembourg. This Article follows the idea that European regulation of remuneration in the financial sector, despite its complexity and the numerous sets of applicable rules, pursues two main objectives: on the one hand, the protection of investors and, on the other, sound governance and solvency rules intended to avoid bailouts and protect taxpayers' interests. As alternative financings are emerging as a serious competitor to traditional bank financing, this distinction is blurred. It is becoming more appropriate to consider the activity of the financial sector holistically. With that in mind, this Article intentionally takes a horizontal approach to the financial services industry. We analyse the incredibly complicated scope of application of the new rules on remuneration, and, insofar as possible, we unveil some of the mystery of their substance.
Source - ALJB (Association Luxembourgeoise des Juristes de Droit Bancaire)