The European Securities and Markets Authority (ESMA) has launched a consultation on proposed Guidelines on sound remuneration policies under the UCITS V Directive and AIFMD.
ESMA says the proposed Guidelines aim to ensure a convergent application of the remuneration provisions and will provide guidance on issues such as proportionality, governance of remuneration, requirements on risk alignment and disclosure. The final Guidelines will apply to UCITS management companies and national competent authorities.
“The consistent, common and uniform application of the UCITS Directive’s remuneration provisions will contribute to convergent supervisory approaches leading to a level-playing field in the fund sector and result in increased investor protection across the EU,” said Steven Maijoor, ESMA chair. “These guidelines will encourage the implementation of sound and prudent remuneration policies and organisational requirements for UCITS, which will help in avoiding potential conflicts of interest and promote prudent risk-taking by fund managers.”