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Financial Services Audit

ESMA publishes remuneration guidelines

On 31 March 2016, the European Securities and Markets Authority (ESMA) published its final guidelines on sound remuneration policies under the UCITS directive and Alternative Investment Fund Managers Directive (AIFMD). ESMA has also written to the European Commission, European Council and European Parliament on the proportionality principle and remuneration rules in the financial sector.

The UCITS remuneration guidelines, which apply from 1 January 2017, provide clarity on the requirements for management companies when establishing and applying a remuneration policy for key staff in accordance with the UCITS directive. The guidelines will ensure a convergent application of these provisions and provide guidance on the governance of remuneration, requirements on risk alignment and disclosure.