CP12/32: Implementation of the Alternative ... - BVCA admin

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[Note: paragraph 1(k) of Annex II of AIFMD] Page 55 of 91 Appendix 1 AIFM Remuneration Principle 5(e): Remuneration structures – retained units, shares or other instruments 19B.1.17 R (1) Subject to the legal structure of the AIF and the instrument constituting the fund, an AIFM must ensure that a substantial portion, and in any event at least 50% of any variable remuneration, consists of units or shares of the AIF concerned, or equivalent ownership interests, or share-linked instruments or equivalent non-cash instruments, unless the management of AIFs accounts for less than 50% of the total portfolio managed by the AIFM, in which case the minimum of 50 % does not apply. (2) The instruments in (1) must be subject to an appropriate retention policy designed to align incentives with the long-term interests of the AIFM and the AIFs it manages and the investors of such AIFs. (3) This rule applies to both the portion of the variable remuneration component deferred in accordance with SYSC 19B.1.18R(1) and the portion not deferred. [Note: paragraph 1(m) of Annex II of AIFMD] AIFM Remuneration Principle 5(f): Remuneration structures – deferral 19B.1.18 R (1) An AIFM must not award, pay or provide a variable remuneration component unless a substantial portion, and in any event at least 40%, of the variable remuneration component, is deferred over a period which is appropriate in view of the life cycle and redemption policy of the AIF concerned and is correctly aligned with the nature of the risks of the AIF in question (2) The period referred to in (1) must be at least three to five years unless the life cycle of the AIF concerned is shorter. (3) Remuneration payable under (1) must vest no faster than on a pro-rata basis. (4) In the case of a variable remuneration component of a particularly high amount, at least 60 % of the amount must be deferred. [Note: paragraph 1(n) of Annex II of AIFMD] AIFM Remuneration Principle 5(g): Remuneration structures – performance adjustment, etc. 19B.1.19 R An AIFM must ensure that any variable remuneration, including a deferred portion, is paid or vests only if it is sustainable according to the financial situation of the AIFM as a whole and justified according to the performance of the AIF, the business unit and the individual concerned.
[Note: paragraph 1(o) first sub-paragraph of Annex II of AIFMD] Page 56 of 91 Appendix 1 19B.1.20 G The total variable remuneration should generally be considerably contracted where subdued or negative financial performance of the AIFM or of the AIF concerned occurs, taking into account both current compensation and reductions in payouts of amounts previously earned, including through malus or clawback arrangements. [Note: paragraph 1(o) second sub-paragraph of Annex II of AIFMD] AIFM Remuneration Principle 6: Measurement of performance 19B.1.21 R An AIFM must ensure the measurement of performance used to calculate variable remuneration components, or pools of variable remuneration components, includes a comprehensive adjustment mechanism to integrate all relevant types of current and future risks. [Note: paragraph 1(l) of Annex II of AIFMD] AIFM Remuneration Principle 7: Pension policy 19B.1.22 R An AIFM must ensure that: (1) its pension policy is in line with its business strategy, objectives, values and long-term interests of the AIFs it manages; (2) when an employee leaves the firm before retirement, any discretionary pension benefits are held by the firm for a period of five years in the form of instruments referred to in SYSC 19B.1.17 R(1); and (3) in the case of an employee reaching retirement, discretionary pension benefits are paid to the employee in the form of instruments referred to in SYSC 19B.1.17R(1) and subject to a five-year retention period. [Note: paragraph 1(p) of Annex II of AIFMD] AIFM Remuneration Principle 8: Personal investment strategies 19B.1.23 R An AIFM must ensure that its employees undertake not to use personal hedging strategies or remuneration- and liability-related insurance to undermine the risk alignment effects embedded in their remuneration arrangements. [Note: paragraph 1(q) of Annex II of AIFMD] AIFM Remuneration Principle 9: Avoidance of the remuneration code 19B.1.24 R An AIFM must ensure that variable remuneration is not paid through vehicles or methods that facilitate the avoidance of the requirements of the AIFM Remuneration Code.
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Consultation Paper CP12/32 Financia
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The Financial Services Authority in
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CP12/32 Implementation of the Alter
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Annex 2 List of consultation questi
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Annex 2 November 2012 CP12/32 Imple
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ALTERNATIVE INVESTMENT FUND MANAGER
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Annex A Making the Investment Funds
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Page 154 and 155: supplementing this section] 4. Comm
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Page 160 and 161: Page 37 of 91 Appendix 1 non-listed
Page 162 and 163: BIPRU 730k firm Page 39 of 91 Appen
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Page 186 and 187: Types of investment firm: BIPRU 50K
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Page 194 and 195: TABLE 7.4 PART I A firm must calcul
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Page 198 and 199: initial capital (see item 5) if the
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Page 206 and 207: … Data item SUP 16.12.12R, unless
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Page 212 and 213: … Data item SUP 16.12.23R, unless
Page 214 and 215: FSA066 and FSA06 are added - see fo
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Page 222 and 223: FSA067 Capital adequacy - supplemen
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