The Austrian Financial Market Authority (FMA) today issued a formal statement to the European Securities and Markets Authority (ESMA) confirming its application in full of the ESMA Guidelines on remuneration policies and practices (MiFID). These ESMA Guidelines form an interpretation of the Markets in Financial Instruments Directive (MiFID) and of the national transpositions of this European legal framework – in Austria’s case the 2007 Securities Supervision Act. The FMA will be basing its supervisory activity on the Guidelines with effect from 29 January 2014.
The aim of the Guidelines is to avoid potential disadvantages for customers as a result of conflicts of interest that can arise in relation to the sale of securities products, for example in those cases in which the seller will receive a variable remuneration for selling certain products. Credit institutions and investment firms can avoid such conflicts of interest by introducing internal rules governing the remuneration of those persons involved in the provision of investment services.
The Guidelines state, for example, that there should be an appropriate balance between fixed and variable remuneration, and that qualitative criteria should also be taken into account when calculating variable salary components. Reference is also made to the role of the compliance function in helping to draw up internal remuneration rules, which should be approved by the management board and supervisory board. Additionally, the Guidelines contain numerous examples of good and bad practices in relation to remuneration systems for the provision of investment services.
The text of the ESMA Guidelines on remuneration policies and practices (MiFID) can be downloaded at https://www.fma.gv.at/en/eu/esma-guidelines/
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-6006
+43/(0)676/882 49 516