Finansinspektionen has decided on new regulations that aim to improve how the undertakings manage risks in their remuneration structures. The regulations implement the changes in the EU Credit Institution Directive regarding remuneration policies and how they are to be applied. The new regulations place general requirements on the undertakings' remuneration policies and variable remuneration.
The regulations also place specific requirements on the undertakings in terms of adapting remuneration structures to risk through, for example, regulations on performance assessment and risk adjustment as well as deferred variable remuneration.
Undertakings shall defer variable remuneration exceeding SEK 100,000 for employees who can materially affect the undertaking's risk level. Undertakings with risk-weighted assets above SEK 500 billion shall also pay out a certain part of the variable remuneration to the senior management in the form of shares or other instruments.
The requirements on disclosure of information about remuneration structures are transferred to FFFS 2007:5 regarding public disclosure of information concerning capital adequacy and risk management.
Swedish fund management companies without authorisation to conduct discretionary portfolio management are not covered by these regulations, but rather by FFFS 2011:2.
Finansinspektionen has decided on amended regulations regarding remuneration systems in credit institutions and securities companies. Under the amendment, the regulations no longer apply to Swedish management companies with authorisation for discretionary portfolio management. These undertakings shall instead meet the requirements on remuneration systems set out in the UCITS 5 Directive.
The new regulations enter into force on 1 November 2016. Amendment 2016:25
As part of the implementation of the Capital Requirements Directive into Swedish law, certain points of the regulations have been amended. Several of the most important amendments include the following. The rule about who may form the Remuneration Committee in significant undertakings is changed so that employees may not be included in the Committee, with the exception of employee representatives. The defined term "specially regulated staff" is replaced by the term "employees whose tasks have a significant impact on the undertaking's risk profile". These employees must now be identified in part through the firm's own analysis and in part through application of a European regulation that specifies some quantitative and qualitative criteria. A new provision is also introduced that requirements the remuneration policy to contain clear criteria for establishing fixed and variable remuneration, and the differences between these criteria shall be clearly specified. The provision on the adjustment of the variable remuneration has been changed to only include employees whose tasks have a significant impact on the undertaking's risk profile. The amendments enter into force on 2 August 2014. Amendment 2014:22