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Banks’ obligation to adopt and apply remuneration policies for their staff

 

According to the amendments to the Credit Institutions Act which are expected to enter into force on 31 December 2010 banks are required to adopt and apply remuneration policies for their staff with specific requirements applicable to the remuneration packages of staff members whose professional activities have a material impact on the risk profile of the bank. In addition, the Bulgarian National Bank is expected to issue an ordinance specifying the principles as well as more detailed requirements applicable to such policies.
The said amendments have been made in compliance with Recommendation 2009/384/EC which the European Commission adopted in April 2009 on remuneration policies in the financial services sector.
In relation to this Recommendation the Bulgarian National Bank published last year guiding principles for remuneration policies which Bulgarian banks had to apply. The awaited legislative amendments will significantly develop the regulation in this area providing detailed rules further to the guiding principles.
In addition to Recommendation 2009/384/EC the European Commission proposed amendments to the Capital Requirements Directive 2006/48/EC (CRD III) which the European Parliament approved on 7 July 2010 and which concern notably bankers’ remunerations.
On 8 October 2010 the Committee of European Banking Supervisors (CEBS) published its draft Guidelines on Remuneration Policies and Practices aiming to facilitate the compliance of the remuneration principles included in CRD III.
Tsvetkova Bebov & Partners has followed the above developments and could provide expert advice in relation to the structuring of remuneration policies.
If you would like to learn more about our services as external counsel concerning the structuring of remuneration policies and related issues, comments on or adapting a draft remuneration policy prepared internally by your group, comments on the relevant legislative requirements including in the European Union, or any other issue, we would be glad to meet you.

Banks’ obligation to adopt and apply remuneration policies for their staff