MFA Submits Comments on AIFMD Remuneration

September 27, 2012

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Topics: affiliated group AIFM, AIFMD, alignment of interests, alternative instruments, Annual Report, assets under management, audit, AUM, Balance Sheet, bank, bonuses, capital requirements, carried interest, chief compliance officer, Claw-Back, commissions, compliance, compliance staff, Confidential Information, consultation paper, control function, control functions, Council of the European Union, counsel, credit institutions, deferral of remuneration and pension, deferred remuneration, delegate, deposit-taking entity, Disclosure, distributions, ESMA, EU, EU Passport, European Commission, European Parliament, European Securities and Markets Authority, European Union, excessive risk-taking, fee structure, fees, financial institutions, financial stability, governing body, government insurance, hedge fund managers, hedge funds, Identified Staff, institutional investor, Insurance, investors, junior partner, Limited Liability Company, limited liability partnership, LLC, LLP, management bodies, management committees, marketing, material risk, Member State, Member State competent authorities, MiFID, MiFID firms, minimum capital requirements, non-deferred remuneration, non-EU AIFM, non-executive directors, operational risk, other risk taker, own account dealer, owner-managed AIFM, parent company, pension, performance fee, performance measures, Policy Makers, private placement, private placement regime, proportionality principle, public shareholders, redemption rights, Regulators, RemCo, remuneration, remuneration policies, retention policy, risk alignment, risk management, risk profile, Senior Management, service providers, shareholders, sophisticated investors, stakeholders, tax, Tax Implications, third country, UCITS, underperformance, United Kingdom, variable remuneration,
From: MFA, Richard H. Baker



MFA submitted comments to the European Securities and Markets Authority (ESMA) on its consultation on guidelines on sound remuneration policies under the on Alternative Investment Fund Managers Directive (AIFMD).  In our comments, MFA stated that ESMA should ensure that the concept of proportionality embodied in Annex II of the AIFMD will allow flexibility in the application of certain of the Annex II principles, particularly with respect to owner-managed AIFMs, and non-EU AIFMs subject to remuneration rules in their home jurisdiction. In particular, among other instances, MFA believes that proportional application of the guidelines is appropriate in the following circumstances:

  • MFA believes that only the remuneration paid to the most senior individuals in each relevant category of Identified Staff should be subject to the Guidelines.
  • the Guidelines should not require AIFMs to have a strict set of guidelines for determining individual remuneration and should instead give AIFMs sufficient room for discretion in making such awards; and,
  • there should be no requirement to disclose remuneration policies or amounts to the public.