MFA Submits Comments on AIFMD Remuneration

September 27, 2012

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