Public Hearing on Identified Staff - CRD V Changes and Regulatory Technical Standards

The Public Hearing on Identified Staff held on 28th January 2020 discussed the CRD V mandate and the changes required for issuing a revised RTS. The EBA is tasked with developing criteria to identify staff with a material impact on an institution's risk profile. The review of the existing RTS is ongoing, and a new draft is expected to be submitted to the Commission in June 2020.

• Public Hearing
• Identified Staff
• CRD V Changes
• Regulatory Technical Standards
• EBA

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1. Public Hearing 28 January 2020 RTS on identified staff

2. RTS on identified staff CRD V changes require to issue a revised RTS CRD V requires the EBA to submit a new draft RTS to the Commission. The submission is planned for June 2020. CP published 19 January 2019 Consultation period ends 19 February 2020 Commission Delegated Regulation (EU) No 604/2014 of 4 March 2014 supplementing Directive 2013/36/EU will be repealed when the new RTS enters into force Public Hearing 28 Januuary 2020 /RTS on identified staff

3. The CRD V mandate (Article 94) For the purpose of identifying staff whose professional activities have a material impact on the institution's risk profile as referred to in Article 92(3), EBA shall develop draft regulatory technical standards setting out the criteria to define the following: (a) managerial responsibility and control functions; (b) material business unit and significant impact on the relevant business unit's risk profile; and (c) other categories of staff not expressly referred to in Article 92(3) whose professional activities have an impact on the institution's risk profile comparably as material as that of those categories of staff referred to therein. Public Hearing 28 Januuary 2020 /RTS on identified staff

4. Some criteria directly included in CRD (Article 92) Categories of staff whose professional activities have a material impact on the institution's risk profile shall, at least, include: (a) all members of the management body and senior management; (b) staff members with managerial responsibility over the institution's control functions or material business units; (c) staff members entitled to significant remuneration in the preceding financial year, provided that the following conditions are met: (i) the staff member's remuneration is equal to or greater than EUR 500 000 and equal to or greater than the average remuneration awarded to the members of the institution's management body and senior management referred to in point (a); (ii) the staff member performs the professional activity within a material business unit Public Hearing 28 Januuary 2020 /RTS on identified staff

5. Review of the RTS in place taken into account Overall identification outcome appropriate A few criteria have been seen as not effective for the identification of staff Not all members of Committees have decision making powers Decisions on credit risk and not the initiation of credit risk should be seen as risk taking Some additional criteria have been suggested to cover specific functions, in particular regarding IT-risks. Remuneration bracket criterion not effective Public Hearing 28 Januuary 2020 /RTS on identified staff

6. Qualitative criteria (1) RTS in Place Revised RTS/CRD V Maintained in draft RTS, some limited amendments Qualitative Criteria Managerial responsibility for material business unit or control function included in qualitative criteria (staff heads ) Now included in CRD V, with mandate to define in draft RTS: managerial responsibility material business unit New significant impact on the risk profile mandate to define Public Hearing 28 Januuary 2020 /RTS on identified staff

7. Qualitative criteria (2) RTS in Place Revised RTS/CRD V 500000 EUR remuneration of MB and Senior Management, but limited to staff that has a significant impact on the risk profile and works in a material business unit No notification required under CRD Removed from CRD and draft RTS 500000 EUR with the possibility to exclude staff that works not in a material business unit or has no material impact on the risk profile. and average Notification required Remuneration bracket Public Hearing 28 Januuary 2020 /RTS on identified staff

8. Qualitative criteria (3) RTS in Place Revised RTS 750000 EUR and 0.3% of the highest earners Retained, but 0.3% criterion only applicable on individual and not any consolidated level longer on Exclusions with prior approval 1 000 000 EUR Exclusions with prior approval and involvement of EBA Definition circumstances added to RTS of exceptional Public Hearing 28 Januuary 2020 /RTS on identified staff

9. EUROPEAN BANKING AUTHORITY 20 avenue Andr Prothin CS 30154 92927 Paris La D fense CEDEX, France Tel: E-mail: info@eba.europa.eu https://eba.europa.eu/ +33 1 86 52 70 00