The European Commission has adopted Regulatory Technical Standards on the identification of ‘material risk takers’, being those staff whose professional activities have a material impact on a firm’s risk profile – see ‘Remuneration code staff’ in SYSC 19A.3.4 and which is effectively a copy-out of Article 92(2) of the CRD.
The RTS document is only a few pages long and is restricted to six Articles. Meeting any one of the 15 ‘qualitative criteria’ in Article 3, or any one of the 3 ‘quantitative criteria’ in Article 4(1) will mean that the individual will captured.
Examples include having the authority to veto the introduction of new products; heading up legal affairs or being awarded total remuneration of €500,000 or more in the preceding financial year (for the purposes of the RTS remuneration which has been awarded but not yet paid is valued as at the date of the award – but see Article 5 for full details).
There is an exclusion available for those falling within the quantitative criteria (only) but who are deemed not to have such a material impact. However to ensure a consistent application of this exclusion there is the requirement to notify the Regulator where the exclusion is applied to those awarded total remuneration of €500,000 or more.
Prior approval is required for staff awarded total remuneration of €750,000 or more and the EBA must be informed, via the Regulator, before approving the exclusion of a staff member awarded total remuneration of €1,000,000 or more.
