MFSA Circular on Implementation of ESMA Guidelines on Sound Remuneration Policies under UCITS Directive and AIFMD

The Malta Financial Services Authority (MFSA) has issued a circular outlining its approach to implementing the European Securities and Markets Authority’s (ESMA) guidelines on sound remuneration policies under the Undertakings for Collective Investment in Transferable Securities (UCITS) directive and the Alternative Investment Fund Managers (AIFM) directive.

Background

The ESMA guidelines aim to ensure that remuneration and incentive structures do not induce excessive risk-taking and are disclosed appropriately. The MFSA has transposed the relevant provisions into its Rulebooks, including those related to UCITS management companies and AIFMs.

Regulatory Changes

In accordance with the ESMA guidelines, the MFSA has introduced regulatory changes, including:

• Deletion of certain sections in Appendix 12 to Part B of the Investment Services Rules (ISRs) for ISPs
• Addition of cross-references to the remuneration guidelines
• Revision of questions and answers on AIFMD issued by the MFSA

Transitional Period

Market participants are encouraged to familiarize themselves with the new requirements and transitional period explained in the circular. The changes apply with immediate effect, as from the date of this circular.

Queries or Requests for Clarifications

Queries or requests for clarifications on the contents of this circular should be addressed to the Securities and Markets Supervision Unit by email at su@mfsa.com.mt.

Contact Information

Malta Financial Services Authority Communications Unit 31 January 2017