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AIFMD Remuneration | Reference guide

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Paragraph by paragraph summary of ESMA guidelines on remuneration under AIFMD

Paragraph by paragraph summary of ESMA guidelines on remuneration under AIFMD

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  • 1. AIFMD Remuneration Reference guide January 2014 1
  • 2. Disclaimer This presentation is provided only as a training and educational resource to assist in the dissemination and awareness of AIFMD’s remuneration rules. It is a supplement to your firm’s internal compliance reference materials and sources. Each individual organization must determine how a specific requirement applies to its particular circumstances. To assist firms in their research, this presentation provides references. Hyperlinks are provided for convenience only, and we do not guarantee their accuracy or completeness. This presentation reflects requirements as of January 2014. Be sure to monitor for subsequent changes. 2
  • 3. Introduction to the Reference Guide • This Reference Guide provides a summary of the ESMA “Guidelines on sound remuneration policies under AIFMD.” – Numbers refer to paragraphs in the Guidelines. – Content is grouped by topic. Paragraphs may appear under more than one topic. • For an overview of the Guidelines, see our presentation: AIFMD Remuneration: An overview This Reference Guide is designed solely to help users easily identify relevant sections of the ESMA Guidelines. Users should consult the full text of the Guidelines and counsel before making decisions regarding remuneration policy and procedure. 3
  • 4. Objectives 5. “Ensure common, uniform and consistent application of the provisions on remuneration.” 34. AIFMs should “maintain a prudent balance between sound financial situation” and payment of variable remuneration. 35. An AIFM’s financial situation should not be adversely affected by the variable remuneration awarded, paid or vested. 38. Remuneration policy should encourage the alignment of risk. 41. Remuneration policy should be consistent with and promote “sound and effective risk management.” It should be in line with business strategy, not encourage excessive risk taking, and align the interests of the AIFs and their investors. 4
  • 5. Objectives (cont.) 70. Remuneration policy should allow employment of qualified and experience personnel in control functions. 78. Remuneration policy should reflect business strategy, risk tolerance and corporate values. It should be multi-year. 79. Remuneration policy should give consideration to prevention of excessive risktaking, the efficiency of the AIFM, and consistency with effective risk management. 5
  • 6. Scope 1. Guidelines apply to AIFMs. Non-EU AIFMs marketing under a national passport are subject only to the disclosure guidelines. 2. Apply to external manager (if not internally managed.) 18. When portfolio or risk management is delegated: the delegates must be subject to regulatory requirements that are equally as effective or contractual arrangements are in place to ensure that there is no circumvention. 32. No exception for subsidiaries of a credit institution. 33. “Compliance with these sectoral remuneration principles by AIFMs which belong to banking, insurance, investment groups or financial conglomerates should be considered as ensuring the respect by such a group of the remuneration principles applicable to the group with specific regard to the AIFM.” 6
  • 7. Remuneration 10. Remuneration includes: • “all forms of payments or benefits paid by the AIFM, • any amount paid by the AIF itself, including carried interest, and • any transfer of units or share of the AIF in exchange for professional services rendered by the AIFM identified staff.” 11. Remuneration is either fixed or variable (based on performance or other contractual criteria.) Excludes “general, non-discretionary, AIFM-wide” payments or benefits that “pose no incentive effects in terms of risk assumption.” 12. Remuneration excludes pro-rata returns of investment into the AIF. Investment has to involve an “actual disbursement” and not a loan. 7
  • 8. Remuneration (cont.) 14. Includes retention bonuses. 15. Can’t circumvent rules through indirect structures. 16. Payments made through a “carried interest vehicle” are subject to the remuneration provisions. 17. “Dividends or similar distributions that partners receive as owners of an AIFM are not covered by these guidelines,” unless they have the effect of circumventing the rules. 82. Discretionary pension benefits should be considered as part of the remuneration policy. 89. Severance payments should be deferred in line with policy. 8
  • 9. Identified Staff 3. Guidelines apply to identified staff. 19. AIFMs should identify “identified staff.” They should be able to demonstrate approach. 20. Unless “it is demonstrated that they have no material impact” on risk profile, the following are identified staff: • Executive and non-executive members of the governing body of the AIFM, • Senior management, • Control functions (compliance, internal audit and the like), • Staff responsible for heading the portfolio management, administration, marketing, human resources, • Other risk takers, who have a material influence on risk profile either individually or as a group. 9
  • 10. Identified Staff (cont.) 21. Identified staff also includes other employees in the same remuneration bracket if they have a material impact on the risk profile. 22. The examples in paragraphs 20 and 21 are “not definitive.” AIFMs need to conduct analysis at an appropriate level of depth. 31. Proportionality can operate within the AIFM with regard to classification of staff. 77. Risk alignment applies only to identified staff, but AIFM-wide application is strongly recommended. 10
  • 11. Governance 37. Rules on governance apply to the AIFM as a whole. 40. Remuneration policy should reflect inputs from all “competent corporate functions (i.e. risk management, compliance, human resources, strategic planning, etc.)” 41. Remuneration policy should be consistent with and promote “sound and effective risk management.” It should be in line with business strategy, not encourage excessive risk taking, and align the interests of the AIFs and their investors. 42. Remuneration policy should be consistent with other governance principles, such as separation of functions, independence of directors, and monitoring of conflicts of interest. 43. Remuneration of the management body and supervisory function should be consistent with their role. 11
  • 12. Governance (cont.) 44. The supervisory function should determine the remuneration of the management body. If consistent with national law, the supervisory function should also determine the remuneration of the highest-paid staff. 45. If the supervisory function is a separate function, members of the supervisory function should probably receive fixed remuneration only. Any variable remuneration should be based on monitoring and control tasks only. If instruments are granted, the award should be structured to preserve independence. If the supervisory function is not separate, the guideline for fixed remuneration applies only to non-executive members. 46. Approval of remuneration policy may be presented to shareholders of the AIFM, in either a consultative or binding vote. 47. The supervisory function is responsible for submissions to shareholders. 12
  • 13. Governance (cont.) 48. Implementation should be reviewed at least annually. The review should confirm that the system operates as intended and is compliant. 49. The relevant control functions should be involved in the review. 50. If the policy is not operating as intended, a remedial plan should be put in place. 51. The annual review may be outsourced. However, the supervisory function retains responsibility. 52. AIFMs should consider setting up a remuneration committee, even if they are not “significant in size” and therefore required to establish a committee. 53. Proportionality applies to establishment of a remuneration committee. “An AIFM which is significant only with respect to one or two of the three [factors used to assess proportionality] should not be required to set up a remuneration committee.” 13
  • 14. Governance (cont.) 54. Other factors to consider with regard to establishing a committee: • Whether the AIFM is listed; • The legal structure of the AIFM; • The number of employees; • The assets under management; • Whether the AIFM manages UCITS; • Whether the AIFM provides the services under Article 6(4) of the AIFMD. 55. Examples of AIFMs which may not need to establish a committee: • Assets of under €1.25 billion and fewer than 50 employees. • AIFMs that are part of larger financial company that has a remuneration committee for the group. 14
  • 15. Governance (cont.) 56. AIFMs that are not required to establish a committee may still choose to have one “as a matter of good practice.” 57. AIFMs that fall outside the examples in Paragraph 55 are not “automatically required” to have a committee. 58 The remuneration committee should comprise members of the supervisory function who do not perform executive functions. The majority must be independent. 59. The committee chair should be independent and non-executive. 60. An “appropriate number” of the committee members should have relevant expertise and experience. 61. The committee should seek advice internally and externally. The CEO should not participate in conversations discussing his/her remuneration. 15
  • 16. Governance (cont.) 62. The committee should: • Recommend remuneration for the most senior staff; • Provide advice on overall policy; • Have access to advice; • Review the appointment of external consultants; • Support the supervisory function; • Confirm that the remuneration policy meets objectives; • Scenario test and back test the remuneration system. 63. The committee may be in charge of the annual review. 16
  • 17. Governance (cont.) 64. The committee should: • Have unfettered access to all data and information on the remuneration system’s design and implementation; • Have unfettered access to all information from risk management and control functions; • Ensure proper involvement of relevant functions and should collaborate with other board committees as appropriate; • Provide adequate information to the supervisory function and, where appropriate, to the AIFM’s shareholders’ meeting. 65. Control functions should have an active role. 66. Control functions should assist in determining overall remuneration strategy. 17
  • 18. Governance (cont.) 67. Risk management should assess how variable remuneration affects the risk profile. It is good practice for risk management to attend a meeting of the remuneration committee to review this. 68. Compliance should analyze how the remuneration structure affects compliance. 69. Internal audit should periodically carry out audits. 71. Any variable remuneration for control functions should be based on functionspecific objectives and not solely on AIFM performance. 72. Remuneration policy should not compromise independence of control functions. If AIFM performance is a factor, conflicts of interest should be addressed. 73. The remuneration committee, if there is one, should directly oversee remuneration of control functions. 18
  • 19. Governance (cont.) 74. If no remuneration committee, the supervisory function should oversee remuneration. 75. AIFMs should avoid undue influence of business areas in remuneration of control functions, though the views of business areas may be incorporated in the assessment process. 76. Compensation of control functions should not be contingent on approving a transaction, giving advice, etc. 78. Remuneration policy should reflect business strategy, risk tolerance and corporate values. It should be multi-year. 132. Use of instruments should not result in a misalignment of interests. For instance, use of instruments to remunerate staff not involved in portfolio management might have that result. 19
  • 20. Governance (cont.) 169. Disclosure should be “produced and owned by the management body.” 20
  • 21. Risk Adjustment 77. Risk alignment applies only to identified staff, but AIFM-wide application is strongly recommended. 78. Remuneration policy should reflect business strategy, risk tolerance and corporate values. It should be multi-year. 79. Remuneration policy should give consideration to prevention of excessive risktaking, the efficiency of the AIFM, and consistency with effective risk management. 80. Remuneration policy should consider conservative valuation policies. It should consider concentration and other risks, such as liquidity. 81. Remuneration policy should be connected to risk management. 107. Remuneration policy should take into account all risks. 21
  • 22. Risk Adjustment (cont.) 108. Remuneration policy should use the “same risk measurement methods as used in the risk management policy for the AIFs . . .” 109. “Taking proportionality into account, the risk management calculations should be transparent and the AIFMs should be able to demonstrate how the risk calculations can be broken down . . .” 118. Remuneration policy should consider all risks. Since performance measures may not capture risk, an ex-ante adjustment should be applied. “AIFMs should establish whether the risk adjustment criteria they are using take into consideration severe risks or stressed conditions.” 119. “AIFMs should determine to what level they are able to risk adjust their variable remuneration calculations quantitatively” and to which level in the organization (e.g., business unit, trading desk, individual.) AIFMs should determine the appropriate level of granularity. 22
  • 23. Risk Adjustment (cont.) 120. “AIFMs should use a number of different quantitative measures for their risk adjustment process.” 122. Risk adjustment should largely rely on measures used for other risk management purposes in the AIFM. 123. Qualitative measures should be considered, either when establishing pools or setting individuals’ remuneration. Qualitative adjustments are “common at pool and individual levels.” Quantitative adjustments are mostly used at pool level. 124. Qualitative assessments at the individual level may include risk and control considerations (compliance and risk limit breaches and internal control breakdowns.) 125. Ex-post risk adjustments are possible only if a portion of remuneration is deferred. 23
  • 24. Risk Adjustment (cont.) 148. AIFM is able to adjust variable remuneration after initial award is made. 149. Ex post adjustments should always be performance-related. AIFMs should “back test” to determine if ex ante risk adjustments were accurate. Definitions: • Malus: Ex post risk adjustment that prevents vesting of deferred remuneration. • Clawback: Ex-post risk adjustment that returns ownership of remuneration to the AIFM. 150. “The effect of maluses should not be inflated by paying out artificially high interest (above market rates) on the cash deferred parts to the staff member.” 24
  • 25. Risk Adjustment (cont.) 151. Specific criteria where malus and clawbacks would apply: • Evidence of misbehavior or serious error; • Subsequent significant downturn in financial performance of the AIFM; • Significant failure of risk management; • Significant changes in overall financial situation. 152. Clawbacks should be used in cases of established fraud or misleading information. 153. Ex-post adjustments can be based on “both quantitative measures and informed judgment.” 154. Ex-post adjustments should be based on outcomes as close as possible to level of decisions made by the staff member. 25
  • 26. Risk Adjustment (cont.) 155. Changes in value of shares of the AIF or other instruments is not a sufficient expost adjustment. 156. A retention period is not a sufficient ex-post adjustment. 157. The value of instruments may rise. 158. Ex-post adjustment may not lead to an increase in remuneration. 159. Guidelines on risk alignment, award process and pay-out process are met when: • An AIFM must first return all capital plus a hurdle rate to investors before staff receive variable remuneration; and • Remuneration is subject to clawbacks until the AIF is liquidated. 26
  • 27. Design and Structure 35. An AIFM’s financial situation should not be adversely affected by the variable remuneration awarded, paid or vested. 36. If the financial situations is at risk, the AIFM should reduce variable remuneration. In future years, the AIFM should not raise variable remuneration to make up for this. 78. Remuneration policy should reflect business strategy, risk tolerance and corporate values. It should be multi-year. 83. No loophole – identified staff can’t retire or leave with vested discretionary pension benefits if there’s a problem at the AIFM. 84. Discretionary pension benefits should be paid in instruments when possible, 85. Vested discretionary pension benefits should be subject to 5-year retention. 27
  • 28. Design and Structure (cont.) 86. If staff member leaves before retirement, discretionary pension benefits should be subject to 5-year vesting and be subject to performance and ex post risk adjustment before pay out. 87. Golden parachutes should be tied to performance and not designed to reward failure. 88. Severance payments should not reward failure. 89. AIFMs should be able to explain criteria used to determine amount of severance pay. Payments should be deferred in line with policy. 90. Personal hedging is defined as entering in a contract with a third party to offset reductions in variable remuneration. 91. Staff members should not personally hedge. 28
  • 29. Design and Structure (cont.) 92. The prohibition against personal hedging applies to deferred and retained variable remuneration. “AIFMs should maintain effective arrangements to ensure that the staff member complies with this requirement.” 94. Variable remuneration decreases with negative performance and may be zero. Fixed remuneration should be sufficiently high to compensate for skills. 95. Variable remuneration should be “performance-based and risk adjusted.” 96. Performance criteria should match business objectives. Accrual period should be at least one year but can be longer. Accrual periods may overlap. Risk alignment can be achieved by using some form of risk-adjusted performance. 97. AIFMs should have a process for translating performance assessment into variable remuneration. Usually achieved through “pools” of variable remuneration. “’Ex ante risk adjustment’ should adjust remuneration for potential adverse developments in the future.” 29
  • 30. Design and Structure (cont.) 98. Variable remuneration should be part upfront and part deferred. Before paying out the deferred part, an ex post risk adjustment should be made. 99. Time horizon should be aligned with “life-cycle and redemption policy of the AIFs managed . . .” 100. “[T]he use of multi-year accrual periods is more prudent . . .” 101. Variable remuneration should be based on individual performance, business line performance and performance of the AIFM. Relative importance should be determined beforehand and “adequately balanced.” 102. Variables should be “linked as closely as possible to the level of the decisions made by the staff member . . .” Criteria should “include achievable objectives and measures on which the staff member has some direct influence.” 103. Should use a “mix of quantitative and qualitative approaches . . .” 30
  • 31. Design and Structure (cont.) 104. Quantitative measures are more transparent, but “AIFMs should also rely on qualitative approaches.” 105. Whenever judgement is used, there should be: • Clearly written policy; • “Clear and complete documentation of the final decision . . . ;” • Involvement of control functions; • Appropriate levels of approval; • “Consideration of the personal incentives of the manager making the judgement, e.g. by using scorecards.” 31
  • 32. Design and Structure (cont.) 106. “AIFMs should be prepared to disclose and reproduce any judgmental elements incorporated into their risk alignment process.” This is especially true if the final outcome is “significantly different from the initial outcome using pre-defined measures.” 110. Should use both quantitative and qualitative measures to assess individual performance. 111. Appropriate mix depends on responsibilities of the staff members. The criteria and balance should be “specified and clearly documented for each level and category of staff.” 112. Quantitative measures should cover a period long enough to “properly capture” risk. Examples of quantitative measures that meet these criteria: IRR, EBITDA, Alpha Ratio, absolute and relative returns, Sharpe Ratio, assets raised. 32
  • 33. Design and Structure (cont.) 113. Examples of qualitative measures: achievement of strategic targets, investor satisfaction, adherence to risk management policy, compliance, leadership, management, team work, creativity, motivation, cooperation with other units and control functions. “Negative non-financial performance, in particular unethical or non-compliant behavior, should override any good financial performance . . .” 114. Absolute measures can minimize the risk that remuneration is awarded that is not justified by AIFM’s performance, but can be difficult to calibrate. 115. Vice versa for relative measures. 116. Internal measures can create more staff involvement, especially if at business unit level, and are easier to risk adjust. External measures are harder to manipulate (though stock price can be artificially increased.) Stock price is probably relevant only for top executives. 33
  • 34. Design and Structure (cont.) 117. Should adopt a documented policy for the award process. Records of the determination of the size of the pool should be maintained. 121. All costs (direct and indirect) should be included in calculations of profitability. Pools should not be “backfitted” to meet remuneration demands. 125. Ex-post risk adjustments are possible only if a portion of remuneration is deferred. Definitions: • Retention period: period during which remuneration paid in instruments can’t be sold. • Deferral period: period that variable remuneration is withheld before payment. • Vesting point: point at which staff member becomes legal owner of the remuneration. There are no clawbacks after vesting. 34
  • 35. Design and Structure (cont.) 126. A deferral schedule is defined by: • Time horizon; • Portion deferred; • Vesting point; • Time from accrual to first payment; • Form of remuneration. 127. Minimum deferral period is three to five years, “unless the AIFM can demonstrate the life cycle of the AIF concerned is shorter.” AIFMs should consider longer deferral periods for members of the management body. 35
  • 36. Design and Structure (cont.) 128. Pro rata vesting means that the deferred remuneration vests in equal proportions in every year of the deferral period. 129. Vesting should not take place more frequently than yearly. 130. Deferral should range from 40% to 60%, depending on responsibilities of staff and amount of variable remuneration. Percentages apply on an average weighted basis. 131. “[T]he first amount should not vest sooner than 12 month after the accrual.” 133. Staff should receive instruments related to the AIF(s) they are most involved in, unless that leads to staff having too strong an interest in the AIF. 36
  • 37. Design and Structure (cont.) 134. Availability of instruments depends on legal structure of AIF, but shouldn’t be an issue for AIFs in corporate form 135. For some AIFs, share-linked instruments are not an option. “In these cases, alternative instruments may be used that reflect the AIF’s value.” 136. Neither dividends nor interest should be paid before vesting. 137. Retention policy should be included in remuneration policy. “The AIFM should be able to explain how the retention policy relates to other risk alignment measures . . . and how they differentiate between instruments paid upfront and deferred instruments.” 138. The retention period is independent of the deferral period. 139. In the case of instruments paid upfront, retention periods help align interests. 37
  • 38. Design and Structure (cont.) 140. For deferred instruments, a retention period comes after each vesting point. 141. Longer retention periods should be applied to staff with the greatest impact on risk profile. 142. “[A]s an example of proportionality,” the retention period for senior staff should normally go beyond the deferral period.” 143. Instruments should be valued on date of award. 144. A retention period is not a substitute for a deferral period. 145. 50% minimum in instruments. Percentage should be applied equally to deferred and non-deferred. 38
  • 39. Design and Structure (cont.) 146. Examples are in Annex III of the Guidelines. 147. 50% minimum in instruments does not apply if AIFs account for less than half of assets under management based on the net asset value of the AIFs. 39
  • 40. Disclosure 9. AIFMs are not required to report whether they comply. 160. AIFMs should consider making the disclosure recommended for financial institutions. [Paragraph (8) of Commission Recommendation on remuneration policies in the financial services sector.] 161. “AIFMs should disclose detailed information regarding their remuneration policies and practices for members of staff whose professional activities have a material impact” on risk profile. “AIFMs should also provide general information about the basic characteristics of their AIFM-wide remuneration policies and practices.” 162. Proportionality applies to disclosure. 163. Disclosure should be published at least annually and as soon as practicable after the information is available. 40
  • 41. Disclosure (cont.) 164. This disclosure should be without prejudice to disclosure obligations to prospective investors. 165. This disclosure should set out the decision-making process. This may include: • governance process (who participates?), • regional scope of policy, and • types of staff considered material risk takers and criteria used to determine classification. 41
  • 42. Disclosure (cont.) 166. The disclosure should include information on how pay and performance are linked with: • Description of main performance metrics. • Design and structure of remuneration processes (e.g., key features and objectives, how independence of control functions are maintained.) • Description of types of variable remuneration and rational for use and allocation. • Parameters for allocation of deferred and non-deferred compensation. 42
  • 43. Disclosure (cont.) 167. The disclosure should include how AIFM considers current and future risk in remuneration decisions: • what those risks are and • how the AIFM adjusts for longer-term performance. 168. The disclosure should describe quantitative and qualitative criteria used. 170. Disclosure should be accessible to all staff members. “Staff members should know in advance the criteria that will be used to determine their remuneration. The appraisal process should be properly documented and should be transparent to the member of staff concerned.” 43
  • 44. Proportionality 23. “AIFMs should comply in a way and to the extent that is appropriate to their size, internal organization and the nature scope and complexity of their activities.” 24. “Not all AIFMS should have to give substance to the remuneration requirements in the same way and to the same extent. Proportionality should operate both ways: some AIFMs will need to apply more sophisticated policies or practices . . .” 25. “. . . proportionality may lead, on an exceptional basis and taking into account specific facts, to the disapplication of some requirements . . . If AIFMs deem a disapplication for these requirements appropriate for their type of AIFM . . . , they should be able to explain to competent authorities, if requested, the rationale for every single requirement that is disapplied.” 44
  • 45. Proportionality (cont.) 26. “Only certain requirements may be disapplied: • Pay-out process (variable remuneration in instruments, retention, deferral, ex post incorporation of risk) • Requirement for remuneration committee 27. The specific numerical criteria regarding minimum deferral period, portion of variable remuneration that should be deferred, and minimum portion of variable remuneration deferred in instruments “may only be disapplied in their entirety.” 28. “It is primarily the responsibility of the AIFM to assess its own characteristics and to develop and implement remunerations policies and practices which appropriately align the risks faced and provide adequate and effective incentives to its staff. Competent authorities should review the ways AIFMs actually implement proportionality . . . “ 45
  • 46. Proportionality (cont.) 29. Criteria relevant to proportionality are: size, internal organization, and nature, scope and complexity of activities. The cross-border nature of business activities and the additional management of UCITS can be relevant. 30. The combination of factors is what’s relevant. 31. Proportionality can operate within the AIFM with regard to classification of staff. 53. Proportionality applies to establishment of a remuneration committee. “An AIFM which is significant only with respect to one or two of the three [factors used to assess proportionality] should not be required to set up a remuneration committee.” 46
  • 47. Proportionality (cont.) 54. Other factors to consider with regard to establishing a committee: • Whether the AIFM is listed; • The legal structure of the AIFM; • The number of employees; • The assets under management; • Whether the AIFM manages UCITS; • Whether the AIFM provides the services under Article 6(4) of the AIFMD. 55. Examples of AIFMs which may not need to establish a committee: • Assets of under €1.25 billion and fewer than 50 employees. • AIFMs that are part of larger financial company that has a remuneration committee for the group. 47
  • 48. Proportionality (cont.) 109. “Taking proportionality into account, the risk management calculations should be transparent and the AIFMs should be able to demonstrate how the risk calculations can be broken down . . .” 127. Minimum deferral period is three to five years, “unless the AIFM can demonstrate the life cycle of the AIF concerned is shorter.” 147. 50% minimum in instruments does not apply if AIFs account for less than half of assets under management based on the net asset value of the AIFs. 162. Proportionality applies to disclosure. 48
  • 49. Documentation 13. AIFMs should clearly identify carried interest (subject to guidelines) versus share in the profits of the AIF accrued as a pro-rata return (not subject to guidelines.) 19. AIFMs should be able to demonstrate approach for designating identified staff. 28. “Competent authorities should review the ways AIFMs actually implement proportionality . . . “ 39. Procedures should be “clear, well-documented and internally transparent. For example, proper documentation should be provided on the decision-making process, the determination of the identified staff, the measures used to avoid conflicts of interest, the risk-adjustment mechanisms used etc.” 89. AIFMs should be able to explain criteria used to determine amount of severance pay. Payments should be deferred in line with policy. 49
  • 50. Documentation (cont.) 105. Whenever judgement is used in a risk judgment, there should be: • Clearly written policy; • “Clear and complete documentation of the final decision” . . . 117. AIFMs should adopt a documented policy for the award process. Records of the determination of the size of the pool should be maintained. 170. “The appraisal process should be properly documented and should be transparent to the member of staff concerned.” 50
  • 51. Other 4. Effective date of July 22, 2013. 6. Must make every effort to comply. 7. Competent authorities must incorporate. 8. Competent authorities must notify of intention to comply. 51
  • 52. Keep Up on the Trends Through NICSA nicsa.org news.nicsa.org @NICSAPres NICSA LinkedIn group Facebook: NICSAOnline nicsa.org/knowledge 52
  • 53. Keep Up on the Trends Through ALFI alfi.lu @ALFIfunds 53