The Legislative Provisions Of The Alternative Investment Fund Manager's Remuneration Policy Guiding Principles

Original Language Title: Normatīvie noteikumi par alternatīvo ieguldījumu fondu pārvaldnieka atalgojuma politikas pamatprincipiem

Read the untranslated law here: https://www.vestnesis.lv/op/2015/220.20


Financial and capital market Commission, the provisions of regulations No 185 in 2015 3. November (financial and capital market Commission Council meeting No. 41 2. p.)
The legislative provisions of the alternative investment fund manager's remuneration policy guidelines Issued in accordance with the alternative investment fund managers and law 24. the second paragraph of article 1 General questions 1. "the legislative provisions of the alternative investment fund manager's remuneration policy the basic principles" (hereinafter-the rules) determines the basic principles of remuneration policy and are binding on the Republic of Latvia to licensed alternative investment fund managers (hereinafter Manager). 2. the manager shall ensure compliance with these provisions, in the light of its organisational structure, scope, types, complexity and specificity. 3. the terms used in the rules: 3.1 internal control functions, risk control, operational control of compliance and internal audit functions according to the European Commission of 19 December 2012 the delegated Regulation (EU) no 231/2013, supplementing the directive of the European Parliament and of the Council in 2011/61/EU for exemptions, the General operating conditions, the proportion of the liability for the depositary, transparency and monitoring; 3.2. the variable part of the remuneration of the non-performance of the independent pay part (normally the salary), where you can create the structure of the various elements of the monetary or non-monetary form; 3.3. the variable part of the remuneration from the performance based pay structure which can create various elements of monetary or non-monetary form. The variable part of the remuneration also includes initiatives laid down by Manager with retirement related benefits (discretionary pension benefits), the amount of which depends on the result of the operation, but does not include, for example, such contributions to private pension funds pension plans established under Manager pension policy Manager organizational structures; 3.4. the remuneration – fixed remuneration and variable part of the remuneration (if applicable) total; 3.5. the variable part of remuneration for essential-35 to 60 percent (not including) from official or employee remuneration laid down in the reference year; 3.6. Special high-wage variable part: 60% or more of the official or employee remuneration laid down in the reference year; 3.7. the Manager or the administration of the Fund's existing risk profile-positions (hereinafter the risk profile-positions)-posts, which employ all of its officers or employees whose professional activities individually or collectively impact the Manager or the administration of the existing risk profile of the Fund, such as: 3.7.1. position such as Board members, positions that 3.7.2. the powers of the Manager or its administration in the name of the Fund to take risks that significantly affect the Manager or managing the risk profile of the Fund, 3.7.3. positions that carry out internal control functions, 3.7.4. positions that pay is equal to or greater than the members of the Board or the Manager's post, which includes authority of the Manager or its administration in the name of the Fund to take risks that significantly affect the Manager or managing the risk profile of the Fund, the post family's lowest level of remuneration; 3.8. providers of investment services-manager staff persons involved in investment services or additional services in accordance with the alternative investment fund managers and law article 5 the seventh and eighth delivery process, including customer service representatives, sales executives, financial analysts, and other individuals who have a significant impact on investment services or additional services quality.
4. the requirements of this Regulation shall be binding in respect of all elements of the remuneration granted by the Manager, any amounts awarded Manager manages the Fund, including additional remuneration (carried interest), and parts of the investment manager of the Fund to manage the risk profile-posts and investment service providers of professional services. Requirements of this regulation are not binding with respect to the administration of the Fund Manager's risk profile of the amounts allocated for posts and affecting investment service providers, where these amounts are received for that officer or employee of the investment fund itself and if this amount is identified as part of the Fund's profit, which is proportional to the investment fund. 5. the manager shall ensure that: 5.1 the requirements of this regulation are applied risk profile-posts and investment service providers, except these rules 13, 14, 15 and 16, which applies only to the Manager or the administration of the Fund's existing risk profile-posts; 5.2. the officials or employees, subject to the requirements of this regulation, undertake not to use personal hedging strategies or remuneration and liability insurance, which reduce the risk of any adjustment, established remuneration policy, impact on remuneration; 5.3. the variable part of remuneration paid, is not using the tools or methods that contribute to the avoidance of compliance with these provisions; 5.4. the transfer of the administration of the Fund management rights to another Manager under alternative investment funds and their Manager law. Article 38 is one of the following conditions: 5.4.1. Manager who placed at the Fund's management, are subject to the right of the European Parliament and of the Council of 8 June 2011-2011/61/EU directive on alternative investment fund managers and amending Directive 2003/41/EC , Directive 2009/65/EC, Regulation (EC) No 1060/2009 and Regulation (EC) No 1095/2010 or equivalent set out requirements concerning the remuneration policy Manager and practice Manager for 5.4.2 placed at the Fund's management rights, introduce appropriate contractual measures to ensure compliance with these provisions, given that these measures cover all contractual payments made to the Manager, who transferred to the Fund management rights If it manages the risk profile of the Fund-posts in Exchange for professional services.
2. Remuneration policy 2.1. governance 6. Manager provide the remuneration policy risk profile-posts and investment services providers (hereafter – remuneration policy) the development and implementation of that: 6.1 calls Manager Administration of the existing risk profile of the Fund and the Fund's operational rules inappropriate risk-taking; 6.2. without prejudice to the ability of the Manager to provide a stable financial situation and solvency; 6.3. meet the Manager and it manages the operations of the Fund on the strategy, objectives, values, such as ethical standards, and interests, as well as meet the prudent and effective risk management and promote it; 6.4. is not contrary to the interests of the investor protection principles and other stakeholder interests; 6.5. guarantee claims prevent the variable part of remuneration, except in the case of new hiring in the first year of work. 7. the Manager, if any, the Council established, is responsible for: 7.1. basic principles of remuneration policy and remuneration policy approval; 7.2. remuneration policy development and implementation; 7.3. determination of remuneration of the members of the Management Board, Manager internal audit functions of the senior staff as well as posts that pay is equal to or greater than the members of the Board of managers of the lowest wage level of the household; 7.4. risk control and compliance control function at the highest level of direct compensation of employees; 7.5. the basic principles of the remuneration policy for regular, but no less than once a year, review to ensure their compliance with the Manager or the administration of the Fund, the existing activities, action strategies, as well as changes in external factors, such as external legislation; 7.6. procedure for the determination of carrying out checks on the implementation of the remuneration policy the remuneration policy approved by the compliance and the internal and external laws and regulations (such as the Manager, the Council laid down that the compliance on a regular basis, but not less frequently than once a year, check and evaluate internal control functions); 7.7. reporting arrangements for the determination of the Council Manager internal control function examinations and knowledge acquired, as well as the wage impact of policies on the management of the existing Manager or the Fund's risk profile and risk management quality. If the Manager is not in the Council, these provisions set out the Council's Manager performs the function of meeting participants, and it is bound by these rules of the Manager to the Council. 8. the Board of Governors is responsible for the remuneration laid down by the Council's Manager of policy principles appropriate remuneration policy development and its relevant internal legislation development, approval and implementation, taking into account that the internal control function of remuneration shall be determined in accordance with the internal control function set goals achieved regardless of the performance of the internal control function controlled areas of activity. Manager Manager or the Management Board shall ensure the administration of the existing risk profile of the Fund positions affecting workers and investment service providers information on the evaluation of the performance and the variable part of remuneration to be used for fixing the indicators and methods, as well as ensure that internal legislation for the determination of the remuneration, including the evaluation process and its results, are clearly documented and available internally, where necessary for the function or job responsibilities or they relate to the specific officials or employees. 9. the Manager, taking into account its or its administrative operations of the Fund in the amounts, types and complexity and specificity, as well as the organisational structure, assess the usefulness of the remuneration Committee. The remuneration Committee is responsible for the internal regulations, which shall be approved by the Manager and the Council relating to pay, including the preparation of internal legislation, the preparation of which has an impact on the Manager or its existing fund management risk profile and risk management quality. The remuneration Committee's internal regulations shall be drawn up, taking into account the Manager shareholders, investors and other interested parties. In accordance with the Council mandate of Manager's remuneration Committee can be responsible also for the members of the Management Board, internal audit functions at the highest level of employee remuneration, the position that is equal to or greater than the members of the Board of the family pay the lowest level, the determination of the remuneration, as well as the risk control and compliance control function to the highest levels of employee benefits plans direct monitoring. The head of the Committee for the remuneration shall appoint one of the members of the Council. The remuneration Committee members may be appointed only members of the Council. Manager ensures that evaluation and decisions on the remuneration Committee's creation utility is documented and substantiated. 10. Remuneration policy and related internal legislation in ensuring the development and implementation involve employees who perform internal control functions, and employees who perform human resource management function, as well as, if necessary, the shareholders or members and external experts. The workers concerned, the remuneration Committee members, shareholders or members, external experts, as well as the remuneration policy Executive Manager Council members are: 10.1 appropriate competence; 10.2. the necessary powers to carry out the functions and gathering information; 10.3. the ability to provide independent and competent on the remuneration policy and its implementation, as well as its suitability for the Manager or its administration for the Fund, including its impact on the it Administration Manager or the Fund's risk profile and the risk management of capital and liquidity. 2.2. principles of remuneration policy the remuneration policy of the 11 basic principles States: 11.1. remuneration policy goals, such as the transaction manager's objectives, i.e., the recruitment of skilled and motivating; 11.2. remuneration, including salary, bonuses, long-term incentive schemes, performance, investment shares, the remuneration of the contract or the termination of the mandate in the case of private pension fund contributions to pension plans and retirement related benefits (discretionary pension benefits) under Manager pension policy, corresponding to the Manager and it manages the operations of the Fund on the strategy, objectives, values, such as ethical standards, and interests; 11.3. financial and non-financial indicators and methods for the assessment of the performance and the variable part of the remuneration; 11.4. the measures for the prevention of conflicts of interest, such as excluding the possibility of members of the Board of managers determine or participate in the determination of his remuneration or directly linking the remuneration of specific financial instruments, financial instruments or a specific quantity of sale; 11.5. the risk profile for each position and affecting the investment service provider a reasonable relationship between the remuneration fixed and variable components, including the variable part of the remuneration structure and the variable part of the remuneration ceiling, taking into account the areas of activity in which the post is established, the conditions and specific features. The manager ensures that the variable part of the remuneration does not pay is big enough that Manager can determine the flexible remuneration policy in relation to the variable part of the remuneration, including the ability to withhold the variable part of the remuneration, such as the Manager or the administration of the Fund and its financial situation, solvency in case of deterioration, given the alternative investment fund managers and law Manager equity and certain additional capital requirements; 11.6. the risk profile for influencing positions, ensuring that evaluation and decisions taken on the risk profile of the effects of the post has documented. 2.3. the assessment of performance and the variable part of the remuneration determination 12. Manager ensures that the risk profile and investment affecting service provider performance evaluation using not only the financial indicators such as income, but also financial indicators, such as the internal regulations and standards that govern the relationship with investors, or limit, in accordance with the following requirements: 12.1 if the performance evaluation using financial indicators calculated on the basis of the accounting data (for example, accounting profit), the manager shall take into account that such scores include results for prior periods, but does not include risks that may arise due to losses in future periods of activity; 12.2. non-financial indicators are taken into account in assessing the performance of the individual. Determining the significance of the non-financial manager, noted that the use of non-financial indicators in individual performance appraisal is essential because a financial failure indicators (or incomplete) can affect the Manager or managing existing risk profile of the Fund or financial performance; 12.3. the performance indicators used to assess, on the basis of which the variable part of the remuneration of the individual premium or the amount of the Fund according to the organisational structure – Manager, business unit manager, administration or the Fund Manager level-adjusted, taking into account the performance of existing and potential related risk assessments. 2.4. the requirements relating to the Manager or the administration of an affecting the Fund's risk profile posts 13. basic principles of remuneration policy in respect of its administration manager or existing risk profile of the Fund-posts in addition to the States: 13.1. significant and particularly high pay the variable part of the suspension, noting that significant wage determination of the variable part of the case, not less than 40 percent (in particular high pay variable part of discovery necessary – not less than 60 per cent) of its deferred to the period corresponding to the existing Administration Manager in the operating cycle of the Fund (the life cycle of the AIF is concerned) and not less than three to five years, except where the Manager Administration fund the existing residual operating cycle is shorter, which correspond to the investment part of the buy-back policy (redemption policy) and which can be assessed for the determination of the variable part of the remuneration of the Manager in managing the existing the Fund performance their persistence and the risks associated with them; 13.2. Special high pay procedures for the determination of the variable part, considering that particular high pay determination of the variable part of the case, subject to the administration of the Fund Manager's legal structure and its articles of incorporation, no less than 50 percent of its non-monetary form to be determined, i.e. the Manager Administration in the existing parts of the investment of the Fund, unless the Manager Administration of the existing management of the Fund, taking into account its net asset value represent less than 50 percent of the total portfolio managed by the Manager. In this case, you can detect less than 50 percent of the extra high variable part of the remuneration of the non-monetary form. Manager for these instruments determine the retention policy (retention policy), including the annual number of non-monetary instruments concerned a recipient is entitled to sell them, to ensure the Manager's remuneration policy incentive scheme set out in the compliance manager and the Fund and manage such funds to investors ' interests; 13.3. the remuneration that exceeds the statutory employment severance pay in the amount of the contract or a mandate contract in the event of termination, reduction or payment conditions, where the Manager or its administration the current risk profile of the Fund-post reviewer period has found errors and failures. The manager ensures that the remuneration of the contract or a mandate in case of termination of the Treaty reflect labour relations during the results achieved; 13.4. for each risk profile -position matching the variable part of the remuneration irrespective of its structure (part of the investment, money or other means of payment) and irrevocable right (vested rights) on the conditions for obtaining it, taking into account that: 13.4.1. the variable part of the remuneration, including the deferred part of the actual cost of carrying out or irrevocable rights, subject to this provision, paragraph 13.4.2, obtained according to the Manager of the Fund managed by the investment part of the buy-back policy and investment risks and, if it meets the financial situation of the General Manager and Manager of the Fund, regulatory risk profile-post reviewer and the performance of the Department. Manager reduces the variable part of the remuneration the total amount, including the variable part of remuneration in the total amount of the deferred part, if the Manager or its administration in an existing Fund's financial performance deteriorates or is negative. Manager supports the use of the facility as the variable part of the remuneration paid out of claim or refund the variable part of the remuneration deferred shares, which are irrevocable rights are obtained, the total size of the partial or total reduction in, for example, if it is granted for the performance based on data that later proved to be purposely distorted (abuse) or pay (clawback) the variable part of the deferred shares, which are not obtained irrevocable rights , the total size of the partial or total reduction based on actual performance (Malus), 13.4.2. irrevocable right for deferred variable part of the remuneration of obtained in proportion to the period (number of years) for which the deferred remuneration variable part, but not earlier than 12 months after the determination of the variable part of the remuneration. Before the irrevocable right to the variable part of remuneration outstanding to parts where necessary adjusted (reduced), as contained in the original calculation of the risks that become known in the period to which the deferred pay, and a variable part which is related to the activities for which the remuneration prescribed by the achievement of the variable part of the deferred part. Manager notices that the variable part of the remuneration deferred part of actual costs can take place when it is obtained irrevocable rights, as well as the variable part of the remuneration deferred part to which the irrevocable is acquired rights are not calculated and paid dividends or interest, 13.4.3. when particular high pay variable parts, including the deferred part of the actual cost, this rule 13.2 of the requirements apply to both the variable part of the remuneration for the postponed and not postponed; 13.5. the benefits associated with retirement, which is the variable part of the remuneration element (discretionary pension benefits), non-monetary form, i.e. the Manager Administration in the existing parts of the investment of the Fund and costs order, subject to the following requirements: 13.5.1. If the employment relationship is terminated prior to retirement age, the manager ensures the benefits associated with the retirement of the non-monetary form, keeping your property for not less than five years, i.e. with retirement benefits costs related to non-monetary form, for five years after termination of employment before retirement age, official or employee 13.5.2. reaching retirement age, the manager ensures that the retirement benefits cost associated in non-monetary form and they are not set by the appropriate Manager monetary instruments subject to the retention policy, the instruments that the holding period must not be less than five years, i.e. officer or employee received retirement benefits associated with non-monetary form be sold not earlier than five years after retirement age. 14. the variable part of the remuneration for the management of the Manager or fund risk profile-posts determined, subject to the following requirements: 14.1. determination of the variable part of remuneration takes into account the risk profile of the post-reviewer's assessment of the performance of the individual in the context of the assessment of the performance of the relevant department or Manager in the relevant fund management level and in the context of the General results of Operations Manager, as well as employee for example, the risk control function, made assessments of performance stability (persistence); 14.2. the performance appraisal takes into account several years according to the Manager of the Fund's activities in the management cycle of performance indicators to ensure that performance appraisal is based on long-term performance. 15. developing methods for the adjustment of the financial indicators in relation to the Manager or the administration of the Fund's existing risk profile-posts, it is recommended that you provide as the variable part of remuneration in the determination of each risk profile-position reflects: 15.1. risks arising or likely to arise activities which employ the appropriate risk profile-position; 15.2. the internal control elements of existing and potential risk reduction; 15.3. the period that is required to assess the nature of the activity, which employs the risk profile of the position, affecting the result.
3. Information on the remuneration policy and practice opening 16. Manager of public information for the implementation of the remuneration policy and practice in relation to the risk profile-posts, choosing the appropriate media and space, as well as ensure the relevance of the information disclosed. Publication of information on the internet is considered a suitable publishing location. Manager public: 16.1. the decision used in determining the remuneration policy, decision-making process, including information on the composition of the remuneration Committee, if one exists, and its powers, external experts, if their services are used in the determination of the remuneration policy, personally identifiable information and the role of stakeholders in setting the remuneration policy; 16.2. the remuneration policy, remuneration elements influencing the risk profile and posts; 16.3. the pay link to performance, including: 16.3.1. the indicators used and the methods for evaluation of performance and the variable part of remuneration in monetary or non-monetary form, for the determination of performance evaluation 16.3.2. using the pointer adjustments, taking into account the performance of existing and potential related risk assessments, 16.3.3. the variable part of remuneration in monetary or non-monetary form suspension, irrevocable right to it, as well as its cost of acquisition conditions.
4. final question 17. Be declared unenforceable in the financial and capital market Commission of 8 august 2013, regulation, Regulation No 170 "legislative provisions for alternative investment fund manager's remuneration policy the basic principles".
Informative reference to European Union directives and other international documents the rules included provisions resulting from: 1) of the European Parliament and of the Council of 8 June 2011 the 2011 EU directive/61/about alternative investment fund managers and amending Directive 2003/41/EC, directive 2009/65/EC, Regulation (EC) No 1060/2009 and Regulation (EC) No 1095/2010; 2) European Securities and markets authority guidelines on remuneration policies and practices (am/2013/606). Financial and capital market Commission President k. Zakuli States