Remuneration system; authorisation to issue statutory instruments

(1) A securities institution must have remuneration systems for managers and staff whose professional activity has a material impact on the risk profile of the securities institution or of the assets it manages, that are appropriate, transparent and geared towards the sustainable development of the securities institution; this does not apply where the remuneration is agreed by collective bargaining agreement, or, within its scope of application, by agreement of the parties to the employment contract on the application of collective-bargaining provisions, or, on the basis of a collective-bargaining agreement, in a works or service agreement.
(2) Where a securities institution receives extraordinary financial support from public funds within the meaning of section 2(3), no. 9 of the Recovery and Resolution Act, 1. it may not grant its managers any variable remuneration at all; and 2. it must limit variable remuneration to a percentage of net income, where variable remuneration for staff who are not managers is not compatible either with maintaining the securities institution's required own funds or with an early discontinuation of the extraordinary support from public funds.
(3) The Federal Ministry of Finance is authorised, by statutory instrument not requiring the consent of the Bundesrat, in consultation with the Deutsche Bundesbank, to make more detailed provisions on 1. identifying the staff whose professional activity has a material impact on the risk profile of the securities institution or of the assets it manages; 2. the decision-making processes and responsibilities for the remuneration systems; 3. the principles for the appropriate design of the remuneration systems under subsection (1), in particular a) the distinction between fixed and variable remuneration, b) the ratio between variable and fixed remuneration, c) the principles for granting variable remuneration, including positive and negative remuneration parameters, performance periods, retention periods and clawback periods, including the conditions and parameters for a full forfeiture or partial reduction, or a full or partial clawback, of variable remuneration, and the remuneration instruments; 4. the monitoring, by the securities institution, of the appropriateness and transparency of the remuneration systems, including the involvement of the remuneration control committee, where one exists; and 5. the application of provisions under nos. 1 to 4 on a consolidated basis, in cases where this Chapter applies and prudential consolidation is applied under Article 7 of Regulation (EU) 2019/2033. These rules must in particular be geared to the size and remuneration structure of the securities institution, and to the nature, scale, complexity, risk content and international scope of its business activities. The Federal Ministry of Finance may transfer this authorisation, by statutory instrument not requiring the consent of the Bundesrat, to the Bundesanstalt, on condition that the statutory instrument is issued in agreement with the Deutsche Bundesbank. The leading associations of securities institutions must be heard before the statutory instrument is issued.