Banking Law Draft Amendment: Implementation of Directive CRD IV

The Minister of Finance has prepared a draft amendment to the Banking law.

The amendment is intended to implement the CRD IV (Directive 2013/36/EU of June 26, 2013) and CRR Regulation (Regulation No 575/2013 of June 26, 2013). In line with the draft there will be significant changes to regulations regarding, inter alia, remuneration policies, rules of nomination of members to the authorities of the bank, and the bank authorities responsible for its compliance with certain regulations.

The draft involves the following changes:

  • In order to be eligible to be on the management board of a bank, a person must be able to demonstrate educational qualifications and work experience and have a proven knowledge of the Polish language. Currently these requirements apply to at least two members of the management board however this will now be broadened to all persons who will fill positions on the management and supervisory board. 
  • The procedure for implementation of the remuneration policy must be developed by the management board and then approved by the supervisory board.
  • Banks will be obliged to notify the Financial Supervision Commission where bank employees are in receipt of remuneration exceeding EUR 1,000,000 per year. Previously, this was only a requirement following a resolution of the Financial Supervision Authority.
  • For “too big to fail banks” that is, those that are significant in terms of size, internal organization and the nature, scope and complexity of the business, it will be necessary to extend the remit of their internal committees to remuneration matters. These committees will be required to give opinions on the whole remuneration policy. At present, these committee reviews have only related to the variable components of the remuneration policy.
  • Where remuneration committees are created within banks, nomination committees will also be formed whose members are appointed from the supervisory board. Nomination committees will be responsible for recommending to the supervisory board candidates for the management board, policy development, aiming to achieve gender parity and proper proportions (with respect to, e.g. managers’ knowledge and effectiveness) in management, and periodic review of the bank's policy on the selection of managers in the bank.
  • The Financial Supervisory Commission will be required to consent to the any proposed appointments of the president of the bank's management board and management board member responsible for the oversight of risk management of the bank's operations. At present, this only applies to the appointment of two management members of the board of the bank (including the president).

The public authority responsible for determining the policy regarding variable components of the remuneration of senior staff will also change. This task currently sits with the Financial Supervisory Commission but will now be transferred to the Minister of Finance.

If the amendment enters into force, the Financial Supervisory Commission’s resolution of 4 October 2011 No. 258/2011 will be repealed. This currently governs, inter alia, the rules for determining the variable components of the remuneration policy of managerial positions in banks.

The changes will also effect the establishment of remuneration policy in brokerage houses.

The draft regulation is currently in the early stages of legislative approval.

 

Topics:  Amended Legislation, Banks, EU, Nominations, Remuneration

Published In: Finance & Banking Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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