Response to consultation on draft RTS on the minimum content of the governance arrangements on the remuneration policy under MiCAR

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Question 1. Are the definitions within Article 1 appropriate and sufficiently clear?

INATBA members believe that the definitions provided are sufficiently clear. These definitions are also appropriate when considering established corporations that have a clear distinction between sales, execution, and control functions.

In addition, INATBA members expect additional guidance on segregation requirements for significant ART issuers, and on emerging significant ART issuers.

Question 2. Are the provisions within Article 2 appropriate and sufficiently clear?

INATBA members believe the provisions of Article 2 are appropriate and mostly clear.
INATBA members recommend clarifying the term appropriately in article 2§2-c. A reference to common market practices or internal policies regarding addressing conflict of interests could be useful to close any potential interpretation of this term.

Question 3. Are the provisions within Article 3 appropriate and sufficiently clear?

INATBA members believe that the provisions of Article 3 are appropriate and sufficiently clear.

Question 4. Are the criteria of identification of staff appropriate and sufficiently clear?

INATBA members believe that, in general, the criteria are appropriate and sufficient.
However, INATBA members believe that explicit mention of any type of trading or market-making function should be included in these criteria to avoid any doubt or uncertainty.

Question 5. Are the provisions within Article 5 appropriate and sufficiently clear?

INATBA members believe the provisions are sufficiently clear. INATBA members believe that more guidance as to the portion of fixed vs variable components could be useful. Avoiding

situations where variable income can outpace fixed income has proven to be a good risk-mitigating factor in traditional finance, but would limit European competitiveness.
When referring to the composition of the variable income, INATBA members would like to highlight that linking the variable income to equity products is not always possible. INATBA members propose that larger equity pools be considered but in conjunction with clear claw-back clauses. This will offer more flexibility to promoters of a framework, especially in the case of a very fast-growing program.
INATBA members would also recommend issuing guidance as to what constitutes a “particularly high amount” (Art5§1-k). Failing to do so would lead to uncertainty and varied interpretation.
INATBA members also recommend that the sustainability of the company be referenced to existing guidelines (e.g. minimum capital ratios) including in a prospective view, as to avoid uncertainty around this concept. If capital ratios are near, at or under the minimum target, variable remuneration could be voided entirely, or at least severely limited.

Question 6. Is the possibility of paying a part of variable remuneration in significant asset-referenced tokens issued by the issuer appropriate also considering the still limited market experience on these instruments?”

INATBA members believe that the concept of paying in asset-reference tokens is good as it will encourage key individuals to ensure the sustainability of the product. However, the product itself might be exposed to market trends that are outside of the control of said staff. Therefore such payment should not be the only way to remunerate critical staff.
Finally, management should make sure that the market for the ART is deep and wide enough to allow for a closing of the created position without losing the 1:1 backing requirement placed on ART issuers in MiCA.

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