CMS Cameron McKenna Nabarro Olswang Pośniak i Bejm sp.k.
NA.
Basically yes. However, regarding the definition of "managerial responsibility" (art. 2, particularly point (b)), in our opinion, the definition is to too general and thus too wide. Consequently, there are managers that, in fact, do not have impact on risk profile due to the purely technical scope of their responsibilities, but they will be classified as "identified staff".
Example: Within the HR function, there can be managers heading units responsible for managing of general, ongoing and rather technical support in employees' matters; such as issuing work certificates, facilitating onboarding procedure, preparing documentation on job promotions/salaries, etc. Such managers report to the institution's HR director, so due to the art. 2 and art. 6, they will be classified as "identified staff", even though their professional activity does not directly affect the risk profile.
For these reasons, we believe that basing solely on the hierarchical position and reporting lines (described as option B in the Accompanying documents) with regard to staff members heading subordinated units is not the best solution. EBA could consider, for example, mixing the Option A and Option B in this respect to avoid classyfing staff members as "identified Staff" only due to their "formal" postion in a given institution. As a result, with regard to the heads of subordinated units, art. 2 could contain criteria related to both i) hierarchical position and ii) performed tasks.
Alternatively, art. 6 could be changed in order to list more specific areas of responsibility than "dealing with human resources", "performing economic analysis", "legal affairs" etc.
If necessary, we are happy to discuss the exact wording if any of our proposals is considered interesitng.
NA, but see our comments to the Question 2, as art. 2 and 6 are closely related.
In our opinion, the mechanism of art. 7 points 3-5 could be unworkable from the operational perspective. The necessity to get prior approval from the competent authority in order to exclude the staff member significantly limits the flexibility of institutions and can prolong the identification procedure in institutions. It also may have repercussions for the employment (or similar) relationship between a given institution and a given staff member.
For example, falling within the scope of the "identified staff" affects the essential contractual terms and conditions between the staff member and the institution. In other words, usually if employee is the "identified staf" he/she should sign the new contract or amend the old one. If the competent authority decides whether the staff member is classified as the identified staff, the intitution and the staff member should hold off on signing/amending the contract until the authority issues its decision. It impedes or even paralyses the negotiation and recruitment process with the staff member. Moreover the delay and uncerteinity in contracting an important staff member is usually unbeneficial for the institution.
Instead, we propose that competent authorities to perform "ex post" control whether the exclusion was proper and justified. If the exclusion was not proper and justified, the competent authority may impose its administractive sanctions. Such solution will be less intrusive for institutions.
If necessary, we are happy to discuss the exact wording of our proposal
We do not have comments regarding other provisions of the art. 7.
The provisions are sufficiently clear.
However, we would like to propose to exclude from calculation of art. 8 point 2 retention bonuses (and similar payments) that are awarded due to the exceptional situation of a given institution (e.g. due to the restructuring process). Such payments are usually awarded only once to retain key employees when a given institution faces difficult times. As a result, such staff members may become "identified staff" only in the year when the retention payment is awarded, whereas in the following years, he/she will not meet the quantitive criteria. Consequently, they should be covered by the CRD remuneration regime for this one year and uncovered in the following years. To our mind, it is over-complicated and disproportionate to cover such employee with CRD remuneration regime (and consequently change his/her employment terms and conditions, apply deferral, etc.) due to such one-time remuneraion rise.
If necessary, we are happy to discuss the exact wording of our proposal
NA
NA
CMS Cameron McKenna Nabarro Olswang Pośniak i Bejm sp.k.
