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22 December 2015

EBA consults on draft guidelines on remuneration requirements for sales staff

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The EBA has identified poor remuneration policies and practices as a key driver of miss-selling of financial products and services. The Guidelines are aimed at protecting consumers and reducing conduct costs of firms.

The draft Guidelines apply to remuneration paid to staff employed by credit institutions, creditors, credit intermediaries, payment institutions and electronic money institutions, when providing deposits, payment accounts, payment services, electronic money, mortgages, and other forms of credit to consumers.

The Guidelines provide a framework for financial institutions to implement remuneration policies and practices that will improve links between incentives and the fair treatment of consumers, thus reducing the risk of mis-selling and related conduct costs for firms.

They do so by:

  • proposing that the management body is responsible for the design and monitoring of remuneration policies and practices, which should take into account the rights and interests of consumers;
  • preventing conflicts of interests;
  • using quantitative and qualitative criteria for determining the level of variable remuneration; and finally
  • retaining documents for auditing purposes.

Responses to this Consultation Paper can be sent to the European Banking Authority (EBA) until 22 March 2016.

Press release

Consultation paper


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