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From Lavenpartners.com: Managers of UCITS who do not already have 18 March 2016 marked on their calendars should do so now. That is the deadline on which the FCA must implement and enforce the transposition of UCITS V Directive (Directive) in the UK. While the burden of UCITS V is carried predominantly by depositaries, managers carry their share of the weight from the Directive’s novelties which come in the form of the new remuneration impositions.

Pay-out process rules

At the forefront of the new remuneration requirements is the application of the remuneration principles. Conceptualised to mitigate incentives for excessive risk taking, these principles impose three main restrictions on the remuneration of key staff, otherwise known as the pay-out process rules. In summary, the restrictions are:

• A minimum of 50% of discretionary bonus should consist of the units of the UCITS managed;
• A minimum of 40% of the discretionary bonus should be deferred for 3 years; and
• Discretionary bonuses should be subject to clawback.

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