FRANCE Law and Practice Contributed by: Damien Luqué, Martin Jarrige de la Sizeranne and Sacha Tartarin, Lacourte Raquin Tatar
business units and who report directly to any person above-mentioned; and • members of staff who were entitled to sig - nificant remuneration during the previous financial year, if the following two conditions are met: (a) this remuneration is greater than or equal to EUR500,000 and is greater or equal to the average remuneration granted to any person above-mentioned; and (b) they carry out their professional activi - ties in a material business unit and these activities are likely to have a material impact on the risk profile of the business unit in question. Remuneration Principles The management body in its supervisory func - tions must adopt and regularly review the remu - neration policy and monitor its implementation. The shareholders must be consulted at least once a year in a general meeting regarding the MRT’s remuneration policy. The remuneration policy must include the fol - lowing principles: • Ratio between fixed and variable remunera- tion A clear distinction must be established between the fixed and variable components of remuneration. The variable component of the remuneration for MRTs must not exceed 100% of the fixed component of their remu - neration. The shareholders of the credit institution, in general meeting, may decide to increase the variable portion of the MRTs’ remuneration to a maximum of 200% of the fixed remuneration. • Instrument payment requirements At least 50% of the variable component of the remu - neration for MRTs must be paid in instru -
ments (eg, shares or equivalent property rights). A retention period may be established by the credit institution to ensure the long- term commitment of relevant MRTs. In this regard, French law does not provide for a particular minimum retention period. • Deferred payment requirements At least 40% of the variable component of MRT’s remu - neration must be deferred over a period of no less than four years. For particularly high variable remuneration, at least 60% of the variable component of the remuneration must be deferred. • Malus and claw-back The remuneration policy can include the possibility of reducing (malus) or returning (claw-back) the variable com - ponent of the remuneration in the event of a misconduct of the MRTs. It should be noted that the ACPR’s policies only partially comply with the EBA Guidelines on sound remuneration policies (EBA/GL/2021/04). This can be explained by the fact that the EBA Guidelines include several measures that exceed standards provided for in the French laws imple - menting CRD’s requirements on remuneration in France, such as the inclusion of all credit institu - tions’ staff within the scope of the remuneration requirements.
5. AML/KYC 5.1 AML and CFT Requirements
As other regulated entities in the banking and financial sector, credit institutions are subject to the French legal framework on AML/CFT. Late - ly, French legislation implemented the Fifth EU Anti-Money Laundering Directive (2018/843/EU).
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