Institutsvergütungsverordnung 4.0 Last page 1

• The principle of proportionality is maintained – new requirements for smaller banks and asset managers in the context of the group
• Publication of the Ordinance amending the current version of the Enterprise Wages Act (IVV 4.0)

Frankfurt 27. September 2021. On September 24, 2021, thus just before the Bundestag elections, the amendment to the Institute’s compensation law projected since the beginning of the year in the current version 4.0 (IVV 4.0) was published in the Official Gazette of Federal Law. delayed completion. After the basic regulations for the implementation of the so-called EU banking package with changes to the Banking Act had already entered into force in January 2021, it was expected that supplementary decrees would be implemented in the near future.

The origins of the new regulations now published are in the Capital Requirements Regulations (CRR II) and the Capital Requirements Directive (CRD V), the stated objective of which is to reduce risks in the financial sector and enhance the resilience and stability of the financial sector, as well as in relation to future crises. In particular, the CRD V requirements in national law had to be implemented through changes to the German Banking Act (KWG) and – for wage-related requirements – through changes to the Institute’s Remuneration Act.

“As expected, the innovations that have now been deployed are less risky for large credit institutions than they were in the recent revision of the Institute’s Compensation Act,” explains Petra Knapp Hagel, senior partner at management consulting group hkp ///. The expert on wages in the financial services sector in particular points to innovations that particularly affect small and insignificant enterprises and capital management firms and their consequences should not be underestimated.

Focus on non-significant institutions and capital management companies

The principle of proportionality will not be affected by the new regulations: insignificant institutions – usually those with total assets of less than 15 billion euros – still do not have to implement the strict reward requirements of large risk institutions.