Subject matter and scope of application

These Guidelines specify requirements for the design and implementation of remuneration policies and practices, in relation to the offering or provision of banking products and services to consumers by institutions as defined in paragraph 17, with a view to protecting consumers from undesirable detriment arising from the remuneration of sales staff.

These Guidelines provide details on how financial institutions should give effect to specific provisions laid down in applicable EU Directives, such as (i) Articles 74(3) and 75(2) of Directive 2013/36/EU⁷ , which confers the mandate on the EBA to develop Guidelines on credit institutions’ governance arrangements, including remuneration policies and practices,

• (ii) Article 7(2) of Directive 2014/17/EU⁸ , which requires Member States to ensure that the manner in which creditors and credit intermediaries remunerate their staff does not impede them from acting honestly, fairly, transparently and professionally, taking account of the rights and interests of consumers, and (iii) Articles 11(4) of Directive (EU) 2015/2366⁹ and 3(1) of Directive 2009/110/EC¹⁰ , which require payment institutions and electronic money institutions, respectively, to have in place robust governance arrangements, to the extent that they relate to remuneration policies and practices.

⁷ Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC

⁸ Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 (OJ L 60, 28.2.2014, p.34).

⁹ Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC (OJ L 337, 23.12.2015, p.35).

¹⁰ Directive 2009/110/EC of the European Parliament and of the Council of 16 September 2009 on the taking up, pursuit and prudential supervision of the business of electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC (OJ L 267, 10.10.2009, p.7).

These Guidelines do not cover remuneration paid by institutions to credit intermediaries (often also referred to as ‘commissions’) and are without prejudice to the remuneration rules laid down under the Directive 2014/17/EU¹¹ and in particular under Article 7(2) of that Directive, which requires that, where creditors remunerate credit intermediaries, they must do so in a way that does not impede the creditor, credit intermediary or appointed representative from acting honestly, fairly, transparently and professionally, taking account of the rights and interests of the consumers.

¹¹ Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 (OJ L 60, 28.2.2014, p.34).

Relevant banking products and services are those which fall within the scope of the legislative acts under which institutions are authorised or admitted to carry out their activities as defined in paragraph 17.

These Guidelines are also without prejudice to the application of stricter requirements specified in applicable sectoral legislation, and in particular under Article 7(4) of Directive 2014/17/EU, in relation to the provision of advisory services on credit agreements as defined in Article 4(21) of that Directive.

Competent authorities may wish to consider applying these Guidelines also to entities other than institutions as defined in paragraph 17, in particular to:

• a. intermediaries other than credit intermediaries as defined in Article 4(5) of Directive 2014/17/EU;
• b. ‘appointed representatives’ as defined in Article 4(8) of Directive 2014/17/EU.

Competent authorities may wish to consider applying these Guidelines in relation to persons other than consumers as defined in paragraph 17, such as micro-enterprises and small and medium-sized enterprises (SMEs).

Finally, competent authorities may wish to consider extending the remuneration requirements set out in these Guidelines also to remuneration (also referred as to ‘commissions’) paid by financial institutions to credit intermediaries.

Where these Guidelines indicate an outcome, the outcome may be achieved through different means. Competent authorities may want to assess the appropriateness of the means used by a financial institution, taking into account its business model, size and complexity.

The implementation of these Guidelines is without prejudice to the credit institutions’ requirement to comply with the EBA Guidelines on sound remuneration policies under Articles 74(3) and 75(2) of Directive 2013/36/EU and disclosures under Article 450 of Regulation (EU) No 575/2013.