On 28 April the amended Banking Law and some other laws to implement the Capital Requirements Directive V and the Capital Requirements Regulation took effect. It introduces several changes in comparison with the regulation that was previously in force.

One of them is the definition of employees who exert a significant influence on the risk profile of a bank and a brokerage house, referred to as “risk takers”. Previously, this definition was lacking in the Banking Law and the Act on Trading in Financial Instruments. This is very important because it is compulsory to articulate a remuneration policy addressed to these persons. The group of risk takers currently consists of supervisory board members, upper level management (including the management board members) and persons who work or perform tasks for a significant business unit, provided that:

• their total remuneration in the previous year was at least the equivalent of EUR 500,000 and no less than the average annual remuneration of supervisory board members and upper level management;
• the work they do or the tasks they execute as part of a significant business unit exert a significant influence on that unit’s risk profile.

The more specific definition of risk takers may in practice restrict their number because the prerequisites classifying people as belonging to this group have been merged.

The amended law also introduces the opportunity of applying the remuneration policy to a limited degree. A limitation may pertain to the variable components of remuneration and discretionary pension benefits, while the details thereof will be prescribed by the executive regulations. A restriction may be applicable to the following:

• a brokerage house / bank that is not a large institution and whose average asset value has not surpassed EUR 5 billion in the four-year period immediately preceding the current reporting year;
• a brokerage house / bank whose average asset value exceeds EUR 5 billion but does not surpass the equivalent amount of EUR 15 million or the amount stated in the executive regulations.
• in reference to a person whose variable remuneration does not exceed the Polish zloty equivalent of EUR 50,000 per annum or 1/3 of its total annual remuneration. 

The amended law lays down a statutory right for the Finance Minister to define the detailed scope of the remuneration policy, including a policy applied to a limited degree. The executive regulations prevailing to-date will stay in force until the time when new regulations are issued but for no longer than 12 months after the effective date of the amended regulation. 

After the Finance Minister issues the new regulations, banks and brokerage houses should analyze their binding remuneration policy and other documents, which may have to be updated.

Find more in the PRO HR May 2021.