Neville Bramwell (pictured), partner at Deloitte, comments on the European Securities and Markets Authority’s (ESMA’s) final guidelines on sound remuneration policies under the Alternative Investment Fund Managers’ Directive (AIFMD)…

ESMA’s final guidelines are likely increase cost and complexity for fund managers. More firms will fall into the scope of the requirements than envisaged in the original consultation paper. The guidelines will now extend to include people performing risk or portfolio management functions on behalf of fund managers. That widens the scope of people who will have to comply with the new rules on remuneration.

However, the provisions on proportionality – which govern how parts of the guidelines apply – mean certain measures will not affect some firms. For example, smaller, less complex managers – who a Deloitte survey indicated would be hardest hit by the AIFMD - may not now need a remuneration committee to agree pay for fund managers.