Credit Institutions / Investment Firms: New rules governing compensation within French credit institutions and investment firms

Sullivan & Cromwell LLP - December 22, 2010

On December 17, 2010, the French Journal Officiel published an arrêté, (i) supplementing the rules adopted by the arrêté dated November 3, 2009 governing the variable compensation of “financial market professionals” employed by credit institutions and investment firms (see our publication of December 4, 2009), and (ii) giving the French Prudential Control Authority additional powers to monitor compensation levels within such institutions. These provisions implement provisions of the E.U. directive N° 2010/76/UE dated November 24, 2010 (referred to as the CRD III Directive) under French law. To a large extent, this arrêté (i) confirms and embodies in regulation the rules of conduct issued by the French Banking Federation dated November 5, 2009, and (ii) is consistent with the Committee of European Banking Supervisors’ Guidelines on Remuneration Policies and Practices, dated December 10, 2010.