The Malta Financial Services Authority has published guidelines on the application of the proportionality principle in relation to the ESMA guidelines on sound remuneration policies.

The MFSA wants to draw the industry’s attention to the new Paragraphs 32, 33 and 34 which have been introduced with these revised 'guidance notes,' as the regulator calls them.

If, after carrying out the proportionality test, the licence holder in question concludes that it is not significant in terms of size, internal organisation and nature, scope and complexity of its activities, then it may apply a degree of proportionality to the remuneration principles. This could result in certain rules in the ESMA remuneration guidelines being entirely waived (in the case of the requirements on the payout process and/or the requirement to establish a remuneration committee) or applied to a proportionate extent.