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CRD IV ToolDelegated Regulation 2021/923
Article 5

Article 5 - Delegated Regulation 2021/923

Article 5

Qualitative criteria

In addition to staff members identified under the criteria set out in Article 92(3), points (a), (b) and (c) of Directive 2013/36/EU, staff members shall be deemed to have a material impact on an institution’s risk profile where one or more of the following qualitative criteria are met:

(a)

the staff member has managerial responsibility for:

(i)

legal affairs;

(ii)

the soundness of accounting policies and procedures;

(iii)

finance, including taxation and budgeting;

(iv)

performing economic analysis;

(v)

the prevention of money laundering and terrorist financing;

(vi)

human resources;

(vii)

the development or implementation of the remuneration policy;

(viii)

information technology;

(ix)

information security;

(x)

managing outsourcing arrangements of critical or important functions as referred to in Article 30(1) of Commission Delegated Regulation (EU) 2017/565 (7);

(b)

the staff member has managerial responsibilities for any of the risk categories set out in Articles 79 to 87 of Directive 2013/36/EU, or is a voting member of a committee responsible for the management of any of the risk categories set out in those Articles;

(c)

with regard to credit risk exposures of a nominal amount per transaction, representing 0,5 % of the institution’s Common Equity Tier 1 capital and which is at least EUR 5 million, the staff member meets one of the following criteria:

(i)

the staff member has the authority to take, approve or veto decisions on such credit risk exposures;

(ii)

the staff member is a voting member of a committee which has the authority to take the decisions as referred to in point (i) of this point (c);

(d)

in relation to an institution for which the derogation for small trading book businesses set out in Article 94 of Regulation (EU) No 575/2013 does not apply, the staff member meets one of the following criteria:

(i)

the staff member has the authority to take, approve or veto decisions on transactions on the trading book that in aggregate represent one of the following thresholds:

—

where the standardised approach is used, an own funds requirement for market risks that represents 0,5 % or more of the institution’s Common Equity Tier 1 capital;

—

where an internal model-based approach is approved for regulatory purposes, 5 % or more of the institution’s internal value-at-risk limit for trading book exposures at a 99th percentile (one-tailed confidence interval level);

(ii)

the staff member is a voting member of a committee that has the authority to take the decisions mentioned in point (i) of this point;

(e)

the staff member heads a group of staff members who have individual authorities to commit the institution to transactions and either of the following conditions is met:

(i)

the sum of those authorities equals or exceeds the threshold referred to in point (c)(i) or in point (d)(i), the first indent;

(ii)

where an internal model-based approach is approved for regulatory purposes, those authorities amount to 5 % or more of the institution’s internal value-at-risk limit for trading book exposures at a 99th percentile (one-tailed confidence interval level); where the institution does not calculate a value-at-risk at the level of that staff member, the value-at-risk limits of staff under the management of this staff member shall be added up;

(f)

the staff member meets either of the following criteria with regard to decision on approving or vetoing the introduction of new products:

(i)

the staff member has authority to take such decisions;

(ii)

the staff member is a voting member of a committee that has authority to take such decisions.

(7)  Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (OJ L 87, 31.3.2017, p. 1).