Article 5
Policies and procedures on conflict of interest in the context of remuneration
1. In their conflict of interest policies and procedures referred to in Article 72(1) of Regulation (EU) 2023/1114, crypto-asset service providers shall define and implement remuneration policies and procedures taking into account the interests of all their clients.
2. Crypto-asset service providers shall ensure that the remuneration policies and procedures referred to in paragraph 1:
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(a) |
do not create a conflict of interest or incentive that may lead the persons to whom they apply to favour their own interests or the crypto-asset service provider’s interests to the potential detriment of any client or that may lead the persons to whom they apply to favour their own interests to the detriment of the crypto-asset service provider; |
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(b) |
appropriately mitigate conflicts of interest which may be caused by the award of variable remuneration and underlying key performance indicators and risk alignment mechanisms, including the pay out of instruments to employees or management body as part of the variable or fixed remuneration. |
3. Crypto-asset service providers shall ensure that their remuneration policies and procedures referred to in paragraph 1 apply to all of the following:
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(a) |
their employees and any other natural person whose services are placed at the disposal and under the control of the crypto-asset service provider and who is involved in the provision of crypto-asset services by the crypto-asset service provider; |
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(b) |
members of their management body; |
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(c) |
any natural person directly involved in the provision of services to the crypto-asset service provider under an outsourcing arrangement for the purpose of the provision of crypto-asset services by the crypto-asset service provider. |
4. The crypto-asset service provider’s remuneration procedures, policies and arrangements shall apply to persons referred to in paragraph 3 that have an impact, directly or indirectly, on crypto-asset services provided by the crypto-asset service providers or on its corporate behaviour, regardless of the type of clients, and to the extent that the remuneration of such persons and other relevantincentives may create a conflict of interest that encourages them to act against the interests of any of the crypto-asset service provider’s clients or to favour their own interests to the detriment of the crypto-asset service provider.