The circular applies to financial institutions regulated by the following laws:
- Banking Act (BA)
- Insurance Supervision Act (ISA)
- Stock Exchange Act (SESTA)
- Collective Investment Schemes Act (CISA)
Implementation is mandatory for large banks and insurers. The scope is determined by threshold values based upon
- the required equity capital for banks, and
- the required solvency for insurers.
The threshold value is set at two billion francs (the required equity capital and solvency).
For these institutions, the principles of the circular represent guidelines that should be followed during establishment of their remuneration policy.
- will incorporate the remuneration policy into its risk-based supervisory
- reserves the right to subject individual institutions to the circular regardless
- of the threshold value.
FINMA will exercise this right on the basis of the risk profile or due to irregularities and inappropriate remuneration practices.