In accordance with its obligations pursuant to the UCITS Regulations, which is in compliance with the ESMA Guidelines, the Company is required to have remuneration policies and practices for those categories of staff, including senior management, risk takers, control functions, and any employees receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers whose professional activities have a material impact on the risk profiles of the Company (“Identified Staff”), that are consistent with and promote sound and effective risk management and do not encourage risk-taking which is inconsistent with the risk profiles, rules or instruments of incorporation of the Company.
The Company has established this remuneration policy in accordance with the requirements of the UCITS Regulations to the extent that it is appropriate to its size, internal organisation and the nature, scope and complexities of its activities.
This remuneration policy has been adopted by the Board and any revisions to this remuneration policy requires approval of the Board.
The Company will ensure:
- that entities to which investment management activities have been delegated are subject to regulatory requirements on remuneration that are equally as effective as those applicable under the ESMA Guidelines; or
- Appropriate contractual arrangements are put in place with entities to which investment management is delegated to ensure that the UCITS remuneration rules are not circumvented. These contractual arrangements relate to any payments made to a delegates’ identified staff as compensation for performance of investment management activities on behalf of the Company
In line with the requirements of the ESMA Guidelines, the Company has confirmed that the entities to which investment management activities have been delegated are subject to regulatory requirements on remuneration that are equally as effective as those applicable under the ESMA Guidelines.
The directors of the Company who are independent of the Investment Manager receive a fixed fee only and do not receive performance-based remuneration therefore avoiding a potential conflict of interest. The directors of the Company who are also employees of the Investment Manager do not receive any fee. The basic fee of a Board member is set at a level that is on par with the rest of the market and reflects the qualifications and contribution required in view of the Company’s complexity, the extent of the responsibilities and the number of board meetings. No pension contributions are payable on Board members’ fees.
The Designated Directors of the Company do not receive any remuneration directly from the Company. Furthermore KB Associates receives a fixed fee only for the provision of designated director services to the Company and does not receive performance-based remuneration.
As noted above, the Company must comply with the remuneration principles set down in the UCITS Regulations in a way and to the extent that is appropriate to its size, its internal organisation and the nature scope and complexity of its activities. Accordingly, some UCITS management companies can determine to meet the remuneration requirements through very sophisticated policies whereas others can do so in a simple and less burdensome way.
The Company does not pay any variable remuneration to any of its Identified Staff. Accordingly, the principles in respect of variable remuneration as outlined in the UCITS Regulations are not applicable.
With respect to the remuneration committee, the Board has determined the remuneration committee requirement does not apply taking into account the below factors:
- All of the above proportionality criteria (i.e. the Company’s size, internal organisation nature, the scope and complexity of its activities); and
- The UCITS Regulations outline a remuneration committee will be, where appropriate, set up in accordance with the ESMA Guidelines.
Review of the Policy
The general principles of this remuneration policy shall be reviewed at least annually by the Board of the Company.
The implementation of this remuneration policy will be subject to review at least annually to ensure compliance with and adherence to the policy.
These reviews will ensure that:
- The overall remuneration system operates as intended.
- The remuneration pay-outs are appropriate.
- The risk profile, objectives and goals of the Company are adequately reflected; and
- The policy reflects available guidelines and regulatory requirements.
The Board will take appropriate measures to address any deficiencies.
Circumstances where action is required
Following a review of adherence to the Company’s remuneration policies and procedures, action may be required if remuneration levels do not adhere to the principles set out therein or is at a level which is unacceptable or gives rise to conflicts of interest. The action to be taken may include possible revision of the level of remuneration payable to the individual(s) concerned.
The responsibility for determining action to be taken and for taking action on behalf of the Company lies with the Board.