The European Securities and Markets Authority has published two sets of guidelines for 'sound remuneration' in the context of the European Union directive that applies to Undertakings for Collective Investment in Transferable Securities and the Alternative Investment Fund Managers' Directive.

The UCITS guidelines apply to 'management companies' as defined in article 2(1)(b) of the UCITS directive and to investment companies that have not 'designated' any management companies. The new AIFMD remuneration guidelines amend the current ones, specifically the section that deals with remuneration rules in a group context. They are "intended to acknowledge the potential outreach of the Capital Requirements Directive rules in a banking group."

National regulators must tell ESMA whether they are going to comply or not within two months. ESMA will then publish a compliance table for all EU nations. The guidelines are to apply on 1 January and have been translated into the 23 official languages of Europe's polyglot governmental club.

In the context of the new UCITS guidelines, 'remuneration' consists of all forms of payments or benefits paid by the management company in question; any amount paid by the UCITS itself, including any portion of performance fees that it pays directly or indirectly for the benefit of identified staff; and/or any transfer of units or shares of the UCITS in exchange for professional services rendered by the management company’s identified staff. All remuneration can be divided into either fixed remuneration (payments or benefits without consideration of any performance criteria) or variable remuneration (additional payments or benefits depending on performance or, in certain cases, other contractual criteria). A 'retention bonus' is a form of variable remuneration and can only be allowed in certain circumstances.

Dividends or similar distributions that partners receive as owners of a management company are not covered by these guidelines, unless the material outcome of the payment of such dividends results in a circumvention of the relevant remuneration rules, any intention to circumvent such rules being irrelevant for such purpose.