Article 5 Policies and procedures in the context of remuneration

Article 5 extends the conflict of interest framework established in Article 32(1) of Regulation (EU) 2023/1114 into the specific domain of remuneration.

It requires issuers of asset-referenced tokens to ensure that their remuneration structures — covering both fixed and variable pay — do not generate incentives that could lead employees or management body members to act against the interests of token holders or shareholders.

The article also requires that any conflict of interest risks arising from variable remuneration components, such as key performance indicators or risk alignment mechanisms, are actively identified and mitigated.

Important points:

• Ensure remuneration procedures, policies and arrangements do not create conflicts of interest or incentivise employees or management body members to favour their own interests or those of the issuer over token holders or shareholders.
• Identify and mitigate conflicts of interest that may arise from variable remuneration, including key performance indicators and risk alignment mechanisms.
• This obligation applies across all time horizons — short, medium and long term — covering both variable and fixed remuneration arrangements.