Background
It is TMF Fund Management (Ireland) Limited (TMF FM) policy that remuneration is consistent with and promotes sound and effective risk management, does not encourage risk-taking that is inconsistent with risk profiles, rules or instruments of incorporation of the investment funds management by TMF FM (the “Funds”). The Policy requires an appropriate balance between fixed and variable remuneration components, including the retention and deferral of a proportion of the variable remuneration over appropriate periods and the payment of part in non–cash instruments (known as the pay-out process rules).
In accordance with the UCITS Regulations, TMF FM has established a remuneration policy (the “Remuneration Policy”) which is consistent with the principles outlined in the 2016 ESMA Guidelines on sound remuneration policies under the UCITS Directive (“Remuneration Guidelines”) including information on how this Policy is consistent with the integration of sustainability risks as required under Article 5 of the Sustainable Finance Disclosure Regulation (“SFDR”) together the (“Remuneration Requirements”).
Proportionality
TMF FM has elected to apply the proportionality principle as provided by the Remuneration Guidelines and the remuneration policy has therefore been conceived in a way and to an extent that it is appropriate to its size and internal organization as well as the nature, scope and complexity of its activities. The application of proportionality principle may lead to some AIFMs being able to disapply certain provisions which include pay-out process requirements and the obligation for a Remuneration Committee. TMF FM has made an assessment of the nature, scale and complexity of its business in line with the Remuneration Guidelines and has determined that overall, a Remuneration Committee is not required specific to TMF FM but a group remuneration committee (“Group Committee’) has been established on behalf of the TMF Group.
Identified Staff
This Policy applies to the remuneration of all identified staff members whose professional activities have a material impact on the risk profile of the Funds, as well as members of senior management, and all staff members carrying out pre-approved control functions on behalf of the TMF FM, including Directors (“Identified Staff”).
Forms of Remuneration
Remuneration includes a combination of fixed and variable remuneration and may include participation in the TMF Groups’ group-wide discretionary bonus scheme. Variable remuneration is discretionary and based upon a number of factors that are not directly linked to the investment performance of the Funds, although performance of the Funds could ultimately affect the performance of TMF FM by virtue of its business model. Variable remuneration will be assessed by senior management to ensure that it does not encourage excessive risk taking.
The Remuneration Policy is in line with the business strategy, objectives, values and interests of TMF FM, the Funds and the investors of the Funds and includes measures to avoid conflicts of interest.
One individual acting as non-executive independent director (“INED”) received fixed remuneration for their role as a member of the board of TMF FM. No variable remuneration is paid to this director.
The remuneration policy provides that:
- The fixed and variable components of total remuneration of Identified Staff are appropriately balanced and the fixed component represents a sufficiently high proportion of the total remuneration.
- Identified staff are compensated in accordance with their professional experience, responsibility, job complexity as well as relevant market conditions and entity and group performance.
Delegates
Where TMF FM appoints a delegate to carry out portfolio management or risk management, it ensures that the delegate is subject to regulatory requirements on remuneration that are equivalent to those set out in the guidelines or puts in place appropriate contractual arrangements to ensure that there is no circumvention of the remuneration requirements.
TMF FM policy is to ensure that all delegates to whom investment management activities have been delegated comply with the above requirements. The Board of TMF FM will request assurances on at least an annual basis from the relevant delegates that the remuneration arrangements within any delegate company are equivalent and in compliance with remuneration requirements.
Integration of Sustainability Risks
The Policy is consistent with the integration of sustainability risks as specified in the Sustainability Finance Disclosure Regulation (“SFDR”). A sustainability risk means an environmental, social or governance event or condition that, if realised, could have an actual or potential negative impact on the value of an investment. TMF FM requires that sustainability risks are considered by all employees involved in the decision-making process in respect of any of TMF FM funds (the “Funds”) as outlined in the Firm ESG Policy (“ESG Policy”).
In addition, and specifically in regard, to how TMF FM integrates the consideration of sustainability risk into the remuneration process, the extent to which the individual employee has adhered to the framework process-based criteria as outlined in the firm ESG Policy will be considered by TMF FM.
Disclosure
As provided for under the regulations, TMF FM discloses the remuneration on an annual basis to shareholders of the funds.
TMF FM will comply with disclosure requirements on remuneration as outlined in the Remuneration Guidelines, requiring disclosures in the TMF FM Annual Financial Statements, the UCITS Annual Financial Statements, the PRIIPs KIIDs (as applicable), the prospectuses and the TMF FM policy.
Review
The Board of TMF FM will review the Policy on an annual basis for the Company. The Policy will be updated by the Board as and when required.
All Identified Staff shall be informed of the criteria associated with variable remuneration.
