EU fund manager bonus cap vote delayed, according to reports

German MEP Sven Giegold, who has led the proposals, told Bloomberg that he had requested the delay in order to "continue political negotiations".

"We are trying to figure out if a pro-European and cross-party compromise for waterproof consumer protection rules in the area of managers' remuneration and performance-fee regulations can be found," he said.

Giegold's proposal was adopted by the European Parliament's Economic and Monetary Affairs Committee (ECON) in March. If supported by member states and the European Parliament, it would prevent bonuses from being issued to managers of Undertakings for Collective Investment in Transferrable Securities (UCITS) that exceed the level of those managers' salaries. In addition, half of the bonus amount would have to take the form of units in the assets being managed.

The proposal was influenced by the new EU cap on bankers' bonuses, which was approved by the European Parliament in April and could take effect as early as 1 January next year, following approval by member states. However the rules for banks are more flexible than those which have been proposed for UCITS managers, as bankers may be awarded up to double their salaries if approved by bank shareholders.

Changes to the current UCITS rules were originally proposed by the European Commission in July 2012. The new rules are intended to prevent fund managers financially benefitting from "excessive risk-taking" with customers' investments, and will introduce precise definitions of the tasks and liabilities of all depositaries acting on behalf of a fund. UCITS are widely used by European retail investors and manage almost €6.3 trillion in assets, according to Commission figures.

Experts at Pinsent Masons, the law firm behind Out-Law.com, have previously warned that the industry would find the proposals "difficult to accept" given that the rationale behind the cap on bankers' bonuses was largely based on protecting against risks to the financial system which were not present in UCITS to the same degree.

"A delay to the vote is one thing but the apparently realistic prospect of the cap being eased is something else altogether," said share plans and incentives expert Matthew Findley, a share plans and incentives expert with Pinsent Masons. "It would also mark a sharp u-turn given how recently the UCITS V bonus cap was proposed."

"Asset managers will be encouraged by this, as will those monitoring EU pay rules generally in terms of what it might mean in other areas such as CRD IV, AIFMD and the proposed Shareholder Rights Directive," he said.