Remuneration policies that focus on short-term parameters and simply reward success without properly penalising failure may result in staff losing sight of the factors that keep their company sustainably successful over the long term. Such remuneration policies are antithetical to adequate risk management. The financial market crisis has demonstrated that the false incentives created by misguided remuneration policies may threaten not only the stability of individual enterprises, but also financial stability in general. The Remuneration Regulation for Institutions (Institutsvergütungsverordnung – InstitutsVergV) fleshes out the provisions of Section 25a(1) sentence 3 number 6 of the German Banking Act (Kreditwesengesetz – KWG), which requires institutions to have appropriate and transparent remuneration systems aligned with the aim of sustainable business development.

The Regulation, which entered into force in December 2013, was last amended with effect from 1 April 2026 by the Banking Directive Implementation and Bureaucracy Relief Act (Bankenrichtlinienumsetzungs- und Bürokratieentlastungsgesetz – BRUBEG) of 25 March 2026. This amended version contains the final implementation of the 2024 amendments to the European Capital Requirements Directive (CRD VI).

The Remuneration Regulation for Institutions fundamentally differentiates between general requirements for staff remuneration systems at all institutions and special requirements for those institutions classified as significant pursuant to Section 1(3c) of the Banking Act and their risk takers. Some of the special requirements are additionally applicable to certain credit institutions that are not significant. Bafin published FAQs on the Remuneration Regulation for Institutions on 13 June 2024. 

Requirements for investment institutions

With effect from 12 January 2024, a separate legal regulation governs medium-sized investment institutions, namely the Remuneration Regulation for Investment Institutions (Wertpapierinstituts-Vergütungsverordnung – WpIVergV), which is based on Section 46 of the Investment Institutions Act (Wertpapierinstitutsgesetz – WpIG). Large investment institutions apply the rules of the Banking Act and the Remuneration Regulation for Institutions. By contrast, there are no specific remuneration system requirements for small investment institutions.

Requirements for issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs)

Pursuant to Articles 45(1), 58(1)(a) and 58(2) of Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCAR): 

• issuers of significant ARTs;
• e-money institutions that issue significant EMTs;
• e-money institutions that issue non-significant EMTs and for which Bafin has ordered compliance with remuneration policy requirements;

must comply with the requirements for sound remuneration policy set out in Article 45(1) of MiCAR in conjunction with Commission Delegated Regulation (EU) 2025/418.