The regulatory requirements for compensation systems in the banking sector distinguish between general requirements that apply to all banks and requirements that apply solely to "major institutions". Various factors are important for classification as a major institution: the bank must be potentially system threatening; it must be supervised by the European Central Bank; and its balance sheet total dates for the last three completed financial years must reach or exceed an average of EUR 15 billion.
 
If the bank is classified as a major institution on the grounds of its size, it may provide the Federal Financial Supervisory Authority (BaFin) with a self-assessment in the form of a risk analysis under section 17 of the Remuneration Ordinance for Institutions (Institutsvergütungsverordnung) proving that it is not in fact a major institution. This self-assessment must be approved by the supervisory board.
 
The detailed self-assessment must consider certain key factors relating to both the business and risk strategy (nature, scale, complexity, risk content and international scope of business activities) and the compensation system.
 
hkp/// group develops tailored self-assessments for banks on the basis of the relevant business and risk profile and the bank's compensation-related regulations. Besides developing and validating these self-assessments, we also support supervisory boards during the approval process.