Recital 12

(12)In a group context, issuances may be managed centrally within a parent undertaking, including situations where the parent undertaking is subject to Directive 2013/36/EU of the European Parliament and of the Council ⁵ or Directive 2019/2034. Investment firms within a group may not always themselves issue instruments which are appropriate to be used for the purpose of variable remuneration. Regulation (EU) 2019/2033 in conjunction with Regulation (EU) No 575/2013 enables Additional Tier 1 and Tier 2 instruments issued through an entity within the scope of consolidation to form part of an investment firm’s own funds subject to certain conditions. Therefore, it should also be possible to use such instruments for the purpose of variable remuneration, provided that there is a clear link between the credit quality of the investment firm using those instruments for the purpose of variable remuneration and the credit quality of the issuer of the instrument. Such a link can usually be assumed to be the case between a parent undertaking and a subsidiary. Instruments other than Additional Tier 1 instruments and Tier 2 instruments that are not issued directly by an investment firm should also be capable of being used for variable remuneration, subject to equivalent conditions. Instruments that are linked to reference instruments issued by parent undertakings in third countries and that are otherwise equivalent to Additional Tier 1 instruments or Tier 2 instruments should be eligible to be used for the purposes of variable remuneration where the trigger event refers to the investment firm using such a synthetic instrument.