Recital 3

(3)While the conditions which apply to Additional Tier 1 and Tier 2 instruments are specified in Article 9 of Regulation (EU) 2019/2033 of the European Parliament and of the Council ² in conjunction with Part Two, Title 1, Chapters 3 and 4 of Regulation (EU) No 575/2013 of the European Parliament and of the Council ³ , the Other Instruments referred to in Article 32(1), point (j)(iii), of Directive (EU) 2019/2034 (‘Other Instruments’) which can be fully converted to Common Equity Tier 1 instruments or written down, are not subject to specific conditions pursuant to those Regulations as they are not classified as own funds instruments for prudential purposes. Specific requirements should therefore be set for different classes of instruments to ensure that they are appropriate to be used for the purposes of variable remuneration, taking account of the different nature of the instruments. The use of instruments for the purposes of variable remuneration should not in itself prevent instruments from qualifying as own funds of an investment firm as long as the conditions laid down in Regulation (EU) 2019/2033 are met. Nor should such use in itself be understood as providing an incentive to redeem the instrument, as after deferral and retention periods staff members are, in general, able to receive liquid funds by other means than redemption.