The UK’s Financial Conduct Authority (‘FCA’) has today published a Policy Statement on Remuneration in CRD IV firms.
The Policy Statement:
- aligns the FCA provisions with the European Banking Authority (‘EBA’) guidelines on sound remuneration policies;
- contains new non-FCA Handbook guidance on frequently asked questions on how the EBA guidelines provisions are implemented, as well as more general provisions in the Handbook; and
- simplifies existing Handbook guidance on remuneration and the general guidance on proportionality.
The Policy Statement affects all firms that fall within the scope of CRD IV, that is:
- building societies;
- investment firms; and
- overseas firms,
who are required to comply with the FCA Remuneration Code under SYSC 19A, SYSC 19C or SYSC 19D.
The FCA has suggested that other firms outside of CRD IV may also find this Policy Statement useful to understand what the FCA expects from firms’ remuneration policies and practices.
We are currently reviewing this document and will issue a separate newsletter providing a more detailed analysis of the changes. However, firms are likely to welcome the simplification and consolidation of existing guidance into one document, and provision of new guidance, following a similar approach taken by the PRA in their recent ‘Expectations on Remuneration’.
If you have any questions about this alert, or any other financial services development, please do contact us – we would be delighted to help!
Janet and Matthew