View more on these topics

FSA publishes revised remuneration code

The FSA has published an updated remuneration code for the largest banks, building societies and broker dealers.

The revised code will cover a total of 2,700 firms, including investment firms that fall under the capital adequacy directive.

The changes have been made to bring the code in line with principles on pay across the European Union.

The main changes are that at least 50 per cent of bonuses should be paid in shares, that bonuses paid in shares should be subject to an appropriate retention period, and provisions on guaranteed bonuses should be applied on a firm-wide basis.

The code will be applied proportionately, with firms categorised into one of four tiers with different minimum expectations of compliance for each level.

Tiers one and two contain credit institutions and broker dealers that engage in significant proprietary trading or investment banking activities.

Tier three is mainly made up of small banks and building societies and firms that may occasionally take overnight or short-term risk with their balance sheets.

Tier four covers firms that generate income from agency business without putting their balance sheets at risk.

Firms already in the scope of the FSA’s remuneration code will have to comply with the new code from January 1 next year.

Other firms will have to comply as soon as possible, and no later than July 31, 2011.

The FSA is also bringing in new rules around pay disclosure.

Firms will need to disclose details of their remuneration policies at least on an annual basis, with the first disclosure no later than December 31, 2011.

Firms in the top tier will need to make full disclosure, while firms in lower tiers will be subject to less onerous requirements.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm