Featured Product

    FCA Proposes to Update Remuneration Code for Firms to Reflect CRD5

    August 03, 2020

    FCA proposed to amend the dual-regulated firms remuneration code and relevant non-handbook guidance, in line with the Capital Requirements Directive (CRD) 5. The proposals aim to ensure that the FCA remuneration regime applicable to banks, building societies, and PRA-designated investment firms continues to promote healthy culture, minimizes harm to consumers and markets, and remains largely consistent with the PRA remuneration framework. Stakeholders can provide feedback on consultation paper till September 30, 2020. FCA will publish the final rules and guidance before December 28, 2020. In doing so, FCA will continue to work closely with PRA.

    PRA published a consultation paper in which it had set out the proposals for implementing CRD5. FCA worked closely with PRA on the proposals related to remuneration. The FCA proposals aim to ensure that its remuneration rules and guidance for dual-regulated firms remain largely consistent with the PRA approach and support its own conduct-based objectives. In the consultation paper, FCA is proposing changes to:

    • Dual-regulated firms' Remuneration Code (SYSC 19D), including to the rules on material risk-takers, proportionality, deferral, and clawback
    • Non-Handbook guidance General Guidance on Proportionality—the dual-regulated firms' Remuneration Code
    • Non-Handbook guidance Remuneration Codes (SYSC 19A and SYSC 19D)—the frequently asked questions on remuneration

    The proposals aim to ensure that the amended remuneration requirements can continue to work effectively at the end of the transition period following the exit of UK from EU. These include converting certain thresholds from Euros to Sterling from January 01, 2021 (Chapter 8). FCA proposed that firms apply the amended remuneration requirements from the next performance year that begins on or after December 29, 2020.

    Overall, the FCA remuneration rules seek to ensure that firms establish, implement, and maintain remuneration policies and practices that are consistent with, and promote, effective risk management and healthy cultures. The proposals will help to strengthen the remuneration framework for credit institutions and designated investment firms. In doing so, FCA would expect them to contribute to reducing the number of misconduct incidents in these firms and, where misconduct does occur, the level of harm it causes. 

     

    Related Links

    Comment Due Date: September 30, 2020

    Keywords: Europe, UK, Banking, Securities, Remuneration, CRD5, Dual Regulated Firms, Basel, Governance, Operational Risk, PRA, FCA

    Featured Experts
    Related Articles
    News

    HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration

    The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.

    July 29, 2021 WebPage Regulatory News
    News

    EBA Guide to Monitor Threshold for Intermediate Parent Undertakings

    The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).

    July 28, 2021 WebPage Regulatory News
    News

    PRA Finalizes Approach to Supervision of International Banks

    In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.

    July 26, 2021 WebPage Regulatory News
    News

    FCA Issues PS21/9 on Implementation of Investment Firms Regime

    The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.

    July 26, 2021 WebPage Regulatory News
    News

    EBA Proposes Regulatory Standards to Identify Shadow Banking Entities

    The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.

    July 26, 2021 WebPage Regulatory News
    News

    IOSCO Proposes Recommendations on ESG Ratings and Data Providers

    The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.

    July 26, 2021 WebPage Regulatory News
    News

    ESMA Group Issues Recommendations on RFR Switch in Interdealer Market

    The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.

    July 26, 2021 WebPage Regulatory News
    News

    ECB Study Assesses Impact of Basel III Finalization Package

    The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.

    July 26, 2021 WebPage Regulatory News
    News

    ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading

    The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.

    July 26, 2021 WebPage Regulatory News
    News

    PRA Updates Remuneration Policy Statement Templates and Tables

    The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.

    July 26, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7311