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

    OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities

    The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.

    May 17, 2022 WebPage Regulatory News
    News

    EBA Proposes Standards to Support Secondary NPL Markets

    The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.

    May 17, 2022 WebPage Regulatory News
    News

    EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution

    The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).

    May 13, 2022 WebPage Regulatory News
    News

    EBA Issues Standards for Crowdfunding Service Providers Under ECSPR

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.

    May 13, 2022 WebPage Regulatory News
    News

    EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution

    The European Securities and Markets Authority (ESMA) published a paper that examines the systemic risk posed by increasing use of cloud services, along with the potential policy options to mitigate this risk.

    May 12, 2022 WebPage Regulatory News
    News

    EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA

    The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.

    May 11, 2022 WebPage Regulatory News
    News

    EC Mandates ESAs to Propose Amendments to SFDR Technical Standards

    The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.

    May 11, 2022 WebPage Regulatory News
    News

    EBA Examines Supervisory Practices, Issues Deposits Reporting Template

    The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),

    May 11, 2022 WebPage Regulatory News
    News

    SNB Updates NSFR Forms and FINMA Consults on Operational Risk Circular

    The Swiss National Bank (SNB) published Version 1.2 of the reporting forms (NSFR_G and NSFR_P) on the net stable funding ratio (NSFR) of banks, along with the associated documentation.

    May 10, 2022 WebPage Regulatory News
    News

    US Agency Publications Address Basel, Reporting, and CECL Developments

    The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances

    May 09, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8191