PRA has identified error in the “higher paid material risk taker” definition in Rule 1.3 in the Remuneration Part of the PRA Rulebook, which was introduced as part of the PRA implementation of the fifth Capital Requirements Directive (CRD5). PRA intends to consult on amending the rule at the earliest opportunity. FCA is aware of the PRA position on the definition of the term “higher paid material risk taker” and, to maintain alignment, FCA also intends to consult on amending this rule at the next suitable opportunity.
The incorrect definition of the "higher paid material risk taker" sets the requirement that "an individual would be treated as a "higher paid material risk taker" when:
(a) their annual variable remuneration exceeds 33% of their total remuneration; and
(b) their total remuneration exceeds GBP 500,000."
However, according to the correct definition an individual does not need to satisfy both the above-mentioned conditions, rather an individual would be treated as a "higher paid material Risk taker" when either one of these conditions is met. Thus, the correct text should convey that an individual should be treated as a “higher paid material risk taker” where either their annual variable remuneration exceeds 33% of their total remuneration, or their total remuneration exceeds GBP 500,000. This is in line with the PRA position outlined in the consultation paper (CP12/20) and policy statement (PS26/20) on the implementation of CRD5.
Related Link: Statement
Keywords: Europe, UK, Banking, Remuneration, PRA Rulebook, CRD5, Basel, Operational Risk, FCA, PRA
The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.
The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).
The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.
The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."
The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.