FSA Remuneration Code - Proposed Guidance released by FSA

The UK’s FSA has released proposed guidance and templates relating to the Remuneration Code which came into force on 1 January 2011 in respect of 2010 performance.

The guidance and templates take various forms as set out below. For our initial view on these items please click on the links below.

What does the guidance cover?

  • Guidance on how to apply to vary a firm’s proportionality tier
  • Templates for self-assessment of compliance (called a Remuneration Policy Statement), (one for tier 2 firms, and one for tier 3 and 4 firms), template for Code Staff lists (one for tier 2 firms, and one for tier 3 and 4 firms)
  • Guidance on retention periods and guaranteed variable remuneration
  • Guidance on a set of frequently asked questions on the Remuneration Code.

Much of the guidance confirms what the FSA has said at conferences and town hall meetings over the past three months. This brings welcome clarity although it should be noted that the guidance is “proposed” rather than final. Since the documents are general guidance they are going through the FSA’s guidance consultation process, but the FSA has said that  firms can begin using the information now if they wish. The consultation is open until 18 May 2011 

What does the guidance not include?

The FSA has not addressed questions that have been raised on the conflict between the Remuneration Code and the draft disguised remuneration legislation. We have queried whether they will be issuing guidance on it and they have informed us that they do not currently intend to do so.

The guidance does not state when the annual data return must be submitted, or provide the format.

If you have any questions, or would like to discuss this further, please contact Gillian Chapman, Janet Cooper, Alex Beidas or your usual contact at Linklaters