The following Financial Services guidance note provides comprehensive and up to date legal information covering:
This Practice Note explains the high-level requirements of the Remuneration Code (the Code) set out in FCA Handbook SYSC 19A. The Code sets out the standards that banks, building societies and some investment firms have to meet when setting pay and bonus awards for their staff. This Practice Note also looks at the relationship between the Code and the other Remuneration Codes under Chapter 19B, 19C,19D and 19E of FCA Handbook SYSC and the CRR Remuneration Code contained in the Remuneration Part of the PRA Rulebook. The aim of the Code is to ensure that firms have risk-focused remuneration policies, which are consistent with and promote effective risk management and do not expose them to excessive risk. It expands upon the general organisational requirements in FCA Handbook SYSC 4. Firms may be subject to more than one code depending on the nature of their business and by whom they are regulated.
The Financial Services Authority (FSA) originally published the Code in February 2009 in response to the global economic financial crisis—the aim of the original Code was to ensure that firms had remuneration policies that:
were consistent with sound risk management
did not encourage inappropriate risk taking, and
did not expose firms to excessive risk
The financial crisis exposed the fact that remuneration frequently gave incentives
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