UCITS Remuneration Code
UCITS Remuneration Code

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • UCITS Remuneration Code
  • What are the remuneration codes?
  • What is UCITS?
  • What is the UCITS Remuneration Code?
  • Which staff are covered under the UCITS Remuneration Code?
  • Which staff are exempt under the UCITS Remuneration Code?
  • What are the UCITS Remuneration Code principles?
  • What are the proportionality and disclosure requirements under the UCITS Remuneration Code?
  • Potential issues and practical implications

What are the remuneration codes?

The FCA Handbook currently contains five remuneration codes (Codes), with change driven by European Directives that include the Third Capital Directive (CRD III), the Fourth Capital Directive (CRD IV), the Alternative Investment Funds Managers Directive (AIFMD) and the UCITS V Directive on Undertakings for Collective Investment in Transferable Securities.

In addition, rules on the remuneration and performance management of sales staff are setout in SYSC 19F. These rules implement Article 24(10) of the recast Markets in Financial Instruments Directive 2014/65/EU (MiFID II), which has effect from 3 January 2018. For information, see Practice Note: MiFID II requirements on remuneration incentives—SYSC 19F.

The FCA has also issued final guidance FG18/2 and policy statement PS18/7 on staff incentives, remuneration and performance management in consumer credit firms.

In September 2018, the FCA published Thematic Review TR18/2 Impact of credit broking remuneration models at the point of sale, which considers whether inter-firm commission affects how consumers are sold credit and whether commission arrangements are resulting in consumer harm. Overall, the FCA did not find evidence that inter-firm commissions are generally resulting in significant harm to consumers.

There have been three codes applicable under CRD III and CRD IV since July 2015:

  1. IFPRU Remuneration Code (SYSC 19A), which sets out the remuneration standards and policies for solo-regulated IFPRU investment firms, within scope of