FSA Remuneration Code Guidance
Regulatory Roundup 33 published in August included details of further consultative guidance issued by the FSA in respect of Remuneration Code aspects.
The guidance was in the form of two ‘Dear CEO’ letters: one targeted at Tier 1 firms with the other one providing guidance for Tier 2, 3 & 4 firms.
The finalised guidance has now been issued. Highlights from the guidance include a reminder of: the need to complete a Remuneration Policy Statement; the need for firms to link the ICAAP with risks arising from their remuneration policy; and that firms not subject to ARROW may be subject to a desk-based thematic review or even an on-site visit (the first review is expected to take place in the first half of 2012).
The guidance also addresses long-term incentive plans and variable remuneration paid in alternative instruments – although this will not be of relevance to Tier 3 & 4 firms, which will form the majority of firms that are subject to the Remuneration Code.
For further details reference should be made to Regulatory Roundup 33.