Remuneration Code & Proportionality Tiers
The FSA has issued yet further guidance on the Remuneration Code to assist firms – see Regulatory Roundup 35 on previous recent guidance given – that will only be relevant to UK Banks and Building Societies.
As will be known, the Remuneration Code is to be applied in a proportional manner. For this purpose the FSA has devised four proportionality tiers to reflect the impact different businesses can have. Most firms will be in the lowest impact tier – proportionality tier four – which captures BIPRU limited licence and limited activity firms.
Following a rethink it is proposed that the barrier between tiers two and three be increased from £50m to £100m for Banks and Building Societies e.g. a UK Bank will now remain in tier three unless, and until, its capital resources exceed £100m which will then elevate it into tier two. The FSA invites comments by 28 November.