With all eyes focussed on today’s Pre-Budget Report, it is worth noting that the FSA has published a feedback statement (FS09/05) on whether to extend its code on remuneration policies beyond large banks, building societies and broker dealers to other FSA-authorised firms. At this stage, the FSA has decided not to extend the rules but will ensure that those firms within the scope of the code are fully compliant. The code comes into force for large banks, building societies and broker dealers on 1 January 2010 and applies to their remuneration awards for the 2009 performance year. The Feedback statement is accompanied by a newsletter.
The FSA will review the code in mid-2010 (together with EU legislation in this area, the Walker review and the Financial Services Bill). If the FSA decides to consult on extending the code beyond the largest financial institutions, it will review the remuneration principles to ensure it is applied proportionately to all firms.
The FSA continues to expect all firms to continue to focus on remuneration risk management and will continue to address this in the course of its normal supervisory activity. this email