City reacts to new FSA remuneration code

first_img alison.lock Friday 17 December 2010 11:48 am by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastSerendipity TimesInside Coco Chanel’s Eerily Abandoned Mansion Frozen In TimeSerendipity TimesBrake For ItThe Most Worthless Cars Ever MadeBrake For ItBetterBe20 Stunning Female AthletesBetterBemoneycougar.comThis Proves The Osmonds Weren’t So Innocentmoneycougar.comDefinitionDesi Arnaz Kept This Hidden Throughout The Filming of ‘I Love Lucy’DefinitionAlphaCute30 Rules That All “Hells Angels” Have To FollowAlphaCuteTaonga: The Island FarmThe Most Relaxing Farm Game of 2021. No InstallTaonga: The Island Farm Show Comments ▼ Tags: NULL Share whatsapp FINANCIAL services firms are now subject to the world’s toughest bank bonus curbs after City regulator the Financial Services Authority published its new remuneration code.But the new rules, which will affect 2,700 financial firms in the UK from January, will not be binding for many smaller institutions and more specialist financiers.The new code bans guaranteed bonuses of more than one year, and specifies that up to 60 per cent of variable pay must be deferred when rewarding the most serious risk takers. Senior risk takers face a cash cap on bonuses of 20 per cent and at least half of all non-deferred bonuses must be paid in shares. It also stipulates that an appropriate ratio of variable to fixed pay should be set by firms, but gives no specific guidance on this. But of four tiers of firms outlined in the code, those in tiers three and four – small banks and building societies, and firms that do not put their balance sheets at risk – may be exempt from many of the stricter rules.“The most significant of these are the requirement to have a UK-based remuneration committee, deferral, and the proportion of variable remuneration paid in shares. For other rules, the FSA will apply a discretionary approach that is likely to result in less-onerous requirements,” the FSA said.The move means that many investment managers and businesses operating an agency model will escape the specific requirements to defer remuneration and pay bonuses in shares, said PriceWaterhouseCoopers.But larger banks will be forced to rein in their remuneration substantially from January, just as the 2010 bonus round gets under way.The British Bankers’ Association hit back at the news, saying the financial services sector contributes significant tax revenues and UK banks should not be put at a competitive disadvantage to rivals outside Europe.“Until there is a genuinely global consensus on pay in financial services, the challenge for policymakers will be to ensure the UK continues to attract this valuable business,” it said in a statement.Jon Terry, remuneration partner at PriceWaterhouseCoopers said: “Retaining talent in a sector where financial reward is often the main motivator and workers are internationally mobile will be more challenging than ever. “It remains to be seen how London’s lure as Europe’s dominant financial centre will be affected as the reality of the pay changes begins to bite.”The code aims to align remuneration principles across the EU and reflects the changes set out by its Committee of European Banking Supervisors last week. whatsapp City reacts to new FSA remuneration code last_img

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