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FCA to bring CRD IV remuneration rules into line with EU

Chris Hamblin, Editor, London, 19 October 2016

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The UK's Financial Conduct Authority is changing its rules to bring them into line with the European Banking Authority's guidelines regarding firms' remuneration policies and practices. It is also simplifying its general guidelines that apply to proportionality.

The EBA's guidelines, published in December 2015, govern remuneration policies that apply to firms subject to the European Union's Capital Requirements Directive or CRD IV. The idea behind them is to make firms remunerate their employees in a way that does not encourage them to take excessive prudential, operational, market-related, credit-related, conduct-related and reputational risks.

The FCA's consultative paper on the subject affects all firms that fall under the aegis of CRD IV (i.e. banks, building societies, investment firms and overseas firms) and their compliance with the regulator's remuneration code under SYSC 19A (a set of remuneration principles for firms that must obey the "Prudential Sourcebook for Investment Firms") or SYSC 19D.

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