Apply to vary a firm’s proportionality level

If you are a firm or group within scope of SYSC 19A or SYSC 19C and think that you may fall into a lower proportionality level, you may apply for individual guidance from the FCA to vary your proportionality level.

From 1 January 2022, when the MIFIDPRU Remuneration Code comes into force, these pages remain relevant only for performance periods beginning prior to this date.

Your application will need to be supported by sound reasoning and be justified, with reference to the proportionality principle (SYSC 19A.3.3 R (2) or SYSC 19C.3.3 R (2)). Once we have received this information we will decide whether to give you guidance.

How to apply

When deciding whether to apply to vary your firm’s proportionality level, you should:

  • identify the firms within your group that the Code applies to directly and determine which proportionality level they fall into, based on the General Guidance on Proportionality: the Remuneration Code SYSC 19A or General Guidance on Proportionality: the Remuneration Code BIPRU firms (SYSC 19C)
  • if you believe that a solo firm, the group or an entity within the group should fall into a lower proportionality level, prepare the application for individual guidance using the most appropriate template on this page
  • provide a separate request for each legal entity for which individual guidance is requested
  • email completed application(s), supporting documents and all relevant contact details to your usual supervisory contact and [email protected] (you should copy in the supervisor where relevant)
  • be prepared to supply further information, if requested

Application templates

To be consistent and help you understand the type of information we may require when making our decision, we have three separate application templates:

  • Template A - Groups only
    Application to move an IFPRU limited licence or limited activity firm engaging in asset management activities, or a BIPRU firm, from the Group proportionality level in paragraph 2 to proportionality level 3
  • Template B - Groups only
    General application to move a firm from the group level into a lower level (excluding IFPRU limited license asset management firms, or BIPRU firms)
  • Template C - General level change application
    For stand-alone firms or firms that are the only firm directly caught by the Code in the group

We will not charge you for making these applications.

If your request does not fit one of the above scenarios, you should speak to your supervisor to discuss your application.

If you are applying for Individual Guidance to change your proportionality level, you should continue to apply the Remuneration Code as outlined in the General Guidance on Proportionality: the Remuneration Code SYSC 19A or General Guidance on Proportionality: the Remuneration Code BIPRU firms (SYSC 19C) until we notify you of our decision.

You should not assume that applications to change level will be approved.

What to expect

Once we receive a complete application, we will:

  • log and acknowledge it
  • discuss the application with FCA internal stakeholders and the PRA where relevant
  • prepare the application for review by the relevant senior manager or committee as appropriate
  • inform you of the decision and provide key reasons for it

We will attempt to process applications and provide a decision within 30 working days of receipt. However, if the request raises complex issues, we may not meet this deadline. To allow enough time to consider applications, you should submit applications well before the performance year end.

We will not make our decisions public. If we are thinking of declining an application, we will send you details of the reconsideration process.

Page updates

17/12/2021: Information added note about MIFIDPRU Remuneration Code post-1 January 2022