CP20/14: Updating the Dual-regulated firms Remuneration Code to reflect CRD V

Open consultation: CP20/14
Consultation closes

In this Consultation Paper, we set out proposals to amend our Dual-regulated firms Remuneration Code and relevant non-Handbook guidance to reflect CRD V.

Read CP20/14 (PDF)

Why we are consulting

The PRA has published a consultation paper in which it sets out its proposals for implementing CRD V. We have worked closely with the PRA on the proposals related to remuneration.

Our proposals aim to ensure that our remuneration rules and guidance for dual-regulated firms remain largely consistent with the PRA’s approach, and will support our own conduct-based objectives.

In our consultation paper, we propose changes to:

  • the Dual-regulated firms Remuneration Code (SYSC 19D), including to the rules on material risk takers, proportionality, deferral and clawback
  • our non-Handbook guidance ‘General Guidance on Proportionality – the Dual-regulated firms Remuneration Code’
  • our non-Handbook guidance ‘Remuneration Codes (SYSC 19A and SYSC 19D) – Frequently Asked Questions on remuneration’

We also make proposals that aim to ensure our amended remuneration requirements can continue to work effectively at the end of the transition period following the UK’s exit from the EU.

We are not proposing to reflect the CRD V changes in the IFPRU or BIPRU Remuneration Codes. This is in line with recent statements from HM Treasury that it does not intend CRD V to apply to FCA solo-regulated investment firms.

Who this applies to

This consultation affects:

  • credit institutions (banks and building societies)
  • PRA-designated investment firms 
  • IFPRU investment firms 

Background to remuneration

Our remuneration rules seek to ensure that firms establish, implement and maintain remuneration policies and practices that are consistent with, and promote, effective risk management and healthy cultures.

Culture in financial services is a key area of focus for the FCA across all sectors. We want to ensure that a firm’s approach to rewarding and incentivising its staff drives healthy cultures and does not drive behaviours that are likely to lead to harm to consumers or markets.

Respond to this consultation

Online response form

We are asking for comments by 30 September 2020.

​​​​​​You can:

Next steps

We want to know what you think of our proposals. We will consider all feedback received and publish final rules and guidance before 28 December 2020. We will continue to work closely with the PRA.