We're consulting on proposed changes to the remuneration rules for dual-regulated firms.
Why we are consulting
We want to ensure our remuneration rules for smaller, less complex dual-regulated firms are proportionate to the risks they pose to consumers and markets in the UK.
We propose changes to our proportionality thresholds. We also propose to exempt firms meeting the updated proportionality thresholds from the requirements relating to malus and clawback.
We are also proposing some minor changes to the current rules to address some differences between the FCA Handbook and the PRA Rulebook.
Who this is for
This consultation applies to:
- credit institutions (banks and building societies)
- designated investment firms (those designated for prudential regulation by the PRA)
- firms from overseas that carry on activities from an establishment in the UK that mean they would be a credit institution or designated investment firm if they were a UK domestic firm
- firms in the same group as at least 1 of the types of firm in the 3 categories above
The following may also be interested in this consultation:
- other investment firms
- trade bodies and firms’ professional advisers
- consumers and consumer organisations to understand how firms remunerate their staff and align risk with reward
Please respond to this consultation by 9 June 2023.
The changes we want to make to the rules are broadly consistent with the changes proposed by the Prudential Regulation Authority (PRA) in their Consultation Paper, Remuneration: Enhancing proportionality for small firms (CP5/23). This consultation should be read alongside the PRA’s consultation.