In this Policy Statement we publish our final rules and guidance to help firms understand the rules that apply to their remuneration policies and practices.
We have aligned our provisions with the European Banking Authority (EBA) guidelines on sound remuneration policies and published new non-Handbook guidance on frequently asked questions.
The EBA guidelines, published in December 2015, set out the requirements on remuneration policies that apply to firms subject to the Capital Requirements Directive (CRD IV). As a result, we have made some changes to our Handbook to remove inconsistencies between existing Handbook provisions and the EBA guidelines. We have also simplified the guidance on remuneration in our Handbook and our general guidance on proportionality.
In addition, we are also publishing new non-Handbook guidance designed to address some of the most frequently asked questions on how we implement provisions under the EBA guidelines, as well as more general provisions in our Handbook.
This Policy Statement affects all firms that fall within the scope of CRD IV, namely banks, building societies, investment firms and overseas firms, who are required to comply with our Remuneration Code under SYSC 19A, SYSC 19C or SYSC 19D.
Other firms outside of CRD IV may also find this Policy Statement useful to understand what we expect from firms’ remuneration policies and practices.
This Policy Statement will primarily be of interest to firms. However, consumers may be interested in understanding how firms remunerate their staff and align risk with reward.