FG23/4: Dual-regulation firms Remuneration Code (SYSC 19D): Frequently asked questions on remuneration [pdf]

The Financial Conduct Authority, FCA, has published revised frequently asked questions (FAQs) as to the remuneration policies of dually regulated CRR firms including investment firms, banks, and building societies. These FAQs are intended to assist firms in their understanding of the Guidelines on sound remuneration policies under Articles 74(3) and 75(2) of Directive 2013/36/EU and disclosures under Article 450 of Regulation (EU) No 575/2013 of the European Banking Authority (EBA) and the provisions contained in the FCA’s own rules and principles on remuneration as outlined in section 19D of the Senior Management Arrangements, Systems and Controls Sourcebook.
The new version includes updates to nearly all FAQs to reflect the latest joint Policy Statement (FCA PS23/17 – PRA PS16/23) of the FCA and the Prudential Regulation Authority (PRA) on reduced remuneration requirements for smaller firms (EventID 24252). It also includes minor technical changes throughout to improve clarity and usefulness and it updates references to existing FCA rules following the issuance of the beforementioned Policy Statement.
The following FAQs have been revised; for ease of reading, we only list the affected questions; for the answers, please refer to the enclosed document:
– Q1 Who needs to be identified as material risk takers?
– Q2 What is the process for identifying (and excluding) material risk takers?
– Q3 Who can be excluded as a material risk taker?
– Q4 / Q5 / Q6 Does a firm that is part of a group that has a Remuneration Committee at the UK consolidation group level also need to establish a local Remuneration Committee?
– Q8 Do the upfront and deferred components of variable remuneration need to have the same split of cash and instruments?