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SYSC 19G.2 Remuneration policies and practices

General requirements

SYSC 19G.2.1R

1A MIFIDPRU investment firm must establish, implement and maintain remuneration policies and practices.

SYSC 19G.2.2G

1The remuneration policies and practices referred to in SYSC 19G.2.1R should cover all aspects of remuneration within the scope of the MIFIDPRU Remuneration Code, and all staff.

SYSC 19G.2.3G

1In line with the record-keeping requirements in SYSC 9, a firm should ensure that its remuneration policies and practices (including performance assessment processes and decisions) are clear and documented.

Proportionality

SYSC 19G.2.4R

1A firm’s remuneration policies and practices must be appropriate and proportionate to the nature, scale and complexity of the risks inherent in the business model and the activities of the firm.

SYSC 19G.2.5G

1The proportionality principle in SYSC 19G.2.4R means that the content and level of detail of a firm’s remuneration policy may depend on a number of factors. These may include the number of staff it employs, the different types of roles, the activities it carries out, and whether the firm is part of a group with a group-wide remuneration policy.

Gender neutral remuneration policies and practices

SYSC 19G.2.6R

1A firm must ensure that its remuneration policy is a gender neutral remuneration policy and the practices referred to in SYSC 19G.2.1R are gender neutral.

SYSC 19G.2.7G

1Firms are reminded that the Equality Act 2010 prohibits discrimination on the basis of an individual's protected characteristics both before and after employment is offered. The Act applies to pay and all other contractual terms, including variable remuneration. A firm must ensure that its remuneration policy complies with the Equality Act 2010.

Risk management, business strategy and avoiding conflicts of interest

SYSC 19G.2.8R

1A firm must ensure that its remuneration policies and practices are consistent with, and promote sound and effective, risk management.

SYSC 19G.2.9R

1A firm must ensure that its remuneration policies and practices are in line with the business strategy, objectives and long-term interests of the firm.

SYSC 19G.2.10G

1For the purposes of SYSC 19G.2.9R, the business strategy, objectives and long-term interests of the firm should include consideration of:

  1. (1)

    the firm’s risk appetite and strategy, including environmental, social and governance risk factors;

  2. (2)

    the firm’s culture and values; and

  3. (3)

    the long-term effects of the investment decisions taken.

SYSC 19G.2.11R

1A firm must ensure that its remuneration policy:

  1. (1)

    contains measures to avoid conflicts of interest;

  2. (2)

    encourages responsible business conduct; and

  3. (3)

    promotes risk awareness and prudent risk taking.

SYSC 19G.2.12R

1A MIFIDPRU investment firm must not pay variable remuneration to members of the management body who do not perform any executive function in the firm.