Related provisions for SYSC 5.2.43
1 - 15 of 15 items.
(1) A firm must apply the requirements of this section at group, parent undertaking and subsidiary undertaking levels, including those subsidiaries established in a country or territory which is outside the United Kingdom3.(2) Paragraph (1) does not limit SYSC 12.1.13R(2)(dA) (which relates to the application of the dual-regulated firms Remuneration Code within UK consolidation groups4). 32
(1) This section applies in relation to dual-regulated firms Remuneration Code staff, except as set out in (3).(2) When establishing and applying the total remuneration policies for dual-regulated firms Remuneration Code staff, a firm must comply with this section in a way2 that is appropriate to its size, internal organisation and the nature, the scope and the complexity of its activities (the dual-regulated firms remuneration principles proportionality rule).(3) Paragraphs (1)
(1) Dual-regulated firms Remuneration Code staff comprises:(a) an employee of a dual-regulated firm whose professional activities have a material impact on the firm’s risk profile, including any employee who is deemed to have a material impact on the firm’s risk profile in accordance with the Material Risk Takers Regulation 20202; or(b) subject to (2) and (3), an employee of an overseas firm in SYSC 19D.1.1R(1)(d) (i.e., an overseas firm that would have been a UK bank1, building
Where an overseas firm in SYSC 19D1.1.R(1)(d) (i.e., an overseas firm that would have been a dual-regulated firm if it had been a UK domestic firm) wishes to deem an employee who earns more than £658,0003 not to be dual-regulated firms Remuneration Code staff, the overseas firm may apply for a waiver of the requirement in SYSC 19D.3.4R in respect of that employee.
A firm must:(1) maintain a record of its dual-regulated firms Remuneration Code staff under the general record-keeping requirements (SYSC 9); and(2) take reasonable steps to ensure that its dual-regulated firms Remuneration Code staff understand the implications of their status as such, including the potential for remuneration which does not comply with certain requirements of the dual-regulated firms Remuneration Code to be rendered void and recoverable by the firm.
(1) A firm should be able to demonstrate that its decisions are consistent with an assessment of its financial condition and future prospects. In particular, practices by which remuneration is paid for potential future revenues whose timing and likelihood remain uncertain should be evaluated carefully and the governing body or remuneration committee (or both) should work closely with the firm's risk function in evaluating the incentives created by its remuneration system. (2)
A firm must ensure that the remuneration policy makes a clear distinction between criteria for setting:(1) basic fixed remuneration that primarily reflects an employee's professional experience and organisational responsibility, as set out in the employee's job description and terms of employment; and(2) variable remuneration that reflects performance in excess of that required to fulfil the employee's job description and terms of employment and that is subject to performance
(1) A firm must ensure that guaranteed variable remuneration is not part of prospective remuneration plans.(2) A firm must not award, pay or provide guaranteed variable remuneration unless:(a) it is exceptional;(b) it occurs in the context of hiring new dual-regulated firms Remuneration Code staff;(c) the firm has a sound and strong capital base; and(d) it is limited to the first year of service.[Note: article 94(1)(d) and (e) of the CRD and Standard 11 of the FSB Compensation
(1) Guaranteed variable remuneration should be subject to the same requirements applicable to variable remuneration awarded by the firm including deferral, malus and clawback.(2) The FCA expects that guaranteed variable awards and retention awards should not be common practice for dual-regulated firms Remuneration Code staff and should be limited to rare, infrequent occurrences. The FCA expects a firm to provide prior notification to the FCA of any proposed retention1 awards.
A firm must set an appropriate ratio between the fixed and variable components of total remuneration and ensure that:(1) fixed and variable components of total remuneration are appropriately balanced; (2) the level of the fixed component represents a sufficiently high proportion of the total remuneration to allow the operation of a fully flexible policy on variable remuneration components, including the possibility to pay no variable remuneration component; and(3) subject to SYSC
A firm may set a higher maximum level of the ratio between the fixed and variable components of total remuneration provided:(1) the overall level of the variable component does not exceed 200% of the fixed component of the total remuneration for each dual-regulated firms Remuneration Code staff; and(2) is approved by the shareholders or owners or members of the firm in accordance with SYSC 19D.3.50R.[Note: article 94(1)(g)(ii) of CRD]
(1) In relation to higher paid material risk takers a2 firm must not award, pay or provide a variable remuneration component unless a substantial portion of it, which is at least 40%, is deferred over a period which is not less than:(a) for dual-regulated firms Remuneration Code staff who perform a FCA-designated senior management function, five years,2 and vesting no faster than on a pro-rata basis;2(b) for dual-regulated firms Remuneration Code staff who perform a PRA-designated
(1) Deferred remuneration paid in:(a) shares or share-linked instruments should be made under a scheme which meets appropriate criteria, including risk adjustment of the performance measure used to determine the initial allocation of shares;(b) cash should also be subject to performance criteria.(2) The FCA would generally expect a firm to have a firm-wide policy (and group-wide policy, where appropriate) on deferral. The proportion deferred should generally rise with the ratio
A firm must ensure that:(1) any variable remuneration, including a deferred portion, is paid or vests only if it is sustainable according to the financial situation of the firm as a whole, and justified on the basis of the performance of the firm, the business unit and the individual concerned;(2) any variable remuneration is subject to clawback, such that it is only awarded if an amount corresponding to it can be recovered from the individual by the firm if the recovery is justified
(1) Subject to (2) to (7), the rules in SYSC 19D Annex 1.1R to 1.6R apply in relation to the prohibitions on dual-regulated firms Remuneration Code staff being remunerated in the ways specified in:(a) SYSC 19D.3.44R (guaranteed variable remuneration);(b) SYSC 19D.3.59R (1deferred variable remuneration);(c) SYSC 19D.3.61R(2) (performance adjustment – clawback); and(d) SYSC 19D Annex 1.10R (replacing payments recovered or property transferred).(2) Paragraph (1) applies only to those
(1) Sections 137H and 137I of the Act enable the FCA to make rules that render void any provision of an agreement that contravenes specified prohibitions in the dual-regulated firms Remuneration Code, and that provide for the recovery of any payment made, or other property transferred, in pursuance of such a provision.(2) SYSC 19D.3.66R and SYSC 19D.3.67R (together with SYSC 19D Annex 1) are:(a) rules referred to in (1) that render void provisions of an agreement that contravene
1A management company must establish and apply remuneration policies and practices for UCITS Remuneration Code staff that: (1) are consistent with and promote sound and effective risk management;(2) do not encourage risk taking which is inconsistent with the risk profiles or the instrument constituting the fund or the prospectus, as applicable, of the UCITS it manages; (3) do not impair the management company’s compliance with its duty to act in the best interests of the UCITS
(1) UCITS Remuneration Code staff comprise those categories of staff whose professional activities have a material impact on the risk profiles of: (a) the management company; or(b) the UCITS that the management company manages.(2) UCITS Remuneration Code staff must comprise: (a) senior management;(b) risk takers;(c) staff engaged in control functions; and(d) any employees receiving total remuneration that takes them into the same remuneration bracket as senior management and risk
(1) When establishing and applying the remuneration policies for UCITS Remuneration Code staff, a management company must comply with the UCITS remuneration principles in a way and to the extent that is appropriate to: (a) its size;(b) internal organisation; and(c) the nature, scope and complexity of its activities.(2) Paragraph (1) does not apply to the requirement for significant management companies to have a remuneration committee (SYSC 19E.2.9R).(3) The UCITS remuneration
(1) Subject to the legal structure of the UCITS and the instrument constituting the fund, a management company must ensure that a substantial portion, and in any event at least 50%, of any variable remuneration component consists of: (a) units or shares of the UCITS concerned; or (b) equivalent ownership interests in the UCITS concerned; or (c) share-linked instruments relating to the UCITS concerned; or (d) equivalent non-cash instruments relating to the UCITS concerned with
(1) £500,000 should be considered a particularly high amount for the purpose of SYSC 19E.2.20R(4).(2) While any variable remuneration component of £500,000 or more paid to UCITS Remuneration code staff should be subject to 60% deferral, management companies should also consider whether lesser amounts should be considered to be ‘particularly high’. (3) Management companies should take into account, for example, whether there are significant differences within UCITS Remuneration
(1) The dual-regulated firms Remuneration Code applies to:(a) a building society;(b) a UK bank2;(c) a UK designated investment firm;(d) an overseas firm that would be a firm in (a), (b) or (c) if it had been a UK domestic firm, had carried on all of its business in the United Kingdom and had obtained whatever authorisations for doing so as are required under the Act.3(2) For a firm which falls under (1)(a), (1)(b) or (1)(c), the dual-regulated firms Remuneration Code applies2
Under Part 2 of SYSC 1 Annex 1 in relation to SYSC 4.1.1R (General requirements), and subject2 to the provisions on group risk systems and controls requirements in SYSC 12 (Group risk systems and controls requirements), the dual-regulated firms Remuneration Code:(1) applies in relation to regulated activities, activities that constitute dealing in investments as principal (disregarding the exclusion in article 15 of the Regulated Activities Order (Absence of holding out etc)),
(1) Where a firm is unable to comply with the dual-regulated firms Remuneration Code because to do so would breach a provision of a prior contract (including a provision in a contract with a dual-regulated firms Remuneration Code staff member), it must take reasonable steps to amend or to terminate the provision in question in a way which enables it to comply with the dual-regulated firms Remuneration Code at the earliest opportunity.(2) Until the provision in (1) ceases to prevent
(1) The aim of the dual-regulated firms Remuneration Code is to ensure that firms have risk-focused remuneration policies, which are consistent with and promote effective risk management and do not expose them to excessive risk. It expands upon the general organisational requirements in SYSC 4.(2) The dual-regulated firms Remuneration Code implements the main provisions of the CRD which relate to remuneration. In applying the rules in the dual-regulated firms Remuneration Code,
(1) In addition to the notification requirements in the dual-regulated firms Remuneration Code2, general circumstances in which the FCA expects to be notified by firms of matters relating to their compliance with requirements under the regulatory system are set out in SUP 15.3 (General notification requirements).(2) For remuneration matters in particular, those circumstances should take into account unregulated activities, as well as regulated activities and the activities of
The FCA's policy on individual guidance is set out in SUP 9. Firms should particularly note the policy on what the FCA considers to be a reasonable request for guidance (see SUP 9.2.5G). For example, where a firm is seeking guidance on a proposed remuneration structure, the FCA will expect the firm to provide a detailed analysis of how the structure complies with the dual-regulated firms Remuneration Code, including the general requirement for remuneration policies, procedures
(1) The dual-regulated firms Remuneration Code covers all aspects of remuneration that could have a bearing on effective risk management, including salaries, bonuses, long-term incentive plans, options, hiring bonuses, severance packages and pension arrangements.(2) As with other aspects of a firm's systems and controls, in accordance with SYSC 4.1.2R (general organisational requirements) remuneration policies, procedures and practices must be comprehensive and proportionate to
In setting the method of determining the remuneration of employees involved in the risk management function:(1) firms that SYSC 19D applies to will also need to comply with the dual-regulated firms Remuneration Code; and(2) firms that the remuneration part of the PRA Rulebook applies to will also need to comply with it.16513138
If this rule applies under SYSC 12.1.14 R to a firm, the firm must:(1) comply with SYSC 12.1.8R (2) in relation to any UK consolidation group18of which it is a member, as well as in relation to its group; and17(2) ensure that the risk management processes and internal control mechanisms at the level of any consolidation group18of which it is a member comply with the obligations set out in the following provisions on a consolidated (or sub-consolidated) basis:17(a) SYSC 4.1.1
(1) An annual long report on an authorised fund, other than a scheme which is an umbrella, must contain:(a) the accounts for the annual accounting period which must be prepared in accordance with the requirements of the IMA SORP;3(b) the report of the authorised fund manager in accordance with COLL 4.5.9 R (Authorised fund manager's report);(c) comparative information12 in accordance with COLL 4.5.10 R (Comparative information12);1212(d) the report of the depositary in accordance
(1) 13The FCA recognises that the annual long report, including the remuneration related disclosures in COLL 4.5.7R(7), may be required to be made available to unitholders before the completion of the authorised fund manager’s first annual performance period in which it has to comply with the UCITS Remuneration Code.(2) Under (1), the FCA expects the authorised fund manager to make best efforts to comply with COLL 4.5.7R(7) to the extent possible.(3) The authorised fund manager,
For a common platform firm, the 3 arrangements, processes and mechanisms referred to in SYSC 4.1.1 R must be comprehensive and proportionate to the nature, scale and complexity of the risks inherent in the business model and of13 the common platform firm's activities and must take into account the specific technical criteria described in article 21(3) of the MiFID Org Regulation21, SYSC 5.1.7 R, SYSC 7 and whichever of the following is28 applicable:3817131312817(1) [deleted]28;(2)
624In setting the method of determining the remuneration of relevant persons involved in the compliance function:1111(1) [deleted]231114(2) 11[deleted]2371611(3) firms that SYSC 19D applies to will also need to comply with the dual-regulated firms Remuneration Code; 23(4) firms that the remuneration part of the PRA Rulebook16 applies to will also need to comply with it; and23(5) 23firms that SYSC 19G applies to will also need to comply with the MIFIDPRU Remuneration Code.7
The following is a non-exhaustive list of examples of conduct that would be in breach of rule SC2.(1) Failing to take reasonable steps to implement (either personally or through a compliance department or other departments) adequate and appropriate systems of control to comply with the relevant requirements and standards of the regulatory system for the activities of the firm.(2) Failing to take reasonable steps to monitor (either personally or through a compliance department
(1) A Chief Risk Officer should:(a) be accountable to the firm'sgoverning body for oversight of firm-wide risk management;(b) be fully independent of a firm's individual business units;(c) have sufficient authority, stature and resources for the effective execution of his responsibilities; (d) have unfettered access to any parts of the firm's business capable of having an impact on the firm's risk profile; (e) ensure that the data used by the firm to assess its risks are fit for
(1) 2The UCITS Remuneration Code (SYSC 19E) also applies to a BIPRU firm that is a UK UCITS management company (that is, a UK UCITS management company that is a UCITS investment firm subject to BIPRU).(2) A BIPRU firm that is a UK UCITS management company will meet its obligations under SYSC 19C and SYSC 19E by complying with SYSC 19E. (3) Under (1) and (2), the FCA will not require the UK UCITS management company to demonstrate compliance with SYSC 19C.
[deleted] [Editor’s note: The text of this provision has been moved to SYSC 24.2.6R]6