12/09 The FSA publishes feedback statement on remuneration

Financial services and regulation alert email

The FSA has published the summarised feedback it received on whether to extend its code on remuneration policies to other FSA-authorised firms.

On the 1 January 2010, the FSA's remuneration code comes into force for large banks, building societies and broker dealers. It will apply to any remuneration awards made by these firms for the 2009 performance year.

The FSA's supervisory focus will be on ensuring that the firms which are within the initial scope of the remuneration code are fully compliant from 1 January 2010, rather than looking at extending the rules to other sectors.

The effectiveness of the remuneration code will be reviewed by the FSA during 2010. The FSA has stated that they will take into account:

• the wider European work that touches on remuneration: there are a number of directives containing remuneration provisions currently at different stages of the European negotiation process; 
• the elements of the Walker Review that focused on remuneration; and 
• the progress of the Financial Services Bill which may give new powers to the FSA in respect of remuneration.

The FSA is currently reviewing the remuneration policy statements that all firms covered by the remuneration code submitted in November 2009 and follow-up meetings have been arranged or held.