The FSA has recently announced plans to update its Remuneration Code to reflect new EU restrictions. This will include widening the application of the Code (which currently applies to the largest banks, building societies and broker dealers) to cover over 2,500 organisations, including all banks and building societies, asset managers, hedge fund managers, UCITS investment firms, as well as some firms that engage in corporate finance, venture capital, the provision of financial advice and stockbrokers. The FSA has stated that it does not intend the final rules to be "super-equivalent" to the EU rules, unless required to do so by UK legislation. The FSA is consulting on these changes, including the question of to which staff the Code will apply, until 8 Octobter 2010. It intends to issue a policy statement in November 2010, with rules effective from 1 January 2011.
The timetable is tight and the FSA is urging all firms within its scope to start preparing for the changes as early as possible. We will keep you updated of developments.