The Financial Services Authority (FSA) is consulting on whether to incorporate its Code of practice on remuneration into the FSA Handbook. The Code has a general requirement that “a firm must establish, implement and maintain remuneration policies, procedures and practices that are consistent with and promote effective risk management.”
The consultation paper sets out proposals to ban major financial companies from providing financial incentives and benefits which encourage risky behaviour in employees. The consulting period on implementation of the Code for larger banks and broker dealers will run until 18 May 2009. The consultation period on the possibility of extending the Code to other companies regulated by the FSA will run until 18 June 2009.
View the consultation paper.