FSA is consulting on guidance in the form of two proposed “Dear CEO” letters to banks, building societies and investment firms subject to the Capital Adequacy Directive. One letter is for firms in “proportionality tier 1” for the purposes of the Remuneration Code, and attaches a template for self-assessment of compliance with the code and a “code staff” list. The letter explains how FSA will monitor compliance with the Code and gives guidance on identification of code staff, what FSA would expect to see in long-term incentive plans and how FSA expects firms to structure “alternative investments” for firms that do not wish to pay part of variable remuneration in shares. The other letter is for firms in tiers 2, 3 and 4, and contains guidance on similar points, but sets a less onerous approach. FSA has already consulted on, and has now finalised, guidance for these firms on the Remuneration Policy Statement template. FSA asks for comments by 2 September. (Source: Proposed "Dear CEO" Letters on Remuneration Code)