PRA is consulting on a new rule on buy-outs of variable remuneration. It is concerned that where firms recruiting staff “buyout” deferred bonus awards, this can lead to malus and clawback not being applied when they should be. PRA plans to create a contract between the new employer and employee. The old employer would notify the new employer of the determination and that a certain amount should be applied to the employee’s deferred variable remuneration by way of malus and/or clawed back where the variable remuneration has already vested. The proposed rule would also provide scope for new employers to apply for a waiver where they have reason to believe an old employer’s decision to apply malus or clawback has been manifestly unfair or unreasonable. The proposed changes to the Remuneration Part of the Rulebook will apply to all material risk takers at PRA-regulated banks, building societies and designated investment firms. Consultation closes on 13 April. (Source: PRA Consults on Buy-Out of Variable Remuneration)