FSA sent a letter to CEOs of banks and broker dealers whose operations are likely to fall within the scope of its new remuneration code of practice. It says FSA will put proposals on reforming remuneration practices to the FSA board for adoption. FSA envisages adopting as a handbook rule the general requirement that a firm must establish, implement and maintain remuneration policies, procedures and practices that are consistent with and promote effective risk management. Supporting principles that take account of responses to the March 2009 consultation will be included. This will take effect from 1 January 2010. The letter draws the CEOs' attention to guaranteed bonuses which run for over one year which may be inconsistent with effective risk management. The letter states that it is not proposing to extend grandfathering arrangements to obligations entered after the publication of its paper on 18 March 2009. The letter notifies CEOs that FSA wishes to receive a remuneration policy statement from them by end of October 2009. The statement must provide information necessary for FSA to verify that remuneration policies and practices will be compliant with the proposed rule and new code from 1 January 2010. FSA will write shortly to each CEO and Chairman of their Group's Remuneration Committee setting out information required for the statement.