In our August Briefing, "FSA Consultations relating to the Remuneration Code", we alerted you to two consultations published by the FSA. One addressed the replacement of the existing guidance on proportionality, which closed in September and on which we reported last month in our Ealert "Update on FSA Consultations relating to the Remuneration Code". The other dealt with proposals on new remuneration data reporting requirements.
Following the Consultation dealing with remuneration data reporting requirements, the FSA Remuneration Code has been amended to implement the new policies on the collection of data relating to remuneration practices. As previously outlined in our August Briefing the Consultation described the reports firms in scope may be required to submit as follows:
- A Remuneration Benchmarking Information Report which must be prepared by all banks, building societies and investments firms with total assets of at least £50 billion. The report will contain information on the group's remuneration structure; and
- A High Earners Report which must be produced by all banks, building societies and investments firms with the exception of limited licence and limited activity firms. This will contain data on all employees (excluding employees of subsidiaries and branches established outside the EEA) with total annual remuneration of €1m or more.
Overall, there have been few amendments to the proposed reporting requirements as described in the Consultation. The two key changes to note are:
- Remuneration Benchmarking Information Report: BIPRU limited licence and BIPRU limited activity firms are now excluded from having to prepare this Report. However, if a BIPRU limited licence or BIPRU limited activity firm is within the same consolidated group as a firm that is required to submit a Remuneration Benchmarking Information Report, then information about that BIPRU limited licence or BIPRU limited activity firm will need to be included in the Report of the entity that is required to submit the Report.
- The first Reports must be submitted by 31 December 2012. Firms in scope are required to report separately for each of the previous two complete financial years that ended before 1 November 2012. In respect of future Reports, the Consultation had proposed that they be submitted two months after a firm's accounting reference date. However, this has been extended to four months to give firms enough time to consolidate the financial data from all group entities.
Affected firms should ensure they are in a position to submit the first set of data by 31 December 2012. Templates are available on the FSA website for the format and content of the Reports.