The FCA is consulting on its proposed changes to the remuneration rules for dual-regulated firms. The consultation (CP23/11) aims to ensure that remuneration rules for smaller, less complex firms that fall under dual-regulation are commensurate with the risks they pose to consumers and UK markets.
The consultation proposes modifications to the proportionality thresholds. Additionally, the FCA proposes granting exemptions to firms that meet the updated proportionality thresholds from the requirements regarding malus and clawback.
The FCA is also proposing some minor adjustments to the current rules to address discrepancies between the FCA Handbook and the PRA Rulebook.
The consultation is relevant to:
- credit institutions (banks and building societies)
- designated investment firms (those designated for prudential regulation by the PRA)
- firms from overseas that carry on activities from an establishment in the UK that mean they would be a credit institution or designated investment firm if they were a UK domestic firm
- firms in the same group as at least 1 of the types of firm in the 3 categories above
- other investment firms
- trade bodies and firms’ professional advisers
- consumers and consumer organisations to understand how firms remunerate their staff and align risk with reward
The consultation closes 9 June 2023.