View more on these topics

FSA publishes consultation paper on remuneration

The Financial Services Authority has published a consultation paper which consults on whether to incorporate its Code of practice on remuneration into the handbook and its application to large banks and broker dealers.

The Code has a general requirement that ‘a firm must establish, implement and maintain remuneration policies, procedures and practices that are consistent with and promote effective risk management’, which would become a handbook rule.

The paper will also propose that the Code’s remaining 10 principles are put into the handbook to help guide firms on the evidence the FSA will focus on when assessing compliance.

The Code’s rules and evidential provisions would apply to certain FSA authorised large banks and broker dealers.

They are defined as FSA authorised banks and building societies which are either or both consolidated regulatory capital in the UK banking entities in excess of £1bn or part of an international financial group whose regulatory capital is in excess of £20bn or the equivalent amount in another currency.

It will also apply to FSA authorised investment firms (BIPRU ‘730k’ firms) which are have consolidated regulatory capital in the UK authorised entity in excess of £750m or its equivalent amount in a foreign currency.

Or are part of an international financial group whose total shareholder equity is in excess of £5 billion or its equivalent amount in a foreign currency.

These criteria will extend the Code to about 45 of the largest banks, building societies and broker dealers operating in the UK.

The paper notes that in order to be effective, policies on remuneration should be implemented globally and in a consistent manner, and in deciding whether to implement our plans we will take into account whether we think there is satisfactory alignment of implementation plans by authorities in the major financial centres.

The paper is also inviting discussion on the idea that the Code should be applied to all other FSA-authorised firms.

The consulting period on implementation of the Code for larger banks and broker dealers will run for two months, until 18 May. The period for discussion and feedback on the idea of extending the Code to other firms regulated by the FSA will run until 18 June.


Personal Touch offers 75% LTV through RBSIP

Personal Touch Financial Services has launched an exclusive two-year fixed rate at 75% loan to value at 3.79% through RBS Intermediary Partners for its network appointed rep members.

Printing money won’t solve all our problems

Quantitative easing is the latest economic catchphrase to get to grips with, and unless you have an in-depth knowledge of Japanese economics in the past decade it’s unlikely to be a term you are familiar with.

Japan Economic Insight

James Dowey, Chief Economist, and Paul Caruana-Galizia, Economist

The conventional wisdom is that following a roughly 50 per cent rise in the stock market in 2013 in Yen terms, the Japan trade is over and done*. So the story goes, those big gains were due to a one-off boost from quantitative easing (QE) and a depreciation of the Yen — policies that one should think of as a palliative to Japan’s economic weakness, but not a cure. Rather the cure, and by implication the necessary condition for a longer-term investment case, is deep structural reforms — a painstaking re-weaving of Japan’s economic and social fabric, no less. The story continues: this is a much tougher test than launching a blast of QE, and one that prime minister Shinzo Abe, although well intentioned and well supported by the public thus far, is likely to fail. Stick a fork in Japan, it’s done…continue reading


News and expert analysis straight to your inbox

Sign up