New UK financial services disclosure consultation paper on pay disclosure

 

 

 

 

Following the announcement of the CRD3 remuneration disclosure rules, the FSA has taken over responsibility for these matters from the UK Treasury (which had published draft regulations on disclosure of remuneration by financial firms in March 2010), given that the Pillar 3 disclosures come under the remit of the FSA.

 

 

 

The FSA’s key proposals on remuneration disclosure include:

 

Disclosure of:

 

   

 

   

 

   

 

   

 

   

 

   

 

Firms will need to disclose details of their remuneration as soon as practicable, and at least annually.  CEBS guidance indicates that disclosure may take the form of a stand-alone report or may be included in the firm’s annual report.

 

The FSA intends that this will be broadly in line with its general approach to proportionality with regard to the Remuneration Code.  The FSA also invites feedback on extending the disclosure requirements to non-EEA firms operating as branches in the UK.

 

 

  The FSA has asked whether the same arguments apply in relation to remuneration, given that “… it is meaningful to talk of remuneration arrangements in relation to a branch, and requiring the disclosure of information in respect of such arrangements would require a meaningful part of the picture to be disclosed.  This in turn could make a real contribution to market discipline.  While extending the requirement to branches will involve some cost, it will also support our regulatory efforts to promote effective risk management.  In addition, it would also provide a level playing field between firms operating in the UK through branches and [domestic] firms.”

 

 

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