MFA provided responses to the FCA’s Consultation Paper questions alongside suggestions for further changes. In particular, the key themes of our response, and areas where we would encourage further attention, are as follows:
MFA:
- Encourages the FCA to consider whether a remuneration code is necessary, given there are other aspects of the broader FCA rulebook that address the underlying aims of the remuneration code (to promote good conduct and effective risk management that is aligned with the interests of a firm’s clients and investors). If a remuneration code is maintained however, MFA supports the consolidation of the current AIFM, UCITS and MIFIDPRU remuneration codes into a single code.
- Welcomes the FCA’s proposed move away from detailed, prescriptive requirements towards a more outcomes-focused regime. We support firms being given flexibility to determine how best to achieve these principles in a manner appropriate to their business.
- Supports avoiding unnecessary extraterritorial application of the new code. The code should apply to employees at group affiliates outside the UK firm only where there is a clear and material nexus to the firm’s UK regulated activities and the UK firm has sufficient influence over the relevant remuneration arrangements.
- Recommends that firms ready to comply should be permitted to apply the new code to in-flight performance periods on the date of publication of the final rules, to allow firms flexibility to start benefitting from the simplified regime sooner if they wish to do so.
