Further to the final report of the Parliamentary Commission on Banking Standards PCBS, Changing Banking For Good (published in June 2013), CP15/14 sets out the new remuneration rules proposed by the PRA and FCA to strengthen the alignment between risk and reward.
Summary of the proposals covered by the CP
This joint PRA and Financial Conduct Authority (FCA) consultation paper seeks views on proposed changes to the regulators’ rules on remuneration, including:
- bailed-out banks;
- risk adjustment (PRA only);and
- the remuneration of non-executive directors.
The PRA is introducing a new Remuneration Part of the Rulebook which will apply, as the Remuneration Code currently does, to all material risk takers in firms that are within scope of the rules.
The changes will affect all banks and building societies, as well as the nine PRA-designated investment firms, which are dual regulated by the PRA and FCA.
The proposals in CP15/14 complement those in CP14/14 Strengthening accountability in banking: a new regulatory framework for individuals.
CP15/14 is also available on the FCA’s website as CP14/14
The consultation closed on Friday 31 October 2014.
Please address any PRA related comments or enquiries to CP15_14@bankofengland.co.uk
Strengthening the alignment of risk and reward: new remuneration rules - CP15/14