Remuneration
Remuneration rules for banking
Our remuneration rules set out the standards that banks, building societies and designated investment firms have to meet when setting pay and bonus awards for their staff. It aims to ensure that firms' remuneration practices are consistent with effective risk management.
Remuneration - Supervisory Statement 2/17 sets out our expectations of firms in relation to proportionality, the application of malus and clawback, other elements of remuneration, and additional expectations of firms. This supervisory statement is intended to be read together with the rules contained in the Remuneration Part of the PRA Rulebook.
Applying to vary a proportionality level
A firm or group that believes it should fall into a lower level than the one indicated in Chapter 2 of Remuneration - Supervisory Statement 2/17 may apply to us for individual guidance to vary its proportionality level.
The application will need to be supported by sound reasons explaining why you think a variation in your firm’s proportionality level is justified, with reference to remuneration proportionality rule 5.1 in the PRA Rulebook. Once we have received this information we will determine whether to give your firm guidance to move into a lower level.
To apply to vary your firm’s proportionality level, you should:
- Identify the firms within your group that the remuneration rules apply to directly and determine which proportionality level they fall into, based on Chapter 2 of Remuneration - Supervisory Statement 2/17.
- Prepare an application for individual guidance using the relevant application template below if you believe that a solo firm, the group, or an entity within the group should fall into a lower level than the proportionality level determined by the criteria set out in Table B of Chapter 2 of Remuneration -Supervisory Statement 2/17.
- Provide a separate request for each legal entity for which you are requesting individual guidance.
- Email completed application(s), supporting documents and all relevant contact details to remuneration@bankofengland.co.uk. You should copy in your usual supervisory contact where relevant.
- Be prepared to supply further information, if requested.
Application templates
We have three separate application templates tailored to the three most common types of request. This helps facilitate a consistent decision-making process and to help firms understand the type of information we may require when deciding whether to issue individual guidance. If your request does not fit one of these scenarios, you should contact your usual supervisory contact.
We will not charge firms for making these applications.
If you are applying for individual guidance to change your firm’s proportionality level, you should continue to apply the remuneration rules as relevant for your current proportionality level until we notify you of our decision.
You should not assume that applications to change proportionality level will be accepted.
For groups only: application to move an IFPRU limited license firm engaging in asset management activities from the group level into level 3
Template A
For groups only: general application to move a firm from the group level into a lower level (excluding IFPRU limited license asset management firms)
Template B
For standalone firms or firms that are the only firm directly caught by the remuneration rules in the group: general level change application
Template C
After we receive your application
Once we receive a complete application, we will:
- Log and acknowledge it.
- Discuss the application with your supervisor and other relevant PRA areas.
- Prepare the application for review at the appropriate decision-making forum.
- Inform you of the decision, providing the key reasons for that decision.
We will attempt to process applications and provide a decision within 30 working days of receiving it. However, if the request raises complex issues, it may not be possible to meet this deadline. To allow enough time for us to consider applications, firms should submit applications well in advance of the performance year end.
We will not make our decisions public. If we are minded to decline, we will send you details of the reconsideration process.