2017年-FCA英国金融行为监管局_remuneration_rules_banking_sector_5页_230kb

Regulator Assessment Summary: Qualifying Regulatory Provisions

Core Content

The document outlines the regulatory assessment for the "Strengthening the alignment between risk and reward – remuneration rules for banking sector" proposal, issued by the Financial Conduct Authority (FCA). The policy aims to improve the alignment between risk and reward in the UK banking sector, addressing concerns raised by the Parliamentary Commission on Banking Standards (PCBS) following the 2008-09 financial crisis.

Key Regulatory Changes

• Deferral: A seven-year deferral period for Senior Managers and three to five years for other material risk takers.
• Clawback: Variable remuneration (both deferred and undeferred) is subject to clawback for at least seven years, with the option to extend for Senior Managers by up to three additional years if an ongoing investigation is in place.
• Exceptional Government Intervention: Regulators can void or cancel all deferred remuneration if a bank receives state aid. This extends the presumption against payment or vesting of variable remuneration to all discretionary payments, including loss of office and discretionary pension benefits.

Affected Areas and Entities

• UK Banks, Building Societies, and Dual-Regulated Investment Firms
• UK branches of overseas banks

The policy is domestic in origin and does not include implementation of a Cutting Red Tape review.

Estimated Number of Affected Firms

• 285 firms in total:
  • 240 banks and investment firms
  • 45 building societies

Cost-Benefit Analysis Summary

Compliance Cost Breakdown

Banks and Investment Firms

Building Societies

Total Compliance Costs

• Total one-off costs: £29.13m
• Total ongoing costs per annum: £1.52m

Cost Modelling Methodology

• A bottom-up approach was used, based on structured interviews and benchmark data.
• Fixed costs relate to activities that are consistent across firm sizes, such as policy development and documentation.
• Variable costs are proportional to turnover and include training, monitoring, and reporting.
• Large firms are defined as those accounting for 80% of sector income (18 firms in the banking sector).
• Small firms are the remaining 222 banks and investment firms, and 39 building societies.
• Large building societies are defined as those with over £100m of annual income (6 firms).

Impact on Businesses

• Deferral: One-off costs are primarily related to reviewing and updating guidance and legal advice. Ongoing costs include monitoring deferred payments and increased administrative complexity.
• Clawback: One-off costs involve contract revisions and policy development. Ongoing costs depend on the frequency of clawback actions. Legal costs could be significant, though uncertain.
• Exceptional Government Intervention: Minimal one-off and ongoing costs, primarily involving documentation changes.

Additional Information for BIT Score Validation

• The policy aligns with the recommendations of the PCBS and the amendments from the Financial Services (Banking Reform) Act 2013.
• The FCA believes that costs could be shared with the HM Treasury (HMT) for future implementation, but retrospective costs are not split in this assessment.

Conclusion

The proposed remuneration rules aim to enhance accountability and ensure that rewards in the banking sector are aligned with long-term risk. While the policy introduces significant compliance costs, particularly for larger firms, it is expected to improve public trust and financial stability in the long run.