Remuneration code will not be extended, FSA announces

9 December 2009

The Financial Services Authority (FSA) has decided not to extend its remuneration code to include independent financial advisors or mortgage brokers.

New regulations surrounding remuneration will be introduced for building societies and large banks from January 1st 2010.

A consultation paper on the code published earlier in the year suggested that the new rules should be extended to other areas of the
financial services industry.

However, the FSA has instead opted to focus on ensuring that the first organisations subject to the new rules are fully compliant before an extension is introduced.

In a statement, the body said: “The FSA does not think it beneficial to make further changes now as adjustments will be required to the existing code given the large body of European directives that contain remuneration provisions.

“In the meantime, the FSA expects firms to continue to focus on remuneration risk management.”

Organisations affected by the new rules needed to submit statements surrounding their remuneration practices to the FSA by the start of November.

The original document was published by the FSA in February as part of a strategy to prevent organisations from exposing themselves to excessive risk.

By Jim Ottewill

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