Remuneration DisclosuresThe FCA has amended the Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU), and specifically BIPRU 11, to now include a requirement for disclosure of the firm's approach to linking remuneration to risk.
The firm feels that its Remuneration Policy appropriately addresses potential conflicts of interest and that the firm's authorised persons are not rewarded for taking inappropriate levels of risk. Under the Remuneration Code, the firm is classified as a Tier Four firm, which allows the firm to disapply many of the technical requirements of the Code and proportionately apply the Code's rules and principles in establishing the firm's policy.
The Decision Making Process
On grounds of proportionality the firm's board of directors also serve as the remuneration committee.
The link between pay and performance
The firm is a broker and does not take proprietary risk. Individual brokers are paid a base salary plus a percentage of the revenues that they generate. All brokers operate under the supervision of the management team and all clients have to be approved prior to trading and post trade checks are undertaken by the compliance department. The firm has determined that the management team and executive directors are the only code staff members. The remuneration of the management team is determined after assessing the capital and cashflow needs of the business. When compensation is paid to the management team and directors it may be comprised of three elements, a base remuneration amount, a share of commission generated if the commission was generated by a member of the management team, and potential discretionary bonuses.
The award of incentive compensation is a qualitative decision where employee and supervisory input are significant components and is currently not used.
RTS 28 Disclosure
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