6Rules made by FSA about remuneration
In the Financial Services and Markets Act 2000, after section 139 insert—
“139AGeneral rules about remuneration
(1)The Authority must exercise its power to make general rules so as to make rules requiring each authorised person (or each authorised person of a specified description) to have, and act in accordance with, a remuneration policy.
(2)A “remuneration policy” is a policy about the remuneration by the authorised person of—
(a)officers,
(b)employees, and
(c)other persons,
of a specified description.
(3)The rules must secure that any remuneration policy that an authorised person is required by the rules to have is consistent with—
(a)the effective management of risks; and
(b)the Implementation Standards.
(4)When making rules about remuneration policies, the Authority must have regard to any other international standards about the remuneration of individuals working in the financial sector (or certain such individuals).
(5)The Treasury may direct the Authority to consider whether the remuneration policies of authorised persons specified in the direction (or of authorised persons of a description so specified) comply with requirements imposed by the rules as to the contents of the policies.
(6)Before giving a direction under subsection (5), the Treasury must consult the Authority.
(7)If the Authority considers that a remuneration policy fails to make provision which complies with the requirements mentioned in subsection (5), the Authority must take such steps as it considers appropriate to deal with the failure.
(8)The steps that the Authority may take include requiring the remuneration policy to be revised.
(9)General rules may—
(a)prohibit persons (or persons of a specified description) from being remunerated in a specified way;
(b)provide that any provision of an agreement that contravenes such a prohibition is void; and
(c)provide for the recovery of any payment made, or other property transferred, in pursuance of a provision that is void by virtue of paragraph (b).
(10)A prohibition may be imposed under subsection (9)(a) only for the purpose of ensuring that the provision of remuneration is consistent with—
(a)the effective management of risks; or
(b)the Implementation Standards.
(11)A provision that, at the time the rules are made, is contained in an agreement made before that time may not be rendered void under subsection (9)(b) unless it is subsequently amended so as to contravene a prohibition under subsection (9)(a).
(12)In this section—
“the Implementation Standards” means the Implementation Standards for Principles for Sound Compensation Practices, issued by the Financial Stability Board on 25 September 2009; and
“specified” (except in subsection (5)) means specified by the rules.
(13)References to the Implementation Standards or to international standards of a kind mentioned in subsection (4) are to standards that are for the time being in force.”