Who is affected?

Overall, all employees will be subject to the Code, however there are specific requirements which primarily affect the remuneration of two categories of employees, namely Code Staff and Code Staff engaged in “controlled functions”.

The concept of “Code Staff” has been introduced by the Code and includes employees who perform a significant influence function for the firm ¬ this will include senior partners of support and control functions, who could have a material impact on the firm’s risk profile, senior managers, all staff whose total remuneration takes them into the same bracket as senior staff; and risk takers, whose professional activities have a material impact on the firm’s risk profile.

The definition of Code Staff may also include consultants and advisors who may fall within the category by virtue of their level of remuneration or because their role could materially impact the firm’s risk profile. Under SYSC 19A 3.5 a firm must maintain a record of its Code staff and must take reasonable steps to ensure they understand the implications of their status as such.

Exclusion from Code based on level of pay

Generally, the FCA will not consider it necessary for a firm to apply the Performance Principles below where a staff member has total remuneration of under £500,000 and whose variable remuneration is less than 33% of the total remuneration.

  1. Guaranteed variable remuneration
  2. Retained shares or other instruments
  3. Deferral
  4. Performance adjustment