The Code applies to
The Code has been extended to apply in some form to all banks, building societies and investment firms, which are within the scope of the Capital Adequacy Directive (2006/49/EC) (CAD). CAD has been amended by the Capital Requirements Directive, known as CRD 3 (2010/76/EU), the remuneration provisions of which have been incorporated by the Code (and other parts of the FCA Handbook). The Code also incorporates remuneration provisions of the Financial Services Act 2010. The Code applies to some 2,700 firms, hedge fund managers and Undertakings for Collective Investments in Transferable Securities (UCITS) including firms which engage in corporate finance, stockbrokers and the provision of financial advice.
The Code applies to:
- UK firms within the scope of CAD;
- If the Code applies to a UK firm, the FCA takes the stance that it applies to employees and directors worldwide within group entities;
- UK branches of firms which are based outside the EEA.
The Code sets out the rules and associated guidelines which will deal with remuneration but also covers governance and the methods of performance measurement used to determine performance related bonuses. The core principle remains that a firm “must establish, implement and maintain remuneration policies, procedures and practises that are consistent with and promote effective risk management” (SYSC 19A.2.1 R).