The FSA introduced the Remuneration Code in 2009. Originally, it only applied to the largest banks and building societies and broker dealers that met certain financial thresholds. The FSA published a revised Remuneration Code (the “Code”), which came into effect on 1 January 2011. The Code is now contained in Senior Management Arrangement, Systems and Controls (SYSC) 19A of the FCA Handbook. The Code is principally concerned with the risks created by the way remuneration arrangements are structured, not with the absolute amount of remuneration, which is generally a matter for firms’ remuneration committees. By limiting risk – the Code seeks to create stability and confidence in financial services markets and protect consumers.
The Code is enforced by the PRA and what is now the FCA.