Our Remuneration Codes set out the standards and policies that certain firms are required to meet when setting pay and bonus awards for staff. Find out more about the Codes, who they apply to, our main requirements and proportionality.

The aim of the FCA’s Remuneration Codes is to:

  • ensure greater alignment between risk and individual reward
  • discourage excessive risk taking and short-termism
  • encourage more effective risk management, and  
  • support positive behaviours and a strong and appropriate conduct culture within firms

This supports our statutory objectives of enhancing market integrity and protecting consumers by ensuring incentives do not encourage excessive risk-taking or misconduct.

Inappropriate remuneration policies were widely identified as a contributory factor to the financial crisis. Our predecessor organisation, the Financial Services Authority, was the first major financial regulator to respond with the introduction of a Remuneration Code and there is now growing international recognition of the role of remuneration on firm conduct.

We have introduced a new Remuneration Code for dual-regulated firms, i.e. banks, building societies and PRA designated investment firms (SYSC 19D), in response to recommendations from the Parliamentary Commission on Banking Standards (PCBS).  This new Code follows a consultation carried on in July 2014 (CP14/14), with final rules published in June 2015 (PS15/16).

We have four Remuneration Codes tailored to different types of firm:

  • SYSC 19A – covering Deposit Taker and Investment firms
  • SYSC 19B – Alternative Investment Fund Managers
  • SYSC 19C – BIPRU Investment firms
  • SYSC 19D - Dual-regulated firms Remuneration Code

Codes applying to your firm

The Codes apply to more than 3,000 firms, including all:

  • banks
  • building societies
  • large alternative investment fund managers and
  • Capital Requirements Directive (CRD) investment firms

This includes broker dealers, asset managers (such as most hedge fund managers and all UCITS investment firms), plus some firms involved in portfolio management, corporate finance, private equity, venture capital, providing financial advice, brokers, multilateral trading facilities and others.

The principles of the Codes apply on a firm-wide basis with certain specific requirements on the structure on variable remuneration which apply in full only to senior management, risk takers and staff in control functions, known as Code Staff. These are the staff we take to have a ‘material impact’ on a firm’s risk profile.

Principal requirements

All applicable firms must make sure their remuneration policies and practices are consistent with and promote sound and effective risk management.

This includes the following:

  • At least 40% of a bonus must be deferred over a period of at least three years. At least 60% must be deferred for the most senior management (for SYSC 19A and SYSC 19D only) or when an individual’s bonus is a particularly high amount.
  • At least 50% of a bonus must be made in shares, share-linked instruments or other equivalent non-cash instruments (or units of shares of the alternative investment fund for firms subject to SYSC 19B). These shares or instruments should be subject to an appropriate retention period.
  • Ensure guarantees are only given in exceptional circumstances to new hires for the first year of service.
  • Ensure senior management adopts and periodically reviews the general principles of the remuneration policy and handles its implementation as well as disclose details of their remuneration policies at least annually.
  • Ensure performance is assessed with respect to financial and non-financial factors and is based on the performance of the individual, business unit concerned and the overall results of the firm.
  • Ensure that any variable remuneration, including a deferred portion, is paid or vests only if it is sustainable according to the financial situation of the firm as a whole, and justified on the basis of the performance of the firm, the business unit and the individual concerned.


We have adopted a proportionate approach to implementing the Remuneration Codes and Remuneration Disclosure. Some of the features of the Remuneration Codes apply to a firm as a whole while other requirements, such as those on the structure of awards, apply mainly to material risk takers (Code Staff). Code Staff are those individuals who are:

  • senior management
  • risk takers and staff in control functions, and
  • those earning in the same remuneration bracket

The approach set out in our general guidance on proportionality also allows firms to implement the Remuneration Codes in a way suitable for its size, internal organisation and the nature, scope and complexity of its activities.

Read more about the code that is relevant for your firm:

IFPRU Remuneration Code (SYSC 19A)

AIFM Remuneration Code  (SYSC 19B)

BIPRU Remuneration Code (SYSC 19C)

Dual-regulated firms Remuneration Code (SYSC 19D)

You may apply to vary your proportionality level.


Last updated: 05 Apr 2016

First published: 09 May 2015