UK: Breaking news – New CEBS guidelines published on 10 December
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Further to our article - CRD 3 and restrictions on remuneration in the financial services sector (click here), the Committee of European Banking Supervisors (“CEBS”) has published new guidelines on the Capital Requirements Directive (“CRD 3”). These Guidelines will be implemented on 1 January 2011 along with CRD 3. They require that up to 60% of total remuneration in relevant financial services firms should be deferred and that the cash element should be limited to between 20% and 30% of total remuneration. It has been confirmed that some senior executives of non-European banks who are themselves based outside the EU will be caught by the new rules. The worldwide staff of EU based banks, and not just their EU based staff, will be caught by the guidelines. In the UK, the Financial Services Authority (“FSA”) is to decide how to implement the proposals into its pay code within the next couple of days. It is believed that the FSA is considering imposing the rules only on those financial institutions which are “systemically important”. This would have the effect of greatly reducing the number of financial services firms who would be affected by these new rules. As a result of these guidelines it is expected that some banks will have to postpone their annual pay and bonus round. Guidelines on Remuneration Policies and Guidelines For further information or to discuss the issues raised, please contact Guy Abbiss (guy.abbiss@abbisscadres.com) or Stephen Wright (stephen.wright@abbisscadres.com) on +44 20 3051 5711.