On May 25, the FSA proposed guidance for firms using the Supervisory Formula Method (SFM) to calculate risk-weighted exposure amounts for unrated securitization positions. The SFM is a formula based on the underlying asset portfolio’s capital requirement calculated under the Internal Rating Based approach. Comments must be submitted by June 22. FSA Proposed Guidance.
FSA
FSA Implementation of the Remuneration Code
On April 19, the Financial Services Authority issued guidance to banks, building societies and Capital Adequacy Directive investment firms on compliance with the Remuneration Code, as modified and extended on January 1. The FSA issued guidance on general compliance with the Remuneration Code’s compensation rules as well as on varying the proportionality tier of a firm. The FSA is seeking consultation on its general guidance by May 18. General Compliance Guidance. Self-Assessment of Compliance for Tier 2. Self-Assessment of Compliance for Tiers 3 and 4. Retention Periods. Guaranteed Variable Remuneration. FAQ on the Remuneration Code. Proportionality Tier Guidance.
FSA Prudential Risk Outlook
On March 17, the U.K. Financial Services Authority published its Prudential Risk Outlook, which sets out its assessment of macroeconomic and financial trends as a context for its regulation and supervision of firms. FSA Release.
The New FSA Code on Remuneration Comes into Effect in the UK
On January 1, 2011, the FSA Remuneration Code came into force, which sets out rules and associated guidance regarding remuneration within a wide variety of organizations. Click here to read more.