Employee Rewards and Benefits News
FSA puts foot down over bonuses
The Financial Services Authority (FSA) has put its foot down with investment banks in the UK and demanded that they comply with regulatory guidelines or risk losing their licences to operate as they do in the UK.
According to a report in the Daily Telegraph, bank bosses have been told by the FSA that 60 per cent of all pay must be deferred without exception and regardless of staff contract terms, causing potential hot water over legal processes.
An unnamed pay executive working for a major City bank told the newspaper: "The message came back that while the FSA agreed it does not have jurisdiction over contractual law, it does have jurisdiction over issuing bank licences in London and that we should go away and unwind the contracts."
It added that banks that have not spoken to staff about bonus payouts are now "scrambling" to make sure that they are compliant with new FSA rules.
The FSA exercises statutory powers given to it by the Financial Services and Markets Act 2000.
Posted by Michael Ewing
