News and Views MiFID II Special Edition 2016

Global Trustee and Fiduciary Services News and Views | MiFID II Special Edition 2016

Remuneration

Codes (SYSC)

SYSC 19A IRPRU

Remuneration

Code

SYSC 19B AIFM

Remuneration

Code

SYSC 19C BIPRU

Remuneration

Code

SYSC 19E UCITS

Remuneration

Code

SYSC 19F (New)

MiFID II

Remuneration

and Performance

Management of

Sales Staff Code

SYSC 19D

Dual-regulated firms

Remuneration

Code

The diagram above describes, at a high level,

the remuneration framework that will exist

should the FCA proposals be adopted.

SYSC currently contains five separate

remuneration codes. While these

remuneration codes focus on the senior

management of firms that are “material risk-

takers”, they do contain several principles

that apply on a firm-wide basis.

Following feedback received by the FCA in

response to DP15/3,

MiFID II remuneration

requirements for sales staff will be transposed

through a new section, SYSC 19F. In addition, it

is proposing that Article 3 firms, third country

firms and dormant-account fund operators must

comply with a remuneration requirement similar

to the one in Article 27

of the MiFID II Implementing Regulation.

FCA description of implications for firms in CP16/19

Given the high-level nature of the MiFID II

remuneration provisions, and existing

domestic rules and guidance in this area, the

FCA does not think these proposals will create

large additional regulatory burdens for

firms and significant costs are unlikely.

Client Assets sourcebook (CASS) (Chapter 7)

This chapter is relevant to all firms that

hold client assets and conduct designated

investment business.

This chapter explains the changes that the

FCA plans to make to CASS arising from the

implementation of MiFID II (including the MiFID II

Implementing Directive.)

The FCA says that its proposed implementation

proposals do not mean significant changes

to the existing CASS regime because MiFID II

is broadly aligned to CASS. It will transpose

new MiFID II requirements not already

implemented in CASS through “intelligent

copy out”, and apply all new MiFID II

requirements not implemented in CASS to

all designated investment business, including

non-MiFID business.