Financial Conduct Authority Guidance on AIFM Directive Remuneration Provisions

October 17, 2013

The UK Financial Conduct Authority (FCA) released proposed guidance on 6 September 2013 on its implementation of the remuneration provisions in the AIFM Directive (the AIFM Remuneration Code) for UK alternative investment fund managers (AIFMs).

Investment managers taking advantage of the transitional period will need a compliant remuneration policy in place by the time they apply for authorisation as AIFMs and, if one is not in place by then, explain why and say when they expect to have one in place. The FCA has advised firms to make this application by 22 January 2014. The remuneration policy must reflect the remuneration rules in the AIFM Directive and the European Securities and Markets Authority’s (ESMA) guidelines on sound remuneration policies under the AIFM Directive (Guidelines). There may well be a number of changes to the guidance following consultation. Nonetheless, it provides an insight into the likely application of the rules to different types and sizes of investment managers in practice. Perhaps most importantly, the FCA indicates the approach firms should take in applying the “proportionality” principle to the application of the rules – in particular, by reference to a firm’s assets under management.

Firms have until 6 November 2013 to provide feedback on the consultation.

Read "Financial Conduct Authority Guidance on AIFM Directive Remuneration Provisions".