Wed, Jul 1, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

AIMA to respond to U.K. FSA on remuneration paper

Tuesday, September 14, 2010
Opalesque Industry Update - The Alternative Investment Management Association (AIMA) – the global hedge fund industry association – is to respond to the UK’s Financial Services Authority’s consultation on remuneration.

The FSA published its Consultation Paper, “Revising the Remuneration Code”, following changes to the European Union’s Capital Requirements Directive (CRDIII). The paper proposes changes to the FSA’s existing Remuneration Code, which was introduced on January 1st 2010 and currently applies to 27 of the largest banks, building societies and broker dealer firms. Following the amendments proposed, it could cover approximately 2,500 firms, including those defined as MiFID investment firms, such as hedge funds.

The remuneration provisions of CRD III include a ‘proportionality’ clause stating that it should be applied to firms in a way which is ‘proportionate to their size, internal organisation and the nature, the scope and the complexity of their activities’, and the FSA has said it will seek to abide by this in its proposals. The consultation period closes on 8th October.

Andrew Baker, CEO of AIMA, said: “We will be meeting representatives of the FSA remuneration team this month, ahead of our submission, to discuss our detailed concerns with them directly and to suggest the need for an appropriate and proportionate regime to be implemented.

“The original justification by global leaders for action on remuneration was that a ‘bonus culture’ at large, systemically-important financial institutions had incentivised reckless and short-termist behaviour, increasing systemic risk, and creating financial instability. It was therefore agreed to tackle remuneration at a global level because it was a financial stability issue.

“Given that the FSA itself does not believe any individual hedge funds are large enough to pose a systemic risk to financial stability and given that hedge funds - unlike many large financial institutions - have not sought or received any public bail-outs, we would hope that if these provisions were to be applied to hedge fund managers it would be on a proportionate basis. Remuneration in the hedge fund sector does not encourage the reckless and short-termist behaviour the ‘bonus culture’ has created elsewhere – quite the opposite. Performance fees help to align the interests of manager and investor. And they do not reward failure, which was another criticism of the ‘bonus culture’ at large financial institutions.” Corporate website: http://www.aima.org

(press release)

- FG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: New systematic strategy managed alongside research firm outperforms S&P500[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: An emerging CTA manager explains how he runs his strategy, which is based on an index produced by a research firm. Peter Turk is head of

  2. Larry Robbins' hedge fund Glenview buys 1m Tenet Healthcare shares[more]

    Komfie Manalo, Opalesque Asia: Glenview Capital Management said it bought an additional 979,482 shares at Tenet Healthcare Corp valued at $53.80 million, raising its stakes in the healthcare services company to 15.16%, reported

  3. Legal - Grayson’s hedge funds under scrutiny for possible ethics violations, Court rejects hedge fund’s motion to block merger of Samsung affiliates[more]

    Grayson’s hedge funds under scrutiny for possible ethics violations From Freebeacon.com: Rep. Alan Grayson is finding himself in hot water over managing hedge funds that bear his name, actions that are in possible violation of House ethics rules. Sitting members of Congress are prohibite

  4. Hedge funds panic over Greece[more]

    Komfie Manalo, Opalesque Asia: Some investors are in panic mode as Greek Prime Minister Alexis Tsipras announced Sunday night that the banks and the stock market would be closed Monday, said

  5. Alternative investment industry could grow to $13.6tln in five years[more]

    Komfie Manalo, Opalesque Asia: Leading auditing and advisory group PwC said that the global alternative investment industry, which includes hedge funds, private equity and real assets, is set to increase to $13.6tln within the next five years. "Be

 

banner