Mon, Jun 27, 2016
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 Roundup: Hedge funds shrink as liquidations outpace new launches in Q1: hedge fund news, week 27[more]

    In the week ending 17 May, 2016, HFR said hedge fund liquidations declined narrowly to begin 2016 after rising sharply to conclude 2015, as investors positioned f

  2. Europe - Hedge funds keep powder dry over big Brexit bets, Hedge funds sense profit in Europe shock waves after Brexit vote, Soros warns Brexit may cause pound plunge worse than Black Wednesday, After Brexit: What will happen if Britain votes to leave the UK?[more]

    Hedge funds keep powder dry over big Brexit bets From FT.com: Hedge funds are shying away from big bets on Brexit, with many unwilling to risk further losses having already suffered a painful first half of the year. With the outcome of a UK vote on the country’s membership of the Europea

  3. News Briefs - ’Flash Boys’ get green light to launch stock exchange, Pimco says ‘storm is brewing’ in U.S. commercial real estate, Bankers get ready to rumble at Hedge Fund Fight Night, AIMA Australia celebrates 15th anniversary[more]

    ’Flash Boys’ get green light to launch stock exchange In an investing environment ruled by fast, the newest U.S. public stock exchange is banking on slow. Well, slower. IEX Group, which won Securities and Exchange Commission approval on Friday to go head-to-head with the New York Stock E

  4. Blackstone buys minority stake in New York-based credit hedge fund Marathon[more]

    Benedicte Gravrand, Opalesque Geneva: Blackstone Strategic Capital Holdings Fund, a vehicle managed by Blackstone Alternative Asset Management (BAAM), has acquired a passive, minority interest in Marathon Asset Management, for an undisclosed sum. Based in New York,

  5. Global markets fell, hedge funds gain in mid-June on Brexit, Fed rate concerns[more]

    Komfie Manalo, Opalesque Asia: Global financial markets declined through mid-June, as uncertainty associated with the upcoming Brexit referendum and expected U.S. Fed interest rate hike contributed to increases in volatility across asset classes, data provider