FCA guidance on proportionality in the operation of certain remuneration provisions

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In January 2014, the FCA issued guidance on proportionality in the operation of certain remuneration provisions.

The remuneration provisions have been among the Alternative Investment Fund Managers Directive’s (AIFMD’s) most controversial elements. Three of these provisions in particular have attracted industry attention: retained structures, deferral and performance adjustment.

Subject to various conditions, the retained structures rules require full-scope alternative investment fund managers (AIFMs) to ensure that at least 50 per cent of any variable remuneration consists of units or shares (or of equivalent ownership interests, etc) of the AIF concerned…

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