FSA publishes new rules on pay and bonuses

You wait all week for something to write about and then three stories come in at once...

The Financial Services Authority (FSA) has published new rules on how financial institutions should determine pay and bonuses for staff. In doing so, it makes clear that it wants to see bankers' pay deals linked far more closely with the long-term profitability of the banks. It says that bonuses should not be guaranteed for more than a year, and that senior employees should have their bonuses spread over three years.

Firms have until the end of October to provide the FSA with a remuneration policy statement, which will enable the FSA to check compliance with the code. Non-compliant firms could face enforcement action or, should they pursue risky processes, be forced to hold additional capital.

Well, that's what the press release says - we'll be dissecting the new rules in greater detail and will be reporting on them soon. In the meantime, you can read the new rules here.