Bankers to receive bonuses faster under post-crisis rule change

"From Thursday, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) will reduce the bonus deferral period for top banking executives from eight years to four, allowing partial payouts to begin in the first year rather than year three as previously required. The move is part of a broader effort to make the UK financial sector more competitive internationally, bringing bonus structures closer in line with those in the US and Asia, where deferrals are generally shorter - or, in the case of New York, not required at all."

"Under the new regime, senior managers will still be subject to stringent "clawback" provisions, allowing firms and regulators to recover bonuses if misconduct or mismanagement emerges after payout. Sarah Pritchard, Deputy Chief Executive at the FCA, said: "The new rules also mean senior managers will continue to follow our high standards and remain on the hook where poor decisions affect consumers and markets.""

The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) will shorten the bonus deferral period for top banking executives from eight years to four, enabling some partial payouts to start in the first year instead of year three. The change aims to boost the UK's international competitiveness by aligning bonus structures more closely with those in the US and Asia. Regulators intend to cut red tape while maintaining safeguards against reckless risk-taking and keeping strict clawback powers to recover bonuses if misconduct or mismanagement emerges. The reform follows last year’s removal of the EU-wide bonus cap.

Read at Business Matters