The UK’s Financial Services Authority has published a proposed code of practice concerning the pay policies of financial firms.

The draft code aims to “ensure that firms have remuneration policies which are consistent with sound risk management, and which do not expose them to excessive risk”.

The regulator stresses that the code does not try to set compensation levels, which it says are a matter for the boards of companies and their shareholders.

“We have already outlined the work we have been doing on remuneration during the last 12 months. The code of practice we have published today is the next stage in that work and clearly lays out the framework we expect firms to adopt,” said FSA chief executive, Hector Sants.

The FSA adds that it will consult on the code and further proposals for remuneration policy in March.

IE