FSB-IOSCO Roundtable on Compensation Practices in the Securities Sector 

The Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO) jointly organized a Roundtable on Compensation Practices in the Securities Sector on 13 December 2016.

Based on the findings of the FSB Compensation Monitoring Contact Group (CMCG)’s fourth progress report on compensation practices, the FSB agreed in 2015 that the CMCG should discuss, together with IOSCO, compensation practices in the securities sector to gather further information about current practices. As a result, the FSB and IOSCO agreed to conduct a roundtable with the industry to discuss compensation and related governance and risk management issues.

The roundtable, which was designed as a fact-finding exercise, helped to exchange views on similarities and differences in firms’ approaches to compensation issues in the securities sector.

Members from the FSB CMCG and the IOSCO Compensation Experts Group (CEG), as well as around 20 senior executives responsible for compensation in internationally active securities firms and banks with securities market activities participated in the roundtable. The industry experts represented some of the major participants in securities market activities including broker dealers affiliated with global systemically important banks and managers of collective investment schemes, including hedge funds and private equity funds.

This summary reflects CMCG and CEG members’ understanding of the main points raised during the roundtable discussion which was conducted under the Chatham House rule. It does not necessarily represent the views of authorities nor consensus views expressed by firms in the securities sector and banks’ representatives at the roundtable. Given the nature of the roundtable this note does not represent a detailed analysis of compensation practices across the securities sector but rather a record of the points raised at an industry meeting.

Roundtable findings will inform the 2017 FSB progress report on compensation practices, which will be published ahead of the G-20 Leaders’ Hamburg Summit in July 2017. 2

The FSB and IOSCO welcome any feedback on topics discussed at the roundtable and summarised in this note. Comments should be sent to Simonetta Iannotti (simonetta.iannotti@fsb.org) and Alp Eroglu (a.eroglu@iosco.org) by 15 May 2017.

To read more about:

1. Compensation in the Securities Sector – Design and Governance
2. Risk Perspective: Financial Stability Risks
3. Compensation Practices, Misconduct Risk and Investor Protection Issues
4. Regulatory Considerations and Compensation in the Securities Sector

Follow the link: IOSCO update

Source: IOSCO

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