Financial Services and Markets Act 2023

Temporary restriction on remuneration U.K.

13 (1) The Bank may by direction restrict or prohibit for a specified period discretionary payments to specified employees of a CCP or specified shareholders of a CCP.

(2) The power under sub-paragraph (1) may be exercised only if—

(a) a stabilisation power is not being exercised in relation to the CCP,

(b) at least one of the conditions in sub-paragraph (3) is met, and

(c) the condition in sub-paragraph (4) is met.

(3) The conditions in this sub-paragraph are—

(a) there is or is likely soon to be a significant deterioration in the financial situation of the CCP (within the meaning given by paragraph 7(6));

(b) there is a material risk of a threat to the ability of the CCP to maintain critical clearing services;

(c) there is a risk of a significant disruption to the operation of the CCP;

(d) the operation of the CCP poses a risk to the financial stability of the United Kingdom.

(4) The condition in this sub-paragraph is that the exercise of the power is necessary or desirable having regard to the public interest in—

(a) the stability of the UK financial system, or

(b) the continuity of critical clearing services.

(5) The Bank must prepare and publish a statement of its policy with respect to the giving of directions under this paragraph.

(6) The Bank may alter or replace a statement of policy published under this paragraph.

(7) The Bank must publish a statement as altered or replaced under sub-paragraph (6).

(8) No directions may be given under this paragraph before the statement of policy under sub-paragraph (5) has been published.

(9) The specified period for the purposes of sub-paragraph (1) must not exceed 5 years.

(10) Directions under this paragraph—

(a) must be given in writing to the employees or shareholders that the directions apply to;

(b) may be varied or revoked.

(11) In this paragraph “discretionary payments” means payments, made otherwise than under a contractual obligation, of any of the following—

(a) equity remuneration;

(b) dividend payments;

(c) share buy-backs;

(d) variable remuneration including, where an employee is a senior manager, bonuses, discretionary pension benefits and severance payments.

Commencement Information

I1 Sch. 11 para. 13 not in force at Royal Assent, see s. 86(3)

I2 Sch. 11 para. 13(1)-(4)(8)-(11) in force at 31.12.2023 by S.I. 2023/1382, reg. 8(b)

I3 Sch. 11 para. 13(5)-(7) in force at 29.8.2023 by S.I. 2023/779, reg. 4(ddd)(ii)