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Financial Institutions: Pay

Volume 501: debated on Wednesday 2 December 2009

To ask the Chancellor of the Exchequer if he will introduce legislative proposals to limit the remuneration of hedge fund directors. (300727)

The Government have no plans to introduce legislative proposals to limit the remuneration of hedge fund directors.

However, the Government have taken steps to ensure that remuneration paid at systemically significant financial institutions is commensurate with a prudent approach to risk and leads to long-term value creation. The Financial Services Authority code, which comes into force on 1 January 2010, includes requirements for deferral and clawback from significant banking and other institutions. In addition, the Government are taking legislative measures in the Financial Services Bill that will bestow a duty on the FSA to ensure remuneration is consistent with effective risk management and will enable improved disclosure of remuneration, which in turn will facilitate better shareholder oversight of risk.

The FSA will review its Rule and Code during 2010.