CP13/6 - CRD IV for Investment Firms - Financial Conduct Authority

CP13/6
CRD IV for Investment Firms
5.20 We consider that applying these CRD IV governance requirements to more prudentially
significant firms is in the interest of consumers and promotes market integrity. However, by
applying these policies additional costs may be imposed. We anticipate that most of these
additional requirements will already be met by firms, as the governance requirements are
broadly covered by SYSC rules, and so the cost will be minimal.
5.21 It is possible that a small number of firms do not currently meet the requirements to include
non-executive directors in the membership of various governance committees in these policies.
Where this cannot be met from existing resource, there will be additional on-going costs
imposed on these firms. We estimate the cost of hiring a non-executive director for such a firm
to be in the region of £50,000 per year. However, due to the more complex nature of these
firms, we believe that the benefits from independent challenge that non-executive directors
bring to the Board and to internal governance, are sizable.
5.22 We have opted not to apply these policies to those firms that are not caught by the definition
of a significant institution, as we do not believe that the additional risk mitigation achieved is
proportionate to the risks posed by these firms.
48 July 2013
Financial Conduct Authority