On 23 November 2022, the House of Commons’ Sub Committee on Financial Services Regulation (the Sub-Committee) published a letter by its interim chair, Angela Eagle, regarding PRA Consultation Paper 8/22 ‘Remuneration: Unvested pay, Material Risk Takers and public appointments’ (CP8/22).
The letter follows the Sub-Committee’s discussion on CP8/22 and sets out the following questions to the PRA:
- What is the PRA’s rational for the proposed changes? Has the PRA identified a significant number of Material Risk Takers who have been prevented from entering public sector employment under the current remuneration rules.
- How does the PRA intend to define a ‘senior public-sector appointment linked to financial policy or financial services regulation’ for the purpose of these rules? Does it relate only to roles at the Treasury and financial service regulators or more broadly?
- Does the PRA anticipate individuals seeking short periods of employment in the public sector for the primary purpose of converting their variable pay?
- Will malus and clawback provisions continue to create a conflict of interest for former Material Risk Takers in public-sector roles even after these proposals take effect?