Incentive-Based Compensation Arrangements
SIFMA provides comments to the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC) and the Securities and Exchange Commission (SEC) on Re-proposal of Rules on Incentive-Based Compensation Arrangements.
Under Section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the OCC, the Federal Reserve, the FDIC, the National Credit Union Administration, the SEC, and the Federal Housing Finance Agency are responsible for jointly promulgating regulations or guidelines regarding incentive-based compensation arrangements at covered financial institutions. Proposed regulations were initially published in 2011. Recent press reports and public statements suggest that in the near future, the Agencies intend to revise and re-propose the regulations for additional notice and comment.
The rules that the Agencies adopt under this provision will have a significant impact on financial institutions’ compensation practices, which are critical to recruiting and retaining top talent and to overseeing personnel in the performance of their duties. Accordingly, it will be important that in preparing the revisions to the proposed rules, the Agencies adhere to the requirements of Section 956, to other applicable statutory requirements, and to general principles of administrative law. SIFMA submits the attached letter to address certain overarching principles that we respectfully submit should guide the Agencies’ development of the revised proposal.
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