Regulatory Alerts2021-07-29
Added · Updated
Guideline on a Sound Remuneration System
The Hong Kong Monetary Authority issued this non-statutory guideline to ensure that Authorized Institutions' remuneration systems promote effective risk management and avoid incentives for excessive risk-taking. It requires Boards to establish written policies that align compensation with long-term financial soundness, specifically governing senior management and key personnel through independent oversight and rigorous performance measurement. The HKMA will assess compliance via a risk-based supervisory approach, integrating findings into capital adequacy reviews and demanding corrective action for systems inconsistent with these principles.
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