For those who have not already seen the FCA announcement ( Statement on EBA guidelines on remuneration policies for public consultation – Financial Conduct Authority ) there is a growing problem associated with the FCA’s application of proportionality to the remuneration requirements of CRD IV, which apply to many MiFID firms. This is an extension of the recent disagreement between the PRA and EBA over remuneration practises. EBA is consulting on ‘Guidelines’ ( Consultation on Guidelines on sound remuneration policies – Calendar – European Banking Authority ) which would ‘effectively remove the proportionality principle for smaller firms’, as FCA puts it. This would have a material impact on firms that have relied on the FCA Guidance on the application of proportionality in applying the Remuneration Code. If EBA confirms its Guidelines as they stand, it will be increasingly difficult for the UK regulator to apply the current approach which disapplies many remuneration requirements for smaller firms. Although ostensibly applicable only to CRD IV firms, it is probable that the approach adopted under CRD IV will be applied to other investment firms (BIPRU, AIMF, UCITS) before long. The FCA is very clearly encouraging firms to respond to the EBA consultation and we support that approach.