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9.1. Application of FCA Remuneration Code

The Policy is summarised in this section.

The Firm is currently a Level 3 Financial Institution for the purposes of the FCA Remuneration Code. It would become a Level 2 Financial Institution as a result of our UK related assets exceeding £15 billion, in which circumstances it reserves its right to amend this policy to ensure that the Firm complies with its legal and regulatory obligations as required by that Level. This policy is reviewed on an annual basis.

9.2. Staff subject to Remuneration Policy

The Remuneration Policy applies to the remuneration of all “Remuneration Code Staff”. “Remuneration Code Staff” includes any staff member whose professional activities have a material impact on ShareIn’s risk profile, including: all ShareIn directors; the Compliance Officer; in-house counsel (all “Senior Management”); staff receiving total remuneration of €500,000+ or as much as any member of Senior Management.

The Remuneration Policy only applies to Remuneration Code Staff, except where otherwise specified, but the term “staff” is relevant to determining which individuals fall within that category. This includes ShareIn staff and takes into account any activities undertaken by staff of group companies, insofar as relevant to the promotion and sale of investments or activities ancillary to such promotion and sale. Staff also includes the staff of ShareIn’s ARs, although they may adopt separate procedures provided they are consistent with ShareIn’s Remuneration Policy. The term “staff” includes employees and contractors and must capture all individuals remunerated through any other arrangement if it relates to the sale or holding investments arranged by ShareIn or its ARs.

ShareIn retains a list of Remuneration Code Staff, which is updated each year.

9.3. Remuneration Principles

The Firm implements the FCA’s remuneration principles contained in SYSC 19A in the following manner in respect of Remuneration Code Staff.

9.3.1. Risk management

Performance appraisal must link remuneration to performance, including financial performance and regulatory compliance. Regulatory compliance includes ensuring that the Firm, its ARs and investors are not taking excessive risks. In the context of the distribution of non-readily realisable securities, the Firm has a tolerance for facilitating investment in higher risk investments provided those risks are prominently disclosed in a way that is understandable to retail investors. Remuneration Code Staff should, where it fal

investments perform the way that they have been described and in accordance with a retail investor’s reasonable expectations.

9.3.2. Long-term interests

Remuneration should be linked to ShareIn’s long-term interests, which in turn are heavily dependent upon the reputation of ShareIn and its ARs in the institutional and retail investment sector. This entails assessing individual, business unit and Firm performance whether determining the amount of individual Remuneration Code Staff remuneration. Assessment of performance must be built on a multi-year framework of at least 3 years where possible. Payments for early termination of a contract should not reward failure or misconduct.

9.3.3. Conflicts of Interest

As ShareIn is remunerated by reference to the volume of compliance work it performs, the risk of staff remuneration being in conflict with investor interests is low. Conflicts of interest are a higher risk for AR sales staff who are remunerated through variable remuneration. This category of staff is considered separately below.

9.3.4. Governance

The Compliance Officer must report to the board on the Remuneration Policy on an annual basis, or whenever it is being substantially reviewed, if more frequent. ShareIn does not have a separate Remuneration Committee due to its size, and the Policy shall be considered at a full board meeting. As ShareIn does not have an investor-facing website, it does not maintain a summary of how it complies with the Remuneration Code.

9.3.5. Control Functions

Remuneration Code Staff shall not be remunerated by reference to the financial performance of the ARs they supervise. Compliance and monitoring staff must receive remuneration that is commensurate with market rates for staff of similar seniority. However new staff members should not be offered remuneration packages to match old packages if this would result in deviation from the principles of the Remuneration Policy.

9.3.6. Remuneration and Capital

The payment of variable remuneration must not limit ShareIn’s ability to raise capital.

9.3.7. Profit-based measurement

Variable remuneration awarded under contract to Remuneration Code Staff must be capable of adjustment to reflect changes to ShareIn’s regulatory capital obligations, so that ShareIn should not be required to pay variable remuneration in the event that such payment would be reasonably likely to result in the Firm breaching its prudential regulatory requirements. ShareIn does not offer guaranteed variable remuneration to Remuneration Code Staff.

9.3.8. Pension policy

ShareIn does not offer discretionary pension benefits to staff.

9.3.9. Personal investment strategies

ShareIn’s remuneration structure does not allow the possibility for Remuneration Code Staff to use personal hedging techniques to ensure they may undermine the risk alignment effects of the Remuneration Policy.

9.3.10. Non-compliance

ShareIn does not use any vehicles or methods for the payment of variable remuneration that can facilitate non-compliance with the Remuneration Code.

9.3.11. Remuneration structures

ShareIn is in proportionality level three. Accordingly, it does not consider it proportionate to apply remuneration rules relating to the use of retained shares (SYSC 19A.3.47R); deferral (SYSC 19A.3.49R); performance adjustment (SYSC 19A.3.51-51AR) or ratios between fixed and variable components of total remuneration (SYSC 19A.3.44R). ShareIn has determined that the implementation of such rules is not appropriate at present because the Firm’s shares are privately held and the total remuneration levels of all of its staff are modest. If the underlying AR client generates significant scale, it is anticipated that it will seek direct authorisation, rather than remaining an AR. ShareIn’s business model entails providing compliant regulatory solutions to third parties and its remuneration is not directly linked to sales.

9.4. Sales staff

Where AR staff are remunerated by reference to sales values, the following principles will apply regardless of whether they constitute Remuneration Code Staff:

  • The level of fixed remuneration shall amount to a living wage;
  • Performance reviews determining remuneration levels should, in addition to financial performance, be conducted by reference to regulatory compliance, including, where relevant, investor complaints, investor cancellations; compliance monitoring for quality assurance (e.g. product knowledge; accuracy; provision of factual information, rather than investment advice).

9.5. Notifications

Notifications should be made to the FCA in respect of any significant breaches of the Remuneration Code, including any breach relating to voiding and recovery of payments made to staff, or any fraud, error or other significant irregularity which may have been motivated by weaknesses in the Remuneration Policy.