The federal financial services regulatory agencies (FRB, FDIC, FHFA, NCUA, OCC and SEC) have proposed a joint rule (the “2016 Proposal”) to regulate incentive-based compensation paid by, inter alia, banks, investment advisers, broker-dealers and credit unions with over $1 billion in assets. The compliance date for the 2016 Proposal would be the first day of the first calendar quarter beginning at least 540 days after a final rule is published in the Federal Register. The proposed rule would not apply to incentive-based compensation plans that have performance periods that begin before the compliance date. Comments on the 2016 Proposal are due on July 22, 2016.
This legal update describes some of the more significant aspects of the 2016 Proposal and provides reference charts summarizing the key requirements.