The Financial Conduct Authority of the United Kingdom (FCA) and the Financial Conduct Regulatory Authority (PRA) of the Bank of England announced on Tuesday that end of variable remuneration limits for bankers starting October 31.

This decision is included in framework for post-Brexit measures with the aim of maintaining the attractiveness of London as international business and financial center. This responds to complaints from the sector, who feel that restrictions are a barrier to attracting and retaining employees, and that this is impacting talent in the City of London.

Bonus limits for workers in the banking sector limited since 2014, when the UK was still part of the European Union. Although the British Govt appealed the action to the European Union courtsbankers’ bonuses were limited to double the employee’s base salary for a maximum of ten years.

Eliminate unwanted actions

The FCA said in its statement that its decision aims to “strengthen effectiveness remuneration system” and “increase the compensation ratio“which can be felt by workers in these sectors.

The changes will help “eliminate unintended consequences” of bonus limits, incl fixed base salary growth in relation to total remuneration, something that “reduces the company’s ability to adjust variable remuneration to absorb losses,” the financial authority said.

“Removing bonus limits offers companies the freedom to do just that restructuring payments from time to time, within the framework of regulatory regulations regarding variable remuneration,” he added.