IOSCO-FSB Roundtable Focuses On Securities Sector Compensation Practices

The Financial Stability Board ("FSB") and IOSCO held a roundtable discussion to examine compensation practices in the securities sector. The examination included the compensation practices of sell-side and buy-side firms, securities firms that are affiliated with banks and those that are not, and firms engaged in a wide variety of businesses.

Members of the roundtable discussed, among other topics:

• the manner in which a firm generally determines compensation, including how compensation expenses are determined for the firm as a whole and at the individual level;
• the regulation of compensation practices of member firms across jurisdictions;
• financial stability risks that can arise from "star-based" compensation structures, and whether securities firms "align their compensation practices with long-term prudent risk taking";