Regulators Propose Restricting Incentive-Based Compensation Arrangements At Covered Institutions

Six regulatory agencies requested comment on a jointly proposed rule to limit incentive-based compensation arrangements at covered institutions as required by Section 956 of the Dodd-Frank Act.

The proposing agencies are the OCC, the Board of Governors of the Federal Reserve System, the FDIC, the Federal Housing Finance Agency ("FHFA"), the National Credit Union Administration and the SEC. The proposal includes the following:

• Incentive Compensation Arrangements: The regulations would include any arrangement where there was some benefit tied to performance.
• Regulated Institutions: The regulations would apply to covered institutions having $1 billion or more in assets. The term "covered institution" would include: (i) depository institutions and depository institution holding companies (which includes their various subsidiaries); (ii) SEC-registered broker-dealers; (iii) investment advisers, regardless of whether registered; (iv) credit unions; (v) Fannie Mae