The Financial Conduct Authority (“FCA” or “regulator”) in the Prudential sourcebook for MiFID Investment Firms in the FCA Handbook (“MIFIDPRU”) sets out the detailed prudential requirements that apply to 3W Equity Ltd Limited (“Traditum” or the “Company”). Further to those prudential requirements, Chapter 8 of MIFIDPRU (“MIFIDPRU 8”) sets out public disclosure rules and guidance with which the Company must comply, Traditum is classified under MIFIDPRU as a small and non-interconnected MIFIDPRU investment firm (“SNI MIFIDPRU Investment Firm”). As such, the Company is required by MIFIDPRU 8 to disclose information regarding its remuneration policy and practices.
The purpose of these disclosures is to give stakeholders and market participants an insight into the Company’s culture and to assist stakeholders in making more informed decisions about their relationship with the Company.
This document has been prepared by Traditum in accordance with the requirements of MIFIDPRU 8 and is verified by the Management Body (as defined in the FCA Handbook). Unless otherwise stated, all figures are as at the Company’s 31 January financial year-end.
Remuneration Policy and Practices
As an SNI MIFIDPRU Investment Firm, Traditum is subject to the basic requirements of the MIFIDPRU Remuneration Code (as laid down in Chapter 19G of the Senior management arrangements, Systems and Controls sourcebook in the FCA Handbook (“SYSC”)). The purpose of the remuneration requirements is to:
- Promote effective risk management in the long-term interests of the Company and its clients;
- Ensure an appropriate relationship between risk and individual reward;
- Support positive behaviours and healthy firm culture; and
- Discourage behaviours that can lead to misconduct and poor client outcomes
The objective of Traditum’s remuneration policies and practices is to establish, implement and maintain a culture that is consistent with, and promotes, sound and effective risk management and does not encourage risk-taking which is inconsistent with the risk profile of the Company and the services that it provides to its clients.
In addition, Traditum recognises that remuneration is a key component in how the Company attracts, motivates, and retains quality staff and sustains consistently high levels of performance, productivity, and results. As such, the Company’s remuneration philosophy is also grounded in the belief that its people are the most important asset and provide its greatest competitive advantage.
Traditum is committed to excellence, teamwork, ethical behaviour, and the pursuit of positive outcomes for its clients. From a remuneration perspective, this means that performance is determined through the assessment of various factors that relate to these values, and by making considered and informed decisions that reward effort, attitude, and results.
Characteristics of the Company’s Remuneration Policy and Practices
Remuneration at Traditum is made up of fixed and variable components. The fixed component is set competitively, in line with the market, and at a level to attract and retain skilled staff. Variable remuneration is paid on a discretionary basis only and takes into consideration the Company’s financial performance as well as the financial and non-financial performance of the individual in contributing to the Company’s success. All staff members are eligible to receive variable remuneration.
All employee remuneration is formed of a fixed component, or ‘base salary’, and a variable component, or ‘discretionary’. bonus. Fixed remuneration is permanent, pre-determined, non-discretionary, and except for the case of termination of employment, non-revocable. Due consideration is given to market practice to ensure competitive, but not excessive, base salaries are set, reflective of individual experience, qualifications, expertise, and role.
The discretionary bonus is based on several factors, including corporate and individual performance and an individual’s regulatory conduct and investment and client servicing performance throughout the year. Ultimately, the payment of any discretionary bonus is subject to the discretion of management. By ensuring that the fixed element of remuneration is sufficient and the discretionary bonus is not solely linked to performance, the Company seeks to minimise excessive risk-taking by its employees and encourages them to act with integrity. This also allows for the possibility of paying no variable remuneration component, which the Company would do in certain situations, such as where the Company’s profitability performance is constrained, or where there is a risk that the Company may not be able to meet its capital or liquidity regulatory requirements.
Governance and Oversight
The Remuneration Committee is responsible for setting and overseeing the implementation of Traditum’s remuneration policy and practices. To fulfil its responsibilities, the Remuneration Committee:
- Is appropriately staffed to enable it to exercise competent and independent judgment on remuneration policies and practices and the incentives created for managing risk, capital, and liquidity.
- Makes decisions regarding the structure of remuneration, including decisions that have implications for the risk and risk management of the Company.
- Ensures that the Company’s remuneration policy and practices consider the long-term interests of shareholders, investors, and other stakeholders in the Company.
- Ensures that employees receive training on the importance of avoiding conflicts of interest.
- Ensures that the overall remuneration policy is consistent with the business strategy, objectives, values, and interests of the Company and of its clients.
Traditum’s remuneration policy and practices are reviewed annually by the Management Body/Remuneration Committee.
Quantitative Remuneration Disclosure
For the financial year 1 February 2022 to 31 January 2023, the total amount of remuneration awarded to all staff was £634k of which £634k comprised the fixed component of remuneration, and £NIL comprised the variable component. For these purposes the definition of ‘staff’ is defined to include employees of the Company itself and directors.