MIFIDPRU 8 Disclosure

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Verition Advisors (UK Partners) LLP

September 2024

Introduction

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 Verition Advisors (UK Partners) LLP (“Verition” or the “Firm”). Chapter 8 of MIFIDPRU (“MIFIDPRU 8”) sets out public disclosure rules and guidance with which the Firm must comply, further to those prudential requirements.

Verition is classified under MIFIDPRU as a small and non-interconnected MIFIDPRU investment firm (“SNI MIFIDPRU Investment Firm”). As such, the Firm 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 Firm’s culture and to assist stakeholders in making more informed decisions about their relationship with the Firm.

This document has been prepared by Verition in accordance with the requirements of MIFIDPRU 8 and is verified by the Management Committee. Unless otherwise stated, all figures are as at the Firm’s financial year-end 31 December 2023.

Remuneration Policy and Practices

Overview

As an SNI MIFIDPRU Investment Firm, Verition 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 Firm and its clients;
  • Ensure alignment between risk and individual reward;
  • Support positive behaviours and healthy firm cultures; and
  • Discourage behaviours that can lead to misconduct and poor customer outcomes.

The objective of Verition’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 Firm and the services that it provides to its clients.

In addition, Verition recognises that remuneration is a key component in how the Firm attracts, motivates, and retains quality staff.

Verition makes considered and informed remuneration decisions that reward staff based on their effort, attitude, and results.

Characteristics of the Firm’s Remuneration Policy and Practices

Fixed and variable remuneration

The Firm categorises all components of remuneration as either fixed or variable remuneration.

In allocating individual remuneration components to fixed or variable remuneration, the Firm considers the quality and purpose of the remuneration component as follows:

  • fixed remuneration is based on a staff member’s professional experience and organisational responsibility and is permanent, pre-determined, non-discretionary, non-revocable and not dependent on performance; and
  • variable remuneration is discretionary and based on the staff member’s performance.

Staff remuneration principally comprises salary, benefits, and a discretionary bonus or a percentage payout and is subject to certain conduct and compliance gateways. Further details of the Firm's variable remuneration arrangements are summarised below.

The Firm ensures that:

  • the fixed and variable components of total remuneration are appropriately balanced taking into account the staff member’s role and the Firm’s business activities and associated prudential and conduct risks; and
  • the fixed component represents a sufficiently high proportion of the total remuneration to enable the operation of a fully flexible policy on variable remuneration, including the possibility of paying no variable remuneration. No member of staff will receive only variable remuneration.

Variable remuneration arrangements

Performance assessment

The decision to pay variable remuneration to staff members is made on a staff member by staff member basis solely at the discretion of the Firm. The decision will be based on the performance assessment criteria in this section. The Firm may take into account a staff member’s tenure if they have worked at the Firm for less than one year as at calendar year end.

For all staff, when assessing individual performance to determine the amount of variable remuneration to be paid to an individual, the Firm takes into account financial as well as non-financial criteria. The non-financial criteria considered includes compliance with all applicable Firm risk management, compliance, and conduct-related policies, and/or having completed all mandatory compliance-related training.

Paying variable remuneration

Any discretionary bonuses or percentage payouts awarded will be paid to staff members during the first quarter of the performance year immediately following the performance year for which the discretionary bonus is being awarded.

In order to be eligible to be considered for a discretionary bonus or a percentage payout, staff members must be actively employed/active members and not under notice during the bonus year. In addition, the staff member must be employed/a member on the date the discretionary bonus or percentage payout, if any, is paid and not have either received or given notice to terminate their employment or membership.

Subject to any guaranteed variable remuneration which may be agreed from time to time, because bonus payments are discretionary, no staff member has any express or implied right to receive any discretionary bonus in the current performance year or for a future performance year.

Bonuses are paid in accordance with the Firm’s practices at the time of award and the rules of the applicable bonus scheme. The Firm reserves the right to amend, withdraw and/or replace any annual discretionary variable remuneration scheme at any time and for any reason without giving rise to any claim for damages or compensation as a result.

Governance and Oversight

The Management Committee is responsible for setting and overseeing the implementation of Verition’s remuneration policy and practices. In order to fulfil its responsibilities, the Management 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.
  • Considers decisions regarding remuneration, including decisions that have implications for the risk and risk management of the Firm.
  • Ensures that the Firm’s remuneration policy and practices take into account the public interest and the long-term interests of stakeholders in the Firm.
  • Ensures that the overall remuneration policy is consistent with the business strategy, objectives, values, and interests of the Firm and of its clients.

Verition’s remuneration policy and practices are reviewed annually by the Management Committee.

 

Quantitative Remuneration Disclosure

For the financial year 1 January to 31 December 2023, the total amount of remuneration awarded to all staff was £60,368,764, of which £12,407,567 comprised the fixed component of remuneration, and £47,961,197 comprised the variable component. For these purposes, ‘staff’ is defined broadly, and includes, for example, employees of the Firm itself and its members.

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Privacy Policy

VERITION FUND MANAGEMENT LLC (THE “MANAGER”) IS COMMITTED TO MAINTAINING THE PRIVACY OF CURRENT AND PROSPECTIVE INVESTORS IN THE VERITION FUNDS (THE “FUNDS”). THE MANAGER RECOGNIZES THAT INVESTORS IN THE FUNDS ENTRUST THE MANAGER WITH HIGHLY CONFIDENTIAL PERSONAL AND FINANCIAL INFORMATION, AND THE MANAGER UNDERSTANDS THAT PROTECTING AND SAFEGUARDING THIS INFORMATION IS IMPORTANT.

IN THE COURSE OF PROCESSING AN INVESTOR’S SUBSCRIPTION AGREEMENT TO THE FUNDS AND THE MANAGER’S ONGOING DEALINGS WITH SUCH INVESTOR, THE MANAGER MAY OBTAIN NON-PUBLIC PERSONAL INFORMATION ABOUT SUCH INVESTOR. THIS INFORMATION MAY INCLUDE THE INVESTOR’S NAME, ADDRESS, TELEPHONE NUMBER, EMAIL ADDRESS, PASSPORT NUMBER, SOCIAL SECURITY NUMBER, TAXPAYER IDENTIFICATION NUMBER, BANK ACCOUNT NUMBER, TRANSACTION HISTORY AND OTHER PERSONAL INFORMATION. THE MANAGER MAY COLLECT DIFFERENT TYPES OF INFORMATION IN A VARIETY OF WAYS, INCLUDING:



  • INFORMATION IT RECEIVES FROM AN INVESTOR’S SUBSCRIPTION AGREEMENT, FROM OTHER FORMS AND QUESTIONNAIRES, OR OTHERWISE IN THE COURSE OF ESTABLISHING AN INVESTOR RELATIONSHIP.
  • INFORMATION ABOUT THE FREQUENCY OF AN INVESTOR’S OR OTHER PERSON’S USE OF THE MANAGER’S WEB SITE.
  • INFORMATION ABOUT AN INVESTOR’S TRANSACTIONS WITH THE FUNDS, ITS AFFILIATES OR OTHERS, SUCH AS SUCH INVESTOR’S INVESTMENT AND WITHDRAWAL HISTORY.


THE MANAGER USES THIS INFORMATION FOR MARKETING PURPOSES AS WELL AS INTERNAL ADMINISTRATION AND ANALYSIS. THE MANAGER DOES NOT DISCLOSE ANY NON-PUBLIC PERSONAL INFORMATION ABOUT INVESTORS OR FORMER INVESTORS IN THE FUNDS TO ANY NON-AFFILIATED PARTIES, EXCEPT TO THIRDPARTY SERVICE PROVIDERS WHO ASSIST IN THE OPERATION OF THE MANAGER’S AND THE FUND’S BUSINESS, AS REQUIRED BY LAW, AT THEIR REQUEST OR WITH THEIR CONSENT. THE MANAGER RESTRICTS ACCESS TO NON-PUBLIC PERSONAL INFORMATION TO THOSE PERSONNEL, AGENTS OR OTHER PARTIES WHO NEED TO KNOW THAT INFORMATION TO PROVIDE SERVICES TO SUCH PERSONS. THE MANAGER MAINTAINS PHYSICAL, ELECTRONIC AND PROCEDURAL SAFEGUARDS TO PROTECT NON-PUBLIC PERSONAL INFORMATION. THE MANAGER’S PRIVACY POLICY COVERS ALL INDIVIDUALS WHO ARE INVESTORS IN THE FUNDS, WHO HAVE BEEN INVESTORS IN THE FUNDS OR WHO ARE CONSIDERING AN INVESTMENT IN THE FUNDS.

FOR THE LIMITED PURPOSES OUTLINED ABOVE, THE MANAGER MAY DISSEMINATE INTERNALLY NON-PUBLIC, PERSONAL INFORMATION CONCERNING INVESTORS. HOWEVER, THE MANAGER WILL USE REASONABLE BEST EFFORTS TO ENSURE THAT SUCH INFORMATION IS TREATED IN ACCORDANCE WITH THIS PRIVACY POLICY.

BY DISCLOSING PERSONAL INFORMATION TO THE MANAGER, THE DISCLOSING PARTY CONSENTS TO THE COLLECTION, STORAGE AND PROCESSING OF ITS PERSONAL INFORMATION BY THE MANAGER IN A MANNER CONSISTENT WITH THIS PRIVACY POLICY.

THE MANAGER WILL PROVIDE INVESTORS IN THE FUNDS WITH A COPY OF ITS PRIVACY POLICY ANNUALLY, AND IF ANY MATERIAL CHANGES OCCUR TO ITS PRIVACY POLICY, THE MANAGER WILL NOTIFY INVESTORS AS PROMPTLY AS PRACTICABLE OF SUCH CHANGES. IF YOU HAVE ANY QUESTIONS ABOUT THIS PRIVACY POLICY, PLEASE CALL A REPRESENTATIVE OF THE MANAGER AT (203) 742-7700.

ALTHOUGH REGULATIONS ONLY REQUIRE THAT THE FOREGOING PRIVACY POLICY BE APPLIED TO NATURAL PERSONS, THE MANAGER APPLIES THE SAME PRIVACY POLICY TO ALL INVESTORS.

THE FOREGOING PRIVACY POLICY SHALL NOT PREVENT THE MANAGER OR THE FUND FROM DISCLOSING TO APPROPRIATE THIRD PARTIES SUCH INFORMATION AS THE MANAGER OR THE FUNDS MAY DEEM NECESSARY OR ADVISABLE IN ORDER TO COMPLY WITH APPLICABLE ANTI-MONEY LAUNDERING AND OTHER APPLICABLE LAWS AND REGULATIONS.