JNE Partners MIFIDPRU 8 Disclosure

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 JNE Partners LLP (“JNE” 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.

JNE 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 disclosure has been prepared by JNE in accordance with the requirements of MIFIDPRU 8 and is verified by the Executive Committee. Unless otherwise stated, all figures are as at the Firm’s 31 March 2023 financial year-end.

REMUNERATION POLICIES AND PRACTICES

Overview

As a SNI MIFIDPRU Investment Firm, JNE 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”)). JNE, as an alternative investment fund manager, is also classified as a collective portfolio management investment firm, and as such, is also subject to the Alternative Investment Fund Managers Remuneration Code (SYSC 19B). 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 client outcomes.

The objective of JNE’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, JNE recognises that remuneration is a key component in how the Firm attracts, motivates, and retains quality staff and sustains consistently high levels of performance, productivity, and results. As such, the Firm’s remuneration philosophy is also grounded in the belief that its people are the most important asset and provide its greatest competitive advantage.

JNE is committed to excellence, teamwork, ethical behaviour, and the pursuit of exceptional 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 Firm’s Remuneration Policy and Practices

Remuneration at JNE is made up of fixed and variable components. The fixed component is set in line with market competitiveness at a level to attract and retain skilled staff. Variable remuneration is paid on a discretionary basis and takes into consideration the Firm’s financial performance as well as the financial performance of each business unit, and the financial and non-financial performance of the individual in contributing to the Firm’s success. The members of the Executive Committee receive a fixed share of the profits of the Firm (if any) and all staff members are eligible to receive variable remuneration.

Remuneration decisions are based on a combination of:

  • JNE’s long-term sustainability and viability, including through varying business and economic cycles;
  • the impact of JNE’s Overall Financial Adequacy Rule and Threshold Conditions; and
  • JNE’s business performance and results against its strategic objectives.

Remuneration decisions for individuals are based on a combination of:

  • individual performance against the specifications of the role;
  • the level of responsibility and seniority;
  • overall performance of the relevant business function;
  • adherence to JNE’s purpose, values and culture;
  • adherence to JNE’s risk management and compliance framework; and
  • compliance with JNE’s internal conduct policies and procedures.

The fixed and variable components of remuneration are appropriately balanced: the fixed component represents a sufficiently high proportion of the total remuneration to enable the operation of a fully flexible policy on variable remuneration. This allows for the possibility of paying no variable remuneration component, which the Firm would do in certain situations, such as where the Firm’s profitability performance is constrained, or where there is a risk that the Firm may not be able to meet its capital or liquidity regulatory requirements.

Governance and Oversight

The Executive Committee is responsible for setting and overseeing the implementation of JNE’s remuneration policy and practices. In order to fulfil its responsibilities, the Executive 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;
  • prepares 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 shareholders, investors, and other stakeholders in the Firm; and
  • ensures that the overall remuneration policy is consistent with the business strategy, objectives, values, and interests of the Firm and of its clients.

JNE’s remuneration policy and practices are reviewed annually by the Executive Committee.

Quantitative Remuneration Disclosure

For the financial year, 1 April 2022 to 31 March 2023 the total amount of remuneration awarded to all staff was £2,861,108, of which £2,096,320 comprised the fixed component of remuneration, and £764,788 comprised the variable component. For these purposes, ‘staff’ is defined broadly, and includes members and employees of the Firm.


December 2023