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