The NewYork State Department of Financial Services on Oct. 11 issued guidance oncompensation at regulated institutions, emphasizing that employees should notbe incentivized to engage in improper business activities.
Guidance issuedby Superintendent of Financial Services Maria Vullo cited the at , andcalled on covered companies to keep in mind certain principles when developingcompensation policies. These include keeping a balance between risks andrewards, imposing effective controls and risk management, and creatingcorporate governance that supports and oversees proper compensation policies.
Vullo alsoinstructed companies to keep an eye out for situations where conflicts ofinterest would arise, especially in cross-selling or referral bonusarrangements. She added that her department would conduct a supervisory reviewof covered companies' incentive policies during its regular risk examinationprocess.