The following disclosure is made by Epiris LLP (“Epiris”) pursuant to the FCA’s Prudential Sourcebook for MiFID Investment Firms (“MIFIDPRU”) in respect of its financial year ended 31st March 2023.
Epiris is authorised and regulated by the FCA in the UK and is subject to the FCA’s MIFIDPRU Sourcebook. In respect of its year ended 31st March 2023, Epiris LLP met all the criteria for small and non-interconnected (“SNI”) investment firms, as detailed in MIFIDPRU 1.2, and so was categorised as an SNI investment firm in respect of that financial year.
As an SNI investment firm authorised and regulated by the FCA, Epiris is required under Chapter 8 of MIFIDPRU to publish key information to assist users of its financial statements. In accordance with MIFIDPRU 8.1, the information which Epiris as an SNI investment firm is required to publish is principally related to its remuneration policies and practices (per MIFIDPRU 8.6).
This disclosure has been prepared by Epiris in accordance with the requirements of MIFIDPRU 8 and has been approved by the Executive Committee of Epiris. Unless otherwise stated all disclosures relate to the financial year ended 31st March 2023.
The Executive Committee of Epiris has the ultimate responsibility for the development of appropriate strategies, systems and controls for the management of risks within the business.
Epiris has established and maintains documented risk management policies and procedures which identify the risks relating to its activities, processes and systems and where appropriate set the level of risk tolerated by Epiris which is low.
Epiris has adopted effective arrangements, processes and mechanisms to manage the risks relating to its activities, processes and systems.
Epiris monitors the following:
- the adequacy and effectiveness of its risk management policies and procedures;
- the level of compliance by Epiris and its relevant persons with the arrangements, processes and mechanisms adopted in accordance with its risk management policies;
- the adequacy and effectiveness of measures taken to address any deficiencies in those policies, procedures, arrangements, processes and mechanisms, including failures by the relevant persons to comply with such arrangements, processes and mechanisms or follow such policies and procedures.
Own Funds Requirement
Epiris must, at all times, hold own funds and liquid assets which are adequate, both in their amount and in their quality, to ensure that it is able to remain financially viable throughout the economic cycle and to address any material potential harms that may result from its ongoing activities; and to ensure that its business can be wound down in an orderly manner, minimising harm to consumers and other market participants.
Epiris conducts and documents its Internal Capital Adequacy and Risk Assessment Process (“ICARA”) to confirm that it complies with the above mentioned overall financial adequacy rule. Epiris may hold additional own funds or additional liquid assets above its own funds requirement or basic liquid assets requirement to manage the potential harms identified.
Epiris’ ICARA is reviewed and approved by its Executive Committee at least annually or more often if deemed appropriate.
Remuneration Policy and Practices
As an SNI Investment firm, Epiris is subject to the requirements of the MIFIDPRU Remuneration Code set out in SYSC 19.G of the FCA’s Handbook. MIFIDPRU 8.6 of the FCA’s Handbook requires Epiris to disclose certain information on an annual basis regarding its Remuneration Policy and practices for all staff.
Epiris’ approach to remuneration
The Executive Committee of Epiris has approved the Epiris Remuneration Policy and has overall responsibility for overseeing its implementation via the Epiris’ Remuneration Committee.
The objective of Epiris’ Remuneration Policy is to ensure that the way it remunerates the Epiris staff:
- is consistent with and promotes sound and effective risk management;
- avoids conflicts of interests, encourages responsible business conduct, promotes risk awareness and does not encourage excessive risk taking;
- is in line with Epiris’ business strategy, objectives, values and long-term interests; and
- is gender neutral and respects the principle of equal pay for male and female workers for equal work or work of equal value.
Each Partner of Epiris is remunerated by profit allocations. The structure of these differs depending on whether the Partner is an Equity Partner or a Non-Equity Partner.
The Equity Partners of Epiris receive fixed drawings which are considered to be fixed remuneration.
The Non-Equity Partners also receive fixed drawings which are considered to be fixed remuneration and may also be awarded Additional Profits. Such Additional Profits are paid from the Epiris bonus pool which is set by reference to the overall performance and profitability of Epiris and the employment market for investment professionals. Awards from this bonus pool are made on the basis of individual performance reviews, which take account of both financial and non-financial criteria. Such Additional Profits are considered to be variable remuneration and are not guaranteed.
Certain Partners who are considered to have a particular impact on the investment services provided by Epiris may also be awarded with carried interest in funds managed by Epiris’ clients which are considered to align the interests of these Partners with both Epiris’ clients and the funds which Epiris’ clients manage. Carried interest awarded is considered to be variable remuneration.
Epiris employees receive an annual salary which is set by reference to a range of factors, taking account of the employee’s seniority and responsibilities and the market pay for the relevant position and their annual salary is considered to be fixed remuneration.
Employees may also be awarded an annual discretionary bonus payment. Such bonuses are paid from the Epiris bonus pool which is set by reference by to the overall performance and profitability of Epiris and the employment market for investment professionals. Awards from this bonus pool are made on the basis of individual performance reviews, which take account of both financial and non-financial criteria. Such bonuses are considered to be variable remuneration and are not guaranteed.
In its consideration of variable remuneration to be awarded to Non-Equity Partners and employees, the Epiris Remuneration Committee will consider not only, nor predominantly, quantitative measurements but also qualitative issues such as training and competence, personal skills and development, risk management, client focus, service quality, fair treatment of its clients and their investors, team working and development, ethical behaviour and regulatory compliance, noting that in the case of Epiris and taking account of proportionality, such detailed assessments are likely to be more relevant to Non-Equity Partners than employees.
Remuneration and Capital
Variable remuneration awards are made within a context of ensuring they do not affect Epiris’ ability to ensure a sound capital base. Epiris will not pay remuneration for potential future revenues whose timing and likelihood remain uncertain and will also retain sufficient sums to cover its regulatory and working capital requirements taking full account of risk management considerations. Remuneration relates only to profits actually made by Epiris and not subject to clawback.
Balance of Fixed and Variable Components of Remuneration.
The fixed and variable components of total remuneration are appropriately balanced with the fixed element being sufficiently high to enable the operation of a fully flexible policy on variable remuneration.
Aggregated quantitative information on remuneration paid to all staff: