N8- Compliance

Question 1

What is compliance?

Answer 1

‘Compliance’, for the purposes of this course, generally means complying with rules and regulations in the context of share plans. These can be:

• legal rules (like company law and employment law);
• tax rules;
• accounting rules; and
• regulatory rules.

There are not just rules and regulations in the UK. You will need to consider compliance globally.

Question 2

Consequence of non-compliance

Answer 2

• potentially, in the worst case, criminal offences;
• key terms being unenforceable;
• disputes and even litigation;
• reputational damage;
• unintended consequences - for example, for other aspects of the benefits package;
• increased tax liabilities or tax penalties/interest; and
• in some cases, for example for financial services companies, breach of regulatory requirements.