EBA欧洲银行-Consultation-Paper-on-Joint-ESMA-EBA-Guidelines-on-suitability-of-management-body-28EBA-CP-2016-1729_89页_1mb

Summary of Joint ESMA and EBA Guidelines on Suitability Assessment

Core Content

The Joint ESMA and EBA Guidelines provide a harmonised framework for assessing the suitability of members of the management body and key function holders under Directive 2013/36/EU and Directive 2014/65/EU. These guidelines aim to improve corporate governance and ensure sound and prudent management in the EU financial sector, addressing weaknesses revealed during the financial crisis.

Main Views and Key Information

1. Scope of Suitability Assessments

• All institutions must assess the suitability of members of the management body.
• Institutions under Directive 2013/36/EU must also assess key function holders who have significant influence over the institution.
• Competent authorities must assess members of the management body and, for significant institutions, the heads of internal control functions and the CFO (if not part of the management body).

2. Suitability Criteria

• Sufficient time commitment: Members must dedicate adequate time to their roles.
• Adequate knowledge, skills, and experience: Both individually and collectively, members must have the necessary expertise to understand the institution's activities and risks.
• Good reputation, honesty, and integrity: These are essential qualities for all members.
• Independence of mind: Particularly important for members in supervisory roles to challenge management decisions effectively.

3. Proportionality Principle

• The suitability assessment must be proportionate to the nature, scale, and complexity of the institution.
• This principle applies to the number of directorships, time commitment, and the depth of knowledge required.

4. Diversity in Management Bodies

• Diversity is encouraged to prevent "group thinking" and ensure a broader range of perspectives.
• Diversity should be considered in the selection process, including aspects such as gender, age, education, and professional background.
• A gender-balanced composition is of particular importance, as highlighted in the directives and other EU initiatives.

5. Induction and Training

• Institutions must establish induction and training policies for members of the management body.
• These policies should ensure that members are familiar with the institution's structure, business, and risk strategy.
• Ongoing training is necessary to maintain up-to-date knowledge of legal, regulatory, and market changes.

6. Governance and Policy Arrangements

• Institutions must have a suitability policy and governance arrangements in place.
• For significant institutions, a nomination committee is required to assess suitability, diversity, and composition of the management body.
• If no nomination committee exists, the supervisory function of the management body must take on these responsibilities.

7. Ongoing Monitoring and Re-Assessment

• Institutions must continuously monitor and re-assess the suitability of members and key function holders.
• Events affecting knowledge, skills, experience, reputation, or time commitment should trigger a re-assessment.

8. Role of Competent Authorities

• Competent authorities have specific processes for assessing suitability, especially for significant institutions.
• Their assessments are prudential and preventive, based on available information, and not part of criminal or administrative procedures.
• Institutions are responsible for demonstrating that individuals meet reputation, honesty, and integrity standards.

9. Legal Basis

• The guidelines are based on Articles 91(12) of Directive 2013/36/EU and Article 9(1) of Directive 2014/65/EU.
• They also incorporate regulatory technical standards and international governance principles.

10. Implementation

• The guidelines apply to both unitary and dual board structures in Member States.
• They do not interfere with national laws on social, company, or labour law, which must be followed in parallel.
• The existing EBA guidelines from 2012 will be repealed upon the entry into force of these new guidelines.

Next Steps

• The EBA and ESMA will finalise the guidelines following the public consultation.
• The EBA is also updating its internal governance guidelines in parallel.

Submission and Confidentiality

• Comments must be submitted by 28.01.2017 via the consultation page.
• Respondents may choose to have their comments disclosed or kept confidential.
• Confidential comments may be requested by competent authorities, and the EBA will consult the respondent if needed.

Data Protection

• The EBA complies with Regulation (EC) No 45/2001 on data protection.
• Personal data collected during the consultation process is handled in accordance with the EBA's implementing rules.

Annexes and Supporting Documents

• Annex I: Template for assessing collective competence.
• Annex II: Skills required for suitability.
• Annex III: Documentation requirements for initial appointments.
• Annex IV: Requirements for suitability assessments and re-assessments by institutions and competent authorities.
• Accompanying documents: Include a draft cost-benefit analysis and impact assessment.