The European Banking Authority (EBA) and the European Supervisory Market Authority (ESMA) launched a public consultation on 31 July 2020 on their revised joint Guidelines on the suitability requirements for senior management of regulated institutions (Joint Guidelines). The revised version will replace previous guidelines issued in 2017.
It is intended that the Joint Guidelines will be used by member state competent authorities when approving individuals to act as senior managers on regulated institutions. This review reflects the amendments introduced by the Fifth Capital Requirements Directive (CRD V) and the Investment Firms Directive (IFD) in relation to the assessment of the suitability of members of the management body.
The consultation closes on 31 October 2020 and interested parties are asked to send submissions by clicking on the "send your comments" button at EBA’s page here.
The revised Joint Guidelines:
- Aim to further improve and harmonise the assessment of suitability within the EU financial sector and to ensure sound governance arrangements in institutions
- Emphasise that senior managers are expected to have the experience and capability to respond appropriately to AML threats that the business may face
- Apply to all institutions, independent of their governance structures
- Seek to promote diversity, including in gender balance, in the process for selecting members of the management body – to avoid “group think”
- Aim to promote objective decision-making, oversight and compliance with external and internal requirements, including strategies and risk limits, conflict of interest policies and internal whistleblowing procedures
The EBA and ESMA will finalise their updated Joint Guidelines after the public consultation and it is expected that the amended document will enter into force 6 months after publication.
The consultation runs until 31 October 2020.
ESMA's news release can be found here.
The consultation paper can be found here.