Wed. Aug 12th, 2020

Planet Compliance

Innovation & Regulation in Finance

European regulators publish guidelines on suitability assessment for senior management

2 min read

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) have published their joint Guidelines to assess the suitability of members of management bodies and key function holders.

The authorities issued these guidelines in accordance with MiFID II, in particular with the requirements introduced by Directive 2013/36/EU and Directive 2014/65/EU, ESMA and EBA issue jointly guidelines on the notions of suitability, as required by Article 91 (12) of the Directive 2013/36/EU and Article 9 (1) Directive 2014/65/EU1.

The directives aim at remedying weaknesses that were identified during the financial crisis regarding the functioning of the management body and its members. The Guidelines aim at further improving and harmonising the assessment of suitability within the EU financial sector and at ensuring sound governance arrangements in institutions. The guidelines specify that all institutions have to assess the members of the management body. Institutions that are subject to Directive 2013/36/EU have also to assess all key function holders that have a significant influence over the direction of the institution under the overall responsibility of the management body. Competent authorities are required to assess all members of the management body and for significant institutions the heads of internal control functions and the CFO, when they are not a member of the management body.

The ESMA statement and related information can be found here.

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