General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
September 26, 2017

EBA and ESMA published joint guidelines to assess the suitability of members of management bodies and key function holders. The joint guidelines will apply as of June 30, 2018 to competent authorities across the EU as well as to institutions on an individual and consolidated basis. The previous EBA guidelines on assessment of the members of the management body and key function holders will be repealed on the same date.

EBA and ESMA offer further guidance on the scope of assessments to be made, the assessment process for institutions and competent authorities, and related policies. They provide for the heads of internal control functions and the Chief Financial Officer, when they are not members of the management body, to be always considered as key function holders, and therefore, subject to the institutions' assessment. The members of the management body should have sufficient time to cover all the necessary subjects in depth, particularly the establishment of business and risk strategies and the management of the main risks. The management body, collectively, should possess adequate knowledge, skills, and experience to understand the institution's activities, including the main risks. This joint work also builds on the outcome of EBA's peer review of the EBA guidelines on the assessment of the suitability of members of the management body and key function holders of credit institutions. The joint guidelines specify the notions of (a) sufficient time commitment; (b) adequate collective knowledge, skills, and experience; (c) honesty, integrity, and independence of mind; (d) adequate human and financial resources for induction and training of members of the management body, and (e) diversity, which is to be considered in the selection process.

 

The guidelines foster more diverse management bodies and, therefore, contribute to improved risk oversight and resilience of institutions. The guidelines aim to harmonize and improve suitability assessments within the EU financial sectors and to ensure sound governance arrangements in financial institutions, in line with the Capital Requirements Directive (CRD IV) and the second Markets in Financial Instruments Directive (MiFID II). CRD and MiFID II include measures to remedy weaknesses identified during the financial crisis regarding the functioning and composition of the management body within credit institutions and investment firms and the qualifications of their members.

 

Related Link: Joint Guidelines

Effective Date: June 30, 2018

Keywords: Europe, EU, Banking, Securities, Governance, Internal Control Functions, CRD IV, MiFID II, ESMA, EBA

Related Insights
News

EBA Finalizes Guidelines on the STS Criteria in Securitization

EBA published the final guidelines that provide a harmonized interpretation of the criteria for a securitization to be eligible as simple, transparent, and standardized (STS) on a cross-sectoral basis throughout EU.

December 12, 2018 WebPage Regulatory News
News

OSFI Sets Domestic Stability Buffer for D-SIBs at 1.75%

OSFI set the level for the Domestic Stability Buffer at 1.75% of total risk-weighted assets, as calculated under the Capital Adequacy Requirements (CAR) Guideline.

December 12, 2018 WebPage Regulatory News
News

FSI Publishes Paper on Proportionality in Insurance Solvency Rules

FSI published a paper on proportionality in the application of insurance solvency requirements.

December 11, 2018 WebPage Regulatory News
News

BCBS Updates Framework for Pillar 3 Disclosure Requirements

BCBS published the updated framework for Pillar 3 disclosure requirements.

December 11, 2018 WebPage Regulatory News
News

EBA Issues Revised List of Validation Rules for Reporting

EBA revised the list of validation rules in its implementing technical standards on supervisory reporting.

December 11, 2018 WebPage Regulatory News
News

IMF Reports Assess the Stability of Financial System in Brazil

IMF published a report on the results of the Financial System Stability Assessment (FSSA) on Brazil.

December 11, 2018 WebPage Regulatory News
News

FED Governor Examines Pros of Imposing Capital Buffers on Large Banks

At the Peterson Institute for International Economics in Washington D.C., the FED Governor Lael Brainard summarized the financial stability outlook, highlighted areas where financial imbalances seem to be building, and touched on the related policy implications.

December 07, 2018 WebPage Regulatory News
News

US Agencies Propose Rule on Appraisals for Real Estate Transactions

US Agencies (FDIC, FED, and OCC) proposed a rule to increase the threshold level at or below which appraisals would not be required for the residential real estate transactions from USD 250,000 to USD 400,000. Comments will be accepted for 60 days from publication in the Federal Register.

December 07, 2018 WebPage Regulatory News
News

EBA Single Rulebook Q&A: First Update for December 2018

This week one answer was published as part of the Single Rulebook Questions and Answers (Q&A).

December 07, 2018 WebPage Regulatory News
News

FED Updates Reporting Form and Instructions for FR Y-14Q

FED published the updated reporting form FR Y-14Q for Capital Assessment and Stress Testing, along with the associated instructions.

December 06, 2018 WebPage Regulatory News
RESULTS 1 - 10 OF 2325