EBA and ESMA consult on assessing the suitability of banks and investment firms members of the management body and key function holders
28 October 2016
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) launched today a consultation on Guidelines on the Assessment of the Suitability of the Members of Management Body and Key Function Holders (the Guidelines). The draft Guidelines aim at further improving and harmonising suitability assessments within the EU financial sectors and so ensure sound governance arrangements in financial institutions.
Weaknesses in corporate governance are widely acknowledged to have been one of the underlying causes of the financial crisis where inadequate oversight by, and challenge from, the management body in a number of credit institutions and investment firms contributed to excessive and imprudent risk-taking in the financial sector. In order to address those weaknesses, the EBA and ESMA have issued jointly these Guidelines in accordance with the new requirements introduced under the Capital Requirements Directive (CRD) and the Markets in Financial Instruments Directive (MiFID II).
The draft Guidelines:
The consultation closes on 28 January 2017 and a public hearing in London will take place on 5 January 2017 from 14:00 to 17:00 UK time.
Legal basis and next steps
These draft Guidelines have been developed according to Article 91 (12) of Directive 2013/36/EU (CRD) and Article 9 of Directive 2014/65/EU.
These Guidelines take also into account the results of the EBA peer review of the Guidelines on the assessment of the suitability of members of the management body and key function holders of credit institutions, published on 22 November 2015.
The joint Guidelines will apply to Competent Authorities across the EU, as well as to credit institutions and investment firms. Once the revised Guidelines are enforced, the previous EBA Guidelines on the assessment of the suitability of the management body and key function holders from 2012 will be repealed.
Competent Authorities across the EU will be expected to implement the Guidelines by mid-2017.
Franca Rosa Congiu
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