Response to consultation on Joint ESMA EBA Guidelines on suitability of management body

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Question 1: Are there any conflicts between the responsibilities assigned by national company law to a specific function of the management body and the responsibilities assigned by the Guidelines to either the management or supervisory function?

No

Question 2: Are the subject matter, scope and definitions sufficiently clear?

Yes

Question 3: Is the scope of assessments of key function holders by CRD-institutions appropriate and sufficiently clear?

Yes

Question 4: Do you agree with this approach to the proportionality principle and consider that it will help in the practical implementation of the guidelines? Which aspects are not practical and the reasons why? Institutions are asked to provide quantitative and qualitative information about the size, internal organisation and the nature, scale and complexity of the activities of their institution to support their answers.

Yes we agree

Question 5: Do you consider that a more proportionate application of the guidelines regarding any aspect of the guidelines could be introduced? When providing your answer please specify which aspects and the reasons why. In this respect, institutions are asked to provide quantitative and qualitative information about the size, internal organisation and the nature, scale and complexity of the activities of their institution to support their answers.

N/A

Question 6: Are the guidelines with respect to the calculation of the number of directorships appropriate and sufficiently clear?

Yes

Question 7: Are the guidelines within Title II regarding the notions of suitability appropriate and sufficiently clear?

Yes

Question 8: Are the guidelines within Title III regarding the Human and financial resources for training of members of the management body appropriate and sufficiently clear?

Yes

Question 9: Are the guidelines within Title IV regarding diversity appropriate and sufficiently clear?

Yes

Question 10: Are the guidelines within Title V regarding the suitability policy and governance arrangements appropriate and sufficiently clear?

Yes

Question 11: Are the guidelines within Title VI regarding the assessment of suitability by institutions appropriate and sufficiently clear?

Yes except q. 130/ it is not clear when the appointment should be made especially if the shareholders decide to nominate and appoint a director at the AGM when there is insufficient time for the institution to fully assess a candidate and apply for an assessment by the competent authority

Question 12: Are the guidelines with regard to the timing (ex-ante) of the competent authority’s assessment process appropriate and sufficiently clear?

No they are not clear. As above what happens when shareholders have the right to nominate and appoint members of the Board of Directors (q. 166)

Question 13: Which other costs or impediments and benefits would be caused by an ex-ante assessment by the competent authority?

Ex-ante assessment would mean that shareholders would need to nominate members at least 4 months ahead of the AGM? Also when recruiting heads of control functions or other senior managment postiions, appointments would need to be put on hold for four months. Candidates could possibly lose interet and find alternative employment posts.
It is difficult to foresee any direct or eve indirect costs except as mentioned above.

Question 14: Which other costs or impediments and benefits would be caused by an ex-post assessment by the competent authority?

The costs of replacing the appointed person and starting the process again is one but is it difficule to foresse any direct or indirect costs.

Question 15: Are the guidelines within Title VII regarding the suitability assessment by competent authorities appropriate and sufficiently clear?

Not as far as the ex-ante assessment by the competent authorities is concerned

Question 16: Is the template for a matrix to assess the collective competence of members of the management body appropriate and sufficiently clear?

It appears excessive and inappropriately complicated

Question 17: Are the descriptions of skills appropriate and sufficiently clear?

Yes

Question 18: Are the documentation requirements for initial appointments appropriate and sufficiently clear?

They appear excessive

Question 19: What level of resource (financial and other) would be required to implement and comply with the Guidelines (IT costs, training costs, staff costs, etc., differentiated between one off and ongoing costs)? If possible please specify the respective costs/resources separately for the assessment of suitability and related policies and procedures, the implementation of a diversity policy and the guidelines regarding induction and training. When answering this question, please also provide information about the size, internal organisation and the nature, scale and complexity of the activities of your institution, where relevant.

It is difficult to put a number on the financial costs of complying with the guidelines. In terms of cost it would mean a dedicated unit (as already most of the guidelines have beeen adopted and are in place) to run the whole process of assessing candidates and re-assessing existing members of the managment unit, assissing the performance of the managment body, ensuring proper training etc. It would mean the cost of recruitment agencies to find appropriate candidates within the diversity policy of the institution and the cost of collecting all the necessary information before assessment can be made.

Name of organisation

Bank of Cyprus Public Company Ltd