Delimitation of responsibilities for the suitability assessment
3.3.1 Starting point
It is incumbent upon the institutions to select and retain the persons who are fit and proper to hold the positions which require a suitability assessment. The main responsibility for verifying that these persons are fit and proper also falls upon the institution. It must make every effort to check a person’s suitability, by carrying out a suitability assessment. Amongst other things, the assessment process must be based upon information provided by the person who is to be assessed.
If the result of the assessment of suitability is positive, the institution must in turn send the NBB full, reliable information about the person’s suitability. Based upon this information, supplemented by details collected by the supervisory authority on its own initiative, the NBB will carry out its own assessment of the suitability of the person in question. Such assessment deals not only with ensuring that the person is effectively fit and proper, but also takes account of the overall individual and collective assessment procedure used to assess the institution. The greater the margin of assessment for a given aspect (e.g. as far as skills, etc. are concerned – see below), the greater the weight the NBB can give to this internal procedure put into place by the institution and therefore limit itself to verifying that this assessment procedure offers the necessary guarantees.
3.3.2 The responsibilities of the financial institution and the person who is to be assessed
As has already been explained, it is incumbent, first and foremost, upon the financial institution to assess the fitness and propriety of persons who hold positions which require a suitability assessment. The institution should inform (inter alia) the supervisor of the outcome of its suitability assessment, including the assessment of suitability of the collective composition of the statutory governing body. In this respect, reference is also made to the information and documentation provided in Annex III to Guidelines EBA/GL/2017/12 (see point 18.104.22.168).
The statutory governing body is responsible for the appropriate recruitment, assessment and training policy designed, amongst other things, to support these assessments. Where the institution has an appointment committee, said committee should make an active contribution to the taking of responsibility by the institution in this respect and draw up appropriate internal rules for the assessment of individual and collective suitability. The institution is best placed to determine what specific fitness criteria are required for a position at the company.
It is part of the duties of the compliance function of the institution to ensure compliance with the legal suitability requirements.
Both the institution and the person who is the subject of the assessment of suitability must ensure that the information given to the NBB during a second stage is complete and accurate.
3.3.3 The responsibilities of the supervisory authority
When a new person is deemed fit by the financial institution, the NBB will collect the necessary information and carry out an assessment on the basis of which it will decide on final approval. For the purposes of its own assessment, the NBB will first of all use the information supplied by the institution and by the person in question as a basis. This information is primarily collected using standard forms designed especially for this purpose (see the annex). Obviously the NBB is free to ask for any additional information and, where applicable, to interview the person in question. More detailed explanations about the NBB's assessment procedure are given further on in this chapter.
The longer that a person has held a position, the more practical information the institution and the NBB will have about the way that the person works within the institution (e.g. by looking at reports made by the statutory governing body, audits, etc.) The institution and the NBB both have a responsibility to reassess this information whenever this may appear necessary (see points 3.5.2 and 22.214.171.124).
3.3.4 Responsibility for the assessment of suitability on an ongoing basis
The legal requirement always to have persons who are suitable to hold the positions which require a suitability assessment is an obligation which all institutions must fulfil at all times. The persons in question must, at any time, “be” skilled and act with professional integrity. The specific details for continuous monitoring of suitability are discussed in more detail later in this handbook.
However, as regards the respective responsibilities of the parties involved for ensuring the ongoing nature of the suitability criteria, the following shall apply:
As regards the person in question
On the standard forms drawn up by the NBB, the person in question is expected to declare that s/he has made every effort to comply constantly with the suitability standards for the purposes of the position which s/he already holds or plans to hold.
Persons who already hold positions must immediately inform the institution of any event which is likely to influence their fitness and propriety.
As regards the institution
Where an institution considers that doubts might arise about the suitability of a person who holds a position or the collective suitability of the statutory governing body, the NBB expects it to take steps as quickly as possible and to make every effort to take a close look at these doubts. The institution must also inform the NBB immediately thereof.
In order to guarantee the constant suitability of the persons in question, the following is recommended:
- When a person takes up a position, it is important for the institution to ask him or her for a written declaration in which s/he confirms that s/he will unreservedly abide by the current suitability standards for this position and that s/he will give immediate notice of any events which might turn out to be important in this respect.
- The person in question should be reminded of this declaration every year. In this way, the institution may, on an annual basis, explicitly ask the persons in question whether they are aware of any relevant, significant changes in relation to their compliance with the suitability standards.
As the financial sector is constantly on the move, continuing training would appear to be a necessary condition, although in principle it is not on its own sufficient to fulfil the requirement for fitness at all times. The supervisory authority expects the institution to take all necessary steps to implement judicious continuing training.
As regards the supervisory authority
The fitness and propriety of persons who require a suitability assessment is under constant scrutiny by the supervisory authority. Whenever the NBB becomes aware of any information which raises doubts about the suitability of a person who currently holds a position, the NBB will immediately carry out a more in-depth examination and, if required, a reassessment.