Suitability requirements applicable to significant institutions under direct supervision by the ECB under the SSM regulation

Regulatory context

Directives 2013/36/EU[4] ('CRD IV') and 2014/65/EU[5] ('MIFID II') lay down various provisions that empower the EBA to issue guidelines on individual and, where applicable, collective suitability requirements for members of the statutory governing body and key function holders within credit institutions, stockbroking firms, financial holding companies and mixed financial holding companies.

In this context, the EBA issued on 26 September 2017 Guidelines EBA/GL/2017/12, which are to be applied as from 30 June 2018. The NBB will rely on these guidelines in its effective supervision of suitability requirements. Unless expressly provided otherwise, institutions should therefore apply and comply with these guidelines as a complement to and clarification of the legal provisions on suitability requirements. This is further explained in Circular NBB_2018_25.

In addition, the ECB published in May 2018 a Guide to fit and proper assessments (‘SSM Guide’), which aims to harmonise the application of assessment criteria for suitability assessments with a view to establishing a common ground in supervisory practice. The NBB and the ECB will also – as part of the Single Supervisory Mechanism – rely on this SSM Guide and recommend that institutions should take them into account.

[1] Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions.

[2] Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation).

[3] Law of 25 April 2014 on the legal status and supervision of credit institutions and stockbroking firms.

[4] Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC.

[5] Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU.