2.2 Delineation of responsibilities in the suitability assessment
2.2.1 Responsibility of the institution and of the person subject to suitability assessment
2:13 It is primarily incumbent on the institution to assess the suitability of persons who hold positions requiring a suitability assessment. The institution should inform 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, please also refer to the information and documentation provided in Annex III to Guidelines EBA/GL/2021/06.
2:14 The statutory governing body is responsible for the recruitment policy, the selection process and the induction and training policies, which inter alia govern suitability assessments. In accordance with Article 31 of the Banking Law, the nomination committee should actively contribute to the institution’s accountability in this respect and draw up appropriate suitability and diversity policies and adequate internal rules for the assessment of individual and collective suitability. Furthermore, it is among the duties of the institution’s compliance function to ensure compliance with legal and regulatory suitability and diversity requirements.
2:15 Both the institution and the person subject to suitability assessment must ensure that the information provided to the supervisor is complete and accurate.
2.2.2 Responsibility of the supervisor
2:16 When a new person is deemed suitable by the institution, the supervisor examines the necessary information and carries out an assessment on the basis of which it decides on the final approval of this person’s appointment. For its own assessment, the supervisor primarily relies on the information supplied by the institution and the person concerned. This information is mainly collected using standard forms designed specifically for this purpose (see Chapter 5 of this Manual). Of course, the supervisor is free to request additional information and, where appropriate, to interview the person concerned.
2.2.3 Responsibility for the ongoing assessment of suitability
2:17 The legal requirement to ensure that the positions requiring a suitability assessment are at all times held by persons who are suited to do so constitutes an ongoing obligation on the part of the institutions. The persons concerned must be fit and proper at all times. The specific details of ongoing suitability monitoring are discussed in more detail later in this chapter.
2:18 However, as regards the respective responsibilities of the parties involved for ensuring ongoing suitability, the following applies:
The person concerned
2:19 On the standard forms to be completed by the person concerned and the institution, the former is expected to declare that he/she has made every effort to comply continuously with the suitability standards for the purposes of the position which he/she already holds or plans to hold.
2:20 Persons already in office must immediately inform the institution of any event that is likely to influence their suitability (see Chapter 5).
2:21 Where an institution considers that doubts might arise as to the fitness and propriety of a person in office or as to the collective suitability of a body of the institution, it should take measures as soon as possible to seek a solution. In accordance with Article 94(1) of the SSM Framework Regulation and Article 60, § 4 of the Banking Law, the institution must also immediately inform the supervisor.
2:22 In order to ensure the ongoing suitability of the persons concerned, the supervisor recommends the following:
- When a person takes up a position, it is recommended for the institution to request a written declaration in which this person confirms that he/she will unreservedly abide by the current suitability standards for this position and that he/she will immediately communicate any information that could affect the assessment of his/her suitability.
- The person concerned should be reminded of this declaration every year. For instance, the institution can, on an annual basis, explicitly ask the persons concerned whether they are aware of any relevant changes that could affect the assessment of their suitability.
2:23 As the financial sector is constantly evolving, ongoing training is a necessary but not a priori sufficient condition for meeting the fitness requirement on an ongoing basis. The institution is expected to take the necessary steps to provide adequate and relevant ongoing training.
2:24 The supervisor continuously monitors the fitness and propriety of the persons subject to suitability assessment. Whenever it becomes aware of any information which raises doubts about the suitability of a person in office, it immediately carries out a more in-depth examination and, where necessary, reassesses this person’s suitability.