EBF response to the ECB Draft Guide on “fit and proper assessments”
EBF advisor: Blazej Blasikiwiecz
Publication date: 20 January 2017
It is not clear how the ECB draft guide relates to the EBA/ESMA guidelines on the assessment of the suitability of members of the management body. One set of principles and one uniform assessment process should be established.
The draft guide aims to harmonise the implementation of assessment criteria applicable to fit and proper assessments. Such harmonised implementation aims to achieve common supervisory practices. Further harmonisation of the procedure and timelines is essential to create efficient processes and a level playing field. A similar procedure as described in Directive 2007/44/EC (Antonveneta directive) would create a truly harmonised assessment process. At times, we experience that it is unclear when the assessment documentation is considered to be complete and the assessment period has commenced. We therefore suggest that timelines should be harmonized. As standard procedure, supervisory authorities must always inform the institution within two working days on whether the assessment notification is considered to be complete or not in order to avoid (undue) delays. In line with the Antonveneta directive, the competent authority could only suspend the decision making period once when asking for additional information. One set of assessment forms should be created so it can easily be determined whether the assessment documentation is complete. We believe this would lead to greater harmonization and certainty for the institution and the candidate regarding the assessment procedure, timing and/or information that is required from them. This would also create a level playing field.
The ECB is responsible for decisions on the appointment of members of the management body/bodies of significant credit institutions that fall under its direct supervision. Question 9 to the guide indicates that the guide could also be applicable to the assessment of key function holders to the extent possible under the national law. Reference shall be made to our comments to the ESMA-EBA Guide on suitability, where we claim that no assessment of key function holders should be provided by Guidelines. The inclusion of this group is beyond the mandate provided by CRD IV to EBA (see Article 91.12 of CRD IV).
Furthermore, we want to highlight the importance of the proportionality principle and its proper implementation. As it is explained in the draft guide, the principle of proportionality applies throughout the whole fit and proper process, meaning that the supervisory process of the ECB as well as the application of the suitability criteria should be commensurate with the size of the entity and the nature, scale and complexity of its activities, as well as the particular role to be filled.
From our perspective, this principle requires further developments. Indeed, we only found one remark on that principle in chapter 5, 6, 7 and 8. In light of these further developments, we also think, that some practical implications should be included in all of the assessment criteria as explained in the guide, however with the exception of the reputation criteria on which we agree with the SSM, that the principle of proportionality cannot apply.
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