On 31 July 2020, the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) issued a consultation revising their joint guidelines on the assessment of the suitability of members of the management body and key function holders.
The review reflects the amendments introduced by the fifth Capital Requirements Directive (CRD V) and the Investment Firms Directive (IFD) in relation to the assessment of the suitability of members of the management body.
The draft revised guidelines also clarify that being a member of affiliated companies or affiliated entities does not in itself represent an obstacle for a member of the management body to acting with independence of mind.
In addition, the draft revised guidelines specify that a gender-balanced composition of the management body is of particular importance. Institutions should respect the principle of equal opportunities for any gender and take measures to improve a more gender-balanced composition of staff in management positions.
The draft revised guidelines also take into account the recovery and resolution framework introduced by the Bank Recovery and Resolution Directive (BRRD) and provide further guidance in this regard. As part of early intervention measures and during resolution, the suitability of newly appointed members of the management body and of the management body collectively is relevant and requires an assessment.
Finally, the draft revised guidelines take into account the new EU legislative framework for investment firms for the identification of the investment firms subject to the various guidelines.
The deadline for comments on the consultation is 31 October 2020.