On 31 July 2020, the European Banking Authority (EBA) issued a consultation seeking to revise its guidelines on internal governance.
The guidelines were developed on the basis of Article 74 of the Capital Requirements Directive IV (CRD IV), which mandates the EBA to further harmonise credit institutions’ governance arrangements, processes and mechanisms across the EU.
The draft revised guidelines take into account the amendments introduced by the fifth Capital Requirements Directive (CRD V) and the Investment Firms Directive (IFD) in relation to credit institutions’ sound and effective governance arrangements.
The draft revised guidelines contain a new section 11 covering loans and other transactions with members of the management body and their related parties. Such loans may constitute a specific source of actual or potential conflict of interest and, therefore, specific requirements have been explicitly included in the CRD IV. In the same way, other transactions with members of the management body and their related parties have the potential to create conflicts of interest and, therefore, the EBA is providing guidance on how to properly manage them.
In line with the requirement to have a gender-neutral remuneration policy, the draft revised guidelines also contain new guidance on the code of conduct to ensure that credit institutions take all necessary measures to avoid discrimination and guarantee equal opportunities to staff of all genders.
The deadline for comments on the draft guidance is 31 October 2020.