Following the publication of the report of the external independent committee “Committee Ottow” on 30 November 2016 regarding the integrity and suitability screenings, the Dutch Central Bank (De Nederlandsche Bank, DNB) issued a press release in which it indicates that further improvements will be made to the integrity and suitability screening process. Both DNB and the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) test directors, supervisory directors and other policymakers of certain financial undertakings (including, but not limited to banks, insurers, investment firms, trust offices, pension funds, managers of UCITS and AIFs) for integrity (betrouwbaarheid) and suitability (geschiktheid). The aim of the screenings is to safeguard the integrity of the financial sector and to ensure that only people with sufficient knowledge and skills work in the financial sector as policymakers.
In its report, the Committee Ottow has made a number of recommendations to improve the screening process, including, but not limited to:
- DNB and the AFM should improve the transparency of the process (e.g. the screening criteria should be clarified) and their communication during the process;
- DNB and the AFM should work closer together during the screening process;
- the primary focus is on the financial expertise of candidates, while the expertise in the areas of IT and HR may also be valuable and can contribute to diversity in the financial sector;
- the position of candidates should be improved. This can be achieved by, among other things, to announce the intended decision to not approve a director or other (co-)policymaker in writing rather than via the telephone together with a possibility to receive a further explanation in a follow-up conversation; and
- the financial institutions undergoing the screenings also play an important role in improving the screening process. They should share clear and understandable documentation of a sufficient quality with DNB and the AFM.
In its press release, DNB indicates that important steps have already been taken to improve the screening process. The report of the Committee Ottow offers DNB and the AFM with the right basis to take further steps for improvement. In a letter to the Dutch Minister of Finance, DNB and the AFM have listed the measures that will be taken. In short, DNB and the AFM will, among other things:
- provide more and better information prior to and during the screening process to increase the transparency;
- launch a pilot involving an external advisor, which will be involved throughout the screening process; and
- emphasise that it is possible to put forward candidates without an extensive financial background and provide information on the criteria applicable to such candidates.
View DNB’s press release (Dutch only), 13 December 2016.
View the report of the Committee Ottow (Dutch only), 30 November 2016.
View DNB’s and the AFM’s response to the report (Dutch only), 8 December 2016.