On 16 October 2023, the Dutch Central Bank (De Nederlandsche Bank, DNB) published for comment a draft Q&A on supervisory boards at payment institutions and electronic money institutions (EMIs). The draft Q&A provides firms with guidance on the circumstances DNB requires a supervisory board at a payment institution or EMI.

Currently there is no specific legal requirement for payment institutions and EMIs to install a supervisory board. However, DNB may require a payment institution or EMI to implement certain corporate governance requirements including a supervisory board where it deems it necessary to ensure the firm has a controlled, balanced, and adequate organisational structure. In doing so, DNB will take into account all relevant circumstances of the payment institution or EMI, being the nature, size, risks and complexity of their operations. DNB will also consider whether there are any other appropriate solutions than the installation of a supervisory board.

The draft Q&A provides for a non-exhaustive list of circumstances as to when DNB may require a payment institution or EMI to install a supervisory board:

  1. When there is one single or dominant shareholder. In this case, the supervisory board can be a countervailing power to safeguard the interests of stakeholders, because a supervisory board should also include independent member(s).
  1. When the internal organisation is suboptimal. For instance when one person carries out multiple control functions, such as compliance and risk. The supervisory board has to supervise the internal risk management of the institution, which allows for a more adequate and balanced organisational structure.
  1. The organisational or control structure is complex. This is the case when the formal control structure is not the same as the actual control structure or when directors have multiple roles within a group. A supervisory board can mitigate these risks and can be involved in the prevention and management of conflicts of interest.

Market parties may comment on the draft Q&A until 27 November 2023.