On 16 January 2020, the European Banking Authority (EBA) published a report on the application by Member State competent authorities (NCAs) of the regulatory technical standards (RTS) on the criteria to identify categories of staff whose professional activities have a material impact on an institution’s risk profile. The review shows that, within the EEA, NCAs have properly applied the RTS during the reference period from 1 January 2015 to 31 December 2017.
The report highlights the following observed best practices in more detail:
- NCAs collect information from institutions to ensure that the required information is all included in the documentation;
- institutions have a notification and prior approval process regarding exemptions for identified staff under Article 4(4) and (5) of the RTS;
- the application of exemptions for individual staff is assessed under Article 4(2) to (4) of the RTS; and
- the use of supervisory tools for assessing the institutions’ compliance.
The review also identified some weaknesses in the application of some parts of the RTS. NCAs typically follow a risk-based approach. However, some NCAs had some difficulties in distinguishing between their standard risk-based methods of supervision and the application of the proportionality principle, leading to diverging approaches with regard to the latter and in a few cases the exclusion of certain institutions from supervisory review on a systemic basis.