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DNB information session on suitability and integrity testing

DNB information session on suitability and integrity testing

29.07.2016 NL law

In June 2016, the Dutch Central Bank (De Nederlandsche Bank, "DNB") hosted an information session about their approach to suitability and integrity testing of executives of financial institutions.

The information session was intended for financial institutions and their employees and executives, and their advisors.

DNB is currently internally reviewing its testing procedures. The information session is part of this internal review. Simultaneously, an external independent review (Commission Ottow) is expected to report its findings at the end of 2016. An interim report, dated 6 July 2016, can be found here.

This external review intends to evaluate these tests and their process. Specifically, the review commission will assess whether the current practice is an adequate implementation of the statutory duty of DNB and the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten) to contribute to the solid and sound business conduct of financial institutions.

DNB emphasized in the session that it aims to be transparent and open for discussions about any questions and/or criticism about the tests. It furthermore informed us that the positive results of the tests were increasing each year, 96% of the tested persons 'passed' in 2015 (out of 1,949). DNB also conducted a survey amongst market participants and received a grade of 7.2 out of 10 (based on 500 received surveys).

Questions from the audience and discussions mainly focused on how to answer the open-ended questions in the integrity test form and whether candidates can and should already perform preparatory activities pending approval.

As a general remark, DNB mentioned that the institution also has a responsibility to perform a due diligence in the preparation of a prospective appointment, whether or not with their advisors. This will speed up the process and reduce discussions with or questions from DNB.

Source: Banking and Finance Update July 2016

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