Articles

Guidance on reassessment of suitability and integrity of policymakers by the dutch financial regulators

Guidance on reassessment of suitability and integrity of policymakers by the dutch financial regulators

Guidance on reassessment of suitability and integrity of policymakers by the dutch financial regulators

08.10.2015 NL law

Board members of Dutch financial undertakings are subject to integrity and/or suitability testing by the Dutch financial supervisory authorities. Suitability and integrity testing aim to promote confidence in the financial sector. 

 

Once a person has been tested and the outcome thereof is positive, the suitability and/or integrity of such person are conclusively established, until a change in relevant facts or circumstances gives reasonable cause for a reassessment. Only limited guidance is available on what may constitute 'changed circumstances', but recent case law provides some guidance.

Background. A board member's suitability is assessed by reviewing a combination of the appointee's CV, job profile, an overview of the knowledge and experience within a management or supervisory role, a description of the selection process and an explanation why the appointee is considered suitable for the position.

The integrity of a board member is assessed on the basis of personal information included in a integrity screening form, and subsequent consultations with other authorities (e.g. the Tax Authorities and the Public Prosecutor).

A reassessment may occur when (i) a change of position occurs, or (ii) a 'change in relevant facts or circumstances give reasonable cause' for a reassessment.

Developments. Recent case law illustrates how the Dutch financial supervisory authorities interpret the concept of 'changed circumstances'. A board member used confidential and price-sensitive information with respect to the introduction of fixed interest rates for long-term liability calculations to enter into profitable transactions for his undertaking. The Dutch Central Bank decided to reassess his suitability and integrity on the basis of these circumstances. The District Court of Rotterdam deemed these circumstances to be a reasonable cause to reassess the board member's suitability and integrity, since the board member was actively involved in (i) sharing the confidential information within his undertaking, and (ii) the decision-making process with respect to the concluded transactions of the financial undertaking.

In another recent case – relating to the same facts and circumstances, but concerning a different board member – the District Court of Rotterdam decided that there is an inseparable connection between suitability and integrity. In that case, the Dutch Central Bank had only considered the board member's suitability, but had failed to reassess his integrity. Furthermore, when making the reassessment, the Dutch Central Bank must take into account the competences of other colleagues in the same organisation and verify whether certain shortcomings of the reassessed person may be offset by the competences of his co-board members.

 

Related news

17.10.2019 NL law
Objective indicator high-risk third countries repealed as of 18 October 2019

Short Reads - The Implementation Decree for the Wwft 2018 has been amended. As a result, as of 18 October 2019 institutions subject to the Dutch Anti-Money Laundering and Anti-Terrorism Financing Act will no longer have to report transactions solely on the basis that this transaction relates to an individual residing, or a legal entity having its registered office in, a high-risk third country.

Read more

25.09.2019 NL law
The long arm of regulation – Dutch chapter by Roderik Vrolijk and Senna Leentjens

Articles - The continued global scrutiny of financial services firms, alongside the sustained pressure on those charged with regulating them to deliver tangible results, continues to drive financial services regulators to seek assistance from their overseas counterparts when investigating issues. This trend shows no signs of abating, and questions such as how and when regulators interact with each other and with firms across borders, how firms are expected or required to respond, and whether duplicate proceedings can be brought in different jurisdictions are more pertinent than ever.

Read more

27.09.2019 NL law
Stibbe is attending the IBA's annual conference in Seoul

Conference - The annual conference of the International Bar Association (IBA) is currently taking place in Seoul. There are fourteen partners from Stibbe attending the event. Several of them have speaking slots on a wide range of legal topics and will take part in various panel discussions.

Read more

06.09.2019 NL law
Supervision of crypto services

Short Reads - On 3 September 2019, De Nederlandsche Bank ("DNB") published a press release in which DNB points out to providers of crypto services that they should prepare for imminent DNB supervision. Companies facilitating the exchange of crypto currency for normal money and companies that offer crypto wallets will have to comply with a registration obligation from the beginning of 2020.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring