Response to consultation on draft Joint ESMA and EBA Guidelines on the assessment of the suitability of members of the management body and key function holders
Question 1: Are subject matter, scope of application, definitions and date of application appropriate and sufficiently clear?
General Comments:
We appreciate the opportunity to comment on the draft guidelines. The German Banking Industry Committee acknowledges the objectives pursued by the EBA and ESMA, as well as their efforts to further clarify the requirements for suitability assessments and governance, thereby strengthening governance standards within the European Union. However, the detailed requirements regarding procedures, processes, review methods, etc., as set out in both the draft guidelines and the RTS, run counter to the EU’s objectives of reducing bureaucracy and strengthening the competitiveness of the EU banking sector. In our view, several aspects of the draft require clarification and adjustment. In particular, there are concerns regarding proportionality and the resulting administrative burden, the insufficient consideration of specific governance structures (especially in cases where institutions have no influence over the composition of their management body in its supervisory function, see Article 91(14) of the CRD), as well as certain requirements that go beyond the legal framework established in CRD VI, such as the requirements regarding formal independence.
For smaller institutions in particular, the proposed requirements entail additional documentation burdens without providing any additional supervisory benefit. In sections 17–21 (internal assessment of suitability) in particular, the formalized documentation requirements are significantly increased, e.g., when institutions are required to review the information on the suitability of the members of the management body once a year.
In addition, some of the proposed provisions, such as the envisaged three-year “cooling-off period” in the event of a move from the management board to the supervisory board (paragraph 93), go beyond the mandate granted in CRD VI. The final version of the guidelines should respect the established limits and the regulatory mandate granted.
Specifically:
Footnote 16 to Recital 61 uses the term “management board,” although according to Footnote 15, only the term “management body” is relevant in the Guidelines. We request a correction and clarification that the term “management body in its management function” is intended here.
Paragraph 5: The last sentence in paragraph 5 is not factually justified. Here, the concept of formal independence is declared to be the subject of the guidelines without there being a legal basis for this in the CRD. We urgently request that this sentence be deleted.
Paragraph 18: According to Paragraph 18, the term “risks” is intended to apply to all ESG risks and all AML/TF risks. This is too broad and is not consistently applied in the subsequent text, as each section specifically addresses the relevant type of risk. Paragraph 18 should therefore be deleted.
Paragraph 19: Definition of the terms “key function holders” and “significant influence over the direction of the entity”: To ensure legal clarity, we recommend that all references to “Key Function Holders” (KFHs) strictly follow the definition set out in Article 3(1)(9a) of CRD VI. In line with this, the definition of “individuals with significant influence over the direction of an entity or branch” seems unnecessary and may inadvertently broaden the scope of KFHs, potentially leading to inconsistent supervisory expectations. In particular, the definition also refers to the level below senior management, which goes beyond the requirements of the CRD and lacks a legal basis. Institutions are already facing an excessive burden involving Key Function Holders in the FAP Assessment. We therefore propose removing this additional definition, as the Directive already offers a clear and adequate description of KFHs. In any case, it should not be extended to include individuals below senior management level.
Paragraph 20: In any case, the guidelines should not take effect until six months after the publication of all translations, in order to give companies the necessary lead time to make any changes to their governance that may be required. A publication of the guidelines later than June 30, 2026, should not result in the deadline being reduced to zero due to the wording “no later than December 31, 2026.”
In any case, it would be clearer if the date of application would be “not later than 1.1.2027” – instead of “not later than 31.12.2026”. (Both days are banking holidays in Germany.)
Throughout the guidelines, the terms “management board,” “management body,” “management body in its supervisory function,” and “management body in its management function” are used inconsistently in various places. In this context, it must be clear for the purposes of application in Germany whether the reference is to the “management body in its management function” or to the “management body in its supervisory function”, or to their respective members. Otherwise, contrary to paragraph 13, the unitary board structure would be given preference.
Question 2: Are the changes made in Title II appropriate and sufficiently clear?
Paragraph 28 does note that the requirements regarding the level and nature of the suitability assessment for members of the management body in its management function differ from those for members of the management body in its supervisory function. However, since it simultaneously refers to the “mapping of duties” in Art. 88(3) CRD VI, which in turn applies only to members of the management body in its management function and key function holders, the scope and specificity of the second sentence of paragraph 28 are unclear. We therefore suggest deleting the reference to Article 88(3) of CRD VI at this point or, at the very least, clarifying that this reference does not apply to members of the management body in its supervisory function.
Furthermore, the relationship between paragraph 28 and paragraph 29 is unclear, as both paragraphs ultimately address the same topic. Here, paragraph 29 should either be deleted or it should be better explained what paragraph 29 requires beyond paragraph 28.
Paragraph 29: Please add: Institutions have discretion in the implementation. The manner in which entities take into account the individual statements should be in relation to how the implementation of individual statements has been carried out within the institution.
Paragraph 31: According to the draft, if a member of the management body takes on 'additional duties', their sufficient time commitment shall be reassessed. This is very broad and could cover a wide range of obligations that may not have a significant impact. The re-assessment of the sufficient time commitment should only be required if there is a significant impact on the time commitment. If the member only takes a side activity or if there is an organizational change in the assignment of business responsibilities which leads to an insignificant impact (e.g. only a couple working days per year), this should not lead to a re-assessment (see also § 24 (2a) KWG, i.e. the German transposition of the CRD VI). Anything else would be disproportionately burdensome, and there is no legal basis for it. We request that the new phrase “additional duties” be deleted. At least, paragraph 31 should better reflect that additional duties are only relevant if they have a significant impact on time commitment.
Furthermore, Paragraph 31 does not correspond with Paragraph 52 which states: “Where changes to such positions occur that may reduce the ability of a member of the management body to commit sufficient time to performing their function, the institution should re-assess the member’s ability to respect the required time commitment for their position.”
Paragraph 29/34/174: CRD does not provide for a mapping of duties. The requirements for individual positions are derived from the respective job descriptions, the allocation of responsibilities, the respective business mandates and the suitability matrix. Any additional requirements lack a legal basis, entail unnecessary administrative burdens and costs for the institutions and provide no added value. Additionally, it is unclear how a yearly re-assessment of collective suitability could be improved by including a mapping of duties.
In the future, the individual overviews of the duties and responsibilities of members of the management body are to be used for the assessment of the collective suitability of the management body in its management function as a whole. This could lead to unnecessary bureaucracy, particularly in smaller institutions, because it makes it more difficult to use standardized tools and forms for the suitability assessment. At least in smaller institutions, it should therefore be sufficient to conduct the suitability assessment based on general supervisory and other legal requirements—to the extent relevant to the institution. We therefore demand deleting Paragraph 34 or limiting its application to large institutions.
Paragraph 35 b: This paragraph addresses the collective suitability of the entire “management body.” We do not consider it necessary, particularly for small institutions, to review collective suitability every time the composition of the management bodies changes. Given the relatively “uncomplex” business model of small institutions, we believe it is sufficient to review only individual suitability in the cases mentioned. Anything else leads only to unnecessary bureaucracy. The requirements of Section 36 appear reasonable provided the focus is clearly placed on “material.”
Paragraph 40: Please add: Institutions have discretion in the implementation. The manner in which entities take into account the individual statements should be in relation to how the implementation of individual statements has been carried out within the institution.
Paragraph 43: The wording is ambiguous. First, it states that when assessing key function holders, the same requirements regarding honesty, integrity, knowledge, skills, and experience should apply as for the management body. It then states that knowledge, skills, and experience should correspond to the role and specific position. Depending on the interpretation, this could mean that the role-specific requirements must also be met. In our view, it is reasonable that the same requirements regarding honesty and integrity should apply. However, regarding knowledge, skills, and experience, the focus should be solely on the role. This distinction should be clear from the text.
Do you have any views on the provisions regarding these independence criteria? Please explain any aspects that may influence the effectiveness, clarity, or implementation of these independence criteria across different business models/types of institutions.
Paragraph 88, 90, 98 et seq.: The requirements regarding the formal independence of certain members of the supervisory body (Section 9.3) should be deleted in their entirety. The provisions on independent non-executive members of the management body still lack a legal basis in CRD VI and should therefore be removed.
Article 91 of CRD VI does not include “the principle of being independent,” but rather only the term “independence of mind,” see Article 91(1), first sentence, and (2a), first sentence, of CRD VI, which applies to the management body. Article 91 of CRD VI contains no legal basis for the additional requirement of “formal independence.” This is particularly true given that the CRD was not amended on this particular point during the last revision of the EU banking package. If the EBA justifies the criterion of formal independence solely on the basis of Article 88 (implementation of the governance arrangements that ensure effective and prudent management of an institution), it must be pointed out that this refers only to the obligations of the institutions and gives no mandate to the EBA, the suitability criteria are set out exclusively and conclusively in Article 91.
EBA and ESMA have no mandate to introduce new expectations that have the de facto character of requirements, which go beyond the fundamentals of Union law (CRD VI), national law, or state law regulations. The formal independence criteria are too restrictive and conflict with the provisions of Member States on employee representation on management bodies (German labour law) and on the appointment of members to supervisory bodies (national and state law). We therefore continue to request that these provisions be removed.
The requirements regarding formal independence pertain to a core area of national corporate law, the regulation of which is the sole responsibility of the legislator (principle of materiality).
We would also like to point out that there are no independence requirements in Germany (see the BaFin’s “non-compliance” statement dated December 13, 2021).
In conclusion, we - along with the German supervisory authority and large parts of the banking sector in various other Member States - believe that the principle of formal independence should be disregarded entirely. As a precautionary measure, we would like to highlight the following additional points, which underscore our general criticism of the concept:
In any case, pursuant to Article 91(14) of CRD VI, it should be explicitly clarified in Section 9.3 that the requirements regarding the formal independence of certain members of the management body in its supervisory function do not apply to institutions that have no influence over the selection and appointment of the members of the management body in its supervisory function.
The provisions regarding independence are fundamentally problematic in relation to cooperative banks, as they contradict their core mission of generating benefits for members through core banking activities. Under German cooperative law, the principle of self-governance applies. Members of the management body in its supervisory function must generally be members of the bank themselves. As members, they also maintain a business relationship with the bank, in accordance with the cooperative ideal. Similarly, business relationships within networks of cooperative banks are traditional and beneficial for the entire network, but they do imply connections that conflict with the principle of formal independence. This example shows that the principle of formal independence conflicts with established national rules and circumstances without providing any regulatory benefit.
Furthermore, the definition of the term “independence” contained in paragraph 90 goes too far when it states: “Being independent’ means that a member of the management body in its supervisory function does not have any present or recent past relationships or links of any nature with the relevant institution or its management that could influence the member’s objective and balanced judgement and reduce the member’s ability to take decisions independently. The fact that a member is considered as ‘being independent’ does not mean that the member of the management body should automatically be deemed to be ‘independent of mind’ as the member might lack the required behavioural skills.” In our view, taking into account “any recent past relationships or links” in the assessment of independence is inappropriate and disproportionate. When relationships or links are terminated, the dependencies resulting from those relationships or links typically cease as well. Furthermore, the term “recent past” is unclear with regard to the period to be considered. Paragraph 90 should therefore refer solely to “present relationships.”
We would also like to point out a circumstance of non-independence that we consider particularly problematic:
Members who represent the interests of a controlling shareholder are considered non-independent (paragraph 100(b) of the consultation draft). If this criterion is met merely by virtue of a controlling shareholder’s election or appointment of such members, an exception would at least be required for companies with a single shareholder. Otherwise, it would be impossible to staff the management body in its supervisory function with independent members. If members of the management body in its supervisory function were deemed non-independent solely because they were elected by the sole shareholder, while at the same time the management body in its supervisory function must include a certain number of independent members, this would result in an irreconcilable conflict between corporate law and corporate law.
The following addition should therefore be made in paragraph 100 b: „the member is a controlling, but not the sole, shareholder of the relevant institution, being determined by reference to the cases mentioned in Article 22(1) of Directive 2013/34/EU, or represents the interest of a controlling, but not the sole, shareholder, including where the owner is a Member State or other public body;”
In our view, it would be appropriate to clarify that mere election or appointment by a controlling shareholder does not call independence into question; rather, this is the case only if the shareholder and the member have a relationship that could give rise to a material conflict of interest.
Question 4: Are the changes made in Title III appropriate and sufficiently clear?
Paragraph 50: The new requirement that institutions have to not only monitor but also record/document that members of management bodies devote sufficient time to performing their duties by assessing preparation for meetings, attendance and active involvement has no legal basis in the CRD VI. It should be deleted as it creates excessive bureaucracy – especially next to the already existing periodic assessment of suitability (e.g. Paragraph 160) that also includes time-commitment elements such as amounts of other mandates. Plus, this would be burdensome for all institutions and particularly for part-time members of the management body in its supervisory function at cooperative banks or other institutions, as this could be interpreted as an obligation requiring them, for example, to also document the time they personally spend preparing for meetings. We therefore recommend deleting the new addition “and record”.
Paragraph 59: The requirements regarding the suitability of individual board members have been expanded to include, among other things, the areas of anti-money laundering and countering the financing of terrorism (letter “h.”) as well as data protection (letter “i.”). While we understand the EBA’s view that such competencies are relevant with regard to the management body as a whole, we do not consider it appropriate to include them in the requirements for individual management body members. In our view, unlike, for example, the knowledge in the areas of risk management or accounting that is also listed, these are specialized areas of expertise that should not be required of every individual member in an in-depth manner (beyond the knowledge of “legal requirements and regulatory framework” already required under b.). In our view, subparagraphs h. and i. should therefore be deleted. It would be sufficient to take them into account within the framework of the requirements for collective suitability.
Paragraph 69 lit. i ): It is unclear why theoretical and practical experience relating to data protection requirements and their implementation are mentioned extra. They are not enumerated specifically in the CRD VI and their specific relevance for the management body beyond lit. c) “legal requirements” remains unclear – as data protection is a legal field that falls into the scope of that provision already.
Paragraph 69 lit. j): Please delete “the ability to present their views, discuss strategies and business objectives” as it is unclear how to obtain “theoretical experience” in this regard (introduction sentence of paragraph 69) and this provision is already well covered in other regards, such as new paragraph 76 or paragraph 91 lit. a)i).
Paragraph 70: The newly inserted letter g refers to 'additional knowledge gained from academical activities'. We assume that 'academical activities' refers only to professional scientific activities in academia. As this will only be relevant in very rare circumstances, please clarify that such activities are not expected, for example by inserting the term 'if applicable'.
Paragraph 77, new letter j: It is unclear how ‘experience in implementing a culture of probing and challenging MB decisions’ is to be understood and supposed to be demonstrated or proven. We understand why such an experience may be beneficial but we request the deletion of this new very vague aspect. In any case, please clarify that the acronym ‘MB’, which is not defined anywhere, stands for ‘management body’.
Paragraph 84: In the new wording for subparagraph “d.” a comma seems to be missing. Furthermore, it is unclear why, according to the new wording, the application of the presumption of innocence should be limited to criminal proceedings. The previous wording should be used, or it should be clarified in some other way that the initiation of civil or administrative proceedings against a member of a managing body does not automatically imply that the member actually committed the alleged violations. In general, civil lawsuits and administrative proceedings only call into doubt a person’s reputation, integrity or honesty under very rare circumstances. This should be reflected in the text.
Paragraph 86 lit. d): This provision requires specification in order to be proportional. Currently, any “past”, even “indirect” business relation or “close family members” could have a negative impact on the assessment of the good repute of the members of the management body and key function holders with regard to ML/TF risks. This needs to be clearly defined, including how far back in time (e.g. 1-2 years?), what kinds of indirect business relations (e.g. directorship? ownership?) and up to what degree of family relationship (e.g. spouse?) will be considered for this provision to be functional.
Paragraph 86 lit. e): Clear further specification needed in order for this provision to be proportional. Unclear terms such as “other factors” and mere “suspicion” do not provide any guidance on how evaluation could and would take place.
Paragraph 91 lit. a)i): Consider revising as description seems circular and does not provide any guidance on how the assessment is supposed to take place (in order to assess “independence of mind” it should be checked if members of the management body i.a. can “independently assess” proposed decisions and “act in an independent manner”).
Paragraph 93: A cooling-off period of three years is indirectly proposed for the transition from the former CEO or, where applicable another executive director or former executive director, to the role of chairperson or as member of the management body in its supervisory function within the same entity. As we have already noted in our response to the consultation on the draft revised Guidelines on internal governance, this requirement, which is not objectively justified, should be scrapped. There is no legal basis for this in the CRD. With the planned indirect introduction of a cooling-off period of three years, the EBA would be exceeding its mandate under Article 74(3) CRD in conjunction with Article 16(1) EBA Regulation, according to which it may close loopholes within the CRD requirements but may not establish regulations that go beyond the CRD.
In any case, the stipulation of a three-year waiting period during which a conflict of interest on the part of former members of the management body in its management function must be presumed on the management body in its supervisory function appears excessively long. Even German stock corporation law provides in Section 100(2)(4) only that former members of the management body in its management function d may not be elected to the management body in its supervisory function for two years and limits this provision to listed institutions.
Paragraph 103: The wording in Section 9.4 - Safeguards (paragraph 103) - is inappropriate. It would result in the introduction of an internal suitability assessment “through the back door,” despite the provision of Article 91(14) of CRD VI.
The draft guidelines state that the institution “should perform the suitability assessment as soon as the member is appointed”. This is not consistent with the specific characteristics of the governance of municipal savings banks, which is shaped by public sponsorship and their municipal roots. An internal suitability assessment of members of the management body in its supervisory function by municipal savings banks - regardless of when it is conducted - contradicts the specific structural characteristics of these institutions, particularly their municipal ownership and the resulting requirement for a democratically legitimized composition of the management body in its supervisory function (Verwaltungsrat). From their status as local banks, it follows that the elected representative body of the local authority determines the composition of the supervisory board of the local savings bank at the beginning of each local election period. This is enshrined in the savings bank laws of the German Länder. The selection of members is based on knowledge of the suitability requirements and the mandate responsibility. The savings banks are not authorized to influence this selection. Nor is it within the savings banks’ purview to rule on this decision by the elected representative body of the local authority or to call it into question through their own suitability assessments of the new members. Consequently, a subsequent internal suitability assessment is also inappropriate in these cases. The democratic legitimacy of the members of the management body in its supervisory function provides sufficient assurance of effective supervision.
Article 91(14) of CRD VI demonstrates that the European legislator has deliberately provided scope for national specificities; this must be utilized. Article 91(14) of CRD VI was introduced precisely for these cases to create an exception to an institution-internal suitability assessment. We request that it be explicitly clarified in paragraph 103 that a subsequent internal suitability assessment is not applicable in these cases.
Safeguards are in place to ensure the suitability of members of the management body in its supervisory function even without an internal assessment by the institution: The supervisory authority conducts a comprehensive review of the members’ suitability. New members of the members of the management body in its supervisory function of municipal savings banks undergo specialized training as a standard procedure within the first few months of taking office. This approach takes into account the specific features of savings bank organizational law and has proven reliable in the past.
Please amend the wording in paragraph 103, sentence 2, to make it clear that there may indeed be exceptions to the internal suitability assessment.
However, paragraphs 103–105 lead to a bureaucratic, time-consuming process that is entirely unnecessary, as induction and training guidelines are already in place today; see Title IV, Section 10.
Question 5: Are the changes made in Title IV appropriate and sufficiently clear?
Paragraph 109: It should be clarified that the induction and training policy regarding members of the management bodies can also be adopted by the Nomination Committee of the management body in its supervisory function, when established, not only by the “management body” (see also paragraph 112). This applies at least when the management body in its supervisory function has delegated this topic to the Nomination Committee in its by-laws.
Paragraph 115: An additional evaluation process is proposed for continuing education programs. This is likely to lead to unnecessary bureaucracy, as this aspect is already—at least implicitly—covered by the regular evaluation of the management bodies. We recommend deleting this provision.
Question 6: Are the changes made in Title V appropriate and sufficiently clear?
Paragraph 116 et seq.: Since certain institutions have no influence over the composition of their management body in its supervisory function, the requirements regarding the objectives of the diversity policy under Article 91(14) of the CRD do not apply in such cases. This should be made sufficiently clear in the guidelines.
Question 7: Are the changes made in Title VI appropriate and sufficiently clear?
Paragraph 125/127: It should be clarified that the suitability policy regarding members of the management bodies can also be adopted, or at least amended, by the Nomination Committee of the management body in its supervisory function, when established, not only by the “management body”. This applies at least when the management body in its supervisory function has delegated this topic to the Nomination Committee in its by-laws.
Question 8: Are the changes made in Title VII appropriate and sufficiently clear?
Paragraph 150: The management body in its supervisory function or the nomination committee shall assess the suitability of members of the management body prior to their appointment. However, this is not feasible in banks where, due to their legal form or national law and state law regulations, the composition of the management bodies is not the responsibility of the management body in its supervisory function (e.g., the election or appointment of members of the management body in its supervisory function or, in some cases, members of the management body in its management function at the general meeting or representatives’ meeting of cooperative banks).
Paragraph 160: Institutions shall review the documentation regarding the suitability of members of the management body at least annually. This appears redundant given the periodic evaluation of the management bodies, but leads to additional bureaucracy in smaller institutions, which are only required to conduct the periodic evaluation every two years. The additional requirement in paragraph 160 should therefore be deleted or at least aligned with the frequency of the regular evaluation of the management bodies.
For smaller institutions, an annual suitability assessment as part of a complex formal review process is disproportionate, especially since the requirements for event-driven suitability assessments apply pursuant to paragraph 160, sentence 2. Furthermore, it is unclear how these general requirements relate to paragraph 175, which provides for an annual review only for significant institutions and a biennial review for others. The relevant requirement should therefore be deleted or, at the very least, clarified to specify that it applies only to the extent that it does not conflict with applicable national law (e.g., corporate law) and state law regulations.
Paragraph 167: The following sentence is not sufficiently clear: “The assessment of collective suitability should provide a comparison between the actual composition of the management body and the management body’s actual adequate collective knowledge, skills and experience, and the required collective suitability.” What is the difference between “actual adequate collective knowledge” and “required collective suitability”?
The proposed addition to paragraph 149 (to become paragraph 167) of the phrase 'Entities should also ensure that all material individual roles and duties of the management body are allocated to a member of the management body' raises fundamental concerns. This conflicts with the management board's overall responsibility, which remains unchanged even under CRD VI. It should be deleted, as it may be interpreted as requiring an individual allocation of responsibilities that is not envisaged under CRD VI and is inconsistent with the collective nature of the management body’s functions.
Paragraph 184: Institutions shall review the information regarding the suitability of key function holders at least annually. Here, too, the requirement should be aligned with the frequency of the regular evaluation of the persons concerned.
Question 9: Are the changes made in Title VIII appropriate and sufficiently clear?
Paragraph 192: According to the draft, supervisory authorities should consider whether to introduce, for smaller institutions, similar supervisory assessment processes prior to the appointment of members of the management body as those required for large institutions. On the one hand, this would contradict CRD VI respectively the decision of the European legislator, which permits both ex-ante and ex-post assessments, provided that the institution is not a large institution. On the other hand, this would lead to a significant increase in bureaucracy for smaller, non-systemically important banks and could make it considerably more difficult to fill management body positions with qualified candidates in a timely manner. We therefore recommend deleting this requirement.
Paragraph 193: According to the draft, supervisory authorities should consider whether to introduce supervisory assessment processes for filling key functions at smaller institutions similar to those required for large institutions. On the one hand, this would contradict CRD VI respectively the decision of the European legislator, which limits these requirements to large institutions. On the other hand, this would lead to a significant increase in bureaucracy for smaller, non-systemically important banks and could make it considerably more difficult to fill important key functions in a timely manner, particularly against the backdrop of demographic change. We therefore recommend deleting this requirement.
Paragraph 201/202: The heading is not clear: “Notifications to ex-post jurisdictions of large entities about intended appointments of members of the management body in the executive function or chairperson (ex-ante suitability applications) and appointments of heads of control functions and CFO”. Is this ex-post or ex-ante? Please also check paragraph 206 (“ex ante”).
It should also be noted that, with regard to the requirement for large institutions to notify an intended appointment, CRD VI does not refer to the “appointment” itself, but rather to “before the prospective members take up their positions.”
Paragraph. 233 et seq.: The provisions in Section 26 regarding suitability assessments in connection with heightened money laundering or terrorist financing risks should—as intended—be aligned with the AMLA. It is essential to avoid double regulation here, particularly since, following the agreement with the AMLA, the EBA is no longer responsible for the money laundering sector as of January 1, 2026. Furthermore, it is important to ensure that there are no inconsistencies or unclear responsibilities regarding the requirements for money laundering prevention. Ultimately, it is unacceptable that, due to the requirements of the AML Regulation, members of management bodies must be classified as PEPs and, solely as a result of this, be subject to stricter fit and proper requirements.
Technical comment: Chapter IX is missing from the table of contents, although it appears in the text itself (paragraph 246 ff.).
Paragraph 208: The proposed maximum assessment period of four months by the competent authorities seems too long and should be shortened to a more appropriate period, to provide banks with clarity regarding the expected timeframe for a decision. We suggest reducing it to two months.
Question 10: Are the changes made in Title IX appropriate and sufficiently clear?
n/a
Question 11: Are the changes made to Annex 1 and Annex II appropriate and sufficiently clear?
In our view, the provisions in the annex are overly detailed and place undue constraints on institutions in their search for suitable staff, without offering any added value. We believe that the provisions in paragraph 65 are entirely sufficient.
If Annex 2 is to be retained, it would make sense to include a reference to Annex 2 in paragraph 65.
Question 12: Is the table on scope of application of the Joint Guidelines appropriate and sufficiently clear?
If the enhanced dialogue between the competent authority under Article 91(1e) CRD only applies to large entities and it is not applicable to entities that are not classified as large (see field E30 of the table on the scope of application) – does this mean that significant institutions which are not large entities do not have an enhanced dialogue?