Changes from plenary report to adopted text

Removed‘(e) the chairman of the management body in its supervisory function of an institution may not exercise simultaneously the functions of a chief executive officer within the same institution.’;

Removed(b) in Article 88, the following paragraph 3 is added:

Removed‘3. Member States shall ensure that institutions draw up, maintain and update individual statements setting out the roles and duties of each member of the management body, senior management and key function holders and a mapping of duties, including details of the reporting lines and the lines of responsibility, and the persons who are part of the governance arrangements as referred to in Article 74 (1) and their duties approved by the management body.

RemovedMember States shall ensure that the statements of duties and the mapping of the duties are made available and communicated in due time, upon request, to the competent authorities.

Removed▌

Removed(19) Article 91 is replaced by the following:

Removed‘Article 91 Suitability criteria for members of the management body of the entities

Removed1. Institutions and financial holding companies and mixed financial holding companies, as approved pursuant to Article 21a(1),(“the entities”), shall have the primary responsibility for ensuring that members of the management body are at all times of good repute, act with honesty integrity and independence and possess sufficient knowledge, skills and experience to perform their duties and fulfil the requirements set out in paragraphs 2 to 8 of this Article. The absence of a criminal conviction or of ongoing prosecutions for a criminal offence shall not in itself be sufficient to fulfil the requirement to be of good repute and act with honesty and integrity.

RemovedCompetent authorities shall in particular verify whether the criteria and requirements set out in the first subparagraph of this Article are still fulfilled where they have reasonable grounds to suspect that money laundering or terrorist financing within the meaning of Article 1 of Directive (EU) 2015/849 is being or has been committed or attempted, or there is increased risk thereof in connection with that institution.

Removed2. Each member of the management body shall commit sufficient time to perform his or her functions in the entities.

Removed3. Each member of the management body shall act with honesty, integrity and independence of mind to effectively assess and challenge the decisions of the senior management where necessary and to effectively oversee and monitor management decision-making. Being a member of the management body of a credit institution permanently affiliated to a central body shall not in itself constitute an obstacle for acting with independence of mind.

Removed4. The management body shall possess collective knowledge, skills and experience to be able to adequately understand the institution's activities, as well as the associated risks it is exposed to, in the short, medium and long term, taking into account the environmental, social and governance factors. The overall composition of the management body shall be sufficiently diversified to reflect an adequately broad range of experience.

Removed5. The number of directorships which a member of the management body may hold simultaneously shall take into account individual circumstances and the nature, scale and complexity of the institution's activities. Unless where members of the management body represent the interests of a Member State, members of the management body of an institution that is significant in terms of its size, internal organisation and the nature, the scope and the complexity of its activities shall, from 1 July 2014, not hold more than one of the following combinations of directorships simultaneously:

Removed(a) one executive directorship with two non-executive directorships;

Removed(b) four non-executive directorships.

Removed6. For the purposes of paragraph 5, the following shall count as a single directorship:

Removed(a) executive or non-executive directorships held within the same group.

Removed(b) executive or non-executive directorships held within either of the following:

Removed(i) institutions which are members of the same institutional protection scheme provided that the conditions set out in Article 113(7) of Regulation (EU) No 575/2013 are fulfilled;

Removed(ii) undertakings, including non-financial entities, in which the institution holds a qualifying holding.

RemovedFor the purposes of point (a) of this paragraph, a group shall mean a group of undertakings that are related to each other as set out in Article 22 of Directive 2013/34/EU of the European Parliament and of the Council*13.

Removed7. Directorships in organisations which do not pursue predominantly commercial objectives shall not count for the purposes of paragraph 5.

Removed8. Competent authorities may authorise members of the management body to hold one non-executive directorship on top of the directorships referred to in paragraph 5, points (a) and (b).

Removed9. The entities shall devote adequate human and financial resources to the induction and training of members of the management body, including on evironmental, social and governance risks and on ICT related risks.

Removed10. Member States or competent authorities shall require entities and their respective nomination committees, where established, to engage a broad set of qualities and competences when recruiting members and to promote diversity and gender-balance in the management body. For that purpose, institutions shall put in place a policy promoting diversity in the management body, including setting a target for the minimum representation of the underrepresented gender and concrete measures to balance gender participation.

Removed11. Competent authorities shall collect the information disclosed in accordance with Article 435(2), point (c), of Regulation (EU) No 575/2013 and shall use that information to benchmark diversity practices. Competent authorities shall provide EBA with that information. EBA shall use that information to benchmark diversity practices at Union level.

Removed12. EBA shall issue guidelines on the following:

Removed(a) the notion of sufficient time commitment of a member of the management body to perform his or her functions, in relation to the individual circumstances and the nature, scale and complexity of activities of the institution;

Removed(b) the notions of honesty, integrity and independence of mind of a member of the management body as referred to in paragraph 3;

Removed(c) the notion of adequate collective knowledge, skills and experience of the management body as referred to in paragraph 4;

Removed(d) the notion of adequate human and financial resources devoted to the induction and training of members of the management body as referred to in paragraph 9;

Removed(e) the notion of diversity to be taken into account for the selection of members of the management body as referred to in paragraph 10;

Removed(ea) the criteria to determine where there are reasonable grounds to suspect that money laundering or terrorist financing within the meaning of Article 1 of Directive (EU) 2015/849 is being or has been committed or attempted, or there is increased risk thereof in connection with an institution.

RemovedFor the purpose of developing the guidelines laid down in paragraph (ea), EBA shall work in close cooperation with the Anti-Money Laundering Authority and the European Securities and Markets Authority.

RemovedEBA shall issue those guidelines by [OP please insert the date = 12 months from date of entry into force of this amending Directive].

Removed13. This Article and Articles 91a to 91d shall be without prejudice to provisions of the Member States on the representation of employees in the management body.’;

Removed13a. Articles 91a and 91b shall be without prejudice to provisions of the Member States on the appointment of members of the management body in its supervisory function by regional or local elected bodies or the appointments where the management body does not have any competence in the process of selecting and appointing its members.

Removed_______

Removed*13 Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council (OJ L 182, 29.6.2013)

Removed(20) the following Articles 91a to 91d are inserted:

Removed‘Article 91a Suitability assessment of members of the management body by the entities

Removed1. The entities as referred to in Article 91(1) shall ensure that members of the management body fulfil the criteria and requirements set out in Article 91(1) to (8) at all times.

Removed2. The entities shall assess the suitability of members of the management body before those members take up their positions. ▌

RemovedHowever, where it is strictly necessary to replace a member of the management body immediately, the entities may conduct a lighter suitability assessment of such replacement members before they have taken up their positions. A complete assessment shall be carried out as soon as possible after the replacement members have taken up their positions. EBA shall issue guidelines specifying the conditions for conducting a lighter assessment, including guidance on the cases that might be considered urgent. The entities shall be able to duly justify such immediate replacement.

RemovedIn the case of small and non-complex institutions within the meaning of Article 4(1), point 145 of Regulation (EU) No 575/2013, and when an ex-ante assessment is not possible to be conducted, entities shall assess the suitability of members of the management body after those members take up their positions.

RemovedWhere the entities conclude, based on the suitability assessment, that the member concerned does not fulfil the criteria and requirements set out in paragraph 1, the entities shall:

Removed(a) ensure that the member concerned does not take up the position considered, in the case that the suitability assessment is completed before that member takes up the position;

Removed(b) remove such members from the management body or take the measures necessary to ensure that such members are suitable for the position concerned, in the case that those members take up their positions before the completion of the assessment.

Removed3. The entities shall ensure that information about the suitability of the members of the management body remains up-to-date. Where requested, the entities shall communicate that information to the competent authorities.

Removed3a. As soon as any new facts or other issues that may affect the suitability of the member of the management body are known to the entities, the entities shall inform without undue delay the relevant competent authorities thereof.

Removed4. The entities that renew the mandate of members of the management body shall inform in writing the competent authorities without undue delay and at the latest within 15 working days of the date of that renewal of the mandate.

RemovedArticle 91b Suitability assessment of members of the management body of the entities by competent authorities

Removed1. Member States shall ensure that competent authorities assess whether members of the management body of the entities as referred to in Article 91(1) fulfil the criteria and requirements set out in Article 91(1) to (8) at all times.

Removed2. For the assessment referred to in paragraph 1, the entities shall submit the initial application of the relevant member of the management body to the competent authorities without undue delay after the internal suitability assessment is completed.

RemovedIn the cases where it is not possible for the entity to carry out an internal suitability assessment before members of the management body take up their positions in accordance with Article 91a paragraph 2, the application shall be provided as soon as possible after the selection of the member, and in any case, without undue delay after the member takes up the position.

RemovedThe application shall be accompanied by all the information and documentation necessary for competent authorities to carry out the suitability assessment effectively.

Removed3. Competent authorities shall complete the suitability assessment within 80 working days (“assessment period”) as from the date of the written acknowledgement of the receipt of the complete application and underlying documentation▌ .

RemovedCompetent authorities may request the competent authority for the supervision of anti-money laundering in line with Directive (EU) 2015/849, to consult, in the context of their verifications, and on a risk-sensitive basis, the relevant information concerning the members of the management body. Competent authorities may also request to have access to the Central AML/CFT database referred to in Article 11 of Regulation [please insert reference – proposal for establishment of an Anti-Money Laundering Authority - COM/2021/421 final]. The competent authority for the supervision of anti-money laundering in line with Directive (EU) 2015/849 shall decide on whether or not to grant such request.

Removed4. Competent authorities that request ▌ additional information or documentation from the entities referred to in paragraph 1 or other authorities or which conduct interviews or hearings, may extend the assessment period for a maximum of 20 working days. However, the assessment period shall not exceed 90 working days. Request for additional information or documentation shall be made in writing and shall be specific. The entities shall acknowledge receipt of request for additional information or documentation within two working days and provide the requested additional information or documentation within 10 working days as of the date of the written acknowledgement of the request from competent authorities. Failure by the entities to provide the requested information within this deadline shall result in the procedure being closed without any further assessment by the competent authority. The closure of the procedure shall be without prejudice to the possibility for the entity to submit a new application.

Removed5. As soon as any new facts or other issues that may affect the suitability of the member of the management body are known to the entities or the relevant member of the management body, the entities shall inform without undue delay the relevant competent authorities thereof.