Changes from report parliamentary committee draft to plenary report

AddedFor 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.

Added7. Directorships in organisations which do not pursue predominantly commercial objectives shall not count for the purposes of paragraph 5.

Added8. 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).

Added9. 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.

Added10. 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.

Added11. 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.

Added12. EBA shall issue guidelines on the following:

Added(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;

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

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

Added(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;

Added(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;

Added(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.

AddedFor 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.

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

Added13. 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.’;

Added13a. 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.

Added_______

Added*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)

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

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

Added1. 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.

Added2. The entities shall assess the suitability of members of the management body before those members take up their positions. ▌

AddedHowever, 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.

AddedIn 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.

AddedWhere 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:

Added(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;

Added(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.

Added3. 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.

Added3a. 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.

Added4. 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.

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

Added1. 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.

Added2. 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.

AddedIn 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.

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

Added3. 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▌ .

AddedCompetent 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.

Added4. 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.

Added5. 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.

AddedWhere the competent authority becomes aware that relevant information concerning the suitability of the member of the management body has changed and such change may affect the suitability of the member concerned, the competent authority shall reassess the suitability of the member of the management.

Added6. Competent authorities may decide not to reassess the suitability of members of the management body when their mandate is renewed, unless relevant information that is known to competent authorities has changed and such change may affect the suitability of the member concerned.

Added7. Where members of the management body do not fulfil the requirements set out in Article 91(1) to (8) at all times or where the entities do not comply with the obligations and deadlines laid down in paragraphs 2 or 4 of this Article, Member States shall ensure that competent authorities have the necessary powers to:

Added(a) prevent such members to be part of the management body;

Added(b) suspend or remove such members from the management body;

Added(c) require the entities concerned to take the measures necessary to ensure that such member is suitable for the position concerned.

Added8. In accordance with paragraphs 1 to 7, competent authorities shall carry out the suitability assessment before members of the management body take up their positions in the following entities:

Added(a) the EU parent institution that qualifies as large institution;

Added(b) the parent institution in a Member State that qualifies as large institution except if it is affiliated to a central body, in which case, only the suitability of members of the management body of the central body shall be assessed ex-ante;

Added(c) central body that qualifies as large institution or that supervises large institutions affiliated to it;

Added(d) stand-alone institution in the EU that qualifies as large institution;

Added(e) relevant subsidiary;

Added(f) the parent financial holding companies in a Member State, parent mixed financial holding companies in a Member State, EU parent financial holding companies and EU parent mixed financial holding companies, having large institutions or relevant subsidiaries within their group.

AddedHowever, where it is strictly necessary to replace a member of the management body immediately, competent authorities may carry out the suitability assessment of members of the management body after they take up their positions. The entities shall ▌duly justify the need for such immediate replacement.

Added9. For the purposes of paragraph 2, EBA shall develop draft regulatory technical standards specifying information or accompanying documents required to be submitted to the competent authorities for performing the suitability assessment.

AddedEBA shall submit those draft regulatory technical standards to the Commission by [OP please insert the date = 12 months from the date of entry into force of this amending Directive].

AddedPower is delegated to the Commission to adopt the regulatory technical standards referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.

Added10. EBA shall develop draft implementing technical standards on standard forms, templates and procedures for the provision of the information referred to in paragraph 2. When developing the draft implementing technical standards, EBA shall take into account existing practices and tools.

AddedEBA shall submit those draft implementing technical standards to the Commission by [OP please insert the date = 12 months from the date of entry into force of this amending Directive].

AddedPower is conferred on the Commission to adopt the implementing technical standards referred to in the first subparagraph in accordance with Article 15 of Regulation (EU) No 1093/2010.