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25 April 2017 Supervision Supervision label Factsheet

Practical examples may help candidates prepare for the assessment. The examples below are intended to provide candidates and institutions with some pointers as to what De Nederlandsche Bank (DNB) considers important with respect to assessments. All examples have been anonymised, and specific details have been omitted.

Insufficient knowledge about investments

A pension fund governing board member was proposed as a member of the investment committee. However, during the interview the candidate was unable to adequately describe the relevant investment processes and related risks. This knowledge is essential in order to provide sufficient countervailing power to the professional parties to which portfolio management is outsourced. We therefore found the candidate to be unfit for the position. Following our feedback, the pension fund's board concluded that the candidate was not the only one lacking the required knowledge; the knowledge level within the board as a whole also left room for improvement.

Insufficient general and specific knowledge of trust regulations

A candidate was proposed as a management board member of a newly incorporated trust office. The company's external compliance officer had pointed the candidate to the fact that he was already carrying out trust activities, and was therefore acting in violation of the law. The candidate did not concur, but agreed to suspend his activities until obtaining authorisation. We asked the candidate to present his view on the matter and submit documentation to support his stance. The candidate initially stuck to his opinion that he had not carried out any illegal activities, but then indicated that maybe he had interpreted the rules and regulations too permissively. He felt he had to carry out the activities to meet a customer's wishes. We found the candidate to be unfit for the position. Due to his lack of knowledge of the relevant trust rules and regulations, he was unable to fulfil the gatekeeper role of his proposed position.

Insufficient executive experience/skills at payment institutions and trust offices

The Policy Rule on Suitability 2012 (Beleidsregel geschiktheid) explicitly states for payment institutions and trust offices that candidates must have at least two years of relevant executive experience. An institution proposed to appoint a candidate without such experience as executive director, although the candidate was unfit pursuant to the policy rule. We contacted the institution and the candidate to inform them of this fact. We also indicated that in these sectors the necessary executive experience for small enterprises is often acquired in a non-executive managerial directorship. The institution decided to withdraw the application and offer the candidate a position as a non-executive director.

Insufficient knowledge of sound and ethical operational management and lack of executive skills

An assessment interview with a treasurer of a small insurance company revealed that the candidate did not have insight into the financial reports the institution submitted to DNB. He also lacked basic accounting skills. The candidate was not happy about the situation, but had no intention of doing anything about it since he felt there were no alternatives. In addition to his lack of relevant knowledge, we found the candidate's attitude to be too passive and not fitting for a treasurer's level of responsibility. We therefore found the candidate to be unfit for the position.

Relevant to:

  • Banks
  • Clearing & Settlement Systems
  • Clearing institutions
  • Collective investment schemes
  • Electronic money institutions
  • Exchange transaction
  • Insurers
  • Investment firms
  • Payment institutions
  • Pension funds
  • Premium Pension institutions
  • Trust offices