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01 July 2018 Supervision Supervision label Q&A

We assess incumbent and prospective policymakers, such as management and supervisory board members. We consider whether they are fit to fulfil their duties and whether their propriety is beyond doubt, focusing on intentions, actions and antecedents of management or supervisory board members that may get in the way of carrying out his or her duties. Below, we explain how we consider a policymaker's antecedents.

What are antecedents?

In investigating a policymaker's antecedents as part of a fit and proper assessment, we distinguish five types of antecedents:

  • Criminal antecedents, such as convictions, transactions, (conditional) dropping of charges, acquittal or discharge from prosecution
  • Financial antecedents, such as major private or business-related financial issues and bankruptcies
  • Supervisory antecedents, such as incorrect or incomplete disclosure to a supervisory authority, rejection of a licence application or imposition of a formal or informal measure
  • Tax compliance antecedents, such as personal or business tax offence penalties imposed by a tax authority
  • Other antecedents, such as a disciplinary measure or employment conflict

There is a notification requirement for antecedents. What does this mean?
When your institution applies for an initial assessment of a prospective policymaker, that person must complete the Propriety Assessment Form truthfully and in full, reporting relevant antecedents. In addition, fitness and propriety are ongoing requirements, meaning that financial institutions and policymakers must always notify us of new antecedents. If you are in doubt as to whether an event qualifies as an antecedent, apply the rule of thumb that it is better to report too much than too little. When investigating a reported antecedent, we regard full disclosure as a mitigating factor.

If you wish to report an antecedent or have any questions, please contact the Expert Centre on Fit & Proper Assessments at toetsing.expertisecentrum@dnb.nl

Any supervisory measures we have imposed will be known to us. You do not need to report those. However, any other formal or informal measures imposed by another supervisory authority, such as the AFM, the ECB, or a foreign supervisory authority.

How does DNB handle antecedents in an assessment?

Antecedents may impact our opinion on someone's propriety and, in some cases, on someone's fitness, or they may provide reasonable grounds for reassessment, but this is not a matter of course. Only the most severe category of criminal antecedents, such as a recent conviction for insider trading, will immediately lead us to express the opinion that someone's propriety is no longer beyond doubt. In all other cases, we will weigh the antecedent, considering various factors, including:

  • extent and timing of disclosure
  • extent of completeness of explanations
  • type of offence and gravity
  • nature and extent of any sanctions
  • time elapsed between the antecedent and the report
  • the involved person's position and the circumstances of the event or offence
  • number of antecedents, repeat offences or behavioural pattern: we may at a later time reassess any antecedents that in themselves do not justify a negative opinion if they should appear to form part of a behavioural pattern

Experience has shown that the large majority of antecedents, once reported, do not immediately lead us to express a negative opinion on someone's propriety. In many cases, we apply a "zero weighting", meaning that the antecedent does not affect our opinion on someone's propriety.

When do supervisory measures result in antecedents, and for whom?

To determine whether a supervisory measure qualifies as an antecedent for a financial institution's policymakers, we consider various factors, including the relevant period and the offences that prompted the measure. As a rule, a measures qualifies as an antecedent for all policymakers in office during the relevant period. This means it is not for those in office when the measure was imposed but not yet in office when the offence took place. Conversely, it is also an antecedent for those in office when the offence took place but no longer when the measure was imposed.

Does DNB's imposition of an informal supervisory measure result in an antecedent?

Yes, when we impose an informal supervisory measure, the offence that prompted it qualifies as a supervisory antecedent. Our communications were somewhat ambiguous on this subject in the past, and financial institutions were not always aware that an informal measure was involved. We always will tell you clearly that we impose an informal measure. Regardless of whether we impose a supervisory measure, we can always weigh relevant instances of non-compliance with the law in assessing or reassessing someone's fitness and propriety.

We use two types of informal measure: a warning letter and a compliance briefing. We use these measures, and sometimes combine them with a formal measure, whenever we find instances of non-compliance. This means that there is always an instance of non-compliance prompting the informal measure. That instance of non-compliance qualifies as a supervisory antecedent.

Does the imposition of an informal measure by another supervisory authority qualify as an antecedent?

If the AFM imposes an informal measure, this will always qualify as a supervisory antecedent. As a rule, if another Dutch or foreign financial supervisor imposes an informal measure, this will qualify as an antecedent if it may reasonably be relevant in assessing someone's fitness or propriety. If you are in doubt, remember that it is better to report too much than too little. Full disclosure, or a lack thereof, is a factor we always weigh.

Can you object to a qualification as an antecedent?

No, we qualify an event as an antecedent on the basis of the law. As a result, this is not a decision open to objection or appeal. However, if we weigh the antecedent and express our opinion following assessment or reassessment, this will in principle be in the form of a decision open to objection or appeal.

sector

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