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The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) have launched a consultation on draft revised joint guidelines on the assessment of the suitability of members of the management body and key function holders (Draft Revised Guidelines). In parallel, the EBA has commenced a consultation on draft regulatory technical standards specifying the documentation and information that ‘large institutions’ must submit as part of their ‘suitability application’ to enable their competent authorities to conduct a suitability assessment of members of the management body and certain key function holders (Draft RTS). Together, these elements form a ‘Suitability Package’, which aims to harmonise suitability assessments and promote supervisory convergence across the EU.
The consultation periods run until 25 May 2026. The EBA is required to submit the Draft RTS to the European Commission by 10 July 2026, and the final Guidelines must be published by the same date.
ALG’s Financial Regulatory Advisory Team has extensive experience in co-ordinating replies to consultations by the European Supervisory Authorities. If your bank, investment firm or industry body is considering engaging in this consultation, please contact your usual ALG contact to discuss how we can help.
Overview of the suitability assessment
Directive (EU) 2024/1619 (CRD 6) amended Directive 2013/36/EU (CRD 4) to introduce new and revised suitability requirements in relation to members of the management body and key function holders within credit institutions, financial holding companies and mixed financial holding companies ((M)FHCs) through amendments to Article 91 and the insertion of new Article 91a.
Articles 91(1a) and 91a(2) of CRD 4 require credit institutions and (M)FHCs to assess the suitability of members of the management body and of key function holders, respectively, before these individuals are appointed (subject to limited exceptions) and on a periodic basis also.
The internal suitability assessment aims to ensure that members of management bodies and key function holders are of sufficiently good repute, act with honesty and integrity (and with independence of mind in the case of members of management bodies), and possess sufficient knowledge, skills and experience necessary to perform their duties (and, in the case of members of management bodies, fulfil the criteria in Articles 91(2) to 91(6)).
Credit institutions and (M)FHCs must ensure that the information about the suitability of the members of management bodies and key function holders remains up-to-date and is made available to their competent authority upon request.
For the purposes of the suitability requirements, ‘key function holders’ means persons who exercise significant influence over the direction of a credit institution but are not members of the management body, including the heads of internal control functions and the chief financial officer (CFO). ‘Internal control functions’ means the risk management, compliance and internal audit functions.
Additional requirements for ‘large institutions’ – requirement to submit a ‘suitability application’
Articles 91(1d) and 91a(5) of CRD 4 now require ‘large institutions’ to submit a ‘suitability application’ to their competent authority in relation to members of their management bodies and certain key function holders (i.e. the heads of internal control functions and the CFO).
The suitability application for members of the management body must be submitted ‘without undue delay’ and as soon as there is a clear intention to appoint a member of the management body in its management function or the chair of the management body in its supervisory function, and, in any event, at the latest 30 working days before the member takes up their position.
On receipt of a suitability application, a competent authority is required to conduct a suitability assessment in accordance with Articles 91(1f) and 91a(5) of CRD 4.
‘Large institutions’ for these purposes means any of the entities listed in Articles 91(1d) / 91a(5), where reference to ‘large institution’ in the list means a large institution as defined in Article 4(1)(146) of the Capital Requirements Regulation, i.e.:
The suitability application must be accompanied by:
Draft RTS on the content of documentation required for the suitability application
Background
CRD 6 amended Article 91(10) of CRD 4 to require the EBA to develop the Draft RTS to further specify the minimum content of the suitability questionnaire, curricula vitae and the internal suitability assessment that a large institution must submit to its competent authority as part of its suitability application. The Draft RTS harmonise the minimum content of the required documents, ensuring that suitability applications are consistent and comparable across the EU. On receipt of the suitability application, the competent authority must conduct the suitability assessment referred to in Articles 91(1f) and 91a(5) of CRD 4.
Key points on the Draft RTS
As mentioned above, the Draft RTS set out in the minimum information required to be included in the:
In addition to the above information, the Draft RTS set out further information and documentation to be submitted to the competent authority for the purposes of assessing:
Each competent authority can determine the manner in which the information and documents should be submitted.
Competent authorities should be permitted to request clarifications or additional information/documentation regarding the suitability of members of the management body and of the heads of internal control functions and the CFO of large entities than those required under CRD 4. Where specific information is already available to competent authorities and is up to date and relevant for the assessment, competent authorities should be permitted not to ask for its resubmission by the institutions.
Separately, the amendments to Article 91(10) require Member States to ensure that equivalent appropriate standards are developed for institutions that are not large institutions.
Draft Revised Guidelines on internal suitability assessments
The Draft Revised Guidelines incorporate new and enhanced requirements to reflect the amendments to the suitability requirements in Articles 91 and 91a of CRD 4. The EBA has published a version of the Draft Revised Guidelines with track changes to highlight the amendments it has made to the existing Joint EBA and ESMA Guidelines on the assessment of suitability.
Once the amendments are finalised, the revised Joint Guidelines will replace the existing Joint Guidelines and will apply to all credit institutions and investment firms. Certain aspects of the Joint Guidelines will also apply to third country branches authorised under the new regime introduced by CRD 6. However, the Draft Revised Guidelines take into consideration different types of credit institutions and investment firms, ensuring a proportionate approach. For this reason, certain provisions do not apply to all types of credit institutions and investment firms.
Among the amendments in the Draft Revised Guidelines are:
For further information on suitability requirements and the amendments proposed by the EBA, please contact Eoin O’Connor, Partner, Patrick Brandt, Partner, Eimear O’Brien, Partner, Louise Hogan, Partner, Sarah Lee, Senior Practice Development Lawyer or your usual ALG contact.
Date published: 13 March 2026
