On 20 December 2022, the National Bank of Belgium (NBB) updated its “fit & proper” Manual, which sets out the prudential standards to be met by all financial institutions under its supervision regarding the assessment of the suitability of directors, senior managers (in particular members of the management committee) and persons responsible for independent control functions.

Supervisory expectations have raised

The updated “fit and proper” manual raises the supervisory expectations regarding different aspects, such as:

1. time commitment: recommendation that members of the management committee and persons responsible for control functions perform their duties full-time,

2. independence of mind: ability to ask questions, challenge proposals, resist groupthink and not be subject to conflicts of interest,

3. collective suitability: in areas related to ICT security, environmental and climate risks, prevention of money laundering and terrorist financing,

4. diversity: for banks, diversity in the composition of management bodies).

Requirements at organizational level

A number of new requirements have been clarified at the organisational level, such as the development of a suitability and, where appropriate, diversity policy, the implementation of procedures and processes for the selection and succession planning of managers, etc.

Moreover, the new manual also emphasises that financial institutions should monitor suitability continuously, and sets out a list of events that should trigger a reassessment of the individual or collective suitability of managers.

Fit and proper forms

The updated “fit and proper” manual does not alter the use of NBB fit and proper forms, used in following situations:

1. New appointment
2. New elements
3. Exit
4. Reappointment