ESMA and EBA consult on revised suitability assessment guidelines for banks and investment firms

The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) have launched a joint consultation on draft revised guidelines on the suitability assessments of members of the management body and key function holders at banks and investment firms. This follows the earlier version published in 2021. The proposed revisions form part of a broader suitability package aimed at harmonising suitability assessments and strengthening supervisory convergence across the EU. The package also reflects new requirements introduced for large institutions by the Capital Requirements Directive, as amended by Directive 2024/1619 (CRD VI) and the Markets in Financial Instruments Directive, as amended by Directive 2014/65/EU (MiFID II).

The revised guidelines cover:

• The use of ex‑ante applications for cases where competent authorities otherwise conduct ex‑post assessments.
• Mandatory suitability assessments for certain key roles, including heads of control functions and chief financial officers.
• The new CRD VI requirements for third‑country branches.
• The identification of potential money laundering or terrorist financing risks, in order to strengthen the link between suitability assessments and the anti‑money laundering and countering the financing of terrorism framework.

The authorities also published an excel spreadsheet covering the scope of the guidelines, linked in the press release. As part of the overall suitability package, the EBA is also consulting on draft regulatory technical standards (RTS) specifying the documentation and information that large institutions must submit to competent authorities as part of their suitability assessments. The deadline for comments on the RTS is 26 May. For the joint guidelines, the deadline is 25 May, with a public hearing expected to take place on 15 April.

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