Policy Rule on Suitability 2012

The Dutch Authority for the Financial Markets (AFM) has published an updated version of the joint *Policy Rule on Suitability 2012, which is a set of guidelines issued by the AFM and DNB that clarifies the definition of ’suitability‘ for policymakers and outlines the criteria used by supervisory authorities to assess the fitness and propriety of these policymakers.
Policymakers must demonstrate suitability in the following areas:
– Management, organization, and communication: Involves managing processes, tasks, employees, ensuring long-term value creation, adhering to social, ethical, and professional standards, and providing clear information to customers and regulators
– Products, services, and markets: Understanding relevant legislation, regulations, and financial aspects related to the enterprise’s operations
– Sound and ethical operational management: Ensuring proper administrative organization, internal control, customer treatment, risk management, compliance, and outsourcing
– Balanced and consistent decision-making: Taking into account the interests of customers and stakeholders, making sound, objective, and independent decisions and judgments in fulfilling responsibilities.
– Time availability: Having sufficient time to understand the enterprise’s activities, main risks, business, and risk strategy, especially during periods of increased activity
The rule specifies when policymakers must undergo assessment and what information and antecedents are considered during this process.
The AFM concurrently issued a feedback statement outlining key points from responses to a Fall 2022 open consultation on proposed changes to the Policy Rule. Furthermore, it includes specific comments on these responses provided by the DNB and the AFM.
The changes to the Policy Rule were made in response to developments in European and national laws as well as regulations and the implementation of European guidelines. They were made as an update and did not alter the existing assessment policy of the AFM and DNB, nor did they change the scope or target group of the assessment policy, except for adjustments required by the new legislation.
The changes affects primarily the following:
– the classification of financial undertakings into three groups (A, B and C);
– the Annex related to part 1.2.1 containing a list of competences; and
– the explanatory notes.
The changes were enforced by the Decision of 8 March 2023 (Besluit van De Nederlandsche Bank N.V. (DNB) en de Stichting Autoriteit Financiële Markten (AFM) van 8 maart 2023 tot wijziging van de Beleidsregel geschiktheid 2012), which was gazetted on 31 March 2023, and became effective on 1 April.