The new guidelines from the European Supervisory Authorities

DEVLHON Consulting decodes: The new guidelines from the European Supervisory Authorities

In a context where the governance of financial institutions is under heightened scrutiny, the European Union is strengthening its regulatory framework. The European Supervisory Authorities (ESAs), including the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA), have recently published guidelines aimed at optimizing the fitness and propriety assessments of key leaders and stakeholders in the financial sector. These new measures, which introduce a centralized information exchange system, mark a crucial step toward more harmonized and effective supervision.

A Framework for Strengthened Governance

These guidelines are set within a clear legal framework, stemming from the EU’s founding regulations. Their objective is to ensure that individuals in strategic roles within financial institutions are assessed according to high standards, ensuring their integrity and competence. To achieve this, the ESAs have developed a specific information system, the ESAs Information System, which plays a key role in sharing the necessary data between the competent authorities of various Member States.

The ESAs Information System: A Tool for Authorities

This centralized system allows the essential information on individuals who have undergone an assessment to be cataloged and for the authorities who previously conducted these assessments to be quickly identified. However, to respect data confidentiality, only bilateral exchanges are permitted outside the platform, with information strictly limited to what is necessary. This system ensures a balance between efficiency and personal data protection, complying with the General Data Protection Regulation (GDPR).

Beneficial Harmonization for the Sector

By establishing a common approach across the European Union, these guidelines harmonize supervisory practices between countries and financial sectors. They speed up the assessment process by simplifying access to available information. Additionally, they strengthen the stability of the financial system by ensuring that key individuals in institutions meet the required standards of fitness and propriety, contributing to more robust governance.

Challenges to Overcome

Despite its many advantages, the implementation of this system presents some challenges. Competent authorities must integrate these new requirements without compromising legal evaluation deadlines. Additionally, particular attention must be paid to data security to avoid leaks or misuse. These issues require close coordination between the various sector stakeholders.

A Step Towards the Future

These new guidelines reflect the European Union’s commitment to modernizing financial governance and enhancing transparency in assessment processes. At DEVLHON Consulting, we support our clients in integrating these regulatory changes, helping them comply with the requirements while seizing the opportunities they present.

To learn more about the impact of these guidelines on your organization, contact our experts.