Fitness and propriety assessments.

Fitness and propriety are two independent requirements. Fitness (Wft Art. 3:8 prudential/DNB and Art. 4:9 conduct/AFM) concerns knowledge, skills and professional behaviour and applies to both the executive board and the supervisory body. Propriety (Wft Art. 3:9 and 4:10) must be “beyond doubt” and is assessed on the basis of antecedents. Whether DNB or the AFM (co-)assesses depends on the type of undertaking; in practice they often assess jointly.

The joint Beleidsregel geschiktheid 2012 (the AFM/DNB policy rule on fitness, successor to the 2011 policy rule on expertise) elaborates the fitness requirement. Fitness is evidenced by education, work experience and competencies. The policy rule uses an A/B/C classification that scales the intensity of the assessment, and a competency annex (a–r) used in the substantiation. Besides individual fitness, the collective fitness of the board or supervisory board counts.

The classification determines how intensive the fitness assessment is. Group A is the heaviest category (including providers of investment objects/services), group B includes credit providers and fund managers, and group C includes advisers and intermediaries. The higher the group, the more extensive the requirements for knowledge, experience and the underlying substantiation.

There is an initial assessment before appointment and a re-assessment for a new role or on new facts or signals. Documents to submit include an application/notification form, a CV (DNB standard format), a fitness substantiation and an antecedents/propriety declaration. The decision period is suspended when further questions are asked. An assessment interview may be part of the fitness assessment; good preparation is often decisive.

This area concerns the assessment of individuals — the fitness and propriety of directors and supervisory board members — not the firm-level authorisation as a whole; that belongs to the relevant sector area (for example PSP/EMI authorisation). Broader governance and controlled operations (Wft Art. 3:17 et seq.) touch on this but fall under the organisational requirements of the sector area. Climate risks are now part of the assessment of individuals.

Yes, particularly for banks. For credit institutions Article 91 CRD and the joint ESMA/EBA guidelines on the assessment of the suitability of management body members apply. For other sectors the national Beleidsregel geschiktheid 2012 remains leading. Bear in mind periodic revisions of the fitness and propriety rules.

Yes. Appointment or effectively starting the role is only allowed after the supervisor has issued a positive decision on fitness and propriety. Plan assessments early when board changes are coming — a process of several weeks to months is normal, and starting the role too early is a violation that strains the supervisory relationship.

Yes. Besides day-to-day policymakers, members of the supervisory board and co-policymakers (persons who effectively co-determine policy, such as certain shareholders or group officers) are also assessed. The depth differs per role; the propriety test is the same for everyone.

Know your institution’s file inside out: business model, figures, risks, SIRA, recovery and exit plan and open supervisory findings. Be ready for case-based questions about your own portfolio and responsibilities, and for questions on time commitment and independence. A mock interview with critical challenge is the best preparation.

The supervisor first shares an intention; you can respond with your views, and in practice applications are regularly withdrawn before a formal decision. A negative decision can be challenged through objection and appeal. A negative outcome has wider consequences — it weighs in future assessments — so prevention through solid preparation is by far the best route.