CSSF Procedure For Approval For Holders Of Key Functions Within Banks And Investment Firms

On 6 February 2015, the CSSF published its prudential authorisation procedure for the approval of holders of key functions within banks and investment firms, according to Circular 12/552 on central administration, internal governance and risk management (the "Circular").

Article 17 of the Circular provides that, for the appointment and succession of individuals with key functions, an institution shall comply with the CSSF prudential authorisation procedure and the requirements of the guidelines published by the European Banking Authority ("EBA") on 22 November 2012 (1).

The key functions are defined in point 1 of the Circular as any function whose exercise may have a significant influence on the conduct or monitoring of activities. Those functions include the directors, authorised managers and the chief risk officer, the chief compliance officer and the chief auditor (the "Relevant person").

To nominate new Relevant persons, the institution shall (i) define internal policies and procedures for selecting key function holders which comply with the principles of robust internal governance, and (ii) complete an authorisation file to be sent to the CSSF for approval.

That file shall provide a list of the following documents:

  • certified copies of valid ID/passport;
  • dated and signed CV;
  • recent copy of the police report (no more than three months old);
  • declaration of honour for natural persons published on the CSSF's website to be duly completed and signed.

In the case of resignation or removal of a holder of key functions, the institution has to notify the CSSF at short notice, attaching to the notification the reasons for the decision as well as the letter of resignation/removal. The institution shall specify if it intends to replace the resigning person and in what period of time.

The appointment of directors as authorised managers, requires prior written authorisation from the CSSF.

(1) Guidelines on the assessment of the suitability of members of the management body and key function holders - EBA/GL/2012/06.