New rules on more flexible fit & proper assessments adopted
Published 28 April 2023
Category: Financial Regulation
On 18 April 2023, the Danish Parliament adopted the proposal to amend the financial regulation presented by the Danish Government, which includes amendments to the rules on fit & proper assessments. The proposal as adopted is available here (in Danish).
The amendments implement the political agreement from June 2022 available here (in Danish) on a broader recruitment basis for management positions in the financial sector. The agreement involves a more holistic approach to fit & proper assessments, which aims to improve financial companies’ opportunities to recruit management members and key personnel from other sectors in business and across sub-sectors in the financial sector.
The amendments include inter alia:
- Explicit authority for the Financial Supervisory Authority (“FSA”) to make fit & proper decisions, duration of rejections, and changes to the requirements of public disclosure;
- Two aligned processes for fit & proper assessments, including an overall assessment and a rule of presumption;
- An opportunity for conditional fit & proper approvals of executive members and key persons, such conditions to be met within 18 months;
- Mandatory renewed fit & proper assessment upon appointment as Chair of the Board in a credit institution, mortgage credit institution or insurance undertaking;
- A right to require that the FSA must bring rejections of fit & proper applications before the courts;
What’s next: The amendments enter into force on 1 July 2023.