Reassessment
Persons who determine the policy of an enterprise either solely or jointly or who supervise such policy must be proper and fit for the performance of their tasks. Persons nominated for these positions at a financial enterprise are assessed by the AFM and/or De Nederlandsche Bank (DNB) for propriety and fitness. If there are doubts with respect to fitness or propriety, a reassessment may be conducted.
'Reasonable cause'
Fitness and propriety are ongoing requirements. If there are facts or circumstances that affect propriety and/or fitness, this must be notified by the financial enterprise or the existing policymaker to the AFM and/or DNB. If the AFM and/or DNB become aware of facts or circumstances that raise doubts regarding fitness or propriety, a reassessment may be considered.
Such doubts may be raised due to actions or omissions by the person in question, or due to relevant developments with respect to the enterprise. In such cases, the AFM and/or DNB consider whether there is ‘reasonable cause’ for conducting a reassessment. Whether such reasonable cause exists always depends on the circumstances of the matter at hand. This will be reviewed for each individual case. This is known as the preliminary review.
The term ‘reasonable cause’ is not defined by legislation or interpretation. There is therefore no exhaustive list of reasonable causes for conducting a reassessment.
Examples of reasonable cause with respect to fitness
- concerns regarding an unexpected change in results; rapid growth of the enterprise
- concerns regarding ethical and controlled business conduct; concerns regarding the enterprise’s business model
- concerns regarding the enterprise’s culture
- concerns regarding compliance
- a merger or acquisition
- an expansion of business operations into other countries
- delegation of (core) tasks; providing harmful products or incorrect, unclear or misleading information
- continued failure to respond to requests for information by the supervisor, or failure to respond in time
- inability to pay the auditor
- poor record-keeping
- high employee turnover
- complaints from customers regarding provision of services without due care
- (repeated) violation of legislation or regulation.
Examples of reasonable cause with respect to propriety
- notification of a change to records by relevant information from the financial enterprise at which the assessed person is a policymaker or co-policymaker or from the assessed person themselves
- relevant information identified during supervisory inspections
- relevant information from the National or District Public Prosecutor/the police/Fiscal Information and Investigation Service (FIOD)
- relevant information from other (financial) supervisors (national and international)
- relevant information from the Financial Intelligence Unit
- relevant information from the financial sector, if relevant and adequately substantiated
- relevant information from the media, if adequately supported by further investigation (public sources).
Result of reassessment and separation of functions
If the existing policymaker will be reassessed, the enterprise and the person concerned will always be notified accordingly in writing. A reassessment interview with the person concerned will be held in all cases. In its notification of the reassessment interview, the AFM will state that the person may be accompanied by an authorised person (representative or legal counsel) at the interview.
Several departments at the AFM are involved with the initiation and the conduct of the reassessment. One or more interviews with the person concerned will form part of the review process. After completion of the review and on the basis of the assessment interview and other relevant information, it will be established whether the person is still fit and/or proper. The persons taking the decision regarding dismissal (if applicable) are not involved in the (internal) decision to initiate a reassessment. An intention to take a decision is communicated to the enterprise before a final decision is made. The enterprise and the person concerned are given the opportunity to state their views. Objection to the AFM and appeal to the courts is possible on the basis of the final decision.