The EBA publishes its final Guidelines on supervisory independence

The European Banking Authority (EBA) today published its final Guidelines on Supervisory Independence under the Capital Requirements Directive (CRD). The Guidelines further clarify the arrangements that competent authorities should have in place to prevent and manage conflicts of interest involving both their staff and the members of their governance bodies. These arrangements include declarations of interest, limitations on trading of financial instruments and cooling-oof restrictions.

Risks to supervisory independence pose challenges to the soundness of supervision and good governance. New requirements introduced in the CRD therefore aim to strengthen the framework for managing such risks. To safeguard the trust in the governance of competent authorities and ensure transparency of procedures, the Guidelines clarify additional aspects related to the appointment of members of governance bodies and the duration of their tenure.

To support the prevention and management of conflicts of interest, the Guidelines set out minimum harmonised standards for the submission and assessment of declarations of interest on a pre-employment, annual and ad-hoc basis.

The Guidelines also include harmonised procedural requirements for the sale or disposal of financial instruments that may give rise to conflicts of interest and further specify the prohibition on trading in financial instruments laid down in the CRD.

Finally, where national laws allow for cooling-off periods beyond the minimum period set out in the CRD, the Guidelines aim to ensure a proportionate and consistent approach across the EU. To this end, they establish procedures and assessment criteria for competent authorities to consider when determining the appropriate length of such periods.

Legal basis and background

The Guidelines on supervisory independence of competent authorities have been developed pursuant to Article 4a(9) of Directive 2013/36/EU, which mandates the EBA to issue guidelines on the prevention of conflicts of interest and the independence of competent authorities, to ensure a proportionate application of that Article, taking into account international best practices.

The Guidelines build on existing EU and international standards and principles related to supervisory independence and the management of conflicts of interest, including the Joint European Supervisory Independence criteria.pdf of 25 October 2023 (JC 2023 17).