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Official Gazette of the Republic of Slovenia, No. 62/11 – Basic text (in force since 6 August 2011).
Official Gazette of the Republic of Slovenia, No. 73/11 – Amendment (valid from 9 september 2013).
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Pursuant to the points 1 and 3 of Article 61 and point 16 of Article 129 of the Banking Act (Official
Gazette of the Republic of Slovenia, Nos. 99/10 - official consolidated text (52/11 – amended); 9/11 –
ZPlaSS-B; 35/11 and 59/11; hereinafter: the ZBan-1) and the first paragraph of Article 31 of the Bank
of Slovenia Act (Official gazette of the Republic of Slovenia, Nos.72/06 [official consolidated text]
and 59/11), the Governing Board of the Bank of Slovenia hereby issues the following
REGULATION
on the diligence of members of the management and supervisory boards of banks and savings
banks
1. GENERAL PROVISIONS
Article 1
(content of the Regulation)
(1) This Regulation sets out:
(a) detailed rules regarding the conduct of members of the management and supervisory boards of
banks and savings banks (hereinafter: the banks) when performing such a function in
accordance with the standards of appropriate professional diligence and the highest ethical
standards of management;
(b) the criteria for defining significant direct or indirect business contacts for the purpose of
identifying conflicts of interest; and
(c) the detailed definition of tasks and the composition of a remuneration committee, and detailed
criteria for determining the significance of a bank for the purpose of appointing a
remuneration committee.
(d) the criteria and procedures for assessing the suitability of the candidates for members of the
Management Board or Supervisory Board, or already appointed members to these functions.
(2) Whenever this Regulation makes reference to the provisions of other regulations, these provisions
shall apply in their valid wording at the time in question.
Article 2
(transposition of EU directives)
This Regulation transposes into Slovenian law:
 Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating
to the taking up and pursuit of the business of credit institutions (Official Journal of the
European Union L 177 of 30 June 2006, p 1), last amended by Commission Directive
2010/76/EU of 24 November 2010 amending Directives 2006/48/EC and 2006/49/EC as
regards capital requirements for the trading book and re-securitisation, and the supervisory
review of remuneration policies (Official Journal of the European Union L 329 of 14
December 2010 pp 3-35),
 Guidelines on the assessment of the suitability of members of the management body and key
function holders (EBA/GL/2012/06).
Article 3
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(definition of terms)
(1) The terms used in this Regulation are the same as those defined in the provisions of ZBan-1, such
as:
(a) a parent undertaking and a subsidiary in Article 25,
(d) risk management in Article 108,
(c) operational risk in Article 112, and
(d) the remuneration system in point 4 of the first paragraph of Article 124.
(2) For the purpose of this Regulation the following definitions shall apply:
(a) "supervisory board" shall mean the supervisory board in a two-tiered bank management system
or the members of the management board, who are not executive directors thereof, in a one-tiered
bank management system;
(b) "management body" shall mean the management board in a two-tiered bank management
system or the executive directors of the management board in a one-tiered bank management
system;
(c) "conflict of interest" shall mean a position when, due to circumstances arising in relation to a
member of the management or supervisory board, the impartial and objective performance of tasks
and decision making by the member in question are threatened or could be threatened, with
respect to the bank's interest, including its interest in the area of competition. All circumstances
are taken into account when assessing conflicts of interest, in particular economic, political and
other circumstances that are directly related to a member of the management or supervisory board
and to other legal and natural persons with interests common to those of the member in question;
(d) "member of the close family of a member of the management or supervisory board"
(hereinafter: close family member) shall mean:
 a person specified in the second paragraph of Article 30 of ZBan-1,
 a natural or adopted child of the member in question or person referred to in the first
indent of this point, with full legal capacity,
 the natural or adoptive parent of the member in question or person referred to in the first
indent of this point,
 the brother or stepbrother or sister or stepsister of the member in question or person
referred to in the first indent of this point, and
 the grandfather or grandmother of the member in question or person referred to in the first
indent of this point.
(e) "Assessment of the suitability of the members of the Management Board or the Supervisory
Board" means the documented assessment of the suitability of each candidate for member of the
Management Board or Supervisory Board member or already appointed to these functions in
relation to the reputation, experience and governance which the bank made on the basis of
predetermined procedures and criteria.
(3) For the purpose of the provisions of this Regulation relating to remuneration, the definitions set out
in the Regulation on Risk Management and Implementation of the Internal Capital Adequacy
Assessment Process for Banks and Savings Banks (Official Gazette of the Republic of Slovenia, Nos.
135/06, 28/07, 104/07, 85/10 and 62/11; hereinafter: the risk management regulation) shall apply.
2. BASIC RULES OF DILIGENCE
Article 4
(professional and ethical standards of management at the bank level)
(1) Professional and ethical standards of management are rules, recommendations and best business
practices that contribute in particular to the mitigation of various risks to which a bank is or could be
exposed in its operations, including operational and reputation risk.
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(2) A member of a management or supervisory board shall conduct himself or herself in accordance
with high professional and ethical standards of management, and prevent, to the greatest degree
possible, circumstances that could result in a conflict of interest.
(3) Through his or her example and conduct, a member of a management or supervisory board shall
promote an appropriate organisational culture that gives the fair and irreproachable execution of
business activities the highest priority.
Article 5
(policies relating to the professional and ethical standards of management)
(1) A bank shall establish and apply policies aimed at:
(a) achieving professional and ethical standards of governance.
(b) the selection and assessment of the suitability of candidates for members of the Management
Board or the Supervisory Board, and already appointed members of these functions
(hereinafter assessment of the suitability of a member).
(2) The policies referred to in point (a) of the first paragraph of this Article, in particular, identify
relationships , products and activities of the bank, which may result in a conflict of interest, including
elements to identify actual and potential conflicts of interest in the relationships between the different
parties in the bank and relationships between the bank and :
(a) members of the Management Board or the Supervisory Board, as well as other persons with
interests common to those member in question, and
(b) customers, shareholders, employees , significant suppliers, business partners and the like .
(3) The policies referred to in point (a ) of the first paragraph of this Article shall include the bank's
approach to the significant business contacts in 12 of this Regulation, in particular, to the following
examples:
(a) any direct business contact by a member of the management or supervisory board or a
member of his or her close family arising from a concluded agreement on the delivery of
goods or the rendering of services for the bank;
(b) an indirect business contact by a member of the management or supervisory board or a
member of his or her close family, if the selection of a supplier of goods or services was not
the subject of a public tender;
(c) the treatment of a member of the management board, as regards banking and other services
provided by the bank, is more favourable than that of other bank employees; and
(d) the treatment of a member of the supervisory board, as regards banking and other services
provided by the bank, is more favourable than that of other bank customers.
(4 ) The policies referred to in point (a) of the first paragraph of this Article shall identify appropriate
measures to address and eliminate identified conflicts of interest, including but not limited to the
appropriate segregation of competences and responsibilities, the establishment of information barriers,
such as the physical separation of certain departments, etc.
(5) The policies referred to in point (a) of the first paragraph of this Article shall define a bank's
approach to recognising and handling acts of corruption at all decision-making levels at the bank, and
methods for detecting and preventing transactions on own account, and other criminal, unethical and
contentious acts linked to the bank's operations.
(6 ) The policies referred to in point (b ) of the first paragraph of this Article shall specify :
(a) The procedures for the assessment of the suitability of a member, including:
 function and/or the person who is responsible for producing an assessment of the
suitability of a member;
 internal procedure for producing an assessment of the suitability of a member;
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information and evidence provided by the member of the Management Board or the
Supervisory Board submitted to the bank for the purpose of assessing the suitability of a
member ;
 measures by which the bank ensures that the General Assembly of Shareholders is
informed of the requirements of the bank regarding members of the Management Board or
the Supervisory Board prior to their appointment ;
 circumstances for which the bank must re-assess the suitability of a member ;
 obligations of the Members of the Management Board or the Supervisory Board to inform
the bank about anything that may affect the assessment of suitability;
(b) the criteria for the assessment of the suitability of a member, including:
 competences, knowledge and skills that a member of the Management Board or the
Supervisory Board of the Bank's should have for reasonable presumption of adequate
professional qualifications and experiences of the member;
 criteria for determining the collective skills and experience of the Management Board or
the Supervisory Board;
 methods of training in case of need for further education and training of members of the
Management Board or the Supervisory Board to ensure their suitability ;
 proposals for measures in cases where a member of the Management Board or the
Supervisory Board or candidate for that function according to the bank's assessment is not
suitable;
These policies must take into account that:
(a) different functions in the management or supervisory board may require a different
experience;
(b) if, on the basis of any information doubt arises about the reputation and experience of the
individual members of the Management Board or the Supervisory Board, the bank must
reassess the suitability of this person. The bank must take into account all relevant information
and facts that are important and are available for evaluation, irrespective of where (in Slovenia
or abroad) and when they occurred.
(7) When formulating the policies specified in the first paragraph of this article, the management board
shall cooperate with the supervisory board, which shall discuss and give the consensus to the policy.
If the Supervisory Board appoint the Appointments Commission or simillar commission, it should
actively cooperate with the Board in formulating policies for assessing the suitability of members.
(8) The management board shall approve the policies specified in the first paragraph of this article,
and notify the supervisory board with regard to their implementation and execution.
Article 6
(diligence)
(1) From the moment a member of the management board assumes his or her function, he or she shall
conduct himself or herself with professional diligence and in accordance with the highest ethical
standards of management. Conduct is deemed appropriate if a member of the management board
performs his or her duties in accordance with the objectives, strategies and policies of the bank and in
the best interest thereof.
(2) From the moment a member of the supervisory board assumes his or her function, he or she shall
conduct himself or herself with the professional diligence necessary for supervision of the bank's
management, in accordance with the highest ethical standards of management. Conduct is deemed
appropriate if a member of the supervisory board understands and carries out his or her role of
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supervising the activities of the management board and the bank's operations based on knowledge of
the bank's business strategy, risk profile and management system.
(3) A member of the supervisory board, who due to any reason is hindered from performing his or her
function (i.e. conflicts of interest, undue pressures in his or her independent decision making, longterm passiveness and inaction of other members of the supervisory board) and who has used all
mechanisms provided by valid regulations, shall inform the Bank of Slovenia of this situation.
Article 7
(responsibility)
(1) Members of the management and supervisory boards shall cooperate closely in the best interest of
the bank. The delegation of responsibilities between the management and supervisory boards and the
cooperation between the two shall be defined in detail and included in a bank's internal acts. Members
of the management and supervisory boards shall strive to achieve consensus when adopting important
bank decisions that may have a significant impact on the business, financial or legal state of the
company. Cooperation between the management and supervisory boards shall include cooperation
during the formulation of objectives, strategies and policies relating to risk taking and risk
management, for which:
(a) the supervisory board shall discuss and give the consensus to these objectives, strategies and
policies, and
(b) the management board shall approve these objectives, strategies and policies and notify the
supervisory board with regard to their implementation and execution.
(2) The responsibilities of members of the management and supervisory boards shall be clearly
defined and documented. In particular, this documentation shall include:
(a) a definition of the the most important duties of management and supervisory board members in
connection with the performance of their function, including relevant work procedures,
(b) minutes of management and supervisory board meetings and the transcript of the audio
recording of meetings of the Supervisory Board.
(b1) informing the Board, Supervisory Board and the functions and / or the persons referred to in
the first indent of point (a) of the sixth paragraph 5 of this regulation on an annual basis of all
circumstances that may affect the compliance of the members of the Management Board and
Supervisory Board member with suitability criteria resulting from the Bank's policies,
(c) other important documentation based on which the Bank of Slovenia is able to assess the
activities of the bank's management and supervisory board members.
(3) In particular, the responsibilities of members of the management and supervisory boards shall
include the formulation and supervision of the following:
(a) the bank's basic business objectives, taking foremost into account the long-term interests of the
bank, in accordance with valid regulations and requirements and recommendation of the Bank of
Slovenia and other competent supervisory bodies,
(b) objectives concerning the risk profile, and strategies for risk-taking and risk management,
(c) a stable and transparent organisational structure, and a policy for appointing and replacing
persons in key positions at the bank,
(d) effective internal reporting systems with regard to the situation in the bank's organisational
structure and relations with competent bodies,
(e) basic principles of management at the bank, including a code of conduct and other comparable
principles, and
(f) an appropriate and effective internal control system.
(4) If a bank is in the position of subsidiary, it shall be evident from the documentation set out in the
second paragraph of this article that the management and supervisory boards of the subsidiary are
responsible for the appropriate consideration of the objectives, strategies and policies of the parent
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undertaking. In the scope of these responsibilities, the supervisory board shall in particular control that
these objectives, strategies, policies and instructions are not in conflict with valid regulations.
(5) If a bank is in the position of parent undertaking, the documentation set out in the second
paragraph of this article shall include the responsibility of its supervisory board for discussing and
giving the consensus to the general objectives, strategies and policies of the bank group and its
subsidiaries, including consent to establish a structure for managing subsidiaries that best provides
effective control over the group as a whole.
Article 8
(autonomy and professional qualification)
(1) A member of the management or supervisory board shall have the necessary knowledge and
experience to independently assess and adopt decisions in the best interest of the bank. To that end, he
or she shall take into account all available information and other relevant factors that may influence
these decisions.
(2) During the assessment and decision making referred to in the first paragraph of this article, a
member of the management board shall consider in particular the impact of his or her conduct on the
following:
(a) the bank's operations, which shall be in line with valid regulations,
(b) the protection of the interest of the bank's customers, and
(c) the bank's obligations to creditors and shareholders, the requirements and expectations of
competent supervisory authorities and protection of the public interest.
(3) During the assessment and decision making referred to in the first paragraph of this article, the
member of the supervisory board shall consider in particular the importance of following:
(a) the development and maintenance of an appropriate level of professional expertise about the
bank that is proportional to the bank's growth and level of development,
(b) the promotion of the bank's security and soundness, and an understanding of valid regulations,
and
(c) the avoidance of potential conflicts of interest in his or her activities and decision making.
(4) A member of the management or supervisory board shall strive for the independent and expertly
justified adoption of decisions in all circumstances in accordance with the highest ethical standards
and, on this basis, assess any opinions or instructions of those who have been elected, proposed or
appointed. These circumstances shall also include any opinions or instructions of the management
and/or supervisory boards of the parent undertaking to a member of the management and/or
supervisory boards of a subsidiary with regard to the execution and implementation of the business
objectives, risk profile, strategies and policies of the bank.
(5) Notwithstanding the provision regarding the independent adoption of decisions set out in the fourth
paragraph of this article, a member of the management board shall fully and accurately inform the
president of the management board with regard to all significant events as they occur and with regard
to the course of specific activities for which he or she is responsible.
(6) If a particular member of the management board believes that the majority of decisions taken by
the management board with regard to specific problems are in conflict with the bank's objectives,
strategies and policies, and violate the duties set out in the first paragraph of Article 66 of the ZBan-1,
he or she shall express this disagreement with a memo and explanation in the minutes of the
management board's meeting.
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(7) A member of the supervisory board shall notify the other members thereof with regard to the
receipt of an opinion or instructions set out in the fourth paragraph of this article. All members of the
supervisory board shall have the same rights and responsibilities, irrespective of who voted, proposed
or appointed them.
(8) If a particular member of the supervisory board believes that the majority of decisions taken by the
supervisory board are in conflict with the bank's business and risk management objectives, and violate
the duties set out in the first paragraph of Article 74 of the ZBan-1, he or she shall express this
disagreement with a memo and explanation in the minutes of the supervisory board's meeting.
Article 9
(independence)
(1) A member of the supervisory board shall not be dependent on the bank or its subsidiaries, meaning
that his or her economic, personal or other connection with the bank, its management board or its
subsidiary shall not influence his or her impartial, professional, objective, fair and comprehensive
personal judgement while carrying out the function of supervisory board member.
(2) A member of the supervisory board shall notify the latter immediately with regard to every
connection with the bank or its subsidiary specified in the previous sentence.
Article 10
(conflicts of interest among the members of management and supervisory boards)
(1) In his or her activities and decision making, a member of a management or supervisory board shall
avoid circumstances and conduct that could mean or lead to a conflict between the interests of the
bank and the personal interests of the member or a person who has economic, political or other
interests that are common to those of the member, and that indicate the joint representation and
activities of the member and other person in question. In his or her activities and decision making, a
member of the management board shall first consider the interests of the bank, subordinate any
personal interests to those of the bank, and may not exploit the business opportunities of the bank for
his or her own behalf or on behalf of a person with interests that are common with those of the
member in question. In his or her activities or decision making, a member of the supervisory board
shall first consider the interests of the bank, and subordinate any personal interests or the specific
interests of shareholders, the management board, the public or other persons to those of the bank.
(2) A member of the supervisory board shall immediately notify the supervisory board of
circumstances that could lead to the suspicion of a conflict of interest. If conflicts of interest or
circumstances that could lead to conflicts of interest are identified, the supervisory board shall adopt
the appropriate measures to eliminate the conflicts of interest or establish control over the
circumstances that could lead to such.
(3) If the supervisory board identifies a conflict of interest or the possibility of the occurrence thereof
with respect to a member of the management or supervisory board on the basis of the assessment
referred to in the second paragraph of this article, the member in question shall immediately cease his
or her contentious conduct and transfer any possible benefits gained from a specific transaction to the
bank. If the bank has suffered any damage as the result of the transaction in question, the member of
the management or supervisory board shall reimburse the bank from his or her own funds.
(4) The supervisory board shall assess the need to terminate the function of a member of the
management or supervisory board, if it identifies a significant conflict of interest that a member of the
management or supervisory board is unable to eliminate, and adopt the appropriate measures on the
basis of the aforementioned assessment.
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(5) If a member of the management board fails to inform the supervisory board immediately of his or
her suspicion of a conflict of interest, or if he or she does not, on the basis of the supervisory board's
findings, rectify the breach or does not facilitate control over the circumstances that could lead to a
conflict of interest, the supervisory board shall recall the member from his or her function immediately
after the contentious situation is identified. If a member of the supervisory board fails to inform the
supervisory board immediately of his or her suspicion of a conflict of interest, or if he or she does not,
on the basis of the supervisory board's findings, rectify the breach or does not facilitate control over
the circumstances that could lead to a conflict of interest, the supervisory board propose to the general
assembly the recall of the member from his or her function immediately after the contentious situation
is identified.
(6) General precautionary measures to avoid conflicts of interest primarily include the following:
(a) when the management or supervisory board meets, a member of the aforementioned bodies
shall, on his or her own initiative or when called upon by the president of the management board or
chairman of the supervisory board, state whether there exists a suspicion of a conflict of interest in
matters subject to voting at the meeting of the management or supervisory board and clarify that
suspicion. The aim is to avoid conflicts of interest that affect the judgement of the member in
question;
(b) a member of the management or supervisory board shall refrain from voting if there exists a
suspicion of a conflict of interest in a matter subject to voting at the meeting of the management or
supervisory board; and
(c) the management or supervisory board shall ensure that the explanation and statement of the
member of the management or supervisory board indicating he or she refrained from voting owing
to the conflict of interest specified in point (b) of this paragraph is included in the minutes of the
meeting of the management or supervisory board.
Article 11
(preventing conflicts of interest among supervisory board members)
(1) In terms of conflicts of interest in its relations with one of its members, the supervisory board shall
in particular discuss:
(a) whether the member of the supervisory board or a member of his or her close family member
currently holds a position on the bank's management board or held such a position in the three
years prior to his or her appointment to the supervisory board;
(b) whether the member of the supervisory board was employed at the bank in the last three years;
(c) whether the member of the supervisory board or a member of his or her close family member
holds a participating interest in or is employed at the current or previous certified auditor; and
(d) whether the member of the supervisory board has served in his or her function for more than
three mandates or more than 12 years.
(2) A member of the supervisory board shall provide a written statement detailing the conflicts of
interest from the first paragraph of this article prior to assuming his or her function, and subsequently
every year or when any change occurs.
Article 12
(significant direct and indirect contact and related criteria)
(a) A conflict of interest may exist in particular if there is significant direct or indirect business contact
between a member of the management or supervisory board or a member of his or her close family
member and a bank or its subsidiary.
(2) A significant business contact is any contractual or other business relationship that meets the
following criteria:
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(a) an agreement has been concluded between a member of the management or supervisory board
or a member of his or her close family member and a bank or its subsidiary on the supply or goods
or rendering of services, including financial and consulting services;
(b) a member of the management or supervisory board or a member of his or her close family
member is, as the user of banking or other services provided by a bank or its subsidiary, subject to
treatment that is not in line with the adopted business policy or usual practices of the bank or its
subsidiary; and
(c) a member of the management or supervisory board or a member of his or her close family
member transacts with or is a member of an organisation that receives contributions in the form of
donations, sponsorships or other assistance from the bank, if the aggregate amount of those
contributions exceeds EUR 1,000 annually.
(3) An indirect business contact exists if a member of the management or supervisory board or a
member of his or her close family member is a business partner, holder of a qualifying holding,
managing director or member of the management staff of a company or organisation that has business
relationship with the bank.
(4) The supervisory board shall treat each significant business contact as a suspicion of a conflict of
interest, as specified in the second to fifth paragraphs of Article 10 of this Regulation.
Article 13
(remuneration)
(1) Remuneration of members of the management and supervisory boards shall be in line with the
bank's remuneration policy, and shall not encourage members of the management and supervisory
boards to take irresponsible and disproportionately high risks that exceed the bank's risk-taking
capacity.
(2) Decisions regarding the remuneration of the management board shall be made in accordance with
the remuneration policy on the basis of the risk management regulation.
(3) If the severance pay of a member of the management board exceeds the fixed component of
remuneration that he or she received during the last year of his or her mandate, the bank shall brief the
general assembly on the reasons for the higher severance pay.
(4) The general meeting shall make decisions regarding the remuneration of members of the
supervisory board. The entire remuneration of a member of the supervisory board usually comprises
only a fixed component, representing payment for the performance of his or her function.
Notwithstanding the previous sentence, a portion of the total remuneration of a member of the
supervisory board may also comprise a variable component in exceptional cases, if that component:
(a) is closely linked to his or her work tasks, and
(b) it is defined on the basis of his or her performance and results achieved.
(5) An appropriate retention period shall apply to the variable component of remuneration paid to
supervisory board member in the form of financial instruments. The aforementioned period shall last,
at a minimum, until the end of his or her mandate.
Article 13a
(Assessment of the suitability of the members of the Management Board or the Supervisory
Board)
(1) A bank shall produce the suitability of a member in following circumstances:
(a) on the basis of the proposal of candidates for a new Management Board member referred to in
paragraph 17 of this Regulation or in the candidate selection process for a new member of the
Supervisory Board referred to in paragraph 18 of this Regulation,
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(b) in other cases where it is necessary to reassess the suitability of a member.
The bank shall produce an assessment of the suitability of a member based on the criteria set out in
Annex 1 to this Regulation.
(2) The bank shall, in the circumstances referred to in point (a ) of the first paragraph of this Article
assure an assessment of the suitability of a member before he takes up its function.
(3) The bank shall, in the circumstances referred to in point (b) of the first paragraph of this Article
provide reasessment of the suitability of a member if it is necessary due to the occurrence of events
that could affect its suitability. In this case, the bank may verify only that the member concerned,
having regard to these events, is still suitable for the performance of its functions.
(4) An assessment of the suitability of a member bank must also be assessed in terms of the collective
suitability of the Management Board or the Supervisory Board.
(5) The bank must document an assessment of the suitability of a member and it results, including any
proposed measure under Article 13b of this Regulation.
Article 13b
(Proposals of measures regarding the Bank's assessment of the suitability of the member)
(1) If a Bank, on the basis of the assessment of the suitability of a member referred to in point (a ) of
the first paragraph of Article 13a thereof doubts about the suitability of the person for appointment as
a member of the Management Board or the Supervisory Board, shall propose to the Management
Board and the Supervisory Board a negative opinion on the nomination or appointment people to these
functions. Bank, in case the member is appointed despite its negative opinion, suggests to the
Management and Supervisory Board appropriate measures from the third paragraph of this Article.
(2) If the Bank on the basis of assessment of the suitability of a member referred to in point (b) of the
first paragraph of Article 13a thereof doubts that is a member of the Management Board or the
Supervisory Board is still suitable to perform their functions , it proposes appropriate measures to
remedy this situation, to the Management and Supervisory Board.
(3) The measures referred to in the first and second paragraphs of this Article may include (in addition
to the submission of a negative opinion) proposals for reallocation of responsibilities among the
members of the Management Board or the Supervisory Board, replacing members and the training of
the individual/all members of the Management Board or the Supervisory Board to ensure adequate
collective professional qualifications and experience of these Boards.
3. ADDITONAL RULES REGARDING THE DILIGENCE OF MEMBERS OF THE
SUPERVISORY BOARD
Article 14
(convening meetings of the supervisory board)
(1) The chairman of the supervisory board shall ensure that the supervisory board meets at least once a
quarter. If this is not ensured by the chairman of the supervisory board, other members of the
supervisory board shall convene meetings pursuant to the Companies Act.
(2) The chairman of the supervisory board shall maintain regular contact with the president of the
management board and request from him or her explanations regarding significant business events of
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which he or she has knowledge, and regarding the risks arising from these events to which the bank is
or could be exposed, and shall convene extraordinary meetings of the supervisory board as necessary.
Article 15
(effectiveness of the supervisory board’s work)
(1) The effectiveness of the supervisory board's work is strongly linked to how well it is informed and
its access to significant information. Members of the management and supervisory boards are
responsible for the timely and comprehensive notification of the supervisory board. The management
board shall regularly, comprehensively and in a timely manner notify the supervisory board regarding
significant matters relating to the bank's operations, risk profile, strategies and policies, and any
deviations from adopted objectives. The supervisory board is entitled and obliged to request from the
management board additional explanations and reports regarding any ambiguities in connection with
the operations of the bank and its subsidiaries.
(2) The chairman of the supervisory board shall coordinate the work of the supervisory board and
chair meetings. The chairman shall encourage other members of the supervisory board to effectively
and actively perform their functions. The members of the supervisory board shall take care that they
have enough time to carry out their tasks, and are obliged to further educate and improve themselves
throughout their mandate in areas important for the effective and quality execution of their duties. The
chairman of the supervisory board and president of the management board shall adopt a plan for the
training of supervisory board members and for the introduction of new members.
(3) Once a year, the supervisory board shall assess its composition and operations, potential conflicts
of interests of individual members, the supervisory board's work as a whole and the work of individual
members, the functioning of the supervisory board's committees and its cooperation with the bank's
management board. To that end, the supervisory board shall define possible measures to improve
effectiveness (as regards composition, education, dynamics and attendance at meetings, acquisition of
information and preparation for meetings, etc.).
Article 16
(written report of the supervisory board to the general meeting)
(1) Once a year, the supervisory board shall report to the general assembly in the form of a written
report that precisely and credibly demonstrates the activities of the supervisory board during the year.
(2) In the written report set out in the previous paragraph, the following in particular shall be
presented:
(a) the bank's business operations,
(b) supervision of the management board's work,
(c) cooperation with the management board and the certified auditor,
(d) internal organisation of the supervisory board,
(e) composition of the supervisory board as regards the independence of its members,
(f) any conflicts of interest and the manner in which they were resolved,
(g) the results of a self-assessment of the work of the supervisory board and its committees,
including an opinion regarding necessary improvements,
(h) the specific contribution of the work of individual members, their presence at meetings and
their involvement in discussions and decision making,
(h1) each new assessment of the suitability of the Bank's Supervisory Board members from the first
paragraph of Article 13a, and any proposals of measures from Article 13b of this Regulation,
(i) the execution of other tasks, as defined by valid regulations.
Article 17
(appointment and recall of members of the management board)
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(1) When appointing and recalling members of the management board, the supervisory board shall
strive to carefully select candidates in a timely manner to ensure continuity of the management board's
work.
(2) The management board shall also participate in the selection of its members. The chairman of the
supervisory board shall call on the management board or its president to propose candidates at least
one year prior to the expiration of a mandate.
(3) The supervisory board shall select candidates on the basis of previously defined criteria, taking into
account the bank's assessment of the suitability of a member from the first paragraph of Article 13a,
and any proposals of measures from Article 13b of this Regulation.
Article 18
(selection of new members of the supervisory board)
(1) During the selection of candidates for new members of the Supervisory Board, the proposer shall
consider the restrictions and conditions set out in 71 and 72 Article 1 of the Banking Act, and the law
governing commercial companies regarding the suitability of the Supervisory Board , including:
(a) synergies of knowledge, experience and skills with other members of the Supervisory Board
(b) the time- availability of candidates.
(2) Nomination for member of the Supervisory Board shall be based on relevant documents and other
evidence confirming compliance with the criteria specified in the first paragraph of this article.
(3) The applicant shall, before deciding on the election of members of the Supervisory Board, present
the appropriate candidates to the General Assembly of shareholders, including with:
(a) the policy of the bank regarding the suitability of the Bank's Supervisory Board members,
(b) an assessment of the suitability of a member in the first paragraph of Article 13a and any
proposals of measures of Article 13b of this Regulation,
(c) any conflicts of interest that exist or could be on their appointment created in relation to the
bank.
If the assessment of the suitability of a member for the purpose of presentation set out in point (b ) of
the first subparagraph of this paragraph at the time of making the election of Supervisory Board
members has not yet been made, the bank shall, irrespective of the second paragraph of Article 13a,
make an assessment as soon as possible, but in any case not later than six weeks from the decisionmaking process at the Assembly.
Article 19
(remuneration committee)
(1) The supervisory board shall appoint a remuneration committee if the bank is of significance to the
banking system of the Republic of Slovenia.
(2) The Bank of Slovenia shall make a decision regarding the significance of a bank to the banking
system of the Republic of Slovenia on the basis of the size and internal organisation of the bank, and
the nature, scope and complexity of the transactions it provides, taking into account in particular the
following criteria:
(a) whether its market share as measured by total assets is 5% or more;
(b) the type of services/transactions that it provides;
(c) the type of customers;
(d) the geographical breakdown of its business; and
(e) whether it has subsidiary institutions that may deemed significant in terms of the financial
system.
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(3) Notwithstanding the second paragraph of this article, a bank is not deemed significant to the
banking system of the Republic of Slovenia if at least one of the following criteria is met:
(a) the bank is a subsidiary of an EU parent bank that has a remuneration committee responsible for
the bank group. The bank shall prove the existence of such a committee with the appropriate
documentation from the parent bank, or
(b) the bank is a subsidiary of an EU parent bank and has adopted the remuneration policies of the
latter. The bank shall prove that it has adopted the remuneration policies of the parent bank with the
appropriate documentation.
(4) If after a decision designating a significant bank has been issued the circumstances specified in the
second paragraph of this article change such that the bank is no longer of significance to the banking
system of the Republic of Slovenia, the Bank of Slovenia shall issue a decision annulling the decision
designating it as a significant bank at the request of the bank in question. The bank's request shall
include evidence regarding the change in circumstances referred to in the second paragraph of this
article.
(5) Notwithstanding the first and second paragraphs of this article, a supervisory board may, at it own
discretion, appoint a remuneration committee, even if the Bank of Slovenia assesses on the basis of the
criteria specified in the second paragraph of this article that the bank in question is not of significance
to the banking system of the Republic of Slovenia.
Article 20
(composition of the remuneration committee)
(1) The supervisory board shall ensure the appropriate composition of the remuneration committee.
The composition of the remuneration committee shall be deemed appropriate if it facilitates the expert
and independent assessment of the appropriateness of remuneration policies and practices, and the
remuneration of employees whose work is of a specific nature aimed at ensuring and encouraging the
appropriate management of risks, capital and liquidity.
(2) A committee shall comprise a chairman and at least two members. The chairman shall be
nominated by the supervisory board from the members thereof. Members of the remuneration
committee shall not be members of the management board.
(3) The supervisory board shall ensure that at least one member of the remuneration committee has
sufficient knowledge and experience with regard to managing the risks that the bank is or could be
exposed to in its operations.
Article 21
(tasks of the remuneration committee)
(1) The remuneration committee shall be responsible for the following:
(a) the drafting of proposals of general remuneration policy principles, including the formulation of
positions regarding specific aspects of remuneration policies;
(b) assessing the appropriateness of established methodologies, on the basis of which the
remuneration system encourages the appropriate management of risks, capital and liquidity;
(c) the drafting of reports to the supervisory board regarding the implementation of remuneration
policies;
(d) the drafting of proposal for decisions regarding the remuneration of employees, including those
who impact the bank's risks and risk management;
(e) reviewing the appropriateness of the external consultant whose services the supervisory board
has used in determining the remuneration policy;
(f) reviewing the appropriateness of basic remuneration policy principles and the implementation
thereof; and
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(g) verifying the compliance of remuneration policies with the bank's long-term business policy.
(2) In drafting proposals for decisions regarding employee remuneration, the remuneration committee
shall take into the account the long-term interests of investors, shareholders and other stakeholders.
(3) The remuneration committee shall be responsible for the oversight of remuneration paid to
categories of employees whose work is of a specific nature and who work in internal control system
functions and other control functions. Responsibility for the oversight of their remuneration shall fall
on the supervisory board if no remuneration committee is appointed.
4. DILIGENCE OF MEMBERS OF THE SUPERVISORY BOARD DURING THE
IMPLEMENTATION OF COMPETENCIES PURSUANT TO ARTICLE 73 AND 74 OF THE
ZBAN-1
Article 22
(consensus with the definition of the bank's business policy)
(1) The supervisory board shall give the management board its consent regarding the definition of the
bank's business policy, based on an assessment of whether the business policy provides for the
implementation of the bank's business strategy, as approved by the bank's management board.
(2) During the assessment set out in the first paragraph of this article, the supervisory board shall
consider the following, in particular:
(a) the appropriateness of business objectives and plans with regard to:
– significant business activities, and
– any expected changes to the bank's business strategy,
(b) risks arising from the macroeconomic environment in which the bank operates, with regard to
the bank's position in the business cycle,
(c) expected macroeconomic trends in the domestic and international environments,
(d) the bank's competitive position and opportunities to increase its market share and/or expand its
market,
(e) the aspect of security and improvement of the quality of operations, and
(f) development aspects of banking and financial services.
Article 23
(consensus with the definition of the bank's financial plan)
(1) The supervisory board shall give the management board its consent regarding the definition of the
bank's financial plan, based on an assessment of whether the financial plan is in accordance with the
bank's business strategy and business policy.
(2) During the assessment set out in the first paragraph of this article, the supervisory board shall
consider the following, in particular:
(a) expected growth in total assets,
(b) the expected trend of the bank's market share by business areas,
(c) cost efficiency,
(d) expected operating results, and
(e) expected return on equity before taxation.
Article 24
(consensus with the definition of the organisation of the internal control system)
(1) The supervisory board shall give the management board its consent regarding the definition of the
organisation of the bank's internal control system, assessing the following, in particular:
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(a) whether the internal control system contributes to the diligent and secure operations of the bank,
(b) whether the internal control system is independent from the business areas that it monitors and
controls, and
(c) whether procedures exist for communicating significant and legitimate warnings from
employees to members of the bank's supervisory and management boards regarding the functioning
of the internal control system.
(2) During the assessment set out in point (a) of the first paragraph of this article, the supervisory
board shall consider the following, in particular:
(a) the efficient and proper implementation of planned business activities,
(b) the reliability of information regarding the bank's financial and operational activities for internal
and external use,
(c) compliance of the bank's operations with valid regulations, and internal decisions and
procedures,
(d) clarity, transparency and documentation of the decision-making process in the scope of an
internal control system that limits and prevents conflicts of interest,
(e) the possibility of unlimited and direct access of the internal audit department to any member of
the supervisory board,
(f) the presence of the internal control system manager at meetings of the supervisory and
management boards. This presence is appropriate if the manager participates at least once a year,
and
(g) the formality of procedures for monitoring compliance with the proposals and recommendations
of the internal audit department.
(3) During the assessment set out in point (b) of the first paragraph of this article, the supervisory
board shall consider the following, in particular:
(a) the functional separation of employees that work in the scope of the internal control function
from the business areas that these employees are obliged to monitor and control,
(b) the organisational separation of specific internal control functions from the business areas that
the internal control function is obliged to monitor and control,
(c) the directness of the internal reporting flow between the manager of a specific internal control
function and the supervisory and management boards, and
(d) the level of payments, reimbursements and other benefits of employees that work in the scope
of the internal control system are not dependent of the success of the business areas that these
employees monitor and control.
(4) During the assessment set out in point (c) of the first paragraph of this article, the supervisory
board shall consider the following, in particular:
(a) the level of formality and documentation of these procedures,
(b) the level of security and protection of employees, and
(c) the availability of instructions to all bank employees for the implementation of these
procedures.
Article 25
(consensus with the definition of the scope of the internal audit department's annual work
programme)
(1) The supervisory board shall give the management board its consent regarding the definition of the
scope of the internal audit department's annual work programme, based on an assessment of whether
the internal audit department's annual work plan is conceived on the basis of the bank's risk profile.
(2) During the assessment set out in the first paragraph of this article, the supervisory board shall
consider the following, in particular:
(a) whether the risk profile, on which the internal audit department's annual work plan is based,
reflects the bank's current exposure to risks,
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(b) the appropriateness of the areas of operations that the internal audit department will audit with
regard to their exposure to risks, and
(c) the appropriateness of the content of planned audits of operations by specific areas with regard
to their exposure to risks.
Article 26
(tasks relating to remuneration policies)
(1) The supervisory board shall define remuneration policies for the members of the management
board and other categories of employees whose work is of a specific nature set out in point (o) of
Article 2 of the risk management regulation. The supervisory board shall strive to ensure that the
remuneration of the aforementioned employees is proportionate to their mandates, tasks, experiences
and responsibilities, to the bank's financial position, and that it is in line with requirements relating to
the remuneration policies set out in the risk management regulation.
(2) The supervisory board shall discuss and make decisions on every significant exemption from or
change to remuneration policies, and shall closely monitor the effects of such exemptions or changes
on the bank's remuneration system and risk management.
(3) Members of supervisory board shall review the appropriateness of remuneration policies at least
once a year and ensure the implementation thereof.
(4) While reviewing the appropriateness of the remuneration policies referred to in the third paragraph
of this article, members of the supervisory board shall assess the following, in particular:
(a) whether when paying remuneration the bank takes into account the risks to which it is or could
be exposed to in its operations, the bank's financial position, and the long-term interests of the
bank, investors, shareholders and other stakeholders, and
(b) the compliance of remuneration policies with regulations.
(5) While reviewing the appropriateness of the remuneration policies referred to in the third paragraph
of this article, members of the supervisory board shall work with the bank's relevant control functions.
4.1 Decisions regarding other matters defined by the ZBan-1
Article 27
(general)
(1) For the purpose of supervising the management system, the supervisory board shall regularly
monitor and assess the following:
(a) the bank's risk profile as set out in point (a) of the third paragraph of Article 2 of the risk
management regulation,
(b) the appropriateness of risk taking and management strategies and policies that a bank must
establish and implement pursuant to Article 3 of the risk management regulation,
(c) the appropriateness of the organisational structure that a bank must establish and implement
pursuant to point (a) of Article 7 of the risk management regulation, and
(d) the appropriateness of the reporting a bank must provide pursuant to Articles 19 and 22 of the
risk management regulation.
(2) The supervisory board shall verify the assessment of the adequacy of the management system at
least once a year and at every significant change to the internal and external factors of the bank's
operations, including the following:
(a) changes to the bank's business strategy,
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(b) changes to past exposures to risk and/or the emergence of new, significant exposures to risk,
and
(c) changes arising from the macroeconomic environment in which the bank operates.
Article 28
(appropriateness of the risk profile)
(1) The supervisory board shall regularly monitor and assess the appropriateness of the risk profile set
out in point (a) of the first paragraph of Article 27 of this Regulation.
(2) When monitoring and assessing the appropriateness of the risk profile set out in the first paragraph
of this article, the supervisory board shall assess the following, in particular:
(a) whether the documented assessments of identified risks and other assumptions facilitate a
review of the bank's risk profile, and
(b) whether the bank's risk profile is in accordance with the bank's risk taking strategy.
(3) During the assessment set out in point (a) of the second paragraph of this article, the supervisory
board shall consider in particular documentation regarding the assessment of risks and other factors
that determine the bank's risk profile.
(4) During the assessment set out in point (b) of the second paragraph of this article, the supervisory
board shall consider in particular the impact of implementing the bank's business strategy on the
achievement of the desired risk profile.
Article 29
(appropriateness of strategies and policies)
(1) The supervisory board shall regularly monitor and assess the appropriateness of the risk taking and
management strategies and policies set out in point (b) of the first paragraph of Article 27 of this
Regulation.
(2) When monitoring and assessing the appropriateness of the strategies and policies set out in the first
paragraph of this article, the supervisory board shall assess the following, in particular:
(a) whether the risk taking and management strategies express the bank's fundamental relation to
the risks it takes in the scope of its operations in order to prevent any inconsistencies, ambiguities
and imbalances in its risk management,
(b) whether the risk taking and management strategies are comprehensive and proportionate to the
characteristics, extent and complexity of activities that the bank performs, and
(c) whether the risk taking and management policies provide for the implementation of risk taking
and management strategies.
(3) During the assessment set out in point (a) of the second paragraph of this article, the supervisory
board shall consider the following, in particular:
(a) the objectives and general principles or guidelines for taking and managing risks,
(b) the approach to managing specific risks,
(c) the approach to implementing the process of assessing internal capital adequacy, and
(d) possible plans with regard to significant business factors and/or changes in the bank's future
business strategy.
(4) During the assessment set out in point (b) of the second paragraph of this article, the supervisory
board shall consider the following, in particular:
(a) a review of the bank's risk exposure and the quality of the control environment, and
(b) the planned approach for implementing risk management processes for risks that the bank
defines as significant.
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(5) During the assessment set out in point (c) of the second paragraph of this article, the supervisory
board shall consider the following, in particular:
(a) the bank's methodology for assessing its capacity to take risks,
(b) organisational rules for implementing a risk management process at the bank,
(c) rules for assessing the bank's risk profile and methodologies for identifying and measuring or
assessing risks,
(d) policies used by external parties,
(e) rules of operation of the internal control system, and
(f) rules for implementing the process of assessing internal capital adequacy.
Article 30
(appropriateness of the organisational structure)
(1) The supervisory board shall regularly monitor and assess the appropriateness of the bank's
organisational structure set out in point (c) of the first paragraph of Article 27 of this Regulation.
(2) When monitoring and assessing the appropriateness of the bank's organisational structure set out in
the first paragraph of this article, the supervisory board shall assess the following, in particular:
(a) whether relations with regard to responsibilities and the delegation of competences and duties
are precisely defined, transparent and consistent, and
(b) whether employees work in accordance with the policies and procedures that relate to their
competences and responsibilities.
(3) During the assessment set out in point (a) of the second paragraph of this article, the supervisory
board shall consider the following, in particular:
(a) the impact of any ambiguities or inconsistencies in relations, with regard to responsibilities, that
could impair the ability of the supervisory and management boards to prudently manage the bank,
and
(b) the appropriateness of the competences and positions of employees who, in the scope of their
responsibilities, receive important information for carrying out tasks and implementing measures.
(4) During the assessment set out in point (b) of the first paragraph of this article, the supervisory
board shall consider in particular information regarding significant inconsistencies of employees' work
with policies and procedures that relate to their competences and responsibilities, and any associated
causes.
Article 31
(appropriateness of reporting)
(1) The supervisory board shall regularly monitor and assess the appropriateness of the reporting set
out in point (d) of the first paragraph of Article 27 of this Regulation, including the appropriateness of
internal reporting flows.
(2) When monitoring and assessing the appropriateness of internal reporting flows as set out in the
first paragraph of this article, the supervisory board shall in particular assess whether it can carry out
supervision of the management board's work based on the reports it receives.
(3) During the assessment set out in the second paragraph of this article, the supervisory board shall
consider in particular whether the reports it receives also contain information regarding the following:
(a) the implementation of business strategies and policies, including information regarding the
achievement of established objectives, and
(b) significant inconsistencies of the bank's operations with valid regulations, standards, codes and
internal acts, including explanations of the causes for such.
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5. FINAL PROVISIONS
Article 32
(repeal of previous regulation)
On the day that this Regulation enters into force, the Regulation on the Diligence of Members of the
Management and Supervisory Boards of Banks and Savings Banks (Official Gazette of the Republic
of Slovenia, Nos. 28/07 and 70/09) shall cease to be in force.
Article 33
(entry into force)
This Regulation shall enter into force on the day following its publication in the Official Gazette of the
Republic of Slovenia.
Marko Kranjec
Chairman of the
Governing Board of the Bank of
Slovenia
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Annex 1 - Criteria for assessing the suitability of a member
1 The criteria for reputation
(1) A member has a good repute, if there is no evidence to the contrary and there are no grounds for
reasonable doubt on its reputation. It is considered that a member does not have a good repute, if its
personal or business practices raise any serious doubts about the ability of ensuring prudent
governance of the bank.
(2) The Bank shall, when evaluates the reputation of the member, consider that it should have a good
reputation in any case (the principle of proportionality shall not bet aken into account). Bank must take
into account all relevant information available, no matter when and where events, which may affect
the reputation of the member concerned occur, and irrespective of any relief which the national
legislation of other Member States or third countries provide. Also, the bank must take into account
that a number of small events individually does not necessarily affect the reputation of a member, but
taken as a whole it can have serious consequences for its repute.
(3) The Bank shall for the purpose of assessment of the circumstances that may cast doubt on the
reputation of a member, consider:
(a) the existing criminal or other relevant official records relating to members
(b) the previous cooperation of a member with the competent authorities
(c) the historical and current business results and financial position of the member.
( 4) The Bank shall in relation to point (a ) of the third paragraph of this section take into account any
criminal or relevant administrative records, considering the type of conviction or indictment, the level
of appeal, the punishment received, the phase of the judicial process reached and the effect of any
rehabilitation measures. The surrounding, including mitigating, circumstances and the seriousness of
any relevant offence or administrative or supervisory action, the time period and the member‟s
conduct since the offence and the relevance of the offence or administrative or supervisory action to
the proposed role should be considered. To this end, the bank must obtain the evidence from the
judicial record or other form of proof of fulfillment of the condition of 2 the first paragraph of 63 of
the Banking Act -1. This should in particular take into account the following circumstances :
(a) conviction or prosecution of a criminal offence, in particular:
 offences under the laws governing banking, financial, securities, insurance activity, or
concerning securities markets or securities or payment instruments, including laws on
money laundering, market manipulation, or insider dealing and usury;
 offences of dishonesty, fraud, or financial crime;
 tax offences;
 other offences under legislation relating to companies, bankruptcy, insolvency, or
consumer protection;
(b) relevant current or past investigations and/or enforcement actions relating to the member, or the
imposition of administrative sanctions for non-compliance with provisions governing banking,
financial, securities, or insurance activities or those concerning securities markets, securities or
payment instruments, or any financial services legislation;
(c) relevant current or past investigations and/or enforcement actions by any other regulatory or
professional bodies for non-compliance with any relevant provisions.
( 5) The Bank shall in relation to point (b) of the third paragraph of this section, in particular take into
account the following circumstances:
(a) any evidence that the member has not been transparent, open, and cooperative in its dealings
with supervisory or regulatory authorities;
(b) refusal of any registration, authorisation, membership, or license to carry out a trade, business,
or profession; or revocation, withdrawal, or termination of such registration, authorisation,
membership, or license; or expulsion by a regulatory or government body;
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(c) the reasons for any dismissal from employment or any position of trust, fiduciary relationship,
or similar situation, or having been asked to resign from employment in such a position; and
(d) disqualification by competent authority from acting as a person who directs the business.
(6 ) The Bank shall, in relation to point (c) of the third paragraph of this section, in particular take into
account the following circumstances:
(a) inclusion on the list of unreliable debtors or any negative records on this kind of list conducted
by recognised credit bureau if available;
(b) financial and business performance of the entities owned or directed by the member or in
which the member had or has significant share with special consideration to any rehabilitation,
bankruptcy and winding-up proceedings and whether and how the member has contributed to
the situation that lead to the proceedings;
(c) declaration of personal bankruptcy; and
(d) civil lawsuits, administrative or criminal proceedings, large investments or exposures and
loans taken out, in so far they can have a significant impact on the financial soundness.
2 The criteria for experience
(1) The bank must assess the experience of the members having regard to the responsibilities of the
functions for which a candidate or for which it was named . Bank of the assessment may take into
account the experience of the members of the nature, extent and complexity of the operations
performed by a bank (principle of proportionality ) .
(2) The Bank shall evaluate the experience of member account:
(a) theoretical knowledge acquired through education and training , and practical experience gained in
previous jobs .
(b ) the nature of the functions for which the member or candidate for which it was named .
(3) The Bank shall for the purposes of paragraph (a ) of the second paragraph of this section take into
account the particular profile and level of education member and link these qualifications in banking
and financial services , or other relevant areas . It is considered that the area of education is generally
appropriate when they are in relation to the field of banking and finance , economics, law,
administrative sciences, financial regulations or mathematical or statistical knowledge. In addition, the
bank must also take into account the knowledge and skills acquired by a member of the previous and
proven business practices .
(4 ) The assessment of the suitability of member education should not be confined only to the
degree or proof of a certain period of service in a bank or other company. A more thorough
analysis of the members‟ practical experience should be conducted as the knowledge gained
from previous occupations depends on the nature, scale and complexity of the business as
well as the function performed within it. When assessing the experience of a member of the
management body particular consideration should be given to theoretical and practical
experience relating to:
(a) financial markets;
(b) regulatory framework and requirements;
(c) strategic planning, and understanding of a credit institution‟s business strategy or business
plan and accomplishment thereof;
(d) risk management (identifying, assessing, monitoring, controlling and mitigating the main
types of risk of a credit institution, including the responsibilities of the member);
(e) assessing the effectiveness of a credit institution‟s arrangements, creating effective
governance, oversight and controls; and
(f) interpreting a credit institution‟s financial information, identifying key issues based on this
information and appropriate controls and measures.
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( 5) The Bank shall, for the purpose of point (b) of the second paragraph of this section consider that
the level and nature of experience required of a board member could be different from the level and
nature of experience required of members of the Supervisory Board. Namely, a member of the
Management Board ahould have sufficient experience, gained on relevant senior executive positions
(short-term or temporary jobs can of course be taken into account, but these are generally not
sufficient for a presumption of sufficient experience) . Member of the Supervisory Board must have
the necessary experience to provide an adequate assessment of the management decision-making and
effective supervision.
The bank must assess the theoretical knowledge and practical experience of a board member obtained
in earlier services, take particular account of:
(a) length of service;
(b) nature and complexity of the business where the position was held, including its organisational
structure;
(c) scope of competencies, decision making powers, and responsibilities;
(d) technical knowledge gained through the position about the business of a credit institution and
understanding of risks credit institutions face ;
(e) number of subordinates.
The bank must assess the experience of the members of the Supervisory Board, in particular the
experience and knowledge acquired in the academic, administrative or other posts and the
management, supervision and monitoring of financial institutions or other comparable companies.
These members must be able to demonstrate that they have the knowledge necessary to understand the
Bank's operations and the risks to which it is exposed.
3 The criteria for the management of
(1) The bank must assess the suitability of members to consider other criteria relevant to the
functioning of the Management Board or the Supervisory Board , including:
(a) the existence of conflicts of interest referred to in point (c) of paragraph 3 of this Regulation ,
(b) the ability to commit a sufficient time,
(c) the composition of the Management Board or the Supervisory Board ,
(d) a collective professional competence and experience requirements of the Management Board
or the Supervisory Board.
(2) The bank must assess the suitability of a member in particular from its ability to fulfill its duties
and responsibilities independently, without allowing undue influence by other entities in its decisionmaking. In assessing the independence of the bank must consider the following factors:
(a) past and present positions held in the credit institution or other firms;
(b) personal, professional or other economic relationships with the members of the management
body in their management function, in the same credit institution, in its parent company or
subsidiaries; and
(c) c personal, professional or other economic relationships with the controlling shareholders of
the same credit institutions, with its parent institution or subsidiaries.
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