What’s Changing in the EU Suitability Assessment Rules - Joint EBA & ESMA Guidelines (Consultation Paper)

On 25 February 2026, ESMA and the EBA published a consultation on revised joint guidelines for assessing the suitability of members of the management body and key function holders in banks and investment firms.

The suitability guidelines themselves already exist: what’s new here is a set of targeted updates designed to reflect recent EU legal developments, expand and clarify supervisory expectations, and improve consistency across Member States.

Below is a practical breakdown of the key changes.

Alignment with updated EU prudential requirements (CRD)

A major driver of the revision is alignment with the updated Capital Requirements Directive (CRD). The revised framework clarifies how institutions and supervisors should apply suitability requirements under the latest prudential rules, especially where the updated CRD introduces new expectations around governance and appointments.

What this means in practice:

• more explicit links between legal requirements and the suitability process,

• clearer expectations on how assessments should be performed and evidenced.

Wider focus on key roles beyond board membership

The revised approach strengthens the focus on key function holders, including roles that may not sit on the board but have a critical impact on governance and control.

In particular, the revisions emphasise suitability assessment expectations for senior control and financial roles (for example, internal control functions and senior finance leadership), reinforcing that governance risk isn’t limited to board appointments alone.

Clearer approach for third-country branches

The consultation also addresses how the suitability framework should apply in the context of third-country branches operating in the EU.

This is important for groups with non-EU headquarters and EU branch structures, as it clarifies supervisory expectations around governance and key individuals in those branch setups.

Stronger link to financial crime and AML/CFT considerations

Another notable development is the clearer connection between suitability assessments and AML/CFT risk considerations.

This doesn’t replace existing fit-and-proper principles, but it strengthens how institutions and supervisors should factor in integrity, reputation, and relevant risk signals when assessing individuals in senior positions.

More harmonised documentation expectations

Alongside the revised guidelines, the consultation package supports greater standardisation of what information is expected for suitability reviews (such as the structure/content of questionnaires, CV information, and supporting documentation).

The practical outcome is likely to be:

• more consistent submissions to regulators,

• fewer jurisdiction-by-jurisdiction differences in what is considered “enough” evidence,

• clearer internal file standards for firms.

Clarifications aimed at consistency and reduced friction

The revised guidelines also include clarifications intended to improve:

• supervisory convergence (more consistent outcomes across the EU),

• operational clarity (who assesses what, when, and how),

• and overall efficiency, reducing avoidable administrative complexity where possible.

Conclusion

This consultation is a signal that EU supervisors want more consistent, better-documented, and more risk-aware suitability assessments, not only for boards, but also for senior roles that drive control, finance, and governance outcomes.