2 Credit servicers ’ assessment of the adequate knowledge and experience of members of the management or administrative organ

Credit servicers should ensure that their management or administrative organ, as a whole, possesses adequate knowledge and experience to perform its duties at all times and to conduct the business in a competent and responsible manner. In accordance with Article 5(1)(b) of Directive (EU) 2021/2167, credit servicers should ensure that all members of these organs are of good repute.

Credit servicers, including firms that apply for authorisation under Title II, Chapter I of Directive (EU) 2021/2167, should perform the assessment or a reassessment, in particular:

• a. when applying for authorisation before commencing their activities;
• b. when material changes to the composition of the management or administrative organ occur, including:
• i. when appointing new members of the management or administrative organ; and
• ii. when members have left the management or administrative organ;
• c. where material changes have occurred to the business model, underlying legal provisions or technologies used.

The knowledge and experience assessments of the members of the management or administrative organ, as a whole, should be carried out before the individual members are appointed. Where applicable, the management or administrative organ in its supervisory function should be responsible for performing the final assessment.

By way of derogation of paragraph 16, the collective suitability assessments may, without prejudice to national law, be performed after the appointment of the member of the management or administrative organ in any of the following cases for which the credit servicer has duly provided a justification:

• a. shareholders, owners or members of the credit servicer nominate and appoint members of the management or administrative organ at the shareholders ’ or equivalent meeting that have not been proposed by the credit servicer or by the management or administrative organ; and
• b. a complete assessment prior to the appointment of a member or the change of the composition of the management or administrative organ would disrupt the sound functioning of the management or administrative organ, including as a result of the following situations:
• i. where the need to replace members arises suddenly or unexpectedly, e.g. owing to the death of a member; and
• ii. where a member needs to be removed as the member is no longer suitable.

The assessment of adequate knowledge and experience should take into account all matters relevant to and available for the assessments. Credit servicers should consider the risks, including the reputational risk, arising in the event that any weaknesses are identified affecting the collective suitability of the members of the management or administrative organ.

Credit servicers should take into account the knowledge and experience of the individual member of the management or administrative organ when assessing the adequate collective knowledge and experience of the management or administrative organ and vice versa.

Credit servicers should document the results of their assessment, and in particular any weaknesses identified between the necessary and the actual collective knowledge and experience of members of the management or administrative organ, and measures to be taken to overcome these shortcomings, including induction or training to be provided.

The assessment of the initial and ongoing individual and collective adequate knowledge and experience of the management or administrative organ and the good repute of their members is the responsibility of credit servicers.

To ensure appropriate ongoing supervision, credit servicers should inform the competent authority of the proposed appointment of members or, without prejudice to national law, inform it without undue delay after the appointment of members.

When the competent authorities have carried out an assessment of the knowledge and experience of the management or administrative organ of a credit servicer for supervisory purposes, the responsibility to assess and ensure the suitability of the management or administrative organ continues to remain with the credit servicer.