C.5. Suitability assessment by competent authorities

Competent authorities should specify the supervisory procedures applicable to the suitability assessment of members of the management body of issuers of ARTs and CASPs. When specifying the supervisory procedures, competent authorities should consider that a suitability assessment performed after the member has taken up his or her position could lead to the need to remove a non-suitable member from the management body or to a situation where the management body collectively has ceased to be suitable.

Competent authorities should ensure that a description of those assessment procedures is publicly available. The supervisory procedures should ensure that newly appointed members of the management body and the management body as a collective body are assessed by the competent authorities. The supervisory procedures should also ensure that re-appointed members of the management body are re-assessed by the competent authority in accordance with these Guidelines, where a re-assessment is necessary due to a change in the information required or the position held by the re-appointed member.

Competent authorities should ensure that their supervisory procedures allow them to address cases of non-compliance with the relevant regulatory requirements in a timely manner.

Competent authorities should require issuers of ARTs and CASPs to notify them without delay of any vacant positions within the management body. Competent authorities that assess the suitability of members of the management body before the appointment should require the issuer of ARTs or the CASP to notify them without undue delay after the firm decided to propose the member for appointment. Competent authorities that assess the suitability of members of the management body after the appointment should require the issuer of ARTs or the CASP to notify the appointment at the latest 2 weeks after the appointment. This notification should include the information referred to in paragraph 70.

In the duly justified cases referred to in paragraph 45, issuers of ARTs and CASP should be required to provide the complete documentation required under paragraph 70 to the competent authority within one month of the member being appointed.

Competent authorities should set out a maximum period for their assessment of suitability which should not exceed 4 months from the date when the notifications of the intended or actual appointment by the issuer of ARTs or the CASPs.

Where a competent authority establishes that information in addition to what is required under paragraph 70 is needed to complete the assessment, the period set under paragraph 67 may be suspended from the time when the competent authority requests additional information until its receipt.

Competent authorities should perform their assessment on the basis of the information provided by the issuer of ARTs and CASPs and assessed members and should assess them against the notions defined in these Guidelines, as applicable.

Competent authorities should require issuers of ARTs and CASPs to submit the information and documentation necessary for the assessment of the suitability of the member of the management body, including the information and documentation required for the suitability assessment at authorisation as specified in the Commission Delegated Regulation mandated under Articles 18(6) of MiCA with regard to the application of paragraph (2) (i) of this Article in the case of an issuer of ARTs and mandated under Article 62(5) of that Regulation with regard to the application of paragraph (2)(g) of this Article in the case of a CASP , containing proof of th e members sufficient good repute, and the members and the management body’s appropriate individual and collective knowledge, skills and experience and ability to commit sufficient time.

Where appropriate on a risk-based approach and for issuers of significant ARTs, competent authorities should use also interviews for the purpose of suitability assessments.

The assessment of the individual and collective suitability of the members of the management body should be performed on an ongoing basis by competent authority, as part of their ongoing supervisory activities.

Competent authorities may attend or conduct meetings with the issuer of ARTs or CASP, including with some or all members of its management body, or participate as an observer in meetings of the management body to assess the effective functioning. The frequency of such meetings should be set using a risk-based approach.

Competent authorities should ensure that necessary re-assessments under sections C.3, C.3.1 and C.3.2 are conducted by issuers of ARTs and CASPs. If a re-assessment of suitability by a competent authority is prompted by a re-assessment by an issuer of ARTs or CAPS, that competent authority should take into account the circumstances that prompted the re-assessment and its impact on the individual and collective suitability of the Management body.