LIECHTENSTEIN Law and Practice Contributed by: Bernhard Rankl, Moritz Blasy and Nicolai Binkert, Schurti Partners Attorneys at Law Ltd
Process The FMA has to confirm the completeness of the required documentation within two business days. Once confirmed, the FMA has 60 business days to evaluate the intended acquisition. If the FMA does not raise a written objection within the assessment period, the acquisition shall be deemed authorised. The FMA may also attach conditions and requirements to the acquisition and set a deadline for the completion of the intended acquisition. 4. Governance 4.1 Corporate Governance Requirements The corporate governance requirements for Liechtenstein banks are laid out in the Banking Act ( Bankengesetz ) and the Banking Ordinance ( Bankenverordnung ), supplemented by various guidelines issued by the FMA. These rules are designed to promote effective supervision of a bank’s business activities, from the definition of the necessary bodies within a bank to the requirements to be met by the staff performing these functions. Board of Directors and Management Responsibilities The senior management of a Liechtenstein bank consists of the members of the board of direc - tors ( Verwaltungsrat ) and the members of the executive management ( Geschäftsleitung ). The board of directors, comprising a minimum of three members, holds the primary responsibility for the bank’s governance. It ensures that the bank’s strategic goals are in compliance with regulatory standards and reflect the interests of its stakeholders. The board of directors is also responsible for establishing a sound organisa - tional framework and overseeing the bank’s risk management system. The executive manage -
ment of a Liechtenstein bank must consist of at least two members, distinct from the mem - bers of the board of directors, to ensure that operational decisions are free from supervisory conflicts. This structure enforces a strict divi - sion between management and oversight roles, which helps maintain objectivity and reduce potential conflicts of interest. The FMA assesses both management and board members by means of a so-called fit and proper test, which ensures that persons in these key positions have the required qualifications, expe - rience and integrity (see 4.2 Registration and Oversight of Senior Management ). Risk Governance and Internal Audit Liechtenstein banks are required to have a com - prehensive risk management framework, which sets forth in regulations or internal policies the basic principles of risk management as well as the responsibilities and procedures for the approval of risky transactions. In particular, they must identify, limit, and monitor market, credit, default, residual, settlement, liquidity, concen - tration, securitisation, counterparty, interest rate, reputational, operational, legal, and over- indebtedness risks. This includes the appoint - ment of an independent risk officer (a member of senior management) who heads the risk depart - ment and is responsible for ensuring the integ - rity of the risk management framework. The risk department is overseen by the board of directors and, if the institution is of significant importance, by a risk committee composed of members of the board of directors. The internal audit function must review the effec - tiveness and adequacy of the internal control system and the propriety of all activities and processes of entities within the same group, whether outsourced or not. Banks and invest -
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