LIECHTENSTEIN Law and Practice Contributed by: Bernhard Rankl, Moritz Blasy and Nicolai Binkert, Schurti Partners Attorneys at Law Ltd
ment firms must ensure that any deficiencies identified by the internal audit function are recti - fied in a timely manner. The internal audit func - tion must report directly to the board of directors and operate independently from the day-to-day business of the bank. Outsourcing When a bank outsources critical functions, it remains fully responsible for ensuring that these services comply with applicable regulations. The outsourcing agreement must include provisions for the monitoring and control of outsourced activities to ensure that they are subject to the same risk management and compliance frame - work. The guidelines on outsourcing arrange - ments (EBA/GL/2019/02) of the European Bank - The Liechtenstein banking industry has organ - ised itself through the establishment of the Liechtenstein Bankers Association ( Liechten- steinischer Bankenverband ), whose objectives are to protect and represent the rights and interests of the banking industry, to engage in self-regulation, to preserve and promote Liech - tenstein as a banking and financial centre, and to promote professional education and training in the banking industry. To this end, the Liechten - stein Bankers Association has issued a code of conduct and guidelines for its members. 4.2 Registration and Oversight of Senior Management ing Authority (EBA) are applicable. Liechtenstein Bankers Association In Liechtenstein, the registration and oversight of senior management of banks are governed by the Banking Act ( Bankengesetz ), the Bank - ing Ordinance ( Bankenverordnung ), and guide - lines issued by the FMA. These rules ensure that senior managers are fit and proper, able to manage risk effectively and comply with govern -
ance standards. The key requirements are set out below: Fit and Proper Requirements The FMA requires banks’ senior management to meet strict fit and proper criteria to ensure that they have the necessary professional skills and experience, as well as personal integrity, to fulfil their duties. The fit and proper assessment cov - ers three main areas: Professional qualifications Senior managers must demonstrate that they have the necessary education, qualifications and professional experience relevant to the banking sector. This includes experience in managerial positions in financial institutions or similar posi - tions. The FMA assesses whether the candidate has the ability to perform the specific responsi - bilities associated with the position, such as risk management, compliance, or general manage - ment functions. Personal integrity A key component of the fit and proper assess - ment is the assessment of a manager’s integrity and reputation. Individuals must demonstrate impeccable conduct and ethical behaviour. The FMA examines their personal and professional history, including any involvement in criminal activities, regulatory breaches or financial mis - management. A clean record of fraud, money laundering, insider trading and other financial Senior managers must devote sufficient time to their duties. The FMA requires that senior man - agers have sufficient availability to perform their duties effectively. They should not hold exces - sive external directorships or engagements that could impair their ability to perform their banking crimes is essential. Time commitment
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