NETHERLANDS Law and Practice Contributed by: Johannes de Jong and Juliet de Graaf, Osborne Clarke N.V.
Screening Requirements for Second-Tier Functions Screening also applies to second-tier functions. These are management functions directly below the executive board, responsible for individuals whose activities can significantly impact the risk profile of the bank. For these second-tier func - tions the DNB assesses the integrity, while the bank itself must establish whether the individual is suitable. An individual cannot start their role until they receive a positive screening decision from the DNB. 4.3 Remuneration Requirements The remuneration requirements applicable to Dutch-licensed banks are laid down in the DFSA, the Regulation on Sound Remuneration Policy DFSA ( Regeling beheerst beloningsbeleid Wft 2021 , Rbb), the EBA Guidelines on Sound Remuneration policies, and the DCGC. These regulations and guidelines differentiate between several types of staff, and each may have different requirements for fixed remunera - tion and variable remuneration. DFSA The remuneration rules in the DFSA apply to individuals working under the responsibility of the Dutch-licensed bank, and its subsidiaries. The most relevant remuneration requirements under the DFSA are as follows: • Remuneration policy requirements: Banks must have a remuneration policy tailored to their size and activities, among others setting out specific principles for awarding fixed and variable remuneration. • Disclosure requirements: Banks must publish a description of their remuneration policy in
their annual accounts and on their website, including information on the amount of vari - able remuneration awarded. • Bonus cap: The amount of variable remu - neration awarded must be limited to 20% of the individual’s fixed remuneration. There are limited exemptions to this bonus cap, such as for individuals predominantly working outside of the Netherlands. • Welcome bonuses and severance payments: Banks can only award guaranteed variable remuneration (welcome bonuses) and sever - ance payments under specific conditions. • Malus and clawback: In certain circum - stances, banks can reduce or reclaim vari - able remuneration (also known as malus and clawback measures). • Retention of shares: A retention requirement of five years applies to shares (or comparable instrument) awarded by the bank as fixed remuneration. A breach of these remuneration rules, such as an employment contract in breach of the Dutch bonus cap rules, is considered null and void ( nietig ) under Dutch law. RBB The RBB contains remuneration requirements for individuals who can materially affect the risk profile of the bank (identified staff). The RBB implements most of the remuneration require - ments following CRD IV. As follows from the RBB: • The supervisory board must adopt the remuneration policy of the bank, and must be responsible for reviewing and implementing this policy. • Significant banks must establish a remunera - tion committee responsible for, inter alia,
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