3.6.3 Fit and proper testing

The following approach has been adopted with respect to fit and proper testing. The supervisor who grants a licence to the relevant financial institution takes the lead in the fit and proper testing process. This means that DNB takes the lead with respect to fit and proper testing of managers and key function holders of banks, insurance companies and so forth, whereas the AFM takes the lead in the case of investment firms and managers of UCITS and AIFs. The other supervisor may, however, veto a positive decision.1 This is to prevent a situation in which the lead supervisor reaches a positive decision despite the disagreement of the other supervisor.2 Once a supervisor has found a member of the management board to be of good repute, this judgement is respected by the other supervisor. This simplifies the application process where a director of, say, an insurance company applies for another directorship at a payment institution or an asset manager. Good repute will not be tested again, unless specific circumstances warrant a reassessment.3